HEALTHCARE 2011
(and beyond)
David Kloth, MD
NANS 2010
Professional and Corporate Disclosure
 Teaching and consulting agreement with St. Jude
Medical
 Previous consulting for Smith and Nephew and
Medtronic
 Consulting on VC start ups
 Board Member ASIPP
 Treasurer/Board Member NANS
 Chair Neuromodulation Therapy Access Coalition NTAC
 President Conn Pain Society
Maxine on Healthcare reform
Let me get this straight......we passed a health care plan written by a
committee whose chairman says he doesn't understand it, passed by a
Congress that hasn't read it but exempts themselves from it, to be
signed by a president that also hasn't read it and who smokes, with
funding administered by a treasury chief who didn't pay his taxes, all
to be overseen by a surgeon general who is obese, and financed by a
country that's broke.
What the hell could possibly go wrong?
Neuromodulation under ATTACK
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WC Guidelines
HTA in WA
Coverage restrictions
Reimbursement
Competition from non-PM providers/poor
quality PM
• OIG/RAC’s
• SGR
Will My Patient Have Access to
SCS, PNS, DBS, and Pumps?
Will I get Paid and How Much?
Spinal Cord Stimulation
Implantable Spinal Drug Delivery
Systems
2011 Medicare Physician Fee Schedule Proposed
Rule
2011 Medicare Outpatient Prospective Payment
System Proposed Rule
2011 Medicare Ambulatory Surgical Center
Prospective Payment System
Overview
• Medicare updates the fee schedule annually
• 2011 proposed rule released June 25 and comment period
ends on August 24
• Final rule published in November and new rates take effect on
January 1
Note: this information is for Medicare only. Non-Medicare payers may use
the relative values and other payment policies for their own unique
proprietary fee schedules
Medicare Physician Fee Schedule
Physician Fee Schedule - Background
The formula
• Relative value x conversion factor (CR) = payment
The CF impacts all procedures
The Sustainable Growth Rate (SGR), found in
Medicare statutes, dictates the CF. Since utilization,
number of beneficiaries, etc. are part of the formula,
negative updates have historically occurred
Over last eight yearly cycles, Congress and the
President have reduced or eliminated the reductions
SGR does not account for increasing number of
Medicare beneficiaries, longer life spans, or new
technology
Medicare Physician Fee Schedule
Conversion Factor – Status as of Dec. 2010
CF is still to decrease by @25% on January 1
Several congressional actions for temporary time-limited fixes
Last fix (passed on December 1st) was to eliminate the decrease
and provide a 2.2% increase from June 1 through November
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For 2011, CMS proposes a -25% decrease (revised down by CMS
from almost 30%). As in past, expect that some fix would be
legislated
The CF will likely continue to be an ongoing issue until a long
term resolution is reached
Cost to extend cut delays >$1 billion/month
AMA calls for 13 month fix (cost $ 17 billion)
67% of physician practices say they will drop or restrict access to
Medicare pts. if the cut goes through (source: MGMA)
Medicare Physician Fee Schedule
CMS: Potentially Misvalued Codes
In the summer of 2008, CMS identified areas of
concern related to past methods of valuing codes.
Some concerns were related to work relative values
(The work value recognizes physician time and
intensity to perform a procedure)
One specific area of concern was the potential for site
of service anomalies. Over 100 specific codes were
identified as potentially mis-valued due to a site of
service anomaly
CMS agrees to not use the proposed reverse building
block methodology on pain codes.
COMMENT LETTERS DO HELP!!!
Medicare Physician Fee Schedule
Reimbursement Changes for
Neuromodulation
• Physician fees relatively stable
• For other IPM procedures prof. fees are mostly stable or
increase by as much as 15% (Fac.) and 20% (office)
www.asipp.org/documents/Physicians2011Final.pdf.
• Fluoro to be bundled with TF ESI’s
• Hospital OPPS
SCS increase 3-6 %
Implantable pump slight decrease for most
codes
DBS 2-6% increase
Interstim @3% increase
ASC mostly stable (1% decrease) except add-on codes with
@ 21% decreases
Practice Expense Surveys
• IPM has undergone review and now an increase
in practice expense
• Second of four years of transition
• Should help protect pain codes over the next
several years from drops related to changes in
work value
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
Affordable Care Act - ACA
• $938 Billion estimated cost (goal to keep less
than $1T)
• Increases our National debt to over $13 Trillion
• Lobbying will explode in DC, big pie to divide $652 million in 2009 (14% increase from 2008)
• Gives new powers to federal agencies, removes
congress from many decisions, much to be
controlled by Executive Branch and Cabinet
secretaries
What HCR of 2010 did not include
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Tort reform
Controls on ins. rate increases
SGR fix
IPM credentialing
Positive ASC payment reforms
Honest estimate of cost – CMS says cost will be
$750 Billion more than estimated.
