AzMedicine Fall 2015

Alternatives to the Health Insurance Paradigm | The Power of Transparent Healthcare Pricing Fall 2015

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Fall 2015 | Volume 26, No. 3 | www.azmed.org | facebook.com/azmedicine

FROM OUR PRESIDENT You cannot be turned down by our insurance, but we reserve the right not to pay the claims… .............4 EDITORIAL Health care isn’t about producing plastic cards .............8 MEDICAL LIABILITY New AZ Law on Self Referred Laboratory Testing.........................................................24 AZ HEALTH COMMUNITY Value-Based Reimbursement and Secure Information Sharing: Four Reasons to Participate in Arizona’s Statewide HIE...........................26 MED STUDENT PERSPECTIVE What it means to help people........................................28 YOUR ARMA TEAM Meet ArMA’s new VP of Policy and Political Affairs: Pele Peacock Fischer, JD.....................30

Trends In Healthcare Delivery & Payment Price Transparency, Disruptive Innovation, and Legislative Reforms...................... 12 Alternatives to the Health Insurance Paradigm............................................... 14 The Power of Transparent Healthcare Pricing: The Surgery Center of Oklahoma Experience............................ 16 Self-Ordered Testing: Another Dying MD Cash Cow, Patient Autonomy and 21st Century Economics................................. 18 Physician Employment — Temporary Trend or Paradigm Shift?..................... 20 HSAG VISTAS Quality Improvement and Value-Based Payment: It’s Not Your Father’s Medicare Anymore.............. 22

Fall 2015 | AZMedicine 3

FROM OUR

President

You cannot be turned down by our insurance, but we reserve the right not to pay the claims…

In the previous edition of AzMedicine, I outlined my goals for the Arizona Medical Association (ArMA) during my term as president. One of those goals was to have ArMA become a liaison with the department of insurance to help oversee health plan violations, including dropping physicians from networks and delay in payments for clean claims. The following comments pertain to fee for service arrangements and exclude new models of ‘pay for performance’ and ‘accountable care organizations’.

Insurance companies are increasingly difficult to work with for physicians in private practice, especially those in individual or small group practice who are not large enough to have an impact on contract rates and other negotiations.

Insurance companies are merging. Aetna and Humana Nathan Laufer, MD, FACC are merging; Anthem and Cigna, Centene and HealthNet. A recent study released by the American Medical Association (AMA) indicates that the Aetna and Humana merger would raise “significant competitive concerns and diminish competition” in Arizona as well as up to 58 metropolitan areas in 14 states.” 1 This means less choice for patients and more leverage against physicians and hospitals. This is the same problem as we find with airline mergers – prices inevitably go up and services go down.

Narrow networks are increasing. Recently, a major Arizona insurer announced it is eliminating state wide networks for patients in Maricopa County and focusing on narrow networks in this region.

This means physicians formerly on their plans could become out of network if their office is in Maricopa County.

As insurance companies move to narrow networks, out-of-network

physicians will likely be losing many patients from the networks from which they were just dropped. This decreases patient choice and forces them to change physicians.

According to a recent study2 of narrow networks in the federal health insurance marketplaces, networks are considered narrow if 25% or fewer physicians in a rating area participate. In Arizona, 73% of qualified health plans offered on the Marketplace in 2014 were comprised of narrow networks. This makes Arizona the fifth highest state in terms of narrow network prevalence – and that is before any of the above mentioned mergers are finalized.

This goes contrary to some of the Obamacare initiatives where patients are supposed to have choice; narrow networks mean less choice – and surprise bills from what patients may not understand are out of network services and providers.3 Furthermore, when physicians are dropped from health plans, they are not necessarily dropped from the health plan website immediately. Patients may sign up for a health plan to see a particular physician only to find out later that physician is NOT on the health plan.

We were dropped on March 30 from a health plan notifying us that effective April 1 we could no longer see patients in this health plan – despite the existing contract that went to 2018. This plan quickly sent out letters to our referring physicians and our patients that we were dropped. This action was quickly rescinded once our attorney got involved. But the health plan was very slow in informing our referring physicians and patients that we were still accepting this health plan. This led to increased patient anxiety and turmoil in our office.

It is also becoming increasingly difficult for practices to deal with health plans which require authorizations for almost everything they do, including follow-up office visits. Many plans require a current visit prior to ordering testing based on new symptoms.

Continued on page 6

4 AZMedicine | Fall 2015

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Dr. Marnee Spierer Chief of Radiation Oncology Clinical Operations Dr. Spierer has been an attending radiation oncologist for more than 10 years and working in the field of radiation oncology for more than 15 Years.

She earned her medical degree from Columbia University College of Physicians and Surgeons, completed her residency at Memorial Sloan-Kettering Cancer Center, and in 2014, she joined the team at Cancer Treatment Centers of America.

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Continued from page 5

This forces another appointment which is an additional cost to patient, who may have not yet met their health plan deductible.

Certain health plans are requiring authorization for each patient visit to the office. To get authorizations for visits and tests some health plans require two weeks advance notice, which is difficult for patients with urgent needs to be seen and evaluated.

For example, a patient with new onset angina should not have to wait two weeks prior to ordering a nuclear stress test or cardiac catheterization. This delay may have adverse clinical outcomes for the patient. To get an authorization, office staff can be kept on hold for up to an hour. Once we get a representative on the phone, some health plans limit us to getting authorization for three patients at a time before we are then required to call back and start the whole process over again.

These requests for refunds can occur up to two years after the payment was issued. They occasionally change their requirements for authorization without informing the physician, after having authorized a procedure, then retroactively deny the procedure and its payment. They are also slow in informing us that a patient has change plans and is no longer covered. When we refile with the current health plan, the claim is denied due to untimely filing!

One of the largest companies handling prior authorizations for many insurance carriers receives a significant part of their payment based on the money they saved the health plan by denying imaging requests for authorization.

There are third parties that have been contracted with health plans to do authorizations, especially for imaging. These companies are incentivized to deny authorizations based on their internal guidelines, which may not be generally accepted by the medical community. One of the largest companies handling prior authorizations for many insurance carriers receives a significant part of their payment based on the money they saved the health plan by denying imaging requests for authorization. This clearly gives them incentive to deny authorizations at the expense of patients’ health. The situation is made doubly difficult by poorly designed websites. Such websites have corrupted patient date of birth information, freeze up before you complete information, and do not recognize the required attachments for processing. So once again, we go back to the phone calls and long wait times.

When these authorizations are denied, it is possible for the ordering physician to get on the phone and do a peer-to-peer higher level request; however, the peer may be from a completely different specialty. I have had the pleasure of speaking with psychiatrists to get authorizations for a cardiac imaging procedure.

Finally, most health plans have a clause in their contract about timely filing and denying claims if not filed within 30 days of date of service. Yet, the health plans can request refunds for payments based on retroactive denials after procedures have been performed.

6 AZMedicine | Fall 2015

An anesthesiologist recently told me of a case where he was notified that the insurance company wanted a refund of $750 on a payment made 13 months ago on a patient the insurance company determined was not actually on their plan at the time of the procedure. I would think that requirements for timely filing for physicians should also apply to insurance companies when requesting refunds.

Narrow networks and roadblocks to authorizations and late refund requests are not in the public’s best interest!

Based on these and other issues, it is my intent to have a mechanism for physician grievances created within the Arizona Department of Insurance (DOI). The DOI seems an ideal avenue for this type of action since they are a regulatory body that oversees and regulates the activities of the insurance industry within the state of Arizona.

I look forward to working with the DOI to improve physicians’ ability to meet their patients’ needs and to improve the efficiencies of the private office practice. AM Nathan Laufer, MD, is the 124th ArMA President. Dr. Laufer is a cardiologist and the medical director of the Heart & Vascular Center of Arizona.

1 “States where health insurers are squeezing out competition.” AMA Wire®. September 8, 2015. http://www.ama-assn.org/ama/ama-wire/post/ states-health-insurers-squeezing-out-competition.

2 Dan Polsky, PhD and Janet Weiner, MPH. “State Variation in Narrow Networks on the ACA Marketplaces.” Data Brief. August 2015. Leonard Davis Institute of Health Economics at University of Pennsylvania and Robert Wood Johnson Foundation. http://ldi.upenn.edu/sites/default/files/rte/state-narrow-networks. pdf.

3 Sun, Lena H. “Watch out for surprise medical bills when you’re in the hospital.” Washington Post. September 1, 2015. http:// www.washingtonpost.com/news/to-your-health/wp/2015/09/01/ watch-out-for-surprise-medical-bills-when-youre-in-the-hospital/

Because not all solutions are black and white.

