CMS eliminated all consultation codes, except telemedicine consults, as of January 1, 2010, as part of its cost cutting measures.  As specialists bill for these codes more than primary care, it is those providers who have experienced greater revenue declines – most of whom by more than 5%, according to an article posted by Amednews.com, last week.

A survey of roughly 5,500 physicians found a number of financial repercussions and unintended consequences as a result of losing the ability to bill for those codes.  The Amednews article examines some of those losses.  The financial ones are to be expected, however CMS only predicted a revenue drop of around 3%.  Yet results of the survey demonstrated a higher loss.  Indeed, an infectious disease physician interviewed for the article said that his practice had experienced an 8% loss so far this year and even had to lay off two mid-level medical staff members and one biller in March due to the loss of the consultation codes.

More far reaching consequences that CMS would surely not want to happen would be less of “the kind of care coordination that CMS has been seeking in Medicare.”  Time spent reviewing charts and talking to families and other medical staff in the hospital setting are also not being recompensed, so that time may be decreased as well.  The article covers many other issues as well, including coding for new or established patients among primary care and other specialists.

The AMA has concerns over how this will affect patients, which primarily means less access for patients.  A neurologist explains what that means in terms of his practice: “One of the keys to neurology is to spend the time with patients.  Taking a good history is critical, so devaluing our time undermines the service.  Ultimately, it means some patients are not getting the care or attention that they should.”  On June 18, the AMA and 30 other physician organizations sent a letter to CMS expressing these concerns.

Amednews.com, the online publication of the American Medical Association, posted an article a week ago on predictions of job growth in physician offices and hospital by the end of this year.  Not only had the recession slowed healthcare job growth, but concerns over the SGR are also blamed for employers having taken a “wait-and-see” attitude about hiring new FTEs.  Those factors added up to 4,600 fewer new hires in the first half of 2010 vs. the same time last year.

Despite continued uncertainty about what state of the recession the country is currently in, the healthcare sector has reasons to feel optimistic.  The month-to-month delay of the 21.5% SGR Medicare cut has ended (for now), and the 2.2% payout increase is in effect until 11/30/10 when Congress will have moved beyond election season and can presumably focus on fixing the SGR.  The recently passed healthcare bill is also expected to increase the need for healthcare providers and midlevel and support staff as previously uninsured people will be able to seek affordable care due to the requirement to get insurance.  Thus, stabilizing Medicare payments and increased patient volume is expected to cause the expected uptick in hiring.

The expected hiring has already begun as a survey done by CareerBuilder.com found a 3% increase over this time last year in healthcare employers intending to add FTEs from physicians to support staff.

The Community Oncology Alliance issued a press release, detailed the rising tide of cancer clinic closings across the country since January 2010.  The COA specifically blamed, “…financial pressures from severe cuts in Medicare reimbursement for care.”

Over the past three years 166 clinics have closed with 39 of them from 15 states shutting their doors since the beginning of this year.  The COA goes on to note, “In the past few years, more than 850 clinics nationwide have experienced severe negative impacts from annual cuts to cancer care by Medicare.  This number includes clinics that have closed their doors; continue struggling financially to pay bills to operate; are forced to send all their Medicare patients elsewhere for treatment, or have been acquired by hospitals or other entities.”

Making matters worse, 20% of today’s oncologists would discourage a medical student or resident from pursuing their field vs. only 3% who would do so less than 10 years ago.  As a consequence, “It is estimated that by 2020, one in four cancer patients will be short an oncologist.”

Medicare has dramatically cut reimbursement rates for chemotherapy as well as PET and CT scans since 2004, with more coming over the next three years.  COA encourages lawmakers to stop these cuts for the sake of effective cancer care across the country.  Ted Okon, Executive Director of COA warns that, “The government has to act now to stop Medicare cuts in order to preserve our nation’s cancer care delivery system before its too late.”

Consumers Union, the nonprofit publisher of Consumer Reports Magazine issued a press release with details from a report in which they examined the surpluses individual nonprofit BCBS plans set aside versus their respective rate increases.  The results are startling.

