January 2015 | Physician Magazine by Los Angeles County Medical Association

L T

C A

REPORTING ON THE ECONOMICS OF HEALTHCARE DELIVERY

A PUBLICATION OF PNN www.PhysiciansNewsNetwork.com

The State of Healthcare in California L I A

M A G

JANUARY 2015

L I A

M A G

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JA NUA RY 2015 | TA B LE OF CONT ENT S

Volume 146 Issue 1

14 16

THE BUSINESS OF HEALTHCARE IN 2015 8 Congress Passes Healthcare Provisions in Current Budget 16 Avoiding CMS Penalties for Noncompliance

COVER STORY

THE STATE OF HEALTHCARE IN CALIFORNIA

20 Verifying Your Patients’ Eligibility and Benefits in 2015 Could Save Your Practice Thousands of Dollars

DEPARTMENTS

An in-depth look at the hottest issues affect-

FRONT OFFICE | PRACTICE MANAGEMENT

you can prepare for anticipated changes,

6 Diagnostic Error: The Most Common Allegation in Malpractice Lawsuits

ing California physicians and tips on how challenges and opportunities ahead.

ASSOCIATION HAPPENINGS | LACMA NEWS 22 Discovery Cube Los Angeles Opens Pedram Salimpour, MD, Wendy Greuel, Tim McCallion and Melanie Coto Will Lead Board

Physician Magazine (ISSN 1533-9254) is published monthly by LACMA Services Inc. (a subsidiary of the Los Angeles County Medical Association) at 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Periodicals Postage Paid at Los Angeles, California, and at additional mailing offices. Volume 143, No. 04 Copyright ©2012 by LACMA Services Inc. All rights reserved. Reproduction in whole or in part without written permission is prohibited. POSTMASTER: Send address changes to Physician Magazine, 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 9001 7. Advertising rates and information sent upon request. Statement of Ownership, Management, and Circulation: Publication Title: Southern California Physician. Publication Number: 1533-9254. Filing Date: 11/19/12. Issue Frequency: Monthly. Number of Issues Published Annually: 12. Annual Subscription Price: $39. Complete Mailing address of Known Office of Publication: 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Complete Mailing Address of Headquarters or General Business Office of Publisher: 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Full Names and Complete Mailing Addresses of Publisher, Editor and Managing Editor - Publisher: Sheri Carr, 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Editor: Tom York, 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Managing Editor: 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017; Owner: LACMA Services, Inc. 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or more of Total Amount of Bonds, Mortgages, or Other Securities: None. Tax Status: Has Not Changed During Preceding 12 Months. Publication Title: Southern California Physician. Issue Date for Circulation Data Below: September 2012. Extent and Nature of Circulation - 15a. Total Number of Copies: 5335 (avg)/5205 (actual); 15b1. 4712 (avg)/4774 (actual); 15b2. 0 (avg)/0(actual); 15b3. 0 (avg)/0(actual); 15b4. 0 (avg)/0(actual); 15c. 4712 (avg)/4774 (actual); 15d1. 0 (avg)/0(actual); 15d2. 0 (avg)/0(actual); 15d3. 0 (avg)/0 (actual); 15b4. 623 (avg)/431(actual); 15e. 623 (avg)/431(actual); 15f. 5335 (avg)/5205 (actual). 15g. 0(avg)/0 (actual). 15h.5335 (avg)/5205 (actual). 15i. 88.3 (avg)/89.6 (actual). 16a: Requested and Paid Electronic Copies: 6161 (avg)/7842 (actual); 16b. Total Requested and Paid Print Copes + Requested/Paid Elctronic Copies: 10,893 (avg)/12,616(actual); Percent Paid and/or Rueqested Cirulation (both print and electronic copies); 100 (avg)/100 (actual). Publication of Ownership: If the publication is a general publication, publication of this statement is required. Will be printed in the January 2015 issue of the Publication. Signature and Title of Editor, Publisher, Business Manager or Owner. , Publisher. 11/19/14.

J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1

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Christina Correia 213.226.0325 | christinac@lacmanet.org Dari Pebdani 858.231.1231 | dpebdani@gmail.com David H. Aizuss, MD Troy Elander, MD Thomas Horowitz, DO Robert J. Rogers, MD HEADQUARTERS

The Los Angeles County Medi-

physicians from every medical

Physicians News Network Los Angeles County Medical Association 707 Wilshire Boulevard, Suite 3800 Los Angeles, CA 90017 Tel 213.683.9900 | Fax 213.226.0350 www.physiciansnewsnetwork.com

specialty and practice setting

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cal Association is a professional association representing

as well as medical students, interns and residents. For more

PRESIDENT

PRESIDENT-ELECT

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IMMEDIATE PAST PRESIDENT

Pedram Salimpour, MD Peter Richman, MD Vito Imbasciani, MD William Averill, MD Marshall Morgan, MD

than 100 years, LACMA has been at the forefront of current medicine, ensuring that its members are represented in the areas of public policy, govern-

LACMA BOARD OF DIRECTORS CMA TRUSTEE

ALTERNATE RESIDENT/FELLOW COUNCILOR

COUNCILOR – SSGPF

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ment relations and community

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relations. Through its advocacy

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efforts in both Los Angeles

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County and with the statewide

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your physician leaders and staff

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strive toward a common goal– that you might spend more time treating your patients and less time worrying about the challenges of managing a practice.

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CHAIR OF LACMA DELEGATION

David Aizuss, MD Erik Berg, MD Robert Bitonte, MD Stephanie Booth, MD Jack Chou, MD Troy Elander, MD Hilary Fausett, MD Samuel Fink, MD Hector Flores, MD C. Freeman, MD Sidney Gold, MD William Hale, MD Stephanie Hall, MD David Hopp, MD Kambiz Kosari, MD Young-Jik Lee, MD Paul Liu, MD Maria Lymberis, MD Carlos Martinez, MD Nassim Moradi, MD TJ Nguyen Ashish Parekh, MD Heidi Reich, MD Sion Roy, MD Michael Sanchez, MD Heather Silverman, MD Andrew Sumarsono Nhat Tran, MD Fred Ziel, MD

LACMA’s Board of Directors consists of a group of 30 dedicated physicians who are working hard to uphold your rights and the rights of your patients. They always welcome hearing your comments and concerns. You can contact them by emailing or calling Lisa Le, Director of Governance, at lisa@lacmanet.org or 213-226-0304.

