Panel examines payer influences on physician practices

The practice of orthopedic surgery has been immeasurably changed. While caring for patients is our passion, administrative responsibilities hold enormous liabilities and threaten our independence and existence as business people. The requirements leveled by CMS and insurers have exceeded our worst fears. Some requirements and performance measures are beyond the provider’s direct control and are patient responsibilities. Even more concerning are the private insurer reimbursement policies and procedures. Most physicians are unaware of the unattainable mandates created by insurers to delay or avoid physician reimbursement for services rendered, and there is no government or regulatory oversight on these policies and procedures.

In this Orthopedics Today Round Table, the panel discusses payer intrusions into physician practices.

William R. Beach, MD
Moderator

Roundtable Participants

  • William R. Beach
  • Moderator

  • William R. Beach, MD
  • Richmond, Va.
  • Jack M. Bert
  • Jack M. Bert, MD
  • St. Paul, Minn.
  • Louis McIntyre
  • Louis F. McIntyre, MD
  • Sleepy Hollow, N.Y.
  • David Glaser
  • David M. Glaser, JD
  • Minneapolis

William R. Beach, MD: What is the most significant intrusion or mandate thrust upon physicians?

Louis F. McIntyre, MD: In 25 years of practice, no requirement has negatively affected productivity and interaction with patients as the electronic health record (EHR). I have measured single chart/computer interaction times up to 2 minutes as opposed to 30 seconds to 45 seconds with a dictaphone and dictation. Jack M. Bert, MD, has said his productivity has decreased by approximately 20% since the adoption.

Cost increases for full-time employees, such as scribes, intake peoples, expensive investments in hardware and software, IT support, etc., while significant, also can be valuable. In 2002, I implemented an electronic medical record system in my office and designed it to improve productivity and workflow. As a result, we were able to see more patients and code better, saving the practice approximately $15,000 per physician annually on charting costs alone. Meaningful Use (MU), the government’s definition of appropriately using EHRs, ruined that effort by requiring more time, employees and system upgrades to comply with the MU guidelines.

Beach: Can you explain the “conspiracy theory” that the reasons for such intrusions are to see fewer patients and thus cost the government and private insurers less?

McIntyre: The conspiracy theory stems from the idea that outright rationing of care would not be tolerated by Americans. According to the conspiracy theory, the government allegedly came up with a simple solution to the predicted backlash to rationing: A regulatory body with reimbursement authority creates an administrative burden (rules, regulations and procedures) significant enough to decrease physician productivity, decreasing overall health care costs in the process.

The chosen administrative burden activities appear to be to the betterment of care. This improves the cooperation of the health care providers being manipulated and, through coding regimens and policy coupled with regulatory burden, physician behavior is controlled without the outright rationing of care that exists in other systems.

Background information does support this theory. In August 2010, Nancy-Ann DeParle, the Obama administration’s top health care advisor, wrote that the Affordable Care Act is “likely to lead to the vertical organization of providers and accelerate physician employment by hospitals.” Because federal mandates for expensive EHRs and reporting on treatment processes and outcomes will be a financial and administrative burden, physicians are expected to close their independent practices and become employees of hospital systems and accountable care organizations. Others are rejecting the “big medicine” model and transitioning to third-party free medicine, although this out-of-network model will only be possible for a few surgical subspecialists.

Beach: What are some examples of regulatory intrusions on practice management?

Jack M. Bert, MD: Let’s say after routine precertification for a procedure has been performed, the surgeon performs procedures that differ from or are additional to those procedures that were precertified. It is mandatory the insurance company be contacted immediately after surgery, as most carriers only allow a 48-hour window in order to get an authorization changed. The new, additional or different CPT codes must also be added to the authorization. If this does not occur, there is a significant chance of denial.

This mandate will require a significant change in most surgeon-business processes. For example, we performed a case on Feb. 3, 2016 that required additional procedures. The coding document was sent to the business office, and the claim was filed within a week of the procedure. On March 25, 2016, we received a denial for no authorization — different procedures were performed than were precertified. An appeal was filed the same day. We were informed 3 weeks later the appeal could take 60 days to 90 days. The net affect is payment could be delayed by 4 months, if not denied altogether. These denials may significantly alter cash flow and accounts receivable and also increase the number of appeals that need to be filed and followed.