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Trends In Healthcare Delivery & Payment EDITORIAL

Health care isn’t about producing plastic cards For decades health care policymakers have been trapped inside a box of their own making. As health care costs continue to rise well in excess of the cost of living, while access to quality health care

Jeffrey A. Singer, MD for everyone remains a stubborn problem, reformers focus on producing plastic cards that symbolize “coverage” of health care costs by a third party payer—be it the government or a government-regulated insurance company. But focus is on the wrong target. The goal should not be “coverage.”

It should be: Better Health Care For More People At Lower Prices Year After Year.

This will never happen as long as we remain within our outdated box.

8 AZMedicine | Fall 2015

Our box took years to construct. It began back in the 19th Century, when America’s “regular” doctors created the American Medical Association (AMA), with the express mission of lobbying state legislatures to license physicians. The idea of occupational licensure was alien to the young republic, and the AMA at first met resistance. But by the dawn of the Progressive Era, licensure became rather common for various occupations. State medical licensing boards originally consisted of the state-based medical societies, but then expanded to include lay people. The AMA later directly involved itself in the accreditation of medical schools, and, after it funded the Carnegie Foundation’s famous Flexner Report, was able to place strict limits on the production of new physicians. This also led to marked increases in the costs of medical education.

With the advent of the Great Depression, hospitals united to create Blue Cross, and later partnered with state medical societies to create Blue Shield,

The goal should not be “coverage.” It should be: Better Health Care For More People At Lower Prices Year After Year. which were the precursors of first-dollar coverage via third party health plans, and led to a jump in health care utilization by the general public. In the 1930s, 1940s and 1950s, politicians got into the act, offering large publically funded grants that went toward the expansion of hospitals, research centers, and medical schools. The McCarran-Ferguson Act allowed each state to establish its own cartel of health insurance companies, barring the sale of health insurance from other states. These health insurance cartels complemented the medical professional cartels already in existence in each state. Meanwhile, Congress passed a law in the early 1950s that made employer-provided

health insurance a taxexcluded benefit, leading to a massive expansion in the third party system. Individually purchased health insurance does not receive that exclusion.

By the 1970s, 90% of people who had health insurance received it through their job— this insurance was chosen by the employer, and was not portable to another job.

Medicare and Medicaid added large chunks of the population to the third party payment system—in this case a single third party: the government.

This led to ever-increasing demand and resulting higher prices.

Government regulations came into play, in attempts to rein Continued on page 10

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Continued from page 8

in costs by placing controls mostly on the supply side, rather than the demand side.

The Nixon Administration created subsidized HMOs, and incentivized states to set up “Certificate of Need” programs, still in existence today in 35 states and the District of Columbia, whereby expansions of hospitals and health care facilities or even additions of equipment require government approval, often after input from the incumbent competitors.

As in the case of most government-regulated cartels, the medical cartel, hospital cartel, and insurance cartel all achieved what economists call “regulatory capture.” This is when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. The cartel incumbents, particularly the larger ones, adapt well to the regulatory environment and take advantage of the high costs of regulatory compliance to keep out new, less well capitalized entrants. This, for example, is a reason why hospital associations are often opponents of repeal of Certificate of Need Laws.

So today we have skyrocketing health care costs, a web of regulations growing denser by the moment, and compliance

10 AZMedicine | Fall 2015

costs that are stimulating the flight of physicians from private practice along with the consolidation of hospitals, medical clinics, insurance companies, and pharmaceutical companies. Economists tell us that consolidation leads to higher prices and fewer choices.

Yet policymakers apply the same remedies, year after year, to the unintended consequences of their earlier interventions: expansion of the third party payment system and new layers of regulations.

The third party payment system prevents normal market forces from working.

The health care providers and hospitals are negotiating their prices with the third party rather than the consumer.

The third party payer has a completely different set of interests and priorities than does the consumer/end user.

The consumer is never offered a direct, transparent price. The consumer is actually out of the loop! Without transparent prices negotiated between the consumer and the producer (provider), market forces are unable to work. There is no realistic feedback between production and consumption

using the pricing mechanism.

Innovation is, likewise, not consumer-driven, but rather driven by the interests of the third party.

To get us better health care for more people at lower prices year after year, reforms need to be focused on minimizing the third party payment system.

Health insurance should be used only for unforeseen, unpredictable, catastrophic events. It should not be used for health maintenance or planned events—just like people do not use homeowners insurance to paint their house or replace their insulation.

The best example we have today of an essentially unfettered free market is the Internet. Economists have spoken about the “permissionless

innovation” that the unregulated Internet has fostered.

These innovations need no permission from a regulatory agency. Some of these innovations have been “disrupters.”

The advents of Uber and Lyft have disrupted the taxi cartels in the various cities, and the cartels have looked to their captive regulators to try to fend off the threat. The same thing is occurring with companies such as AirBNB, and other pioneers of the new “gig” economy. These disrupters also threaten the political class because they challenge the regulators’ ability to oversee and tax the new independent contractors. The various cartels don’t like these new disrupters.

But the consumers are voting for them with their wallets.

state licensing laws, as people are able to get advice and/or treatment from practitioners who are out-of-state or even offshore.

Offshore clinics are blossoming, as is the phenomenon of “medical tourism,” where people get health care at low prices by private clinics in other countries.

If health care broke out of its box, we can see a rise in “permissionless” disruption that will rebound to the benefit of the health care consumer.

We see it already starting to happen. More and more providers are opting out—partly or completely—from the third party payment system.

Surgical and other specialty hospitals, clinics, and practitioners are proliferating that take no Medicare, Medicaid, or insurance. They are offering quality care at transparent prices, often much lower than those offered in the third party payment system. And they are competing for consumers’ business.

Some states are enacting “pricing transparency” laws to facilitate the growth of “Direct Care” or “Third Party Free Practice’ (TPFP). Websites like Medibid.com, provide platforms for consumers and providers to negotiate cash prices for medical services.

Innovations such as telemedicine, enhanced by amazing advances in communication technology, are challenging

These reforms will continue to get pushback from the old, rusty cartels. But it appears that, no matter how resistant the old guard and their friends in the ruling class continue to be, the walls of the box are starting to buckle, and an ever-growing number of patients will be getting their care from providers outside of

To get us better health care for more people at lower prices year after year, reforms need to be focused on minimizing the third party payment system. the old system. When the box completely breaks apart, we will see better health care for more people at a lower price year after year. Until that time comes, the cartels and their captive regulators will keep making plastic cards. AM

Dr. Singer is the Supervising Editor of this issue of Arizona Medicine. He is a general surgeon in Phoenix, an adjunct scholar at the Cato Institute, and gives a course on “America’s Health Care System: Historical Origins and Contemporary Issues” at Arizona State University Extension.

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Fall 2015 | AZMedicine 11

Trends In Healthcare Delivery & Payment

Price Transparency, Disruptive Innovation, and Legislative Reforms Harvard professor, entrepreneur, and author Clayton Christensen coined the phrase disruptive innovation to describe new products or

Eric Novack, MD ideas that begin with simple applications in a market and ultimately grow to displace and eclipse established, ‘big’ competitors.

In healthcare today, where there is more upheaval and uncertainty than ever before, in an annual market exceeding $3 trillion, the opportunities to use the principles of disruptive innovation to keep patients in control of their health care decisions have been ongoing in Arizona and around the country. Given the extent to which regulation at both the state and federal level increasingly impacts health care delivery, these efforts

12 AZMedicine | Fall 2015

include citizen initiatives, legislation, and in the courts.

In 2010, Arizona became the first state to place a right for patients to spend their own money for lawful health care services and for health care providers to accept direct payment for lawful health care services protected in her constitution.

Practically, this means that the state, directly or indirectly through law or rule, shall not penalize patients or doctors from engaging in direct pay relationships for the delivery of legal health care services including patients on AHCCCS. While this may sound intuitive and obvious, the federal government prevents this same right for Arizona residents on Medicare who seek to get care from participating Medicare providers.

Single payer advocates, and some in the insurance and hospital industry, oppose this right as well. And it is worth noting that Democrat Presidential nominee frontrunner Hillary Clinton, during her effort to push through her health reform plan in 1994, would have eliminated this right for all Americans.

For Arizona physicians, this means you can package and price your services for direct pay in the manner and at the level you see fit and present those to your patients...

While the constitutional amendment constrained the state’s legislators, agencies, and bureaucrats, Arizonans who had private insurance did not have the same protections. With the passage of the Affordable Care Act (ACA) and the upholding of the individual mandate tax by the Supreme Court, a bipartisan Arizona legislative effort in 2013 passed, over significant opposition from the insurance and hospital industries, an expansion of those protections for people with private insurance. Insurers would not be able to insert any ‘fine print’ into either provider or patient contracts. Additionally, patients who pay directly may now submit those receipts and, for covered services, be

eligible to have the amounts paid applied to their deductible, coinsurance, and other out of pocket requirements.