SUBSCRIPTIONS Members of the Los Angeles County Medical Association: Physician Magazine is a benefit of your membership. Additional copies and back issues: $3 each. Nonmember subscriptions: $39 per year. Single copies: $5. To order or renew a subscription, make your check payable to Physician Magazine, 707 Wilshire Boulevard, Suite 3800, Los Angeles, CA 90017. To inform us of a delivery problem, call 213-683-9900. Acceptance of advertising in Physician Magazine in no way constitutes approval or endorsement by LACMA Services Inc. The Los Angeles County Medical Association reserves the right to reject any advertising. Opinions expressed by authors are their own and not necessarily those of Physician Magazine, LACMA Services Inc. or the Los Angeles County Medical Association. Physician Magazine reserves the right to edit all contributions for clarity and length, as well as to reject any material submitted. PM is not responsible for unsolicited manuscripts.

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P RES IDEN T ’S LET T ER | P EDRAM S ALIM P OU R, M D

H OW TO C A PITA LIZE O N O UR VI C TO RY As a child I recall hearing the story of a Persian man who claimed to speak Arabic. He was asked what the word was for cow. He happened to know and responded appropriately. Then, he was asked what the word was for calf. He did not know but cleverly responded by saying that the Arabs were very patient people; they did not have a word for calf. “They wait instead,” he said. “They wait for the calf to grow up. And then they call it ‘cow.’” As Americans, we are extraordinarily tolerant; we cringe at the word “enemy.” Instead, often in patience we wait for our adversaries to grow up. And then, we call them “friends.” So it remains to be seen whether such is the state of the medical profession in California. We just finished the toughest fight in a generation. Doctors worked hard to defeat Proposition 46. Tens of millions of dollars and countless thousands of speeches and meetings later, we did defeat Proposition 46 and with it, those who brought the fight to us. But there may be a victory yet within the more obvious one. It is possible that in our waiting we will find a friend with whom we can work toward the delivery of better healthcare for all of us. The alliances we built to wage our confrontation do not have to be transitory. We can build further on them. And now they can include even those on the other side. Maybe we have similar interests now. Stronger in resolve, bigger in numbers, and together with those who have become friends, and again on behalf of our patients and our profession, we can more easily rise up and defeat the next adversary. Today, over three decades after hearing that story, I hold even more dearly that which I believed in my heart of hearts as a child: that Americans, as a nation and as individuals, are the greatest peacemakers that history has ever known. Americans are the reconcilers of the world. Just beneath reconciliation, there is alliance. And this is the season for both of those.

4 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

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P RAC T IC E M AN AG EM ENT | F RONT OF F IC E

DIAGNOSTIC ERROR: The Most Common Allegation in Malpractice Lawsuits

PRO B LE M S R E L AT E D TO diagnostic error are the most common allegations in medical malpractice

claims, according to industry sources such as the PIAA’s (Physician Insurers Association of America) Data Sharing Project. The Doctors Company reviewed 7,438 claims closed from 2007-2013. The claims involved 10 medical specialties: pediatrics, emergency medicine, internal medicine, family medicine, hospital medicine, cardiology, general surgery, gynecology, orthopedics and obstetrics.

34%

of nonsurgical specialty claims were diagnosis-related. For surgical specialties, 14% were diagnosisrelated.

Twenty-five percent of these claims (1,877 claims) were diagnosis-related. The analysis then focused on the variance between these medical specialties in the incidence of alleged diagnosis-related error and the specific diagnoses involved. Overall, 34% of nonsurgical specialty claims were diagnosis-related (the number one allegation in these claims). For surgical specialties, 14% were diagnosis-related (the third most common allegation in these claims). The top five diagnoses for each medical specialty’s diagnosis-related claims involved commonly encountered conditions with differential diagnoses that were well-known to most physicians. Furthermore, 52% of the top diagnoses were found repeatedly in different specialties, e.g., acute myocardial infarction appeared in emergency medicine, internal medicine, family medicine, hospital medicine and cardiology. This suggests that knowledge deficiency was not the primary cause of diagnostic error and that other factors played an important role. The following are some of the factors that can lead to diagnostic errors. To reduce risks and enhance patient safety, physicians should keep these factors in mind when making a diagnosis: • First-impression or intuition-based diagnosis. • Narrowly focused diagnosis influenced by a

6 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

known chronic illness. • Failure to create a differential diagnosis. • Impaired synthesis of diagnostic data from various sources, such as medical history, physical examination, diagnostic tests or consultations. • Failure to order appropriate diagnostic tests. • Context errors. • Failure to follow diagnostic protocols. • System-related errors, such as poor communication or electronic health record design flaws. • Human-factor errors, such as impaired judgment, fatigue or distractions. In an effort to better understand the causes of diagnosis-related error, the Institute of Medicine has appointed a Committee on Diagnostic Error in Health Care. The committee will examine a range of topics, such as the epidemiology of diagnostic error, the burden of harm and economic costs associated with diagnostic error, and current efforts to address the problem. The committee will propose solutions that may include definitions and boundaries, educational approaches, behavioral/cognitive processes and cultural change and health information technology. To achieve the desired goals, the committee will devise conclusions and recommendations that will propose action items for key stakeholders. Contributed by The Doctors Company. For more patient safety articles and practice tips, visit www.thedoctors.com/patientsafety.

T H E B U S IN ES S OF H EALT H C ARE | 2 0 1 5

Congress Passes Healthcare Provisions in Current Budget CMA STAFF

C O N G R E S S N A R R O W LY PA S S E D a $1.1 trillion federal budget that will fund most of the

federal government through September 2015. Below is a summary of key healthcare provisions in the bill.