Surgeons and their practices must modify their processes that support this onerous demand. The process may vary depending on surgeon preferences and written vs. electronic inter-office coding submissions. Time is of the essence in contacting the carrier with any changes or additions to the authorization. Surgical dictation must be performed on the date of service, and the billing office must receive the surgical CPT codes the same day or before noon of the next business day. The same information also must be returned to the precertification team in a similar time frame. This is best facilitated by a practice management system that allows communication among all who access the chart.

Beach: What reasons do insurance companies give for payment denials?

Bert: The most common denials are so frequently cited that the insurers now have codes for them:

CO22: This care may be covered by another payer per coordination of benefits. Patient has a new prefix for insurance plan, patient has a Medicare advantage plan and not Medicare, eligibility has not been verified.

N115: Denial decision was based on a local coverage determination.

CO97: The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.

CO197: Denial for precertification/authorization/notification absent.

PR27: Expenses incurred after coverage terminated.

CO4: The procedure code is inconsistent with the modifier used or a required modifier is missing.

CO50: These are non-covered services because this is not deemed a medical necessity by the payer.

N19: Procedure code incidental to primary procedure (59 modifier).

CO16: Claim/service lacks information or has submission/billing error, which is needed for adjudication.

Beach: Are there procedural difficulties with payment?

Bert: Not only are there difficulties, they are also extremely convoluted and time-consuming to manage. Insurers are free to impose any practice in processing and paying physicians, no matter how unfair. Here are some examples of large insurance companies and the maneuvers providers must often take to get paid:

1. A patient presents to the office with acute onset shoulder pain secondary to a fall. The surgeon suspected a shoulder dislocation/subluxation and spontaneous reduction with an associated acute rotator cuff tear and orders an MRI. The MRI was denied because the insurer has mandated the patient have 4 weeks of physical therapy. The patient paid out-of-pocket for the MRI, which revealed a large tear of the supraspinatus and infraspinatus. The patient is scheduled for surgery, which has been authorized by Anthem/eviCore.

2. United Healthcare uses a company called OrthoNet, which is partly owned and founded by orthopedic surgeons, to do claims review for correct coding. We now receive requests for operative notes and medical records on 90% of surgical cases, so an inordinate amount of time is spent contacting both OrthoNet and United Healthcare to find out the status of the claim and when it is going to be paid. Almost all calls to United Healthcare go to off-shore representatives. You are then referred to OrthoNet, which refers you back to United Healthcare.

3. United Healthcare also has changed provider fee schedules by implementing certain payment policies. We have a contract in place with a fee schedule attached and referenced in the contract. United Healthcare makes a reference in the contract to its payment policies, but in the context of updating CPT and diagnosis codes, as well as multiple procedure discounts. Despite changes in fee schedules not implied in these policies, if you dig deep enough into the website, you may be able to find the changes in the fee schedule. In essence, the insurer can change the fee schedule and bundling package anytime.

4. In working with Tricare, we call and authorize a surgical case giving the procedure codes and outpatient facility. We file the claim and promptly receive a denial citing that procedures performed are only covered on an inpatient basis. When we call and ask how we were able to obtain authorization at an outpatient facility, we were told it is not their responsibility to notify the provider of medical policy. The provider is responsible for checking the website for every surgical case and reviewing medical policy before performing the procedure.

5. We routinely call and precertify codes 29877 and 29881 for all insurance providers. We then perform procedure codes 29879 and 29880. One specific claim was denied by Cigna for no authorization because the procedure codes performed were different than what was precertified. The first appeal has been denied by Cigna on the grounds we did not call medical management within a 48-hour time frame to update authorization, so a second-level appeal has been filed.

Beach: What is the solution? Is the reality that insurers are so large and their lobbying efforts so extensive that individual physicians, or even large groups of physicians, have no recourse? Can physicians bargain together?

David M. Glaser, JD: There are no easy answers. While insurers have considerable clout, that does not mean physicians cannot fight back. People still have a great deal of respect for physicians. When choosing between a physician and an insurer, people are likely to choose the physician. That said, it is easier for insurers to lobby, because while physicians need to organize and communicate to make such efforts occur, corporations do not have to take time off work to talk to a legislator.

