Dr. Jane Hughes presents at the AAPS 73rd Annual Meeting on transitioning to Medicare Non-Par and Out of Network
Every physician in America has experienced the squeeze of third party intrusions into their daily practice of the art and science of medicine. As an ophthalmologist there was one particular day when I realized that I could not continue as a “Preferred Provider” for any commercial insurance. It was with the arrival of a letter from a PPO concerning a medication I had ordered for my patient, whom I’ll call Mrs. Jones.
I have cared for Mrs. Jones over the last 15 years having diagnosed her with moderately severe glaucoma. Fortunately, with close monitoring and the innovative panoply of glaucoma medications from which to choose, her glaucoma has been arrested with effective topical treatment. Fast forward to the day of the epiphany.
(Slide: “Brand Penalty Exception Request- Complete this form to request an exception for a patient to receive a brand-name drug instead of a generic alternative and pay only the appropriate brand copayment.”)
I received this CVS/Caremark form entitled: Brand Penalty Exception Request. Let that sink in. On it I was to attest that I had tried two generic medications that failed to control Mrs. Jones’ glaucoma or my patient would be subjected to the “punitive brand name charge versus the appropriate brand name charge.”
(Slide: Wolves photo)
For those who missed the ophthalmology rotation, to prove a drug has failed in glaucoma is to show that there has been irretrievable loss of more of the nerve fiber layer of the retina. To knowingly remove a controlled patient from their drug to run a trial of two generics is morally and ethically reprehensible. To fill out the form and lie is committing fraud
and embracing the idea that the end justifies the means. This one letter finally layed bare the ruthless heavy-handed blackmailing of physicians by threatening financial punishment of their patients. As of November 30, 2015, I divested myself from all PPO’s and became an out of network physician for all commercial insurance. Here is the letter I sent to all of the commercial plans.
(Slide: Insurance Letter)
More on Medicare later, but I was already a non-participating provider for Medicare so those patients were accustomed to paying me for services rendered and being reimbursed from Medicare. And, my employees were comfortable with collecting fees at the time of services rendered. This brings me to the purpose of my presentation.
(Music: Come With Me Now)
I would like to share my plan for transitioning from third party dependence on the commercial side and what every physician should consider immediately, at minimum, for Medicare.
Probably the most important step in achieving the will to make this change is to take one week to have all employees and yourself pay attention to time spent processing fax and phone requests for generic substitutions, pre-certifications, proof of coverage, denial appeals, etc. Equip each with a stopwatch.
(Picture: harried worker)
During this week have your office manager pull the payment amounts for several selected procedures and visits from all commercial insurance in which you participate as well as Medicare. Compare the payments. You may be very surprised. I found several of the major insurance companies were paying
80% of Medicare rates for certain procedures. My office personnel had not noted this downward progression as many payments come in bulk, there is variation in patient deductibles, and reconciliation did not display previous payment rates.
(Picture: Home Alone Kid)
When I shared my discoveries with my anesthesiologist, he investigated and discovered that Humana was paying less than Medicare for a very common procedure, and none of his billing people had caught the decrease either. So, I had a situation where the demand on my time for insurance issues was increasing, the intrusion into the practice of ophthalmology was best described as coercion to
falsify information or have my patients be financially penalized, and I was being paid less than Medicare in some instances. With this added information my resolve was set in stone. It was time for a change.
(Slide: Picture dog dressed like lion)
(Music: Inner Ninja)
No change like this can be undertaken without careful planning which includes your employees, your patients, and you. Getting your employees on board and enthusiastic is of utmost importance. The good news is they despise the hassles as much as you do. The bad news is that all change is stressful, and their concerns about job security and the solvency of the practice cannot be ignored.
(Picture of Stressed out kid)
(Song: Stressed Out)
Involve them in the planning and transition. Point out what insurance has done to the practice, to their workday, and to the ability to offer your patients individualized care. They need to
be comfortable with cash transactions, discussing fees, helping people make financial arrangements if necessary, and how to explain the new office policies. All employees with patient contact were involved. I made a template of the way I wanted our policy to be presented on the phone and in person. We had practice sessions. Once we made the transition, I solicited feedback on how our patients responded and changed things if we needed to.
