MEDICAL CAREER NEWS

From the dark side: Payers’ views on paying us

Knowing our adversaries can help us better represent our needs and our patients’.

Few of us think that we are paid appropriately for our work. We regard payers, whether government or private, as adversaries who impose needless bureaucratic hardships and impede rather than facilitate efficient, high-quality patient care.

Growing payer focus on chronic disease management and prevention, plus intensifying scrutiny of acute, costly interventions outcomes—ie, operations—have created a climate in which surgeons feel beleaguered and disenfranchised. For surgeons, taking a larger-scale, strategic, systems-based view of reimbursement might allow us to better represent our needs and those of our patients.

It’s not difficult to understand why we think our reimbursements are inadequate (TABLE). Medicare fee schedules for several common procedures have declined in absolute dollars from 1989 to 2007.¹ Obviously, the cost of living, practice expenses, and professional liability coverage costs have not followed this trend.

Revisions to the 2007 Medicare Part B Fee Schedule shifted $4 billion to Evaluation & Management (E&M) services, a sum more than the total annual payments to cardiothoracic, colorectal, general, neurological, and vascular surgeons.²

Payers seem unconcerned about shrinking surgical payments, so why should we care how they perceive us? In the 6th century BC, Sun Tzu told his warriors to know their enemies as well as themselves, and modern negotiation strategists tell us to “get inside your opponent’s head.”^3,4

The Center for Medicare and Medicaid Services (CMS) is the largest health insurer in the world. The Medicare Resource-Based Relative Value Scale (RBRVS) directly determines surgeon payments. Most commercial carriers incorporate the RBRVS into their payment structures.⁵

CMS is also the only payer required to fully disclose its policies and procedures to the public. We can easily examine Medicare trends, an exercise from which surgeons can learn much. Take-home points include^6–10

• The Medicare population is growing rapidly.

• Beneficiaries are living longer; many have multiple chronic conditions.

• Treating chronic conditions represents the largest portion of Medicare expenses.

• Five percent of Medicare beneficiaries account for nearly 50% of expenses. The top 25% account for nearly 90% of expenses. Costs are greatest for inpatients, patients with multiple chronic conditions, and those in the last year of life.

• The volume of services delivered to Medicare beneficiaries continues to grow rapidly and varies significantly across geographic regions.

• Increased frequency or complexity of services delivered does not always improve outcomes; many beneficiaries forgo tests such as screening mammography and colonoscopy.

• In traditional fee-for-service Medicare, physicians either provide or control orders for most inpatient or outpatient services.

• Major procedures, including surgery, is the slowest-growing category of Medicare Part B expenses.

• Medicare is going broke: Annual expenses in the so-called HI Trust Fund (Part A: hospital, skilled-nursing facility, home health, etc) are projected to exceed payroll tax revenues by 2010. Beneficiary-paid premiums cover only 25% of Part B (physicians and other providers) and Part D (prescription drug) costs.

• A beneficiary’s expenses (premiums, cost-sharing) will exceed one-third of her or his Social Security income by 2010.

• Telephone surveys of beneficiaries show that the vast majority have no problems accessing physicians.

What it all means to you

So, without major policy changes, Medicare must serve more and sicker patients with the same or fewer resources. One CMS strategy is to move beneficiaries from traditional fee-for-service to managed care (BOX).

What should surgeons do to prepare for this evolving health-care system? First, stop whining about reimbursement. Surgical reimbursements still exceed those of other specialties. Physicians, particularly surgeons, continue to earn more annually than most other occupations tracked by Bureau of Labor Statistics—and we certainly earn more than most of our Medicare patients.

We also need to become more knowledgeable about our health-care system. Talk with our patients about it when appropriate opportunities arise. Listen to what they want from us and from the system.

