Confessions of a Pediatric Practice Consultant

I'm looking for some volunteers to test out our new 2007 RVU Calculation Tool. I have links to 2003-2006, but those don't work yet - I want some feedback about the 2007 first.

I put this tool on-line because, thanks to the AMA, it is very difficult to freely do any kind of CPT or RVU analysis. Their excessive view of their copyrights, in our opinion, actually limits progress and hurts their very members (the physicians) at the benefit of - get this! - United Healthcare. You know, the people who own Ingenix, the company that makes you pay a lot of $$ to get data that you are required to use by law and can find in the Federal Register?

Anyway, once I get enough feedback about the 2007 tool, I'll add the pieces for 2003-2006.

I've added 2003-2007!

In 2007, CMS gave values to two important pediatric codes for the first time, the 92551 (hearing test) and the 99173 (vision screen). Sure, the values aren't astronomic, but that extra ~$10 for each test, which are part of a standard well visit, means a lot to a pediatrician.

Then along comes Oxford.

E & M Utilization
Several recent changes to OXP policies related to E & M coding include
bundling the vision screening code 99173 into visit codes. This became
effective 1/1/2007.

Yeah, we'll just ignore CMS entirely and, retroactively, deny paying for  a fundamental preventive care procedure.  You know, one that could save the vision or hearing of your child.

Sigh.  This is, of course, one of hundreds of these little missives our clients get throughout the year.

How do I even know about this?  Because of the lovely work by The Verden Group.  Ignore that silly quote on their front page (I wasn't paid a dime, I promise!), it's a very cool service.

I always forget to leave notes about where we are going to be and what we're doing when we get there!
* NEW PCC Pediatric Solutions Workshop in Las Vegas, May 20

Put your practice ahead of the curve with expert guidance from
PCC. PCC's Pediatric Solutions consulting group brings their
expertise to you through affordable, convenient workshops around
the country in 2007. Pediatric Solutions Workshops focus on topics from
coding practices to insurance negotiation assistance.

Join us on May 20 at the Venetian Resort Hotel in Las Vegas to
increase your revenue through effective patient recall strategies.
Increasing well visit volume and managing chronic diseases among your
patients is crucial to both the clinical and financial success of your
practice. During this discussion, you will learn about proven recall
techniques used by pediatric offices across the country to augment your
marketing, manage your patient appointment volume, and improve your
clinical response.

To learn more about this and other Pediatric Solutions Workshops,
and to register, go to www.pcc.com/practmgmt. Registration fee is
only $75 per person and space is limited.

* What happens in Vegas?

For your convenience, this event begins just after the AAP
California Chapter 2 Advances In Pediatrics, 18th Annual Las
Vegas Postgraduate Meeting, and is located at the same venue.

I've always enjoyed this show, Vegas notwithstanding. I hope to get a
good turnout at the workshop, but we haven't been great at advertising it.

Well, sadly, not more reimbursement. That's the problem. More about it.

From the Washington Post, we have another piece similar to last month's NYT article about the problems with immunization reimbursement for private practice pediatricians. It would be hard to overstate the importance of this subject in our world these days. Dr. Lessin is quoted again, so those coming to see him at our Users' Conference should expect more of the same (he's no shrinking violet):

I have to pay for nursing time, supplies, syringes, alcohol pads, dropped doses and time to explain it," Lessin said of the ancillary costs of providing vaccines. "And when insurance companies decide to pay me $122 per dose and take three months to pay, I can't afford to do it. For insurance companies that are paying me $140 or $150 a dose, I'll give it."

I then got a message about Beechstreet's continued lowball reimbursement for some key imms (like ProQuad at $35 or something like that when it costs >$100/dose to purchase...someone correct me if I'm wrong).  Given all the other problems with Beechstreet, I often wonder why practices even participate with them.

I have to come up with an analogy for the Great Medical Insurance problem here in the US. The Rebels vs. The Empire? Robin Hood vs. The Sheriff of Nottingham? David vs. Goliath? None of these is just right, but they each contain elements of the issue: a giant, controlling source of pain and trouble being fought by the little guy (or woman - see below). It's a matter of time before we see the Erin Brokovitch movie about the insurance industry.

What a delight it was, then, to read this month's SOAPM newsletter (past issues are available at the AAP as well as at PCC, as we sponsor the newsletter). First, I read Dr. Francis' piece reminding pediatricians to go to hmosettlements.com to participate and keep an eye on the settlements with Aetna, Healthnet, Wellpoint, Humana, and Cigna. Just go read the entire site.

Even better was the description, from Dr. Stoller, of how she discovered Aetna was in violation of their settlement terms and, through just a little work, was able to recover a significant amount of income relating to -25 modifiers as well as mis-processed "out-of-network" claims (that were really in-network). As she says, "FIGHT BACK!"

Then, I got the email:

horizon class-action lawsuit settled

Good work. My favorite part of the email reads as follows:

This latest national class-action settlement is one in a series of actions against major healthcare insurers and another milestone in the check against widespread and chronic abuses against physicians. These class-action lawsuits have resulted in significant reforms in the health insurance industry.