For Arizona physicians, this means you can package and price your services for direct pay in the manner and at the level you see fit and present those to your patients as an alternative to the complex, expensive and time consuming process of claims submission even if both you and your patient are contracted with the same insurer.

While few physicians have taken advantage of this, slow, progressive advancement of this now permanent protection stands to place an enormous amount of control back in the hands of patients.

The ACA has also significantly accelerated the trend toward more restrictive physician networks, higher out of pocket copays and deductibles, and an aggressive crackdown on out of network care.

Recognizing this, in 2015, a bipartisan group of legislators passed an enhancement of the 2013 law whereby direct payment for covered services to out of network providers can be applied in the same manner to patients’ in network deductibles. This provision goes into effect at the end of 2016. The actual statutory text can be found by searching for Arizona Revised Statutes 32-3216 and 36-437.

Establishing, protecting, and slowly growing the regulatory ‘breathing room’ for patients to not be penalized for seeking out care directly creates the opportunity for true disruptive innovation. Entrenched interests will not, however, cede any control easily—so vigilance must be maintained to protect and expand these gains.

At the federal level, bipartisan sponsored legislation in both the House and Senate known as the AIM Act- Accelerating Innovation in Medicine has been introduced this Congress. The AIM Act will allow device manufacturers to designate new devices as being outside the Medicare reimbursement system for a renewable period of 3 years.

So, once the new device is approved or cleared by the FDA, it will be immediately available for patients without

Establishing, protecting, and slowly growing the regulatory ‘breathing room’ for patients to not be penalized for seeking out care directly creates the opportunity for true disruptive innovation. additional administrative costs or delays.

The benefits to patients, providers, and even the federal government are many, including, more rapid availability of new therapies, more real world data on efficacy, lower Medicare spending, and unleashing entrepreneurial spirit and creativity for new, better devices.

Learn more and get your voice heard at www.aimactalliance. com.

While the ‘big’ Obamacarerelated court cases have drawn most of the attention, there are two cases currently under the radar have the potential to have substantial disruptive innovation impact.

The first involves whether companies may distribute truthful information about ‘off label’ uses of their products.

The FDA prohibits companies from promoting off label uses to doctors or other providers, but what about the companies simply giving doctors truthful information – for example, independent medical journal articles – about their products?

The FDA has suggested that this would be illegal.

One company has taken the FDA to federal court, making the case that preventing

truthful and non-misleading speech is a violation of their first amendment rights. In early August, federal district court judge Paul Engelmayer decided the case in favor of the company, explaining in a 71 page decision that government may NOT block truthful speech.

The Obama administration FDA has not yet decided how it will respond.

Another new case could have equal or greater disruptive impact. Copays are an essential component of the current 3rd party payment system. Patients are led to believe that the copay is the ‘part of the payment covered by the patient, with insurance picking up the rest of the cost’ (subject to deductibles and coinsurance). But, in many cases, the copay amounts are far higher than the direct pay cost of the health care service or medication.

A class action lawsuit against pharmacy giant CVS makes the case that the copay system has been a ‘massive fraud’ against consumers since the company’s cash pay discount program is, in many cases, vastly less expensive than the insurance copays for the exact same medication.

The implication that having

insurance gives you access to a ‘discounted’ medication when in fact the company is substantially overcharging patients relative to the cash price certainly appears to be, at minimum, highly unethical, and quite possibly, fraudulent.

CVS and the other huge, entrenched players in health care will be willing to fight this by any means necessary, as it threatens the very foundation upon which they stake their value to consumers.

In today’s world, striving to keep patients and families in control of their health care decisions means fighting to innovate in every arena.

The ever more regulated and government-controlled nature of our $3 trillion health care market requires physicians to both pay attention to, be aware of, and, hopefully, act at the local, state, federal levels and even use the legal system to retain and regain ‘territory’ to allow for the disruptive innovation that has served our country and our patients so well in the past. AM Eric Novack, MD, is a Phoenix-area orthopedic surgeon with OrthoArizona. He led the 2010 Health Care Freedom Act ballot initiative and authored and advocated for the 2013 and 2015 transparency and direct pay laws.

Fall 2015 | AZMedicine 13

Trends In Healthcare Delivery & Payment

Alternatives to the Health Insurance Paradigm With the onslaught of government and insurance intrusion into medical practices and declining reimbursement, physicians have turned to

Gerard J. Gianoli, MD, FACS alternative forms of medical practices. This movement started slowly 10-12 years ago but has accelerated in the past six years due to the Affordable Care Act (ACA). In this article, we relay our story of converting a surgical specialty practice, Neuro-otology, into a third party free practice (TPFP). A TPFP is a practice with no insurance contracts, has opted out of Medicare and Medicaid, and accepts payment only from patients.

In 2001, our practice decided to opt out of Medicare. We started charging Medicare patients a reasonable cash price where our

14 AZMedicine | Fall 2015

overhead would be covered and we would make a small profit.

After opting out of Medicare, our revenue went up. Many of the Medicare patients still came to see us because we had a reputation of providing good service. Of course, some Medicare patients stopped seeing us and cited our payment policy as the reason. However, the empty clinic spots were soon filled by patients with better paying insurance plans. Lastly, many of the patients who left us later came back.

Recognizing the general trend of increasing bureaucracy and lowered reimbursement stemming from the commercial insurers, from 2001 to 2005 we gradually eliminated insurance contracts and, in November of 2005, we cut ties with our last insurance company. We have been a completely TPFP since then.

During the transition to TPFP (2001-2005), we witnessed intermittent drops in revenue after cutting a contract, followed by a usually quick return to the revenue baseline.

However, after eliminating our last contract in 2005 we saw a more prolonged decline in revenue of 35% over the

course of 2 years before there was a rebound (Table 1). The counterbalance to this drop in revenue was a drop in overhead. We had gone from 11 FTEs to only 5 FTEs during that time period. We were concerned about our drop in revenue, but had prepared for this inevitability by eliminating debt, both professionally and personally, as well as having a cash reserve.

In the four years following the nadir of our revenue decline, we saw our revenue grow by a multiple of 2.5, such that our revenue was 60% higher than when we cut our last contract with the still significantly reduced overhead. We would liken our practice after 2005 to starting a new practice and building it from scratch.

It would seem we were at a disadvantage to our competitors considering that we would charge cash at the time of service and almost everyone else would accept the patient’s insurance and their nominal copay. However, by not being contracted with any insurance company we had tremendous advantages. We could spend as much time with each patient as was needed.

Evaluation of vertigo and dizziness requires an extensive history and physical exam.

In the third party payment system, you get paid about as much for a 2 minute visit for cerumen removal as you get for an hour and a half visit with a vertigo patient. Vertigo patients require extensive vestibular and auditory testing – all of which is underpaid by the third party system. Lastly, vertigo/dizzy patients require extensive education and counseling – none of which is paid for by the third parties.

Because of these difficulties, many of my colleagues have responded by simply eliminating the evaluation of vertigo/ dizziness from their practices.

Among those that continue to see vestibular patients, many limit the number of dizzy patients they will see. Others have the dizzy patient seen by the PA, NP or resident.

By contrast, in our practice, we – neuro-otologists with 7 years of specialty residency and fellowship training and each with more than 20 years of experience in the field, not the resident, PA or NP – see the dizzy patients. We do this in a timely manner and typically spend an hour or more

Revenue

1.6 1.4

Last contract cancelled

1.2 1.0 0.8 0.6

Stopped advertising

Opted out of Medicare

0.4

Started advertising

0.2 0

Overhead progressively declined 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Table 1. Revenue Chart for our practice as we transitioned to a third party free practice.

on their initial visit. We do the extensive testing and the education/counseling personally.

Because we have much more experience and expertise than the PA, NP or resident we are better able to get resolutions for our patients in an expeditious manner. We can do this because we can charge a reasonable fee and not have to deal with the insurance companies or Medicare. We actually get paid what we charge. If our competitors practiced like this while contracted with the third party payers, they would go bankrupt.

Our current practice is as follows. We are 100% TPFP with no contracts linking us to any insurance entity. We are not HIPAA-compliant since we do not transmit any covered transaction electronically. We are not compliant with Meaningful Use since we do not

accept any money from CMS. Similarly, we do not participate in PQRS or any other government, bureaucratic alphabet soup, nonsense demands that are currently badgering physicians in America.

We work for our patients and no one else. When a patient calls the office, they are told in advance the cost of the visit and/or testing prior to scheduling the appointment. There are no surprise bills afterwards.