The bill directs CMS to provide education to providers on error reduction and asks the agency to develop procedures to reduce backlogs of claims and hearings

•

Within the bill, Congress expressed concern that there had not been adequate opportunity for public comment on bundling of surgical codes in the final rule of the Medicare Physician Fee Schedule. The budget bill says that the appropriate methodology has not been tested to ensure that patient care and patient access are not negatively impacted and ponderous administrative burdens placed on providers. It asks the Centers for Medicare and Medicaid Services (CMS) to reconsider that fee schedule provision.

•

The budget includes $5.4 billion of emergency funding to prepare for and respond to the Ebola outbreak.

•

The National Institutes of Health will receive $30.3 billion (an increase of $150 million), including $283 million for Ebola-related research.

•

CMS receives no increase in funding over last year ($3.6 billion).

•

The Centers for Disease Control and Prevention (CDC) will receive money to combat prescription drug abuse around the country. Twenty million dollars has been set for prevention of drug abuse and another $12 million has been included under the Substance Abuse and Mental Health Services Administration for the states to expand treatment services for drug addiction. This funding is also expected to support activities to establish or expand prescription drug monitoring databases of physicians writing prescriptions for opiates and pharmacists filling prescriptions.

•

The bill looks at the Medicare Recovery Audit Contractors (RAC) and how audits may be reducing patient access to care. The bill directs CMS to provide education to providers on error reduction. It also asks the agency to develop procedures to reduce backlogs of claims and hearings and asks CMS to provide education to RAC contractors to improve the accuracy of their audits.

•

The bill urges the Office of the National Coordinator for Health Information Technology to decertify electronic health records products that block the sharing of information and to certify only those products that meet current meaningful use program standards.

8 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

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THE STATE OF

CALIFORNIA

HEALTHCARE

BY MARION WEBB

1 0 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

Healthcare reform has brought sweeping changes for physicians. In this issue we will provide expert opinions commenting on the state of the healthcare industry for 2015. We’ll take an in-depth look at the hottest issues affecting California physicians and provide tips on how you can prepare for anticipated changes, challenges and opportunities ahead. Learn about critical developments—from private healthcare insurers and malpractice insurance to ACOs and Medicare and Medi-Cal—and how they could affect your income this year. How secure is your website? Read on to learn how you can mitigate your security risk for a data breach and how to keep your electronic information protected whether you’re logging in from a healthcare site or from home. We’ll also look at legislative issues, including Gov. Jerry Brown’s administration’s consideration to expand Medi-Cal to undocumented immigrants in California, and what they could potentially mean for your practice. Learn about the market forces that are going to impact healthcare and what healthcare jobs are hot in the New Year.

18%

of employees covered by health insurance have deductibles of at least $2,000

DEVELOPMENTS AFFECTING YOUR INCOME

The new year will bring developments that may be troubling to physicians and affect physicians’ income to various degrees. Here are some tips to plan ahead.

• High Deductibles: According to a study by the Kaiser Family Foundation, eight of 10 employees covered by health insurance now have a deductible, and 18% have deductibles of at least $2,000. For many individuals and families, these high deductibles could become a major financial burden, putting your practice at risk for not getting paid. To ensure payment, ask for payment up front or put patients on a payment plan. Inform patients of costs up front. More on this subject will be covered in the February issue. • Malpractice Premiums: According to an annual premium survey released last October by Medical Liability Monitor, malpractice premiums for three specialities—ob/gyns, internists and general surgeons—saw a 13% decline in premiums nationwide since 2008. California voters last November struck down efforts by consumer groups to repeal the Medical Injury Compensation Reform Act (MICRA), but the fight isn’t over. The Supreme Court in December agreed to hear a case that challenges the constitutionality of MICRA and also looked at how noneconomic damages should be paid. • ICD-10: There have been many delays in implementing the International Classification of Diseases (ICD-10), but many people believe the deadline of Oct. 1, 2015, will stick. More on this hot topic in the February issue.

J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 11

ACOS—CRITICAL DEVELOPMENTS

Medicare accountable care organizations will mark their anniversary this year, which is a key juncture because the program’s three-year shared-savings contract, which shielded ACOs from losing money, will run out. ACOs that stay in the program will start taking a “downside risk” and face the possibility of penalties. If you participate in an ACO or are deciding whether to join, consider the following:

• Although the number of ACOs keeps rising—from 27 in 2012 to 337 in 2014—the number of Pioneer ACOs has dropped—from 32 in 2012 to 19 in 2014—according to Medscape.com. This is key because shared-savings ACOs are supposed to look like Pioneer ACOs and are vulnerable to penalties, experts said. Many ACOs have threatened to leave the program if penalties become mandatory this year. • Last month, the CMS released the long-awaited Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program

(MSSP), which, when finalized, will impact ACOs entering the program in January 2016 and those renewing their agreements for another three years. • Among the proposed changes: MSSP participants in Track 1, which involves only upside risk, can remain in Track 1 for three more years but also can expect less savings (max savings would fall to 10% from 40% or 50%), Healthcare Finance News reported. As of last December, MSSP participants were required to transition into Track 2 in subsequent performance periods, which was a major concern

for doctors. The proposed changes are seen as a way to retain current participants while encouraging others to apply. CMS also proposed that ACOs move more groups to the two-sided risk models and proposed creating a Track 3 model that would increase both rewards and risks. Experts say the comment period will be critical for the future of ACOs. • Some ACOs, like Los Angeles-based National ACO (NACO), have seen tremendous growth—from 21 PCP participants to more than 50 PCPs in 2014.

