Category Archives: physician compensation

COVERED CALIFORNIA TRANSITIONING TO VALUE PAYMENTS

HEALTHCARE PROVIDERS SHOULD PREPARE FOR END OF FEE FOR SERVICE PAYMENTS

Introduction

Medicare reimbursement has slowly changed from a system primarily based on fee for service to a system paying for treatment of a population.  Physicians and other providers who have relied on Medicare have seen payments reduced and general income levels decline as a result.

Covered California and Value Payments

Reinforcing the view that medical care can be less expensive if incentives are put in place for providers, Covered California has always promoted the utilization of value payments over fee for service for physicians and other healthcare providers.  They view it as a method to reward quality care and patient satisfaction, even though it is having the effect of reducing payments to providers, making medicine more corporate medicine and driving smaller practices out of business.  This has happened with similar Medicare reforms.

The Model QHP Contract

The Covered California Board has been considering its contract with Qualified Health Plans (“QHP”) for the coming years.  A review of the 2017 Qualified Health Plan Contract and Attachments shows that the Covered California Board is continuing its advance to reform payment models under the Healthcare Exchange.

The Qualified Health Plan Model Contract (“Model Contract”) is the agreement entered into between the Qualified Health Plans (“QHP”) and Covered California. The contract sets the terms for the QHP  operate under in order to participate in California’s healthcare exchange.  These contracts have become the major method by which Covered California promotes its major policy initiatives, such as appropriate healthcare networks and payment reform to healthcare providers.

The Model Contract specifically references federal policy on incentivizing quality by tying payments to providers by measuring performance. When providers meet specific quality indicators or enrollees make certain choices or exhibit behaviors associated with improved health, providers receive a higher level of payment.    Such policy requires quality reporting, care coordination; chronic disease management, patient-centered care, evidence based medicine and health information technology. (Quality Improvement Strategy: Technical Guidance and User Guide for the 2017 Coverage Year.)

Attachment 7 to the QHP Model Contract

Attachment 7 to Covered California 2017 Model Contract provides the meat of the policy.  According to Attachment 7, QHPs are to work with Covered California to create healthcare networks that are based on value.   By working with Covered California, all QHPs will share data which they have received from providers across the state.  The plan also contemplates meetings where best practices are discussed.

QHPs Must Select Healthcare Providers Who Are Utilizing Quality Measurements

Under Attachment 7, all plans must include “quality” measurements in the selection and utilization of providers, including “clinical quality, patient safety and patient experience and cost.” Covered California will carefully monitor the plans to assure that that  QHPs only contract with providers and hospitals that demonstrate quality care.

QHPs are to ensure that providers which are serving enrollees with conditions that require highly specialized management have “documented special experience and proficiency based on volume and outcome data.”   Attachment 7 further specifically requires the submission of the Consumer Assessment of Healthcare Providers and Systems, developed by the Agency for Healthcare Research and Quality.  The CAHPS requests information from the consumer experience, including:

  Asking about aspects of care for which a patient or enrollee is the best or only source of information.

  Asking about the aspects of care that patients say are most important.

  Asking patients to report on the health care they receive.

  Reflecting input from a broad spectrum of stakeholders, including patients, clinicians, administrators, accrediting bodies and policymakers.

Finally, Attachment 7 promotes the use of Patient-Centered Medical Homes as well as integrated care models, with quality and patient satisfaction as key data points; population-based care, including integrated care; utilization of electronic health record technology, including utilization of data for results management and clinical decision support and patient support.

2017 continues the trend toward value added care.  Physicians and other providers should start preparing practices for this new payment models if they intend to continue in medicine.

By Matt Kinley,Esq., LLM, CHC

562.715.5557

 

 

Los Angeles Medical Association: Navigating the Hornet’s Nest of Reimbursement

Matt Kinley Speaks to Los Angeles County Medical Association on March 23, 2016.  Contact Mr. Kinley at mkinley@tldlaw.com if your interested in attending.

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PHYSICIAN COMPENSATION UNDER OIG REVIEW

Physician Compensation Arrangements Under Scrutiny

On June 9, 2015, the Office of Inspector General issued a special Fraud Alert warning physicians that compensation arrangements (such as medical directorships) must ensure that the arrangement reflects fair market value. Such arrangements “may violate the anti-kickback statute even if one purpose of the arrangement is to compensation a physician for his or her past or future referrals of Federal health care program business.”

California statures and rules can be even stricter.

In this era of merger and consolidation, medical providers must be careful to create appropriate compensation arrangements. They must carefully document attempts at establishing fair market value, or be subject to regulatory prosecution.

This alert comes after the OIG recently reached settlements with 12 physicians who entered into medical directorships and other arrangements, which the OIG concluded violated the Federal Anti-Kickback Statute. In those cases, the arrangements appeared to be illegal for one or more of the following reasons:

• The payments to the physicians took into account the physicians’ volume or value of referrals.

• The payments did not reflect fair market value for the physicians’ services.

• The physicians did not actually provide the services required under the agreements.

• The entities contracting the physicians paid the salaries of the physicians’ front office staff.

Certain physician compensation arrangements – and particularly medical director arrangements – are perceived as risk areas for Anti-Kickback Statute violations. Facilities and physicians entering into such arrangements should review existing and new arrangements for compliance in light of this Fraud Alert and should seek the expertise of health care legal counsel.

By Matt Kinley,Esq., LLM, CHC

562.715.5557