Patients can decide to schedule after hearing the cost. At the time of service, the patient pays us. In return, we give the patient an insurance form which they submit to their own insurance company for direct reimbursement to the patient.

How much the patient is reimbursed varies according to their insurance benefits. We have no accounts receivables and we don’t send out bills.

There are a multitude of reasons to transition your practice to a TPFP. However, there is one good reason not to transition: to make more money.

The easy way to make money in medicine in the year 2015 is to sign up for every insurance plan. Then have your staff schedule double-booked appointments every 10 minutes. In doing this, you will generate a lot of revenue. However, the quality of the medical care you would deliver would be poor at best. If you have any conscience, you wouldn’t be able to look at yourself in the mirror. These “medical mills” are being advocated by medical practice consultants and will lead to your demise.

By contrast, the TPFP is not nearly as lucrative. However, if you keep your overhead low and provide quality care and

time for your patients, you will make a reasonably good income. More importantly, you will be able to spend time with your patients and you will be much happier in your medical practice.

When we transformed to a TPFP, less than 1% of physicians had a cash-based practice.

Most of our colleagues thought we had gone off the deep end and our practice would soon go bankrupt. However, we looked to the future anticipating one of three outcomes for physicians: 1.) Quit clinical medicine 2.)

Transition to TPFP, or 3.)

Become an employee. Time has proven our predictions correct. As of 2014, 7.2% of physicians had some form of cash-based practice with an additional 13.3% anticipating a move in this direction within the next few years.1 While it is easier to become an employee than to change a practice to TPFP, the burden of third party intrusion and corporate bosses complicate the diluted patient-physician relationship. We feel that the practice of medicine is more fulfilling as a TPFP in spite of the difficulties in transition. AM Gerard J. Gianoli, M.D., F.A.C.S., is a private practice neuro-otologist in Covington, Louisiana.

1 2014 Survey of America’s Physicians. Practice Patterns & Perspectives. The Physicians Foundation. Merrit Hawkins.

September, 2014. Available at http://www.physiciansfoundation. org/uploads/default/2014_ Physicians_Foundation_ Biennial_Physician_Survey_ Report.pdf Accessed on May 5, 2015.

Fall 2015 | AZMedicine 15

Trends In Healthcare Delivery & Payment

The Power of Transparent Healthcare Pricing: The Surgery Center of Oklahoma Experience Eighteen years ago, Dr. Steve Lantier and I did what we had been told by the big hospital system administrators was impossible: opened the Sur-

G. Keith Smith, MD gery Center of Oklahoma with a mission to deliver the highest quality care at an affordable price. We further decided to accept no federal funds and adopt what we now are calling price transparency.

Almost immediately after opening we found ourselves quoting bundled, all-inclusive prices for surgeries over the phone to patients with high deductibles and those with no insurance at all. Our “impossible” vision is now an incredible success story, soon to be completely free of third party payment, as well.

16 AZMedicine | Fall 2015

Then as now, we maintain profitability with prices one sixth to one tenth what the socalled “not-for-profit” hospitals charge for the same procedures across town. We had no idea how radical our business model was until much later, having heard countless stories from patients that could never get an answer to their simple question: “how much will this procedure cost?”

The attacks on our facility by the usual corporate healthcare suspects began early, each of which backfired as our reputation for high quality was established early on in the community. For instance, legislative mandates (requiring that a certain percentage of a surgery center’s revenue come from Medicare, Medicaid and uncompensated care) not only failed to pass, but rather, completely exposed the cronies seeking these obvious and targeted anti-competitive measures. Seen as the “underdogs” and the champions of the uninsured, legislators not known for their support of free market principles came to our defense. We had enough

“friends” on both sides of the aisle to keep these attacks from gaining any traction.

Insurance carriers wanted no part of including us in their “networks,” a stance that has become clear to us only recently. You would think that the carriers would want low prices and high quality, but nothing could be further from the truth, as counterintuitive as this may seem. We could not understand our exclusion from the “networks,” even though we had inadvertently been given the clue we needed: “uncompensated care” was included as a revenue source along with Medicare and Medicaid in one of the legislative attacks. This was the missing puzzle piece that later allowed for a more complete understanding of the scam of healthcare pricing in the U.S. It turns out that hospitals receive a kickback from the federal government to the extent that they don’t collect on the ridiculous amounts they charge. The more they claim they have “lost” the more they make. That is why there is a building crane in front of most

emergency rooms (ostensibly the loss-leader at any hospital).

Hospitals also need all the red ink they can find to justify the fiction of their “not-for-profit” status. While this part of the scam is pretty easy to understand, this still doesn’t explain why the carriers wanted no part of cheaper and better.

“Claims re-pricing” is the key, where insurance carriers “sell” discounts. To the extent that a hospital bill is “discounted,” carriers typically charge (usually an employer health plan) for the discounts achieved.

For example, a $100,000 hospital bill “discounted” to $20,000, results in a commission paid to the carrier on the $80,000 “saved.” It is not rocket science to see that the carrier would rather see a $200,000 bill than a $100,000 bill, to maximize their “repricing” opportunity.

It should now be apparent why the carriers wanted no part of our saying, “here is your knee arthroscopy and that will be $3740,” for this price transparency left them no opportunity to re-price the claim and bill

Our “impossible” vision is now an incredible success story, soon to be completely free of third party payment, as well. for any discounts achieved.

Another common (and much more sneaky) practice is for the carriers to deduct one amount from an employer’s health plan, then render a much smaller amount to the physician/facility, the difference (the re-priced amount) remaining undisclosed to the employer.

I have taken some time and space to explain this scam in detail because this revelationscam might have never been clear to us had we not taken the simple step of posting our prices online. We launched a website (www.surgerycenterok. com) a little over six years ago after the carriers began stacking “in” and “out” of network deductibles, a move which took a heavy toll on our business as patients could no longer financially justify using our facility. In a free market, we knew that cheaper and better should have filled our waiting room and our waiting room was becoming increasingly empty as a result of this deductible stacking attack.

Posting prices online has once again filled our waiting room and shined a bright light on the underworld of the health cronies that would bankrupt all of us if left unopposed.

We have operated on patients from all fifty states (except

Hawaii) and many from Canada, each drawn to us by our online pricing. Self-funded health plans (companies paying for the health needs of employees from operational revenue, rather than buying traditional insurance “coverage”), have the same sticker shock uninsured individuals have and are thus motivated shoppers.

The shocking savings these health plans have realized utilizing our facility no longer remains a secret in the selffunded “community” and the number of arrangements we have made with these company health plans has grown and is growing at an incredible pace. Many of these company

plans happily pay the travel expenses for their employees to come to Oklahoma City for their surgery, as even with the travel costs considered, the total amount spent for any given surgical experience remains a fraction of what the local “not for profit” hospital would have charged.

More and more physicians and facilities, having embraced the wisdom of transparent pricing and the principles of the free market are disrupting the status quo. So many are involved in this movement that a national group, the Free Market Medical Association (FMMA) was formed. The FMMA (www.

marketmedicine.org) serves to connect the buyers and the sellers in this newly competitive health marketplace without the interference of the ticket-scalping intermediaries.

The huge and early growth of this organization signals a future deflation of the ridiculously priced health care in the U.S., accompanied by a simultaneous boost in quality.

That is what the market does, after all, in all other industries.

Our experience has shown that this can be an opportunityfilled, exciting and promising time for all those in health care who are willing to embrace the healthy competition so foreign and obnoxious to those currently running the health cartel in this country. AM G. Keith Smith, MD is an anesthesiologist in Oklahoma City, and Co-founder of Surgery Center of Oklahoma (www.surgerycenterok. com) as well as the Free Market Medical Association.

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Fall 2015 | AZMedicine 17

Trends In Healthcare Delivery & Payment

Self-Ordered Testing: Another Dying MD Cash Cow, Patient Autonomy and 21st Century Economics “...60-70% of all decisions regarding a patient’s diagnosis, treatment, hospital admission and discharge are based on laboratory test results” — Mayo School of Health Sciences, May 8, 2015 Last Century, most Doctors’ offices had ancillary income streams: x-ray, EKG, dispensing oncology and other meds, and often a small lab.

Ronald P. Spark, MD

Eroding reimbursement and profit margin have caused an abandonment of most of these cash cows. I can speak to that.

I’m Medical Director of three labs, each in a different setting: university health service, internist group office and small rural hospital. Because of varying degrees of overhead

18 AZMedicine | Fall 2015

pricing, none can currently be competitive with what the Big Reference Labs charge.

The outpatient test industry is $60B yearly and another $25B for lab equipment. The Reference Labs have great economic sustainability by being embedded in the American Health Bio-industrial Complex. But, the mid and long term outlook just became grimmer for them and in-house labs with the entry of Self-Ordered testing and Theranos.

reimbursement. They claim their pricing is roughly half of what an insured consumer pays for independent lab testing.