• New CBO estimate adds $115 billion and this doesn’t
include the cost of dozens of misc. programs the
legislation authorizes.
• Adequate control of pharma costs
ACA continued
• Exceptions granted for many companies who offer ‘Mini-med’
plans – minimal capped coverage for low wage employers
with high employee turnover, i.e. – McDonald’s
• Requirement that carriers spend 80% of premiums on
medical care and quality improvement activities (increases to
85% for large group market) – starts 2011
• More small businesses offering health benefits because of tax
credit incentives
• Increased premiums to cover the cost of changes from ACA
(pre-existing conditions, lifetime limits, kids to age 26)
• Other exclusions being considered => undermining of the
purpose of the bill
Health Care Reform Legislation of 2010
• Many hidden programs and committees which will
effect reimb.
• Ultimately the goal of this bill is to pay all MD’s the
same
• Medicare Indpt. Payment Advisory Board – MIPAB
Reimbursement committees with no congressional
oversight that will make changes to existing MFS –
15 members appointed by President (2015, 2/3 vote
to override changes), hospitals exempt initially
• Move toward Capitation
• CER committee
Independent Payment Advisory Board (IPAB)
• Establishes 15-member Board appointed by President (confirmed by
Senate) to reduce per capita rate of growth in Medicare spending
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In 2014, the Board will develop a proposal to reduce Medicare spending by targeted amounts compared to
current law
For 2014-2018, the targeted reduction amounts equals the excess 5-yr average growth in per capita
Medicare compared to the 5-year rate of change of CPI and CPI-M averaged
Beginning in 2018, the target growth rate is the nominal GDP per capita plus 1%
• Board is to present a final proposal to Congress and the President by
January 15, 2014
• Beginning in 2015 – Bi-annual recommendations to slow growth in
national health expenditures
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Cannot: ration care, increase revenues, beneficiary premiums or cost-sharing; restrict benefits; or modify
eligibility criteria
Prior to 2019, cannot recommend Medicare payment rate reductions for providers and suppliers subject to
update reductions (e.g. hospitals)
• Congress must adopt total package of recommendations (or alternative
that achieve comparable savings) within six months or they are
implemented automatically
HCR 2010 will lead to many New
Problems
• Decreased access to Medicare patients
• Decreased reimb to MD’s
• Equalization of pay across specialty
• Increased use of PA’s/NP’s a shift in the way
medicine is practiced. The solution to the doctor
shortage if many MD’s drop par with govt
programs
“Doctor shortage? 28 sates may expand nurses
role”
What if you Tx. 75% Medicare
• The govt’s dream.
• Wont be able to afford to stay in business
• Join Hospitals and larger groups or close their
doors
• Helps to move toward Capitation (ACO)
• Many unseen hidden agendas in this bill
Medicare Participation?
• Par – 80/20
• Non-par – 95/15, pt gets the check (net 9.25%
increase)
• Private contracting – once out, you are for 2 years
• What % of your practice is Medicare? Volume and
revenue, they are hopefully different.
• State may mandate participation to have a license –
MA
• States may drop out or limit their participation in
Medicaid
Hospitals and Physicians Increasingly Share Mutual Incentives
About Service and Care Decisions
ACOs and Other Reform Provisions Will Accelerate These Trends
Source: Medical Group Management Association, Physician News (online digest) 2/4/09
Physicians move increasingly to
employee model
• Decreased financial risk
• Steady pay-check
• Patient access especially with ACO’s on the
horizon
• ACO’s will require cooperation between
hospitals and physicians
• Mostly primary care, general surgery, and other
medical specialties (cardiology – 60%)
• Surgeons and pain physicians continue to resist
and prefer indpt. practice
Accountable Care Organizations
ACO’s
Intention is for providers to join together to coordinate care, share
clinical information, and report on quality measures.
The intended result is that this coordination will lead to improved
quality of care, prevent costly hosp. visits, and thereby create a
more cost effective heatlthcare delivery system.