Surgical organizations need to present to policy makers a unified, systems-based strategy for the delivery of high-quality surgical patient care. Individual surgeons need to participate in the development of surgical quality of care measures, such as the National Surgical Quality Improvement Program (NSQIP) initiative by the American College of Surgeons. (See “Real World: NSQIP: What it really means for the general surgeon.,” April 2007.)

Our organizations and institutions can also help us embrace efficient health information technology in our hospitals and offices. Without electronic records, it will be impossible for most of us to meet quality targets.

We can also continue to be the coordinators of care for our patients. That is, we do not relegate everything but the operation itself to the primary-care physician.

What you can do today

What can you do now to optimize reimbursement and to transition into the future care systems? Here’s a to-do list:

• Provide a mixture of services (office, ambulatory surgical, inpatient hospital OR).

• Do not give away E&M services (CPT codes 99201-99499). Payment for them is rising while payment for procedures is falling. Learn how to bill by time for counseling patients on their many treatment options.

• Learn to use CPT modifiers properly. They often allow increased payment within the surgical global period. Use add-on codes and -51 exempt codes.

• Utilize the 1995 E&M Documentation Guidelines (rather than 1997) for your office records. They are more flexible and are easier to meet.

• Take advantage of free or discounted electronic medical records systems your hospital offers, the free product based upon the Veterans’ Affairs electronic record, or budget now for your own system.

• Track your own outcomes. ACS fellows can use a free web portal. En-courage your hospital to participate in databases such as ACS-NSQIP and the National Cancer Database.

• Be a team player. When your center asks you to work on a quality management project, do it. Otherwise, you will be done unto. Embrace safety measures such as surgical-site marking. Your willing participation will enhance your value to patients and your own institution.

Our health-care system is changing rapidly. You are smart and capable or you would not be where you are today—and you don’t have to be left behind.

References

1. Borman KR.  Medicare physician spending: Past as prologue? Ramblings of a surgical specialist. Presented at the National Health Policy Forum, Washington, DC. October 12, 2006.

2.  Center for Medicare and Medicaid Services. CMS-1321- FC: Medicare program revisions to payment policies, five-year review of work relative value units, changes to the practice expense methodology under the physician fee schedule, and other changes to payment under part b; revisions to the payment policies of ambulance services under the fee schedule for ambulance services; and ambulance inflation factor update for CY 2007. Federal Register. December 12, 2006.

3.  Sun-tzu. The Art of War. Griffith SB, trans-ed. Oxford, UK: Oxford University Press. 1963.

4.  Buell, Barbara. Negotiation strategy: Six common pitfalls to avoid. Stanford Graduate School of Business. Available at: http://www.gsb.stanford.edu/news/research/hr_negotiation_strategy.shtml. Accessed June 27, 2007.

5.  Medicare RBRVS 2007: The Physician’s Guide. Chicago, IL: American Medical Association; 2007.

6.  Medicare Payment Advisory Commission. MedPAC Data Book 2006. Government Accountability Office: Washington, DC. Available at: http://www.medpac.gov/documents/un06DataBook_EntireReport.pdf. Accessed June 27, 2007.

7.  Medicare Payment Advisory Commission. March 2007 Report to the Congress. Medicare Payment Policy. Government Accountability Office: Washington, DC. Available at: http://www.medpac.gov/documents/Mar07_EntireReport.pdf. Accessed June 27, 2007.

8.  Medicare Payment Advisory Commission. June 2007 Report to the Congress. Promoting Greater Efficiency in Medicare. Government Accountability Office: Washington, DC. Available at: http://www.medpac.gov/documents/Mar07_EntireReport.pdf. Accessed June 27, 2007

9.  US Bureau of Labor Statistics. National Compensation Survey: Occupational wages in the United States, June 2006. Available at: http://www.bls.gov/ncs/ocs/sp/ncbl0910.pdf. Accessed June 27, 2007.

10.  Current Procedural Terminology 2007. Beebe MD, ed. Chicago, IL: American Medical Association; 2006.

Contemporary Surgery ©2007 Dowden Health Media