MEDICARE DEVELOPMENTS

For 2015, there will also be key Medicare developments that could impact doctors both negatively and positively. Here are three key issues:

More than 257,000 U.S. doctors will see their Medicare pay cut by 1% this year, because they didn’t meet goals for using electronic medical records

• More than 257,000 U.S. doctors will see their Medicare pay cut by 1% this year, because they didn’t meet goals for using electronic medical records, and 28,000 providers will be docked another 1% of Medicare pay for not prescribing medications electronically, the Wall Street Journal reported on Dec. 18, 2014. Others will lose 1% of their Medicare pay this year for missing the deadline for EMR use. Those who did not comply with the program as of Dec. 29, 2014, will be notified by CMS and subjected to pay cuts imposed by law. • This year, physicians also need to deal with two new websites, or “Open Payments site,” which report pay by Medicare and makers of drugs and medical devices. Dr. Ted Mazer, past president of the San Diego County Medical Society, told Medscape.com that he tried unsuccessfully to review his information online and warned doctors that wrong reporting could have serious consequences for doctors. Other doctors also reported issues in trying to review their information online. • On the upside, CMS’s new chronic care management, starting this year, will pay doctors for managing Medicare patients with two or more chronic conditions, even when contact is made by phone or email, not in person, which could be a significant source of income for family practitioners. These and other telemedicine trends will be covered in the March issue of Physician Magazine.

1 2 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

MEDI-CAL TRENDS

More than 3 million Californians now reportedly have Medi-Cal coverage, cutting California’s number of uninsured in half.

• Gov. Jerry Brown’s consideration, announced last month, to expand statefunded Medi-Cal coverage to undocumented immigrants could benefit more than a million immigrants in California, but also comes at a cost. We will continue to follow this issue.

35-49 per

100,000

the percentage of California primary care doctors participating in Medi-Cal fell short of federal guidelines—35 to 49 per 100,000 enrollees instead of the recommended 60 to 80.

• A new California law requires the state Department of Health Care Services to establish standards to provide technical assistance to Medi-Cal managed plans to offer hospice care to patients who are seriously ill. To put the law into practice, however, will be challenging due to the shortage of doctors and other healthcare providers, as the delivery of hospice is supposed to be cost-neutral. • The current state budget continues its 10% cut in reimbursement to healthcare providers, a lingering sore spot for lawmakers, doctors and others. California doctors have among the lowest reimbursement for treating underserved patients nationwide. Access to care, a shortage of providers and reimbursement remain major issues. • A study by the California HealthCare Foundation said the number of California primary care doctors participating in Medi-Cal fell short of federal guidelines—35 to 49 per 100,000 enrollees instead of the recommended 60 to 80. • Reversing the 10% cut would have cost the state less than $300 million, according to the Los Angeles Times. Assembly Speaker Tony Atkins (D-San Diego) told the newspaper in August she would keep pushing for reform.

J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1 3

JOB OUTLOOK

CYBER SECURITY

Electronic medical records and the explosion of healthcare information outside the doctor’s practice and health systems, including fitness-related wearable devices, make sensitive health data vulnerable to hackers.

• Auditors found weaknesses in the U.S. Department of Health and Human Services’ financial management of IT systems, including $65 billion in improper pay in fiscal 2013, mostly from Medicare. With the conversion to electronic medical records, HHS will need to closely monitor incentives to providers. Medicare and Medicaid incentives totaled $25.4 billion as of September 2014, according to Healthcare Finance. • HHS has made huge strides in fighting waste and fraud, but experts suggest that providers continue to give feedback about the rollout of EHRs. • With more hackers targeting doctors’ practices, even small physicians’ offices are well served in implementing IT security tools, such as encryption technologies, that they can afford to protect themselves and patient data. • Cyber-liability insurance protection can help cover the costs incurred after a data breach.

$25.4

The HHS says the demand for primary healthcare services will see a dramatic rise this decade, largely driven by the growing aging population and expansion of healthcare under the Affordable Care Act. Indeed, the gradual increase in the number of insured Californians, the Gary Anderson Center for Economic Research at Chapman University said in its recently published annual economic forecast for California, will lead to a 3.6% rise in the number of jobs in the healthcare services and social assistance sector over the 20132020 period, or an added 498,000 jobs. Here are some of the hottest and fastest-growing jobs:

• Pharmaceutical and medical device manufacturing jobs will rise 2.1% over the next six years, according to Chapman University’s forecast. • Topping the list of Moneywatch’s leading health care jobs for 2015 are audiologists (34% projected growth by 2022); pharmacists (14% growth by 2022); physiologists (19%); and podiatrists (23%). • Other healthcare jobs in high demand include dental hygienists, dietitians, medical lab technicians, medical technologists, opticians and physical therapists.

billion

Medicare and Medicaid incentives totaled $25.4 billion as of September 2014, according to Healthcare Finance.

1 4 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

As we enter the new year, we will continue to follow up on some of the projected key trends identified by leading experts in the healthcare industry and dive even deeper into the issues. We wish all of our valued readers a happy and successful 2015.

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Avoiding CMS Penalties for Noncompliance BY MATT KINLEY, ESQ., PARTNER, TREDWAY LUMSDAINE & DOYLE LLP

P R I M A RY C A R E P H Y S I C I A N S (PCPs), already financially affected by years of

stagnant reimbursements and rising costs, will soon face a new challenge to their bottom lines. Beginning in 2015, government financial incentives aimed at encouraging physicians to use electronic health records (EHRs) and report quality metrics will turn into costly penalties. As the Centers for Medicare and Medicaid Services (CMS) continues its efforts to align regulations with policies expressed by the Accountable Care Act (ACA), physicians should prepare for value-based healthcare reform and begin to phase out traditional fee-forservice payment methods. Following the action items listed below could save your practice money and, in some cases, help increase profits in 2015.