ACO’s
• Goal – high quality, low cost, and more efficient care
• Meant for Medicare but will also be used by commercial
carriers
• Similar to capitation and original HMO/PPO withhold models
• Integrated medical delivery system will push more MD’s into
an employee role
• ACO’s will likely replace MAP’s which lost sign. funding with
ACA
• Shared risk environment
• Financial rewards for meeting certain cost-saving benchmarks
and performance guidelines (quality measures)
• Will control where patients are directed
• Encourage limits on healthcare by incentivizing more
restrictive treatment coverage policies
ACO’s
• Hospital controlled
• Physician controlled
• Variable payment arrangements including fee
for service
• May effect viability of indpt. ASC’s
• Anti-trust questions abound
• Anti-kickback concerns
• ACO’s could reduce competition in areas where
there is only one choice allowing them to dictate
fees and thereby increase the cost of healthcare
ACO’s
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Pilot programs starting
Commercials payors moving forward already
Steering of business
Integrated delivery system will require multiple
components including pain care to properly
control costs
• Increases pressures on hospital health systems
to acquire practices
• Single specialty ACO’s? more likely to develop
around chronic high cost disease states
ACO’s
• NEJM 11/13/2010
“Physicians vs. Hospitals as Leaders of
Accountable Care Organizations”
“He who hesitates has lost”
“If you are not at the table, you are on the menu”
AMA
• Supported HCR
• Wont support temp fixes to SGR only long term
fixes
• Less than 15% of practicing MD’s are members
• 90% of revenues ($300m/yr) come from the govt.
exclusive license to the AMA on CPT, a sanctioned
monopoly on codes and reimb.
• Any govt. threat to pull this could end the AMA.
• AMA’s support demonstrates their COI and financial
ties, not what the membership or physicians in
general think
A View From Obama’s
Perspective
“If you like what you have, we want you to keep it.”
What Obama really wants?
Single Payer system
How do you force a change to a
single payer system?
• Make private insurance unaffordable to
companies and individuals
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No review of premium increases
Minimize penalty to corporations
Tax good plans
Make requirements so expensive that co. cannot
(or don’t want to) afford
▫ Create govt. sponsored and controlled buying
cooperatives
ObamaCare’s Incentive for Employers
to Drop insurance
• Federal subsidies to purchase insurance through
“exchanges”
• Exchanges available starting 2014
• No pre-existing condition exclusions
• Penalty $2000/employee
• 170 million Americans get employer sponsored group
insurance
• Increased incentives include tax on better plans and
increasing requirements that even basic plans must meet
• Large companies, including state and municipal
employers will be incentivized to shift the cost of health
benefits to the federal govt.
Debt Reduction Commission
• Bipartisan
• Appt. by Obama
• Proposed “doc fix” that would spread the pain
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Physicians
Medicare and Medicaid patients
Drug companies
Plaintiff attorneys
What do the GOP gains mean?
• Gains occurred both on federal and state level
• ACA will not be repealed
• Parts of ACA may be changed or unfunded in an
attempt to kill it (lack of appropriations killed
NASPER)
• Increased number of lawsuits challenging legality of
ACA
• Some states may choose to drop out of Medicaid
• Fiscal responsibility and the may economy may =>
decreased MD reimbursement
• Tort reform? Still unlikely in the short term
Other pressures on the healthcare
system
• Recession – medicine may not be as recession
proof as we once believed
• High unemployment
• National Debt
• Increasing aggressiveness of health insurers
• Increasing fraud and abuse => more OIG, RAC’s
• Estimated $800 Billion in waste, abuse, fraud
($200B), and administrative costs (18%)
• Medical mistakes $50-100 Billion
EHR/HIT give back
• At least 50% of encounters must be Medicare
or
• At least 30% of encounters must be Medicaid
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Up to $44k/MD through Medicare
Up to $63,750/MD through Medicaid
Paid over 5 years
“Meaningful Use” = Must meet 25 distinct measures – 15
core, 10 from a ‘menu of options’
• Medicare penalty for delay - % reduction that
progressively increases
• Hospital based MD’s not eligible (90%)
• http://cms.gov/EHRIncentive Programs/.
NANS Outreaches
• Lobbying jointly with ASIPP 6/10
▫ ASIPP 6/25-28/2011 – Legislative day 6/28
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NTAC
Active participation in WA state HTA process
Joint society meeting
Joint SCS course with ASIPP
Participation in NLF through NTAC
Intersociety collaboration
Public Relations Initiative
• Media outreach to change the public perception
of what we all do.
• We need more stories
• Celebrity spokespersons
• Public advocacy and lobbying are not the same
and are equally as important.
Over 5,000 years ago, Moses said to the children of
Israel , Pick up your shovel, mount your asses and
camels, and I will lead you to the Promised Land".
Nearly 75 years ago, Roosevelt said, "Lay down your
shovels, sit on your asses, and light up a Camel, this is
the Promised Land".
Now Obama has stolen your shovel, taxed your
asses, raised the price of Camels, and
mortgaged the Promised Land!
I was so depressed last night thinking about health
care reform, the economy, the wars, lost jobs,
savings, social security, retirement funds, U.S. debt
etc. So, I called Lifeline , the suicide help line. Got
a call center in Pakistan and when I told them I
was suicidal, they all got excited and asked if I
could drive a truck . . .
THANK YOU