(Picture: boss calculating)
Your most difficult job is to create the cash fee schedule. This is more difficult than it seems at first because the fees for non-Medicare patients are not what you have actually been paid, but rather a percentage of that. I looked at my non-Medicare fees and my non-participating provider Medicare fees for my most common procedures and services. Next, I looked in the Physician’s Fee Reference by Wasserman Medical Publishers for the 50th and 75th percentile fees for the codes I use. Then, and this was an excellent exercise for me, I spent a good amount of time determining what was a fair and
sustainable fee for every service I rendered based on time required, complexity, usual and customary fees, and resources utilized. The result was my personalized transparent fee schedule which I posted on my website and included in the letter I sent to every one of my patients two months prior to the transition.
This brings me to patient involvement.
(Tearful goodbye/ Song: Bad Goodbye)
You will lose patients but they will be replaced. How you notify them and handle the transition will determine how many. No one likes a financial surprise. I think it is imperative to inform your patients ahead of the visit.
(Slide: Handwritten Letter picture)
In my letter I included my experience with Mrs. Jones as part of the reason for my decision, and always my staff and I say we are an out of network practice for all commercial insurance, being careful not to use phrases such as, “ We don’t take insurance.”
(Picture of reading a letter)
Share with the patients that you recognize that they or their employer have paid for their insurance and that you will help them recover out of network reimbursement. I do this by filing
all claims for the patient with any reimbursement going directly to them, which is usually ranges from 50% to 60%. This has not increased overhead as I was filing prior to the change and I do not want to let the insurance companies off of the hook. Many patients find only a small increase in out-of-pocket expense to see me when co-pays and deductibles are considered when they use their insurance. We also offer payment plans for those in need. I no longer deal with insurance regarding generics, but rather discuss the options with my patients as needed.
(Picture of gangsters)
The insurance companies don’t take this lying down One thing I wish I had included in my patient letter is a warning that the insurance company will send them a letter saying I am no longer in-network so they can’t see me and must choose another “provider.” I wouldn’t have known this was occurring except through my patients who were savvy
enough to know that they had contracted for out-of-network options. Finally, reassure your employees that you are growing the practice under a new structure to promote the attitude that you’re building something better and all growth takes time.
Now, regarding Medicare, the passage of the Medicare Access and Chip Reauthorization Law (MACRA) presents an ominous threat to solo and small practices, and ultimately to the private practice of medicine.
(Music: Somethin Bad)
(Picture: Thelma and Louise)
These are the steps every physician should consider immediately. First, become a non-participating provider at minimum. The next opportunity is November and December of this year. This means the patient pays you at the time of the visit, you file as usual, and Medicare reimburses the patient. This has several advantages, one of which is you are paid slightly higher than accepting assignment.
(Slide: CMS explanation of fees)
Everything you need to understand about participating and non-participating as a Medicare provider is on this slide from
the CMS website. I will explain it, but you can see the convoluted system to which we have adapted, and most of us without understanding it. As you know, a participating provider can charge anything they want for a service, but Medicare only pays 80% of Medicare’s determined fee and the secondary only picks up the 20% remaining of the Medicare fee. The physician bills for the patient and is paid directly from Medicare and the secondary. The remaining balance between what the physician charges and what Medicare and the secondary pays is written off by the physician.
For non-participating providers, there IS a limiting charge and only that amount is can be charged. The patient pays that amount at the time of the visit. You file with Medicare and the patient receives reimbursement from Medicare and their secondary in the amount shown. As you can see, the actual limiting charge translates to 9.25% more payment for the
the non-participating physician compared to the Medicare direct payment to the participating provider physician. The difference in payment is covered by the patient when he pays the limiting charge amount. Remember the 9.25% percentage!
(Slide: American eagle)
This arrangement restores the concept that your contract is with the patient for care, and their contract is with
Medicare for reimbursement for promised benefits. You still have the option to accept assignment on a case-by-case basis as needed. You will find the patients become much better stewards of their healthcare dollars even though they are getting reimbursed, AND, you will be too as the questions shift from, “Does Medicare pay for it?” to include, “How much does it cost, why do we need it, and will you tell me ahead if extra testing is necessary.”
(Picture: parachute jump)
Finally, it sets you in a much better position to opt out or dis-enroll in Medicare when that time arrives. And, without substantial reform, that time WILL arrive.