1 6 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

Medicare’s meaningful use program promotes the utilization of EHRs. In the past, physicians could apply for bonuses from CMS for reaching milestones in adopting EHRs and demonstrating appropriate usage in the office. EHRs are a digital version of a patient’s paper chart. They are real-time, patient-centered records that make information available instantly and securely to authorized users. Federal agencies have wanted to support EHRs for years, especially for federal healthcare. As previously stated by the CMS, “When fully functional and exchangeable, the benefits of EHRs offer far more than a paper record can.” EHRs serve to provide: • Improved quality and convenience of patient care • Increased patient participation in care • Improved accuracy of diagnoses and health outcomes • Improved care coordination • Increased practice efficiencies and cost savings Not all physicians agree, however. A sizable group claims that technology dehumanizes healthcare by decreasing face time with patients, and a small percentage of doctors are actually opting out of Medicare. Starting in 2015, physicians’ offices that are not supported by EHRs will be penalized. The penalties start at 1% of Medicare, and eligible professionals (EPs) who have not demonstrated meaningful use of EHRs will face a 1% penalty in Medicare reimbursements in 2015. These penalties will increase by 1% annually until 2019, when they plateau at 5%. For EPs who are not participating in Medicare’s electronic prescribing program, the penalties start at 2% in 2015 and will climax at 5% in 2019. In addition, all EPs must continue to demonstrate meaningful use every year through 2019 to avoid penalties. ACTION ITEMS Should you opt-out of Medicare? If a physician chooses to opt out of Medicare, specific actions must be

1. Notify patients you are opting out of Medicare. 2. File an affidavit with “each carrier that has jurisdiction over the claims that the physician or practitioner would otherwise file with Medicare” no later than 10 days after entering into your first private contract. 3. Enter into a private contract prior to rendering any covered services to a Medicare Part B beneficiary. 4. Make sure your office never files a Medicare claim and never provides information Starting in 2015, physicians’ to a patient that enables filing a Medioffices that are not supported care claim. (There are by EHRs will be penalized. The two exceptions: for emergency or urgent penalties start at 1% of Medicare and for covered care, and eligible professionals services that Medicare would deem un(EPs) who have not demonstratnecessary.)

ed meaningful use of EHRs will face a 1% penalty in Medicare reimbursements in 2015.

Keep in mind, a new “opt out” affidavit must be filed every two years to maintain your status. The final date for all Medicare participants to register and attest to 2014 meaningful use is Feb. 28, 2015.

More Penalties: Physician Quality Reporting System

The Physician Quality Reporting System (PQRS) seeks to improve the quality of healthcare through technological reporting. When it reaches full implementation it seeks to further the trend of quality over quantity by using a combination of incentive payments and payment adjustments to promote reporting of quality information. Up until 2014, this was a voluntary program. Physicians provided data on whether or not they were J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 17

2 0 1 5 | T H E B U S INES S OF H EALT H C ARE

The Dark Side of Meaningful Use

taken by the physician. Even so, some physicians argue that it is far easier to opt out of Medicare than it is to stay in the program. Broadly stated, the procedure to opt out of Medicare involves the following:

T H E B U S IN ES S OF H EALT H C ARE | 2 0 1 5

meeting selected quality measures, and specialists participating in the reporting protocols received a .5% increase in their Medicare reimbursements through maintaining the certification program. This program for specialists ended in 2014. In order to comply, EPs satisfactorily report data on quality measures for covered Physician Fee For EPs who are not parSchedule (PFS) services ticipating in Medicare’s furnished to Medicare electronic prescribing Part B Fee-for-Service (FFS) beneficiaries. program, the penalties Very few practices start at 2% in 2015 are ready for this program. However, starting in 2015, a penalty for not reporting PQRS data starts at 1.5% and will rise to a 2% penalty in 2016. The penalties are based on the previous year’s data and are ironically called, “Negative Payment Adjustments.”

ACTION ITEMS PQRS penalties are difficult to figure out, and the best way to get up to speed with what is required is to visit the CMS website at www.cms.gov and search “how to get started.” This site will tell you if your practice is eligible for penalties or payments under this program.

Chronic Care Changes to CPT Code

On the minus side, CMS will scrutinize the most widely utilized and abused Current Procedural Terminology (CPT) codes, Modifier 59. The CPT Manual defines Modifier 59 as follows: “Distinct Procedural Service: Under certain circumstances, it may be necessary to indicate that a procedure or service was distinct or independent from other non-E/M services performed on the same day. Modifier 59 is used to identify procedures/services, other than E/M services, that are not normally

1 8 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

reported together, but are appropriate under the circumstances. Documentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual. However, when another already established modifier is appropriate, it should be used rather than Modifier 59. Only if no more descriptive modifier is available, and the use of Modifier 59 best explains the circumstances, should Modifier 59 be used.” Consistent with amendments to the Affordable Care Act, CMS has been engaged in a vigorous effort over the past several years to identify and review potentially overused codes, and to make adjustments where appropriate. The codes under attack are those that have been used for catch-all services that cannot be adequately defined. In place of the Modifier 59 in the Healthcare Common Coding System, physicians’ offices will be using four new subset modifiers. ACTION ITEMS New coding requirements related to Healthcare Common Procedure Coding System (HCPCS) Modifier 59 could impact your reimbursement. Change Request (CR) 8863 notifies MACs and providers that the Centers for Medicare and Medicaid Services is establishing four new HCPCS modifiers to define subsets of the Modifier 59, a modifier used to define a “Distinct Procedural Service.” Review the CMS website at www. cms.gov, which gives specific examples of modifiers for different specialties.

Primary Care and Chronic Care Management (CCM)

CMS established a new policy to make separate payment for non-face-to-face—phone or electronic means—chronic care management services for Medicare beneficiaries who have multiple (two or more) significant chronic conditions. Payment for Chronic Care Management is only one part of a multifaceted CMS initiative to improve Medicare beneficiaries’ access to primary care. This

DISABILITY INSURANCE CLAIM ADVICE

ACTION ITEMS Physicians must work with their patients to identify which population may be able to take advantage of these payments. An expert in predictive modeling may be utilized to determine the appropriate population. More traditional utilizations may be through the new diagnosis of chronic disease, or multiple hospitalizations.