Augmented by internet access, consumers are becoming more and more health concerns educated. So, unless you have Cadillac insurance, many will now shop around for the least out of pocket charge.

Many consumers who opt for high-deductible health insurance for lower premiums have sticker shock when asked to pay lab test fees out of pocket. Many only get the jolt when the lab bill arrives a few weeks after.

Another headache is finding and waiting hours at an out-patient phlebotomy site. In contrast, at least in Phoenix, where 40 Walgreen’s have Theranos Wellness Centers, there’s patient convenience. Some insurers may also eventually decide to reimburse consumers for self-ordered testing. That will save the both insurers and consumers money. Another attraction is that blood sampling is minimal for those who are tryanophobic (fear of needles).

Theranos posts prices often at or less than Medicare

Another major alignment of self-ordered lab testing is

empowering consumers to take control of their health care decisions. The late 20th Century saw the emergence and growth of over the counter meds and lab tests. This paralleled the access and use of the internet for medical information. Physicians have always encouraged and taught patients to take control of their care.

So, this convergence shouldn’t be a surprise. But having to wait a couple of weeks for a doctor’s appointment doesn’t sit well with the demand culture: I want what I want when I want it! Think pregnancy or HIV tests. HIPAA rules give consumers unfettered access to

their test results and why have to wait for a physician’s call maybe a week later?

So what are the untoward effects? No doctor wants his/her patient to opt for an important move without consultation. That said, I am finding many, especially newly minted MDs know less about lab tests, confounding technical concerns and potentials for misinterpretations. Patient management based on lab results then can be problem-

On the face of it, self-ordered testing holds the promise of reducing consumer costs, speeding decision-making for appropriate care and further self-educating the Public about disease prevention and active self-management.

Like all physicians, I have a major concern about flagged and especially critical lab results. to providers, even if they’re not expecting one.

Like all physicians, I have a major concern about flagged and especially critical lab results.

I can recall a late Friday draw with a critical value

and no response from the answering service and no pick up on the rural phone call. I wound up calling the Sheriff to make a wellness check. With self-orders, whose responsibility will this fall to? If this is a PhD-directed lab, should they give medical advice? How do you give cogent direction without accessing the patient’s EHR?

Hmm, I think I’ll just check my thyroid function now! AM Ron Spark, M.D. teaches at Arizona College of Medicine and the College of American Pathologists.

He practices as Medical Director of Laboratories. Since 1990, he has contributed articles to AzMedicine and served on the Advisory Council.

For 11 years, he hosted “Prescription for Health” on Tucson AM radio and Cable TV.

Learn about medical liability and self-ordered testing on page 24.

We, physicians and consumers, are all trying to cope with this new era of consumer-driven health care.

atic. That’s why more and more reports have interpretive paragraphs. Now that responsibility, when it’s a self-order, falls squarely on the wellintended but medical science naïve consumer. Of course, self-ordering can only feed a hypochondriac’s affliction!

Wisely, the Arizona Statute states that no provider has medical care responsibility unless they’ve ordered the lab test. Many lab order entry programs still have a provider field just in case the self-orderer wants that option. In that case, the lab report will be sent

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Fall 2015 | AZMedicine 19

Trends In Healthcare Delivery & Payment

Physician Employment — Temporary Trend or Paradigm Shift?

There is no disputing the fact that the number of physicians employed by health care entities has increased dramatically over the last ten

Marc Leib, MD, JD years. To determine whether this is a short-term trend vs. long-term paradigm shift, we must examine the economic forces driving these changes and evaluate whether they are likely to remain in place long-term. In addition, we must assess the risks of ignoring a trend that could, in fact, remain in place for the long-term.

Embracing change while ignoring fundamental economics is fraught with dangers. Most trends “continue until they don’t.” Forgetting this can have disastrous financial implications, such as the dot.com bubble, the real estate bubble, stock market collapses 20 AZMedicine | Fall 2015

and other economic calamities. When hospitals embraced physician employment during the 90s, they underestimated the costs of owning practices and overestimated their abilities to collect professional fees, resulting in extensive losses, the unwinding of those employment relationships, and the loss of hundreds of millions of dollars in a matter of a few years.

On the flip side, failure to recognize long-term market changes can also have devastating results. Some may remember Digital Equipment Corporation. DEC was a leading computer company of the 80s, but one of the DEC’s founders dismissed the rising trend of personal computers.

He opined, “the personal computer will fall flat on its face in business” and likened PCs to “toys” for playing video games. The results were disastrous, with DEC being left behind in the paradigm shift from mainframe computers to PCs, eventually failing as an independent company.

Returning to the question at hand, powerful economic drivers for both physician-employees and

Decreasing professional fees and increasing practice expenses have increased the economic risks of opening and managing small physician practices. hospital-employers must be present to explain such a significant increase in physician employment. Unmatched desires to be either employee or employer would not result in the number of employment arrangements that have developed over the last decade. It is the strength of those drivers that will determine whether this is a temporary trend or a paradigm shift. If these drivers are likely to continue it would strong indicate that we are facing long-term changes that will continue over the next decade or longer.

Much has been written about the changing priorities of young physicians. Although they seem to be more interested in achieving a balance between their work and

personal lives, it is not because they are less professional or less driven than previous generations of physicians. Rather, they are making rational decisions based on current economic conditions. Decreasing professional fees and increasing practice expenses have increased the economic risks of opening and managing small physician practices.

Compound that with the uncertainty of attracting patients due to controls exerted by payers through restrictive network contracting and the probability of success is far less certain for new physicians than for previous generations of private practitioners.

Add to this the potentially significant financial penalties under the recently

into employment relationships is evidenced by the types of positions available for new and relocating physicians.

passed Medicare Access and CHIPS Reauthorization Act (MACRA), which repealed the Sustainable Growth Rate (SGR) formula and replaced it with the Merit-based Incentive Payment System (MIPS) beginning in 2019.

Scoring in the lowest tiers of the MIPS range will result in fee decreases of up to 9% for Medicare patients.

Given these economic pressures, it is not surprising that many new physicians gravitate towards employment situations. Even established physicians are feeling the pressures of changing health care economics, driving some to sell their practices to local hospitals, close their practices and look for employment in other settings, or change their practice type to eliminate third party payors.

Government and private payers are also challenging hospitals to decrease costs and increase quality. Economic pressures include financial penalties for failing to meet standards and implementing

alternative payment models (APMs), such as Accountable Care Organizations (ACOs) and bundled payment arrangements. A number of APMs involve a single payment for an entire treatment episode, including physicians, hospital and post-discharge

According to recent reports by Merritt Hawkins, a large physician recruitment firm, over 90% of the current physician job openings are for employment situations, with less than 10% for independent practice opportunities. This means that for the foreseeable future the number of employed physicians will increase much faster than the number of those practicing independently, all but guaranteeing an increas-

economic pressures on physicians and hospitals. This, in turn increases the likelihood that providers will find it beneficial to create their own efficiencies by joining together into integrated networks.

Although physician employment is not necessary to create such networks, it seems that a significant number of physicians and hospitals currently see employment as mutually beneficial.

Whether this is a trend that will reverse itself as it did during the last physician employment binge by hospitals in the 1990’s or is a true, long-term paradigm shift in physician-hospital relationships is almost impossible to know. If it is a trend, the

The increased desire of physicians and hospitals to enter into employment relationships is evidenced by the types of positions available for new and relocating physicians. care. Although it is certainly not necessary for everyone involved in bundled payment arrangements to be part of a single organization, it is much easier to address the medical and financial issues when they are. Hospitals believe they can better achieve mandated goals if the hospital and a significant percentage of its physician staff are working towards those same goals as a single entity.

The increased desire of physicians and hospitals to enter

ing percentage of employed physicians.

Given the current economic environment, it appears that the trend toward physician employment arrangements will not only continue, but the rate at which those arrangements occur is likely to increase over the next five to ten years. Recent consolidation among payers has resulted in fewer large national payers, increasing their ability to exert

bubble will burst (the end of most trends), if a paradigm shift, the practice will endure for the long-term, resulting in a true change for the health care system. But, temporary trend or paradigm shift, given the nature of the economic forces involved, this change is likely to continue for the foreseeable future. AM Marc Leib, MD, JD, is an anesthesiologist, attorney and past president of ArMA.

Fall 2015 | AZMedicine 21

HSAG

Vistas

Quality Improvement and Value-Based Payment: It’s Not Your Father’s Medicare Anymore “Cost is not something we can put on the back burner any longer. If we waited until all of the various stakeholders thought any of this was perfect, we’d never do anything.”

