2015 Changes in Medicine for Medicare Patients

CMS, the parent organization for the Medicare program has decided to reduce health care costs. One method for reducing health care costs is to pay a flat bundled fee for services to one entity and let that entity worry about how to pay for all the services and equipment. CMS first venture into this practice in the State of Florida begins shortly with Medicare deciding to pay one flat fee for knee and hip replacements. In our local area they will pay Boca Raton Regional Hospital (BRRH) one time. The hospital is expected to provide physicians, nurses, pharmaceutical goods, the orthopedic appliance (the hip and knee) and all related costs including your postoperative stay in a rehabilitation facility and physical therapy. If a patient has a medical complication of the surgery, or the surgeon needs consultative physician assistance, that too is covered in the bundled fee.

This means that your orthopedic surgeon will either need to be an employee of Boca Raton Regional Hospital or a contracted physician at an agreed upon price for that service. For several years now, CMS has been encouraging hospitals and health care organizations to organize into Accountable Care Organizations (ACO’s) which would receive the bundled payments and distribute them according to a formula they devise internally. The ACO’s have formed in most parts of the country, but Florida remains as a stronghold of fiercely independent physicians primarily in the medical and surgical specialties that are procedure oriented and generate large revenue streams. They have seen hospital systems like Boca Raton Regional Hospital purchase physician practices and try to run them at least twice in the last 25 years. In each case the hospitals lost large sums of money, the practices ran inefficiently and were returned to the physician owners as a means of cutting their losses. Over the last few years, in addition to building many new facilities , BRRH has been buying up local physician practices and employing the doctors in primary care ( Boca Care), hematology oncology ( Lynn Regional Cancer Group), plus their hospitalist service, emergency department physicians ( who additionally staff their community Urgent Care Centers) pathologists , anesthesiologists and others. By accumulating so many of the formerly private physicians’ as employees or contracted help, they were able to change the structure and bylaws of the medical staff rules and regulations and bylaws allowing the hospital administration to effectively eliminate a checks and balances arm of decision making that protected patient and physician interests.

When you enter the hospital for a knee or hip replacement, it is unclear if your personal physician will be paid by Medicare for seeing you if that physician is not a member of the Accountable Care Organization or an employee of the hospital. A non-employed, non-contracted consulting doctor may possibly bill the patient privately for their services but it is unclear whether Medicare will pay the doctor if they accept assignment, or reimburse the patient if they pay privately and submit the receipt to their insurances for reimbursement. CMS plans to bundle payments for 30% of existing conditions by 2017 and over 70% by 2023. These changes are part of the Affordable Care Act or “ObamaCare”.

I will continue to see my patients who need a hip or knee replacement and develop a fair payment option for them. This will apply to any future bundled service CMS implements as well. My patients will continue to be cared for by me! Experienced local physicians have a healthy distrust of the hospital as an employer based on their past track record. Younger physicians coming out of training with large educational debt and a desire to balance their lives by working regular shifts are more willing to accept employment positions and work for the ACO’s. The goal of the Federal Government is to reduce health care spending by fiat rather than by natural market forces. As the Baby Boomers age and develop more chronic conditions and require more care It seems to me that physicians will need to spend more time with these complex patients rather than less time in short conveyor belt type visits being advocated CMS and current health care policy makers. Feel free to contact me if you wish to discuss any of this.

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