The settlement consideration includes a guaranteed cash payment of over $128 million to class members. In addition, the settling defendants have agreed to implement important business practice changes that will bring the estimated value of the entire settlement consideration to well over $1 billion.

Perhaps an Austin Powers analogy would work? "One Billion Dollars."

It gets better, though:

The agreement follows similar settlements with other major managed care companies, with the exception of United Healthcare, who continues to litigate against physicians rather than making the kinds of positive practice changes other insurers have agreed to make.

Indeed, United Healthcare has repeatedly refused to address the significant concerns raised by representatives of the more than 400,000 physicians nationwide who care for United Healthcare's members. According to MSNJ CEO & Executive Director, Michael T. Kornett: United Healthcare simply has not raised its standards to what has become the industry standard in healthcare. United Healthcare has systematically engaged in practices of coercion and intimidation that are akin to the actions of a school-yard bully. When all the other major national healthcare insurers agree to conduct business with their physician/providers in a more transparent and fair manner, it is difficult to understand why United Healthcare refuses to operate on a more level playing field.

Wow. Although I assume it actually isn't difficult for anyone to understand why United behaves this way, kudos to the Medical Society of New Jersey for stepping up.

Vaccines may be saving the lives of children, but they are killing the docs who give them. Pediatricians have to pre-purchase tens or hundreds of thousands of dollars of vaccines, insure them while they sit in the fridge, and then are often paid at or less than what they paid for the vaccines themselves when administered weeks later. If a mom changes her mind after the imm has been drawn or the kid fights it - there's $75 down the drain. Gardasil is a great example: many insurers still don't cover it fully! - so the practice is supposed to eat the few hundred bucks? Or, how about the flu vaccines? Patients fill the phone lines of the offices looking for a shot...that the docs can't fill until after the rush is over...meanwhile, Wal*Mart and the retail clinics often got their deliveries on time.

That just makes no sense. Enough pediatricians are feeling the pinch, however, that we're seeing movement. One solution is to check out the numerous vaccine buying collectives (Physician's Alliance, Pediatric Federation, and Main Street Vaccines come to mind).

To the AAP's credit, this is one issue they are doing something about. I just hope they can do something in time.

Meanwhile, here's a summary of the problem from the latest issue of Infectious Diseases in Children. It provides more data to match the vignettes from that NY Times piece from a few weeks ago (featuring PCC clients and friends alike). In the IDC article, they recommend:

• Fix vaccine administration fees; this includes collecting data on the costs of delivering vaccines in private practices, getting support on methodology from the Centers for Medicare and Medicaid Services and using the data to educate insurers and Medicaid on appropriate reimbursement.
• Work with vaccine manufacturers to obtain more favorable terms for the initial inventories of new vaccines.
• Work with federally qualified health centers to delegate authority to serve underinsured children through the Vaccines for Children Fund at public health department clinics.

..which is a pretty good list, if you ask me. Yes, there are other changes I'd recommend, including:

• Simplifying the coding process. I know practices who still don't even use the 90465/6 codes (spoke to one today!) for reasons of half-legit voodoo: it wasn't getting paid for the first 6 months, they don't understand it, etc.
• Mandate a clear process for providers to follow once a vaccine has been approved. To make a long story short, the practices routinely run into circumstances where a vaccine is "recommended" months before payment is approved from the insurance companies. And, once payments come in, they are below provider costs (or don't meet the 25% margin they need not to lose money).
• Provide contractual protection to providers who would like to give a vaccine but do not wish to suffer from the lagging payments of the payors. In other words, if Merck decides that the price of Vaccine A needs to go up by $25 or Vaccine X is now recommended by ACIP or the AAP or whatever, allow the practices to collect the price difference from the patients during the 3-6 months it takes for the payors to fix their reimbursements.

Frankly, I think it would all be easier and more appropriate if all vaccines were VFC. That will never happen, though, as long as the pharms can make good money.

The most common worry I hear from practices considering dropping a plan is that they can't afford to "lose all those patients." The larger the portion those patients make of a practice, the scarier it gets. "BCBS/Aetna/Oxford/etc. is 25% of my practice! I can't lose 25% of my visits!" Ultimately, it's the greatest obstacle in the process of helping customers negotiate.

It's obvious to most practices that you can't - usually - simply drop a plan and rejoice. You need to do a lot of homework and follow-up, especially as it relates to patient recall. As one of our customers told me once, "I put my patient reminder letters in the same batch of letters telling patients we're dropping a plans." With some attention to well visits and chronic disease management, you can keep yourself quite busy and your patients quite healthy.

That's only part of the equation, though. Even after you drop a plan, quite a few of those patients will still come to your office. They know you, they like you, and that extra out-of-pocket expense is often well worth it. Even better, some of your patients will actually switch insurance (when they can) just to continue seeing you cheaply.
The question, though, is how many of those patients will stay?

Just recently, I've checked on two East Coast groups who have used Partner to examine this very info. And, interestingly, the numbers were the same in both places: in the year (or less) since each practice dropped a plan, approximately 50% of the patients on the dropped insurance returned to the practice. Of those patients, more than half had switched insurance companies. Now, I haven't gone to see what the visit rate is normally for patients (i.e., not all of your patients are active and visit every year), so as a practical matter, that 50% return rate is actually higher than 50%!