— John Santa, MD, Medical Director of Consumer Reports

By Howard Pitluk, MD, MPH, FACS & Mary Ellen Dalton, PhD, MBA, RN The Affordable Care Act (ACA) of 2010 mandated the creation of a National Quality Strategy (NQS) to serve both as catalyst and compass for a nationwide focus on quality improvement and measurement. The NQS is guided by the aims of providing better, more affordable care for individuals and better health for communities. The NQS also created a mechanism for measuring healthcare delivered to patients through the use of electronic health records in both hospitals and provider offices.

By aligning its own quality strategies and goals with those of the NQS, the Centers for Medicare & Medicaid Services (CMS) positioned itself to become an active purchaser of quality healthcare rather than a passive payer of services regardless of value. In the Summer 2015 issue of AzMedicine, Health Services Advisory Group (HSAG) described how federally mandated health policy creates value for patients and providers. As a result, recently legislated programs are shifting the practice of medicine to a value-based reimbursement model that rewards quality care as documented through public reporting (hospitalcompare.gov and physiciancompare.gov) and leads to improved population health outcomes.

In this issue, we focus on some of the specifics of these federal initiatives that promote higher quality, more efficient healthcare.

22 AZMedicine | Fall 2015

As the Medicare Quality Improvement Organization (QIO) for Arizona, HSAG engages providers to improve the quality and efficiency of care through technical assistance and education that aligns with the NQS. Central to this effort are three federal programs that directly affect physicians and patients by linking reimbursement to quality and cost. These programs are the Physician Quality Reporting System (PQRS), Physician Feedback Program/Value-Based Payment Modifier (VM), and Meaningful Use (MU) of electronic health records (EHRs).

Promoting Higher Quality, More Efficient Healthcare As one of the CMS federal pay-for-reporting initiatives, PQRS serves as the foundation for ascertaining the quality of care individual or group practices are providing through EHR submission of evidence-based quality measures. Combined with Medicare Fee-for-Service (not Medicare Advantage) claims data, CMS is able to calculate a composite score for individuals and groups of providers that reflects the value of services provided. The result is an individual Quality and Resource Use Report (QRUR) for each provider or provider group that determines whether the care and its cost are above average, average, or below average as compared to national benchmarks. This affords practitioners the ability to assess the quality of care they provide and the frequency with which they meet certain metrics compared to the cost of care during a performance period.1 The report is then used in the development of a VM for differential payment on a per-claim basis under the Medicare Physician Fee Schedule (PFS). Providers successfully submitting PQRS measures data in 2015 qualify for incentive payments and automatically avoid payment adjustments in 2017.2 Because the program is budget-neutral, the number of practices receiving incentive payments is offset by those practices who either fail to report PQRS measures or whose QRURs reflect high-cost and low-quality care resulting in a payment penalty.

HSAG works with providers to help with interpretation of CMS guidelines concerning VM and conducts no-cost, provider-directed training and advising to effect practice changes necessary to meet VM payment adjustment requirements. Moreover, HSAG’s involvement with practices helps in identifying opportunities for improvement in quality and efficiency that improve physician office work flow and patient outcomes.

The EHR MU program rewards eligible professionals as they adopt, implement, upgrade, or meaningfully use certified EHR technology.

The EHR MU program rewards eligible professionals as they adopt, implement, upgrade, or meaningfully use certified EHR technology. This program, which began in 2011, allows for an annual payment incentive of up to 75 percent of an eligible provider’s Medicare PFS to a maximum of $18,000 per year for five years, with a total maximum payment of $44,000 if the provider satisfactorily participates in the program.3 As of 2015, the program is no longer enrolling new practices, and the incentive payments will not be available for first-time participants. However, the other two payment incentive programs continue, and failure to participate in PQRS and VM programs will result in payment penalties.

Looking Ahead: Rewarding Value Through Payment Reform In January of this year, the U.S. Department of Health and Human Services (HHS) set forth specific goals and a timeline to transform the healthcare system’s payment model to one based on quality as opposed to quantity of care. This transformation aligns with the ACA and its mandated NQS goal of making quality care more affordable for individuals, families, employers, and governments by developing and spreading new healthcare delivery models that will phase in over the next three years.

Starting this year, the proposed framework for payment ties 30 percent of reimbursements to quality by using alternative payment models, such as accountable care organizations or bundled payment arrangements, progressing to 50 percent by 2018.4 Similarly, 85 percent of Medicare FFS payments will be tied to quality or value by 2016, increasing to 90 percent by 2018. 4

population health will continue to replace the present FFS structure and will drive healthcare delivery in the years to come.

For the physician provider, understanding and adopting these new federal payment models can be a daunting undertaking. HSAG, as the Medicare QIO for Arizona, is prepared and capable to supply the knowledge and technical assistance necessary to help navigate the sea change taking place.

Together with our physician and provider community, and always keeping the patient as the focus of all that we do, HSAG is there— as it has been for more than 35 years—serving as a resource and partner for healthcare improvement. AM

Howard Pitluk, MD, MPH, FACS, is Vice President, Medical Affairs & Chief Medical Officer; Mary Ellen Dalton, PhD, MBA, RN, is Chief Executive Officer.

Dawn Williams, BS, Director of Communications, assisted with this article.

This material was prepared by Health Services Advisory Group, the Medicare Quality Improvement Organization for Arizona, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. AZ-11SOW-D.1-08272015-01.

1 Physician Quality Reporting System Overview. Available at: https://www.cms. gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/ Downloads/PQRS_OverviewFactSheet_2013_08_06.pdf.

Accessed on: August 11, 2015 2 Value-Based Payment Modifier. Available at: https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/valuebasedpaymentmodifier.html# What is the Value-Based Payment Modifier (Value Modifier). Accessed on August 10, 2015 3 Centers for Medicare & Medicaid Services, Medicare Health Record Incentive Payments for Eligible Professionals. Available at: https://www.cms.gov/ Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/ MLN_MedicareEHRProgram_TipSheet_EP.pdf. Accessed on August 20, 2015 4 Better Care. Smarter Spending. Healthier People: Paying Providers for Value, Not Volume CMS 2015 Fact sheet. Available at: https://www.cms. gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheetsitems/2015-01-26-3.html. Accessed on: August 3, 2015.

The ACA has forever changed the landscape for healthcare delivery and payment in America. The days of Medicare operating as a passive payer of healthcare services are rapidly giving way to the new payment paradigm of an active purchaser of value-driven care. Alternative payment models that are linked to quality and

Fall 2015 | AZMedicine 23

MEDICAL LIABILITY

New AZ Law on Self Referred Laboratory Testing Q: Now that individuals may obtain lab tests without an order, what is my liability if I refuse to discuss the results with my patient of a test I did not order?

A. Arizona recently passed a law that allows a person to obtain any laboratory test from a licensed clinical laboratory on a direct access basis without an order if the laboratory offers that laboratory test to the public on a direct access basis. The law also requires the report of the test results to be provided by the lab to the person who was the subject of the test. The report must state in bold type that it is the responsibility of the person who was tested to arrange with the person’s “health care provider” for consultation and interpretation of the test results.

Paul Giancola, Esq. The law further provides that if the provider did not order the laboratory test: • The provider’s duty of care to a patient does not include any responsibility to review or act on the laboratory test result; and

The report must state in bold type that it is the responsibility of the person who was tested to arrange with the person’s “health care provider” for consultation and interpretation of the test results. with the person’s health care provider for consultation and interpretation of the test results.” The law does not state how “consultation” should take place, for example must it be in person, and it does not address whether a provider may refuse to interpret the results or should be compensated for interpreting the test results. However, if such a consultation occurs, regardless of the form it takes, the provider will now have a legal duty to the patient to competently review and act on the test results.

Providers who order a laboratory test have a duty to the patient to both review and act on the results. The legislature was presumably sensitive about imposing a duty (and liability) on providers to review and act on patient self-ordered (consumer) test results. For this reason, a provider has no duty to review and act on such test results.

It is likely that such direct access lab reports will be provided by testing labs and/or patients to providers. If this occurs, it is also likely that some providers will inadvertently review the results without being asked to or being aware it was self-ordered.

Although the law provides immunity for “failure to review or act on the results,” the law is ambiguous as to whether a “failure to act” would include a provider who inadvertently reviews the report, but fails to act on the results. Arizona case law suggests that in this situation, a provider who reviews the report likely triggers a duty to the patient to review it competently and to act on the results.

If a person wants a provider to interpret the test results, the law provides that the person tested is “responsible” to “arrange

For this reason, providers may decide to have staff screen for such self-ordered laboratory test reports to avoid the potential

• The provider is not subject to the liability or disciplinary actions for the failure to review or act on the results of the laboratory test.