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Conclusion

In this vastly shifting legal landscape, for a physician practice to succeed, medical professionals will have to be diligent when approaching the implementation of these new laws. If you follow the action items noted above, you could

• New, pending or denied disability claims • Disability claim buyout offer • Partial or total disability • How to complete claim forms & communicate with your attending physicians effectively • I.M.E, F.C.E. Field Investigation, Video surveillance, progress report and APS, etc.

J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1 9

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is a novel program in order be well on your way to to promote care for chronic cementing a lasting, and patients by utilizing techprofitable, practice. Starting in 2015, a penalty nology. Models being tested ABOUT THE AUTHOR: Matt through the Innovation Cenfor not reporting PQRS data Kinley is a partner at Tredway Lumsdaine & Doyle LLP, a longter will continue to explore starts at 1.5% and will rise standing Southern Californiaother primary care innovabased law firm providing a full to a 2% penalty in 2016. The range of legal services to pritions. CCM services include vately held companies and indipenalties are based on the viduals. With more than 25 years regular development and of experience, Kinley is chair of previous year’s data and are revision of a plan of care, the firm’s healthcare law practice and regularly advises physicians communication with other ironically called, “Negative to help them maintain a successful practice in a changing treating health professionals Payment Adjustments.” environment. His focus includes and medication managematters related to federal and state regulatory compliance, liment. This program supports censing and certificates, Medical Board representation, Medicare the concept of value-based and Medicaid law and audit payment, allowing signifirepresentation, managed care contracting and disputes, fraud cant payments for supportand abuse issues, referral disputes, unique healthcare employment ing and managing chronic pain patients. The final issues, HIPAA compliance, creations and mergers and acquisition of healthcare practices. Contact Kinley at MKinley@tldlaw.com or call rules for this program became public at the end of (877) 923-0971. October and will likely result in an increase in physician reimbursement. To qualify, the physician must have EHR systems, and they must be able to share information with caregivers. Since the physician’s office must be available to the patient 24 hours a day, it will probably require the use of mid-level professionals such as nurse practitioners. This rule specifically provides for greater flexibility in such staff.

Verifying Your Patients’ Eligibility and Benefits in 2015 Could

SAVE YOUR PRACTICE THOUSANDS OF DOLLARS CMA STAFF

W I T H T H E N E W year soon upon us, physicians are urged to be diligent in verifying patients’

eligibility and benefits to ensure that you will be paid for services rendered. The beginning of a new year means calendar year deductibles, and visit frequency limitations start over. With open enrollment there may also be changes to patients’ benefit plans, or they may even be insured through a new payor. The new year also brings a host of other challenges that could affect your ability to be paid: •

Medicare patients can modify their enrollment choices from October 15 through December 7, allowing them to switch between Medicare fee-forservice and Medicare Advantage, or switch from one Advantage plan to another. • The Covered California open enrollment period is November 15, 2014, through February 15, 2015. Existing exchange/mirror patients have the option

2 0 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

to select a different plan, and Covered California expects an additional 500,000 individuals will enroll in an exchange plan during 2015 open enrollment. Additionally, there will be some changes to exchange/mirror product names in 2015. Covered California notified all exchange plans that the product names must be the same for exchange and mirror products and that plans must also utilize a standard naming convention for all individual exchange/mirror

J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 2 1

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products. payment will be due at the time of service. If you offer California moved the remaining 25,000 seniors an appointment reminder service, remind the patient and persons with disabilities (SPDs) from fee-for ser- if payment is expected at the time of service. Failure vice to managed care on December 1, 2014, in the to collect deductibles, copays and coinsurance at the following counties: Alpine, Amador, Butte, Calaveras, time of service can be very costly for a practice. as Colusa, El Dorado, Glenn, Imperial, Inyo, Mariposa, your ability to collect can decrease significantly after Mono, Nevada, Placer, Plumas, San Benito, Sierra, Sutter, Tehama, Tuolumne and Yuba. The 2015 Covered California QHP naming convention is as follows: Additionally, 30,000 [carrier name] + [metal tier name] + [Actual Value] + [product type (e.g., EPO, HMO, PPO)] patients who are dually Example: Blue Shield Bronze 60 PPO eligible for Medicare and Medi-Cal in Los Angeles and Santa Clara counties began the transition from fee-for-service Medicare and Medi-Cal into man- the patient leaves the office. aged care on January 1, 2015. Dual eligible enrollTaking these proactive steps to protect your pracees will transition in these two counties over the next tice by preventing denials, delays in payment and dis12 months based on month of birth. Duals will also gruntled patients goes a long way toward ultimately continue to transition based on month of birth in saving time and money. San Bernardino, Riverside and San Diego counties. The duals transition for Orange County is scheduled to begin in July. For more information on Duals, see CMA’s toolkit, “Cal MediConnect Physician FAQ – What you need to know about keeping your patients and billing for the dual eligible population,”available at www.cmanet. org/duals. Don’t get stuck with unnecessary denials or an upset patient. Do your homework before the patient arrives by obtaining updated insurance information at the time of scheduling, if possible, and making copies of the insurance card at the time of the visit. And don’t forget that deductibles are typically based on the calendar year and have reset on January 1. Many of the exchange/mirror plans have high deductibles (e.g., $5,000 deductible on the Bronze plan), as do some employer-based plans. This reinforces the importance of verifying patient eligibility – particularly for exchange patients – each time they are seen. Best practice is to communicate with patients upon scheduling to remind them that their plan has a deductible that may have reset on January 1 and, if that is the case,

AS S OC IAT ION H AP P ENINGS | LAC M A NEWS

Discovery Cube Los Angeles Opens Pedram Salimpour, MD, Wendy Greuel, Tim McCallion and Melanie Coto Will Lead Board

P E D R A M S A L I M P O U R , M D, MPH, president of the Los Angeles County Medical Association