(Slide: little kid saying no/Song:No)
Second, for as long as possible, do not comply with any of the financially rewarded mandates, the EMR Meaningful Use, the PQRS, the or the inter-connectable EMR. Take the fines which result in less financial loss than compliance. As you could see from the CMS slide, by becoming a non-participating provider you will increase Medicare patient payments by 9.25%, enough to cancel out even 2019 MACRA fines. Your bottom line, mental health, and practice enjoyment will instantly improve.
(Slide: Study of Cost)
A recent study from The Department of Health Care Policy at Weill Cornell Medical College in New York City, as sited in Medscape, 03/2016, found that the average cost of “quality” and computer compliance reporting and usage per physician was $40,000 per year. The authors estimate this translates to hundred of millions of dollars in annual spending by physicians. One can only imagine the concomitant bureaucratic expense of tracking physician data. And this is before MACRA escalates demands for reporting and alternative practice patterns, and links them to “bonus” payments. Any physician who takes these bonuses is at marked increased risk for audit and recoupment of payments as is already occurring for Meaningful Use 1 and 2 of mandated EMR.
(Slide: Off a cliff)
I was part of a task force that read all 962 pages of the CMS MACRA rules and by unanimous opinion, no practice will be able to comply, and attempts to do so will lead to financial and professional ruination. Interconnected EMR, connected to CMS as required in MACRA for good ratings and bonus payments, marks the end of privileged communication between patient and physicians, and strips patients of privacy and dignity. This is done under the guise of mega data collecting and eventual best practice rubrics to keep people healthy. Maybe the government should be ease dropping in the priest’s confessional to data gather so we can stamp out sin, or the lawyer’s chamber to eliminate crime.
Finally, when the fee reductions for non-compliance
become unsustainable or compliance becomes mandatory period, you will be in a better position to exit Medicare. Prior to that, be proud of your “zero” rating by the CMS bureaucrats, become a medical Gandhi, and share why with your patients.
The decision to continue in any capacity in the Medicare program is a personal one based on many factors. For me, I am a dissident in that I do not comply with PQRS, EMR, or eRx, but rather take the fine. This satisfies my need to remove myself from the ridiculous mandates, not to mention saving me literally thousands of dollars per year. This has allowed my team and me to focus our time and energy on our patients. My patients pay me, and I have never taken any Medicare “reward” making me much less of a target for recoupment or audit. One fact people often forget, and this weighs heavily on me- Medicare patients did not choose Medicare
(Slide: minions/Chain Gang song)
They are conscripts in the Medicare Insurance brigade and are treated as such with the new MACRA law. They have had money removed from many years of wages with the promise of healthcare benefits at age 65. In a rare act of true government genius, the average life expectancy in 1963 when Medicare was passed was 69 years. The government has betrayed them and now many of them are paying as much per month for their Medicare insurance, which the government calls a benefit, as they were for private insurance. Therefore, as long as I am able to offer state of the art care to my patients, protect their privacy and the sanctity of our therapeutic relationship, and remain financially solvent, I have made the decision to continue as a non-participating provider so that my patients can get reimbursement from Medicare.
For example, I am able to offer state of the art cataract surgery with access to every intraocular lens on the market by balance billing which was legalized by Medicare to afford
patients access to implant technology. This allows even modest income patients to enjoy these advanced lenses with a modest out-of-pocket charge, while Medicare pays for the procedure and baseline lens charge. I make less per case than an opted-out or a dis-enrolled physician, but many patients are not in a position to NOT to use their Medicare benefits.
(Slide: Hot air balloons)
In closing, rather than listening to the hype and hysteria coming from people and many of our own medical and surgical organizations trying to sell you compliance tools for MACRA, MU, PQRS, etc., or insurance companies hammering you with untenable choices and threats, start today to channel your energies into taking the steps necessary to TRANSITION into ultimate freedom from all third party intrusions.
I will gladly share my patient and insurance letters with anyone interested, and I hope this starts you on the road to a more fulfilling and less stressful practice environment. In the meantime it is imperative that we continue our unrelenting efforts to get insurance and the government out of the practice of medicine by offering patient centered, physician guided, free market solutions for reform that must include choice for our Medicare patients as well.
(Song: I’m on Top of the World)
Jane Lindell Hughes, MD, FACS