24 AZMedicine | Fall 2015

inadvertently review the test results, you have likely assumed a duty and therefore potential liability to the patient for failure to appropriately review and/or act upon the results. As to whether a provider may refuse to interpret the test results on request with a patient, it may be acceptable to refuse if the test is outside of your scope of practice, if the patient refuses to make an appointment, or refuses to pay for the consultation. On the other hand, some providers may be pleased that their patients are proactively engaged in their own care, which is one of the claimed benefits of the law, and decide to review and follow-up on the results without a request for consultation or payment. However, if the patient is willing to comply with the law and arrange for a consultation, and the test is within the scope of your practice, a refusal could be a violation of the law and medical practice acts. AM This article first appeared in the June 2015, MICA Risk Advisory, as the Counsel’s Corner. It is reprinted with permission of MICA.

duty of care that could result from inadvertently reviewing them. Since it is the patient’s responsibility to arrange for consultation, unless reviewed, it is not the provider’s responsibility to follow-up with the patient when a self-ordered report is received.

Paul J. Giancola, JD, is a partner in the Healthcare Practice Group, Snell & Wilmer, LLP, Phoenix, Arizona.

Since it is the patient’s responsibility to arrange for consultation, unless reviewed, it is not the provider’s responsibility to follow-up with the patient when a self-ordered report is received.

As these lab reports are a communication related to a patient’s physical health or condition prepared by a provider, they should be kept as part of the chart. However, if not reviewed, I suggest specifically noting on it: “report received but not reviewed per A.R.S. §36-468(C).”

In summary, it is likely that some patients who obtain direct access labs will have them sent to their providers whether or not they request interpretation. Until a patient requests that it be interpreted as part of a consultation, there is no duty to review it and act on it. However, if you voluntarily or Fall 2015 | AZMedicine 25

AZ HEALTH COMMUNITY

Value-Based Reimbursement and Secure Information Sharing: Four Reasons to Participate in Arizona’s Statewide HIE In today’s health care landscape, government and commercial payers are asking providers to shift from volume-based care (fee for service) to a value-based reimbursement structure (fee for value) with a population health approach. Value-based reimbursement encourages health care providers to achieve a triple aim of better outcomes, improved quality and lower costs overall, challenging providers to transform their practice from a traditional “silo” model of episodic diagnosis and treatment to a network care model focused on effective, coordinated interventions and the treatment of patient populations.

Many providers are already engaged in these new payment and care management arrangements through participation in accountable care organizations (ACOs) and other value-based arrangements. To be effective in this new environment, providers will need to work more closely with other providers and with hospitals to better coordinate care, and they will need to be connected to other providers in order operate from more complete and comprehensive patient records.

Melissa Kotrys, CEO, Arizona Health-e Connection

Arizona’s statewide health information exchange (HIE), The Network, offers valuable information and help for providers in this new environment.

26 AZMedicine | Fall 2015

Value-based reimbursement encourages health care providers to achieve a triple aim of better outcomes, improved quality and lower costs overall Here are four reasons why providers in a value-based environment should participate in the statewide HIE: 1. Community provider participation fees have been eliminated and integration costs have been significantly reduced.

The Network’s Board of Directors recently approved a new Network fee schedule that eliminates community provider participations fees. Community providers include all primary care and specialty providers and first responders in settings such as private practices, community health centers, rural health clinics, public health facilities, correctional facilities and more.

This change not only removes a critical barrier to participation, it recognizes the value of securely sharing valuable patient data with community providers. In addition to the elimination of community providers’ participation fees, The Network has worked very closely with EHR vendors to encourage them to reduce or eliminate the costs associated with integrating EHRs into The Network’s platform.

2. The Network enables better care coordination through Direct secure email with hospitals and other providers and through real-time alerts and notifications such as hospital admissions, discharges and lab results.

The Network’s Board of Directors recently approved a new Network fee schedule that eliminates community provider participations fees.

All Network services are available to community providers, including Direct secure email with hospitals and other providers in The Network. This is a HIPAA-compliant, encrypted, standards-based application that enables point-topoint sending and receiving of routine information such as referrals, simple clinical messages and test results. In addition, providers can subscribe to and be set up to receive alerts of hospitals admissions, discharges and transfer (ADTs) and notifications of lab and test results for patients they need to track closely. This basic service enables better care coordination and earlier intervention for complex patients and those with chronic conditions.

3. The Network enables more comprehensive patient records to be available at the point of care through a bidirectional connection between The Network and a provider’s certified EHR. A connection to The Network allows a provider to access the health care records of his or her patients from hospitals and other providers that participate in The Network. This bidirectional connectivity not only enables more comprehensive patient records, it allows access to valuable information in a provider’s EHR without interfering with or affecting the workflow of the provider’s practice. Although participation in ACOs and other value-based arrangements may increase staff time spent in accessing and sharing patient information, participation in a statewide HIE actually saves valuable time and resources through the bidirectional sharing of patient information among authorized users.

the Department of Veterans Affairs. Arizona providers see a large number of winter visitors and veterans, and Network participation enables access to more comprehensive records on these patients.

Community providers face challenges in the movement to a value-based reimbursement environment. There is work to be done and there are challenges to be met, but Arizona’s statewide HIE is a valuable asset in enabling the improved care coordination and more comprehensive patient records that will allow providers to be successful. The Network recognizes the valuable role that community providers play on the front line in keeping key patient populations healthy. That is why our Board recently eliminated community provider participation fees and why I would encourage you to begin participating with The Network soon.

All Network services are available to community providers, including Direct secure email with hospitals and other providers in The Network.

To learn more about participation, please contact a Network representative at (602) 688-7200 or at TheNetwork@azhec.org. AM Melissa Kotrys is the Chief Executive Officer for Arizona Health-e Connection (AzHeC) and the Health Information Network of Arizona. AzHeC operates the Arizona Regional Extension Center, which assists Arizona providers in achieving Meaningful Use.

4. A Network connection allows providers to access health information on their patients from other states and federal agencies such as the Department of Veterans Affairs.

The Network is connected with the national eHealth Exchange network. The eHealth Exchange connection allows Network participants to discover patient records, query and receive health information and share documents on their patients with other HIEs nationally and with federal agencies such as Fall 2015 | AZMedicine 27

MED STUDENT PERSPECTIVE

What it means to help people As a medical school applicant, I devoted time to all of the typical activities of a pre­med and post­grad. I explored every avenue available to me, inhaling every experience tentatively and slowly exhaling an aptitude for patient care. I naively thought these involvements would reveal the true meaning of the seemingly simple phrase, “I want to help people.” In my application, I expressed my humble gratitude for having the opportunity to undertake this journey and understood my expedition had barely begun. I also, however, foolishly and impatiently assumed that these pre­ med experiences had sufficiently taught me the meaning behind this ubiquitous phrase, and my medical school acceptance supported this assumption.

My first year of medical school was filled with lessons of biology, chemistry, physiology, pharmacology, ethics and a deep — though expected — understanding of Latin. These went along with 20 other Alona Sukhina, MS2 proper sciences and medical fields tasked to first-year medical students. Yet my truest revelation was just how little I truly understood the nature of helping people.

Throughout the rigor of my first year, I was faced with a balancing act between excelling academically, shadowing and volunteering. I found it difficult to place as much attention on patient care because clinical skills aren’t as rigorously tested until third and fourth year. Although I had started with the notion that “I want to help people,” the whirlwind of my first year deviated my attention. It wouldn’t be until two seemingly opposing shadowing encounters that I again could find that focus.

The first was with Alzheimer’s disease; an affliction that can become a heavy, dark cloud shrouding a patient’s life. Along with the physical and emotional trauma, the financial burden can destroy many families. Dr. Pierre Tariot at Banner Alzheimer’s Institute is an extremely gifted physician who embraces the challenge of helping his patients. Though he enters every encounter

28 AZMedicine | Fall 2015

with a proper physician’s notepad, within five minutes, his hands are empty and clasped in his lap as he leans forward. In his words, the information on his paper is meaningless when compared to the patients sitting in front of him. Dr. Tariot considers the well­being of family members and caregivers just as important as his patients suffering from Alzheimer’s.

Although I had started with the notion that “I want to help people,” the whirlwind of my first year deviated my attention.

My second experience came during the summer weeks between my first and second year. I had the opportunity to shadow Dr. Sandra Buttram, a pediatric neurointensivist at Phoenix Children’s Hospital. At first glance, Dr. Buttram’s practice had nothing in common with the patients at Banners Alzheimer’s clinic. Children there are in the beginning stages of life. Their rooms were covered with cartoons or happy animals; they were decorated with flowers and balloons; or stuffed with toy trains, favorite blankets and pet teddy bears. Despite this dichotomy, her patients shared one glaring similarity to Dr. Tariot’s: They had entered the hospital just as desperately vulnerable as those who’d entered the Alzheimer’s clinic. Many children who enter PCH will go home healthy, but others may never leave.