As the press release notes, a “surplus” is essentially a retained profit.  And, some of the BCBS plans raised rates by 20% per year, while maintaining a surplus of more than three times the amount recommended by regulators for solvency protection.  Some of the more egregious examples include:

• “Blue Cross Blue Shield of Arizona raised rates for its individual market customers between 14.5 percent and 19.4 percent in 2007, 13.1 percent and 15 percent in 2008, and 8.8 percent to 18.4 percent in 2009.  During that time, the company's surplus grew from $648.3 million to $717.1 million, which is more than seven times the amount that regulators consider to be the minimum necessary for solvency protection.”
• “Health Care Service Corporation (HCSC), doing business as Blue Cross Blue Shield of Texas, Illinois, New Mexico and Oklahoma, raised rates in Texas on some individual and family plans multiple times in a year between 2007-2010. Some Blue Cross Blue Shield of Texas rate increases exceeded 20%. In Illinois, the company filed for rate increases of 10.2% in 2007, 18% in 2008, and 8.4% in 2009 for some customers, and in New Mexico, some customers faced annual increases of more than 20% since 2007.  At the time of these increases, HCSC's surplus grew from $6.1 billion in 2007 to $6.7 billion in 2009, up from $4.3 billion just four years earlier in 2005.  The company's surplus is five times the minimum required for solvency protection.” 

While Consumers Union notes that some states have begun to reject rate increased amidst such huge surpluses, the organization urges the rest to begin to, “…examine these surpluses, develop appropriate ranges for minimum and maximum surplus, and disapprove or reduce rate increases, particularly on individual market plans, when the company has more surplus than is necessary for solvency protection.”

They go on to recommend, “…policymakers, insurers, consumer advocates and other industry participants should reexamine the purpose of surplus and the formulas for establishing each insurer's appropriate surplus requirements.  Minimum and maximum ranges of appropriate surplus should be developed for insurers based on prevailing and projected risks and other appropriate factors, including affordability for consumers.”

The Medical Group Management Association (MGMA) has reported results of their annual survey on members’ healthcare management challenges, called MGMA 2010 "Medical Practice Today: What Members Have to Say".

The top 3 concerns facing MGMA members include:

1. Dealing with rising operating costs
2. Managing finances with the uncertainty of Medicare reimbursement rates
3. Selecting and implementing a new electronic health record system

Other issues made the list, but it is hardly surprising that these three challenges made the top of the list.  Rising operating costs is a huge motivator to improve billing collections, and that actually makes the top of the list of “how the recession is affecting their medical groups and how they are responding.”  Medicare reimbursement rates have faced a vote in Congress every month of this year to stave off the SGR but for only a month at a time until last week’s bill that allowed for a 6-month revprieve in addition to a 2.2% increase.  And, the motivation is huge this year to select an EHR system.  Implementation before September 2010 for a hospital and January 2011 for a practice can result in maximum HITECH Act incentive dollars.  Delay of EHR implementation for as late as 2015 will result in Medicare payout reduction.

For further details on this survey, members can follow this link to MGMA’s press release that includes a link to the actual survey results.

In the May 24 issue of the online magazine, Modern Physician, is an article about renewed interest in the concept of “pricing transparency” (Pricing transparency gaining renewed interest).  Three bills are being reviewed by the Energy and Commerce Committee's Health Subcommittee that would mandate healthcare organizations like hospitals, clinics, ambulatory centers, physicians’ offices, etc., to disclose full pricing at the risk of financial penalty for noncompliance.

Currently, the prevailing belief is that with all the thousands of variations of disease states, it is impossible to state charges up front.  This mindset is being challenged by lawmakers on both sides of the aisle, including a legislator who is a physician, himself.  One issue being discussed is the practice of charging a higher price to patients without health insurance while at the same time charging a discounted price to patients who have coverage.  As patients would be able to see these charges up front, they may become more empowered in their healthcare choices.  The article states that the bills, “…attempt to give individuals the important information they need to choose where to go for care and how much they can expect to pay once they get there.”

While there is interest in Congress to mandate pricing transparency in healthcare, it is not clear if any of the bills will move out of committee this year.  There are a number of other pieces of legislation awaiting hearings, so this one may have to wait until next year before any serious discussion takes place.

The National Cancer Institute (NCI) posted an update to its Cancer Trends Progress Report 2009/2010 on April 15, 2010.  Of the many new measures included, is an expanded section on Cost of Cancer Care (http://progressreport.cancer.gov/doc_detail.asp?pid=1&did=2009&chid=95&coid=926&mid=).  The report reviews national cancer care expenditures in 2006 based on cancer site, phase of care, first year of diagnosis and lost productivity per site.  The data are presented in interactive graphs that provide more information when the cursor hovers over a data point.