(LACMA), was elected board chairman of the Discovery Cube Los Angeles (DCLA) hands-on science museum that opened in November 2014. The officers of the board will lead the 2.5acre campus at the Hansen Dam Recreation Area in the San Fernando Valley. Wendy Greuel, former LA city controller, was was voted vice-chairwoman and Tim McCallion, president of the Western Region of Verizon, became the treasurer. Melanie Coto, president of the Coto Foundation, will serve as secretary. Dr. Salimpour, practicing physician, scientist and researcher specializing in pediatric medicine and child development, said he is honored to be part of an organization that helps kids in Los Angeles. “Since much of my career has been dedicated to kids, I am delighted to help expand DCLA’s mission to inspire and educate young minds through science-based programs and exhibits–both in the Valley and beyond. “Research has proven that DCLA’s highly interactive approach is helping children learn in and out of the classroom, and it’s an honor to be able to bring a new level of hands-on discovery to more families throughout Southern California.” Dr. Salimpour received his Master of Public Health degree at the UCLA School of Public Health, and earned his medical degree at Boston University School of Medicine. The first-ever two-time recipient of the American College of Physicians’ Research Award, he completed his residency at L.A. CountyUSC Medical Center/Keck School of Medicine. From 2001 to 2005, prior to the launch of CareNex Health Services, Dr. Salimpour served as co-founder and executive vice president of NexCare Collab2 2 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

orative, a not-for-profit organization that served the healthcare needs of more than 100,000 underserved children and families in Southern California. Associated with the DCLA project from the beginning, Greuel previously served on the Los Angeles City Council and as Los Angeles city controller for five years. “The Discovery Cube Los Angeles Board of Directors has an extraordinary opportunity to impact LA’s next generation of practitioners and leaders in science, technology, engineering and mathematics,” said DCLA Executive Director Kafi D. Blumenfield. “We are pleased to add the talent of these respected leaders to our Board. Our four new officers have the local experience, wisdom and connections necessary to help turn our long-term vision for Southern California into reality.” Discovery Cube Los Angeles is a sister campus of the popular Discovery Cube Orange County in Santa Ana. It offers a world-class collection of technically advanced exhibits, displays, programs and learning spaces unique to Los Angeles. Highlights of the two-story building in the Lake View Terrace neighborhood range from a simulated helicopter flyover of California’s natural resources to a planetary research station, interactive park science exhibits and immersive grocery story experience.

Cal MediConnect:

Making It Work Change can be difficult. But sometimes change can lead to a better outcome. Cal MediConnect is an example of just that. The Cal MediConnect program was designed to improve care coordination for dual eligible beneficiaries -- those who qualify for both Medi-Cal and Medicare. Members are provided with medical and behavioral health, long-term institutional and home-and community-based services all through one organized delivery system. The program even helps members live independently by receiving appropriate care in their homes and communities rather than in institutions. As a physician, we know you’re concerned about how this change will affect your patients, your practice and your processes. We understand your concerns because physician-owned clinics are part of our business too. That’s why we’ve made it easier for you…

We’re in This Together • We developed integrated care teams. These teams coordinate effective communication among members, their doctors, family and other caregivers. Together, the team determines the right approach to care in the right setting at the right time. • We conduct a health risk assessment with each member, which identifies appropriate resources (social services, behavioral health, transportation, etc.) needed to manage each member’s care. The assessment is then shared with our contracted physicians to work toward shared goals for their patient. • For physicians who are wary of a varied payment structure under Cal MediConnect, it’s important to know that the overwhelming majority of physicians will get paid at least their current fee-for-service rate. • Our Community Connector program is well received by both members and providers. These community based individuals are available to assist physicians with their patients who need additional help with non-medical issues. • By signing up on Molina Healthcare’s provider web portal, you have quicker access to authorizations.

• We have contracted with a vendor to offer our providers the option to receive electronic fund transfers. This means you get paid faster and you receive copies of 835 files. • We continue to hold group meetings with all our contracted providers to share the latest information about Cal MediConnect and seek feedback and ideas to better our processes.

Working in Partnership Change doesn’t come easily or alone. Neither physicians nor health plans nor community agencies can take care of the sickest and neediest members in our community alone. We may disagree about how we got here. We may still want to lobby for change. And we may have differing opinions when it comes to providing care. But we can all agree that better care coordination will improve health outcomes and drive down the high costs of medical care. As the Cal MediConnect program has already begun, now is the time to work together to help patients benefit from the change.

Call us at (562) 435-3666 extension 127223 and let us know what keeps you up at night about the Cal MediConnect Program.

Let’s work together to care for our patients.

AS S OC IAT ION H AP P ENINGS | LAC M A NEWS

CEO’s LETTER

A S WE ’R E HE ADING INTO THE NE W YE AR , I’m proud of the many great successes LACMA achieved in recent times. The year 2014 brought a lot of groundbreaking accomplishments for doctors and the patients they serve. I want to thank everyone for their hard work and hope that you will seize the moment to build upon our many successes to reach even greater heights. Last year, LACMA proved again that we are getting stronger as an organization and will rise to the challenge to do what is right for our doctors, patients and the community as a whole. Among the highlights of 2014 was the resounding defeat of the most contentious and high-stakes ballot initiative in California. The victory of California’s No vote on Proposition 46, the ill-founded attempt to overturn California’s Medical Injury Compensation Reform Act, sent a clear message that patients don’t want to increase payouts in medical malpractice lawsuits that would have lead to higher healthcare costs and reduced access to care. LACMA has become the “go-to” source for the voice of physicians and patients in the media and will continue to be their voice in 2015. We have ramped up our efforts to remind the public that physicians are the primary line of defense and of their importance in providing key services. President Salimpour continues to dedicate significant time and energy to the LACMA mission. Most recently, Dr. Salimpour took the charge to discuss the preparedness of our LA County healthcare system to handle the possibility of an Ebola outbreak. He will continue to work tirelessly to elevate LACMA’s mission and vision and empower all physicians along the way. This year, LACMA’s committees remain instrumental in representing the interests of every practicing physician in Los Angeles County and our future physicians. LACMA members can also look forward to an even greater number of events to promote and enhance opportunities for them, such as the vendor fair, which is sponsored by the Ambulatory Surgery Center Committee at LACMA. For this coming year, we expect our committees to become even stronger in numbers so we can address key issues and provide education, mentorship and support to LA doctors. We can achieve these goals with your help. Our 2014 HealthCare Awards and physician honorees elevate LACMA’s profile in LA County and cultivate the next generation of physicians who will practice medicine in our community. That said, we will continue to face significant challenges ahead, and the affront to physicians’ ability to provide quality healthcare will not cease. We have already heard rumblings from our members about the unauthorized use of their reputations in the marketing of health plans by insurance companies. Rest assured, LACMA will not simply stand by and watch as our physicians are being misrepresented and have their good reputations tarnished. This year, we will continue our efforts to address critical issues such as the ill-conceived Cal MediConnect demonstration project and MICRA’s preservation. I’m pleased that LACMA’s membership continues to be on the rise—as it stands LACMA has 6,500 members in LA County. Our goal is to continue to add to these numbers thanks also to the prospects for additional physician groups. I’m hopeful that physicians across California will seize this opportunity and join LACMA to push through much-needed reforms in the legislative cycle. If you’re not yet a member, this is the year to join and add your voice to the crescendo of power. WISHING YOU A HAPPY, HE ALTHY AND PRO SPEROUS NE W YE AR!