While there, during a seemingly relaxed and uneventful afternoon, a patient arrived from the emergency department. He had been visiting his father for a weekend celebration and tragically drowned. He was cold to the touch, despite the scorching 112-degree summer weather. Dr. Buttram managed to stabilize his respiratory and cardiac failure, though only by mechanizing his breathing with a ventilator and pharmacologically stimulating

To them, “patient” is an ambiguous term. It extends beyond the mother who is managing her Alzheimer’s to the son who’s helping her with it. They can see that when an elderly husband cares for his terminally ill Alzheimer’s afflicted wife on his own that she’s not the only “patient” in the room. When spouses, children and grandchildren have to become 24­hour in home nurses in a matter of months, while simultaneously watching their family members degenerate and transform into a complete stranger, they know they too need some form of help, care and attention.

his heart with epinephrine. He had occasional agonal respirations.

Agonal: derived from the Greek word agon, meaning to struggle, pertaining to death. As she explained to the parents that he would most likely not survive the next several days, I witnessed his parents collapse into a debilitative state of mind. I couldn’t understand how I had the right to observe such an intimate, momentous tragedy for this family, and it was then that I was suddenly aware of my intrusive presence. I left the room out of respect.

The patient’s state debilitated overnight. His agonal respirations stopped and were replaced with no respirations. He was becoming acidotic. After many discussions with the parents and family, they agreed to let him pass away.

As I left the hospital that day, I reflected on my medical school application essay and the celebrated phrase that has been upheld by countless medical students, “I want to help people.” I realized then that some patients can’t be helped. Despite the best efforts of an experienced, trained physician or having the best staff at their side, some patients may politely decline their aid. As a physician who’s in training, how can I come to terms with the fact that some patients with debilitating mental illness and who have exhausted all possible medication cocktails and clinical trials simply will not comprehend my presence? How can I stand by while some patients will already come to my unit diseased, and not a single intervention will improve their state?

That day, Dr. Buttram was quickly aware there would be little she could do to help her patient as soon as he arrived in her unit. She appreciated, however, that despite this little boy’s grim outcome, there were still people she could help. The boy’s ICU admission included the simultaneous admission of his mother, father, grandparents and pastor. Those were the patients who, in the upcoming days, would need excellent care as they began to cope with an arduous, devastating disease.

As an aspiring medical student, I could not imagine, much less write about the moments when a husband is tearful in admitting he can’t bear to care for his wife of 50 years any longer. I did not consider witnessing a father plead for his son to take one last agonal respiration, to indicate any sign of life, during a brain death exam. I instead fantasized about the gilded, glamorous career of a doctor in the 21st century, where modern medicine has forced disease into retreat and surrender.

My first-year as a medical student has humbled me to the powers we truly have over nature, illness and death. It has also redefined the word patient, unveiled the truly remarkable ways we can help people and has given me better insight into the sentiment we students hold so dear. AM Alona Sukhina is a second-year medical student at the University of Arizona College of Medicine-Phoenix. Born in the small Eastern European country of Moldova, Alona moved to Arizona in 1993, grew up in Tucson and graduated from the University of Arizona in 2013 with degrees in Physiology and Molecular and Cellular Biology. Alona is strongly interested in neurology, pediatrics and acute critical care medicine.

Drs. Tariot and Buttram understood this, and yet they eagerly treated their patients with the same gusto as they would any other.

Fall 2015 | AZMedicine 29

YOUR ARMA TEAM

Meet ArMA’s new VP of Policy and Political Affairs: Pele Peacock Fischer, JD The Arizona Medical Association is excited to announce the appointment of Pele Peacock Fisher, J.D., as Vice President of Policy and Political Affairs.

Pele will be responsible for interactions with all branches of state government including the legislature, the courts, the Governor’s office, state agencies and regulatory boards, and for establishing and maintaining communications with Arizona’s members of Congress and their staffs both in Washington, D.C., and Arizona. She will help coordinate our direct lobbying efforts at the state capitol and will work closely with ArMA’s lobbyist, Steve Barclay. Pele is exceedingly well-versed in the legislative process of the Arizona Legislature. Before joining ArMA, she served as policy advisor and staff attorney to the majority at the Arizona House of Representatives, where she provided legal and policy analysis of current law and proposed legislation.

She has worked with Health, Reform and Human Services, Children and Family Affairs, Technology and Infrastructure, and Commerce Committees. Pele was the

30 AZMedicine | Fall 2015

Majority lead staffer during Medicaid restoration and creation of the Department of Child Safety. She worked with members, stakeholders and constituents to evaluate and address concerns, draft bills and amendments, and usher them through the legislative process. Additionally, Pele monitored the activity and implementation of laws and policies at the Department of Health Services, the Arizona Health Care Cost Containment System (AHCCCS), the Department of Child Safety, and the Department of Economic Security. She grew up in Arizona, received her undergraduate degree in business from Southern Methodist University, and her law degree from the University of Idaho. Pele previously served as a law clerk to the U.S. Senate in Washington, D. C., before returning to Phoenix to practice law with the firm of Alvarez & Gilbert.

She brings a wealth of knowledge, political acumen, and “fresh eyes” to the ArMA team and mission. AM

Supervising Editor Jeffrey A. Singer, MD

AzMedicine Advisory Council Robert W. Bina Marshall B. Block, MD Jacqueline Chadwick, MD Ronnie Dowling, MD Michael F. Hamant, MD M. Zuhdi Jasser, MD Phil Keen, MD Marc Leib, JD, MD J. Michael Powers, MD Mary E. Rimsza, MD Jeffrey A. Singer, MD Ronald P. Spark, MD

President Nathan Laufer, MD

Executive Vice President Chic Older chicolder@azmed.org

Managing Editor

2015-2016 Board of Directors Robert M. Aaronson, MD At-Large Director Gretchen B. Alexander, MD President-Elect, Executive Committee Miriam K. Anand, MD At-Large Member, Executive Committee Suresh C. Anand, MD Maricopa Director

R. Screven Farmer III, MD At-Large Director

Marilyn K. Laughead, MD Vice Speaker and Parliamentarian, House of Delegates

Rebecca Fega, MD Resident Physician Director Gary R. Figge, MD AMA Delegate Howard B. Fleishon, MD Maricopa Director

Daniel P. Aspery, MD AMA Alternate Delegate Timothy H. Beger, MD At-Large Director

Dale W. Guthrie, MD At-Large Director

Kale D. Bodily, MD Rural Director

Kelly Hager, Student Director

Adam M. Brodsky, MD Maricopa Director Henri R. Carter, MD Rural Director Bourck D. Cashmore, MD Rural Director Jacqueline A. Chadwick, MD At-Large Member, Executive Committee

Advertising

Gary S. Christensen, MD Rural Director

Simone Lustig, Associate VP of Membership and Development (602) 347-6907 simone@azmed.org

Nathan Laufer, MD President, Executive Committee

Stuart D. Flynn, MD Dean, University of Arizona College of Medicine – Phoenix

Sharla J. Hooper, MA Associate VP, Communications sharla@azmed.org For questions regarding advertising, please contact:

Timothy C. Fagan, MD Pima Director and AMA Alternate Delegate

Edward J. Donahue, MD Maricopa Director Ronnie K. Dowling, MD AMA Delegation Chair and Speaker of the House

Michael F. Hamant, MD Vice President, Executive Committee, and AMA Alternate Delegate Jennifer R. Hartmark-Hill, MD At-Large Member, Executive Committee Thomas H. Hicks II, MD AMA Delegate M. Zuhdi Jasser, MD AMA Delegate Nadeem A. Kazi, MD Rural Director Philip E. Keen, MD At-Large Director

Daniel M. Lieberman, MD Maricopa Director Robert J. Marotz, DO Rural Director Timothy M. Marshall, MD Pima Director Jeffrey T. Mueller, MD Immediate Past President, Executive Committee Robert R. Orford, MD At Large Director Traci Pritchard, MD Secretary Allison Rosenthal, DO At-Large Director Thomas C. Rothe, MD Outgoing Past President, Executive Committee Susan M. Whitely, MD Treasurer, Executive Committee

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Peter C. Kelly, MD At-Large Director

AzMedicine is published four times a year by the Arizona Medical Association (ArMA) for Arizona Physicians.

It contains articles of interest to the medical community, covering socio-economic, political and scientific information.

The views and opinions expressed are the authors’ and do not reflect those endorsed by ArMA. ArMA does not guarantee or endorse the products or claims advertised.

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