The report notes that the total national cancer care expenditures for 2006 were an estimated $104.1 billion.  Cancers of the female breast, colon, lung, prostate and lymphoma dwarfed expenditures of other forms and each type of cancer listed includes costs associated with initial, continuing and last year of life care.  Relative to the other big expenditure cancers, prostate cancer had a relatively low last year of life cost.  When comparing losses of lifetime earnings due to cancer deaths in 2005, lung and bronchus cancers are triple that of the next nearest type, female breast. 

The report notes that, “In the near future, cancer costs may increase at a faster rate than overall medical expenditures.  As the population ages, the absolute number of people treated for cancer will increase faster than the overall population, and cancer prevalence will increase relative to other disease categories…”  Additionally, “Costs are likely to increase as new more advanced, and more expensive treatments are adopted as standards of care.”

This month the Institute of Medicine has released a report titled, “A National Cancer Clinical Trials System for the 21^st Century, Reinvigorating the NCI Cooperative Group Program,” that assessed, “…the state of cancer clinical trials, review the Cooperative Group Program, and provide advice on improvements.”  Coincidentally, ASCO released the results of a survey of NCI Cooperative Groups on April 15, 2010, that relates to those groups limiting clinical trial participation.  The similarity in both of these reports relates to funding, or lack thereof, of such clinical trials.

In addition to all the clinical, speed and prioritization suggestions that the IOM makes, they also note that eligible patients may decline participation due to financial concerns, “…as coverage of patient care costs in clinical trials by health insurers is inconsistent.”  They suggest, “Among other actions, federal and state health benefits plans, private health insurers, and the Centers for Medicare and Medicaid Services should establish consistent payment policies to cover patient care costs.”

ASCO’s survey of NCI Cooperative Groups found that they, “…plan to limit participation in federally funded clinical trials due to inadequate per-case reimbursement.  Additionally, nearly 40 percent of sites planning to limit NCI Cooperative Group trials reported plans to increase industry trial participation, despite expressing a preference for conducting Cooperative Group trials.”  ASCO points out that such federally-funded trials, “…often examine questions that the private sector has little incentive to investigate.”  While participation in federally funded trials may go down, the results also indicate that 39% of those decreasing such trials will be increasing their participation in industry-funded trials.

Both of these reports indicate a need for reinvesting in the kinds of clinical trials that may not produce dollars for private industry but may ultimately lead to superior cancer patient care.  To read both reports, go to http://www.iom.edu/~/media/Files/Report%20Files/2010/A-National-Cancer-Clinical-Trials-System-for-the-21st-Century-Reinvigorating-the-NCI-Cooperative/NCI%20Cancer%20Clinical%20Trials%202010%20%20Report%20Brief.ashx, for the IOM one and http://www.asco.org/ASCOv2/Press+Center/Latest+News+Releases/ASCO+Survey+Finds+NCI+Cooperative+Groups+Limiting+Clinical+Trial+Participation, for ASCO’s study.

ASCO expresses pleasure and concern in their response to the recent passage of the healthcare reform legislation.  They see a number of benefits for cancer patients in the immediate and more distant future as a result of the bill, but express concern (along with many other entities) about the “flawed Sustainable Growth Rate”.  To read the entire response, you can find it here:   (Article Link)

In a letter signed by a bi-partisan group of 27 U.S. Senators, CMS is urged to modify the proposed Meaningful Use (MU) criteria for hospitals and physicians wanting to take advantage of the incentive dollars available for EHR conversion as part of the HITECH Act.  Key concerns are addressed with regard to multi-campus hospital systems, definition of what qualifies a physician for the dollars and exclusion of smaller Critical Access Hospitals (CAH).

The senators assert that since one hospital system may have several campuses under one Medicare number, the system may only be incentivized for that one number, rather than all the locations.  By that definition, hospital systems containing more than one campus are decentivized to build EHR systems for more than one of them.  They also contend that CAHs should be allowed into the program, which, as the proposal stands today, they are not.

As for physicians who work in outpatient centers, the senators worry that CMS’ very specific definition of which providers qualify for incentive dollars and which ones don’t will unfairly limit many who ought to qualify.  A clinic that is simply owned by a larger health system is no different than any other center and should be eligible for incentive dollars.  They point out that, “Regardless of how the ambulatory care sites are licensed or established, the care and services furnished in these settings are similar to services furnished by private physician offices in other communities that are able to attract private physicians and clearly eligible under the statute to receive HIT incentive payments.”

The entire letter can be read at this link from the AHA’s website:  http://www.aha.org/aha/letter/2010/100302dearcolleagueSenateHIT.pdf.