Rocky Delgadillo Chief Executive Officer

2 4 P H Y S I C I A N M A G A Z I N E | J A N UA RY 2015

v i c victory

tor

On nOvember 4, the vOters Of CalifOrnia spOke lOudly

and definitively, sending the trial lawyers’ prOpOsitiOn 46 tO defeat by a vOte Of 67 tO 33. the message is Clear – CalifOrnians simply dOn’t want tO inCrease health Care COsts and reduCe health aCCess sO trial attOrneys Can file mOre lawsuits. An increase in the Medical Injury Compensation Reform Act (MICRA) cap on non-economic damages has been rejected in California again and again: 10 times in court, 5 times in the Legislature and now overwhelmingly by voters. This idea now has its own dedicated spot in California’s political trash heap. But this time, we energized the membership of CMA as a whole to fight the fight together, as one unified voice of medicine, representing the patients we so deeply care about and the care that we have committed to provide them. Despite the trial attorney proponents’ attempt to sweeten the deal by adding provisions that polled well– physician drug testing and mandatory checking of a prescription database – voters said NO on Election Night. As people throughout the state heard from physicians and No on 46 coalition members about the real intentions of the measure’s proponents, there was resounding opposition. One of the secret weapons of this effort was the size and diversity of our coalition. We helped amass one of the largest and most diverse campaigns in California history. The breadth of the coalition — which includes labor, business, local government, health providers, community clinics, Planned Parenthood, ACLU, NAACP, taxpayers, teachers, firefighters and more – underscores just how important affordable, accessible health care is to every Californian. In addition to the groups on the ground talking to voters about the deception and trickery behind Prop. 46, every major editorial board in California opposed the initiative.

The Los Angeles Times said, “As worthwhile as [Proposition 46’s] goals may be, the methods the measure would use to achieve them are too flawed to be enacted into law.” The San Francisco Chronicle decried Prop. 46 saying that the measure, “overreached in a decidedly cynical way.” The Orange County Register, UT San Diego, San Jose Mercury News, Monterey County Herald, Sacramento Bee and dozens of other newspapers echoed these sentiments. The efforts of the California Medical Association and the county medical associations across the state is a tremendous showing of what we can do for the future of health care, the quality of medicine and the dedication to patients everywhere. Working together to spread the truth about Prop. 46, building coalitions across communities and standing strong as one united voice is what helped carry us to victory. This was one of the most contentious and high-stakes ballot fights in California history and we rose to the occasion. We must use this unity moving forward and showcase to our colleagues the value the California Medical Association brings to our great profession and stay united for whatever comes our way next.

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J A N UA RY 2015 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 2 7

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LACMA and CMA are distinguished by their successes. Dual membership provides for unparalleled legislative advocacy to end abusive practices. In addition, LACMA has sued health care plans on behalf of members to stop intimidation tactics.

• Socialize and network with members of the medical community • Find or create opportunities for your practice • Engage with legislators and policymakers

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Working together, the Los Angeles County Medical Association and the California Medical Association are strong advocates for all physicians and for the profession of medicine. Of the many reasons for joining LACMA and CMA, 10 stand out.

CMA develops toolkits, guides, webinars, and resources on all things related to today’s changing healthcare landscape—all FREE with membership. In addition, LACMA provides access to important and local CME-accredited events.

FOR JOINING LACMA AND CMA

When you join LACMA and CMA, you hire a professional staff that serves as an extension of your practice. We are here to help you reach your goals and connect to the resources you need most. Whatever you need—be it help with a problematic payor, or details about your member discounts—just call the member helpline at (800) 786-4262 or visit www.lacmanet.org

RIGHT NOW

is the best time to join LACMA and CMA For more information on member benefits and resources, visit www.lacmanet.org/Membership LOS ANGELES COUNTY MEDICAL ASSOCIATION 707 WILSHIRE BLVD, SUITE 3800 LOS ANGELES, CA 90017 PHONE: (213) 683-9900 FAX: (213) 226-0353

Physicians have faced over 90,000 alleged HIPAA violations. Make sure you’re prepared. *

For decades, The Doctors Company has provided the highest-quality medical malpractice insurance. Now, the professionals of The Doctors Company Insurance Services offer the expertise to protect your practice from risks beyond malpractice. From slips and falls to emerging threats in cyber security—and everything in between. We seek out all the best coverage at the most competitive prices. So talk to us today and see how helpful our experts can be in preparing your practice for the risks it faces right now—and those that may be right around the corner. Call (800) 852-8872 today for a quote or a complimentary insurance assessment. n n n n

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*Source: U.S. Department of Health and Human Services

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