I'll have some more data shortly and I'll post it. But how nice would it be to know that 25% (or more!) of the patients on your panel will drop the insurance company just to see you when you are sitting across the table from your rep? And half of them - or more! - will come see you anyway, costing the insco extra $$?

The 2007 RVU changes were a bit of a mess. Read the AAP’s RVU brochure you’ll see this little tidbit:

Budget Neutrality: Statutory guidelines indicate that revisions to the RVUs for physician services may not alter physician expenditures within the Medicare RBRVS physician fee schedule by more than $20 million from the principal expenditures that would have resulted if the RVU adjustments were never initiated. CMS normally maintains Medicare budget neutrality exclusively via annual adjustments to the Medicare Conversion Factor. However, in 2007 the Medicare program will additionally apply a separate budget neutrality adjustment factor to the physician work RVUs to ensure Medicare budget neutrality in light of work RVU increases tied to the 2005 Five-Year Review.

In 2007, Medicare decided to stay within its budgetary requirements by adding an “after market” adjustment of about 5% to all of the codes. It’s a trick, frankly. They kept the CF at $37.90, yet cut the work factor by ~10%. The problem is that private insurance companies are using this pay cut as well, even though they have no such similar budgetary requirements.

I’ve been trying to assemble some good fightin’ language to help our clients who are running into this. I don’t have much there, unfortunately. At the very least, however, if the 2007 RVUs are being used for your practice, make sure you’re getting paid for the 99173, 92551, 99339, and 99340…2007 is their first year with values! (Those would be vision, hearing, and home health codes for those scoring at home.)

Boy, I’ve got to get the new RVU tool out. All CPTs, all the time!

I took another “We Think We Need To Merge!” call today from a thoughtful practice on the east coast. A couple small groups, aimed at getting a more fair piece of the pie. Can’t say I blame their intent.

Practice mergers are like tattoos - they sound good when you and all your friends have had a few drinks. They even look good on a few people. “Just picture it: 70 of us, fighting UnitedHealthCare!” sounds suspiciously like, “Just picture it: a rose, right there, where no one can see it!” Face it, can you come up with a tattoo design that will look good on you 10 years from now?

The inspiration to to record this conversation came from one comment in the middle. Apparently, there’s a trustworthy lawyer in the mix (they exist) who has stated, unequivocally, that he believes the practices need to merge in order to negotiate with insurance companies. I wonder if this lawyer has ever actually negotiated a primary care insurance contract? Do you think he sees tens of thousands of dollars in fees making this happen, risk free? I sure do - whenever I see a lawyer pushing for groups to merge, I throw a GIANT RED FLAG. If the plan succeeds, he’s a genius. If it fails, there are 1001 reasons for the failure besides his insistence. And if it neither succeeds nor fails, but rides in the middle for a decade or more…you become one his favorite clients!

I’ll save the long lectures for future posts, but our experience with group mergers (which is significant) has identified a few of the myths of practice mergers:

• Smaller practices cannot negotiate as well or better than larger practices.
• The only way to negotiate is to be a large practice.
  My area is different from the rest of the country and, therefore, we can’t negotiate.
• Practice X grew in a way that I am sure would work here where I live.
• There are significant economies of scale to be gained by merging practices.
• Merging practices isn’t expensive, doesn’t affect your productivity and personal life, and won’t distract you too much.
• In order to save lots of money on ordering supplies, etc., (part 1 of the myth), we have to be large enough to make a difference (part 2 of the myth).
• I could get along with all these practices I’ve competed against for years!

This sounds reactive, I realize, but for every merger success I’ve seen, there have been a half-dozen failures. Perhaps I’ll provide real examples of these items above to act like warning signs for anyone following the merger footsteps.

It’s not that we think they are a bad idea, we just think they are usually done poorly and for the wrong reasons.
Or, more succinctly: groups merging simply to stick it to the insurance companies will fail. FTC issues aside, you’d better have a lot more in common than hatred for managed care or it’s never going to fly and only the lawyers will get wealthy.

Paraphrased from a customer message on our client-only mailing list today:

I was wondering what you think of Coventry Health/Health First. I guess they have replaced old Health Care Value Management. We have been noticing that since Coventry has replaced HCVM their reimbursement has been ridiculously low… I called him and complained. Someone called back today and asked, “Why should we increase our rates if you don’t ask us to?” Anyway they are open to negotiating the rates and are offering me XXX% of the Medicare fee schedule. What do you all think?

What do I think? I think the insurance rep is right. They do run a business. And if you don’t run your practice like a business, why should they run it for you? Every day, millions of dollars go right into pockets of insurance executives from contracts that haven’t been examined, reviewed, or poked at in months or years.

For all the blame I have for insurance companies, a huge portion of the lack of proper payments for pediatricians is due to the pediatricians themselves.

God helps practices that help themselves. If you don’t demand proper payments, you won’t get them. I told this practice to sign immediately and give them the expectation that it will be reviewed every year!