An important part of the communication, however, is choosing a message. I think many physicians express frustration with the Affordable Care Act. It is easy to think “after this administration, things will improve.” On that front, I do not think the end of this administration will change things materially. Remember, the Affordable Care Act was once the Republican plan and I have not heard any meaningful discussion out of the Republicans for a clear alternative. There is discussion about repealing the law, but not much talk about what would come next. Perhaps more importantly, much of what frustrates physicians is rooted in private plans or in inconsistencies between various health plans. During the George W. Bush administration, I do not think there was any sense providers were being treated more fairly. The tightening of Stark regulations, for example, happened under his watch.

I know the Affordable Care Act is a trigger phrase that causes people to go a bit “nuts,” but many of the changes in the delivery system are market-driven rather than legal-driven. If the Affordable Care Act goes away, most of the things driving physicians crazy will be unchanged.

That said, I encourage physicians to band together to aggressively resist rules they do agree with. It is legal to band together for political advocacy. Direct negotiations with payers are more complicated and joint negotiation is potentially illegal in that respect. But each clinic can, and should, stand up for itself.

Disclosures: Beach reports he is a paid consultant for Arthrex, is board or committee member for Orthopedics Today, American Academy of Orthopaedic Surgeons and Arthroscopy Association of North America and is an unpaid consultant for Conmed Linvatec, Mitek and Smith & Nephew. Bert reports he is a paid speaker for Sanofi-Aventis, a paid consultant Smith & Nephew and Zimmer Biomet, a board member of Orthopedics Today and Arthroscopy Association of North America and an unpaid consultant for Exscribe, Luminus and Orthopedic Practice Management, Inc. McIntyre reports he holds stock or stock options in Tornier, is a paid consultant for Ceterix and Rotational Medical, is a paid speaker for Rotational Medical and a board member of Orthopedics Today, American Academy of Orthopaedic Surgeons, Arthroscopy Association of North America, Advocacy for Improvement in Mobility, Delegate Medical Society of the State of New York, Westchester County Medical Society and Orthopedic Practice Management Inc. Glaser reports no relevant financial disclosures.

The practice of orthopedic surgery has been immeasurably changed. While caring for patients is our passion, administrative responsibilities hold enormous liabilities and threaten our independence and existence as business people. The requirements leveled by CMS and insurers have exceeded our worst fears. Some requirements and performance measures are beyond the provider’s direct control and are patient responsibilities. Even more concerning are the private insurer reimbursement policies and procedures. Most physicians are unaware of the unattainable mandates created by insurers to delay or avoid physician reimbursement for services rendered, and there is no government or regulatory oversight on these policies and procedures.

In this Orthopedics Today Round Table, the panel discusses payer intrusions into physician practices.

William R. Beach, MD
Moderator

Roundtable Participants

  • William R. Beach
  • Moderator

  • William R. Beach, MD
  • Richmond, Va.
  • Jack M. Bert
  • Jack M. Bert, MD
  • St. Paul, Minn.
  • Louis McIntyre
  • Louis F. McIntyre, MD
  • Sleepy Hollow, N.Y.
  • David Glaser
  • David M. Glaser, JD
  • Minneapolis

William R. Beach, MD: What is the most significant intrusion or mandate thrust upon physicians?

Louis F. McIntyre, MD: In 25 years of practice, no requirement has negatively affected productivity and interaction with patients as the electronic health record (EHR). I have measured single chart/computer interaction times up to 2 minutes as opposed to 30 seconds to 45 seconds with a dictaphone and dictation. Jack M. Bert, MD, has said his productivity has decreased by approximately 20% since the adoption.

Cost increases for full-time employees, such as scribes, intake peoples, expensive investments in hardware and software, IT support, etc., while significant, also can be valuable. In 2002, I implemented an electronic medical record system in my office and designed it to improve productivity and workflow. As a result, we were able to see more patients and code better, saving the practice approximately $15,000 per physician annually on charting costs alone. Meaningful Use (MU), the government’s definition of appropriately using EHRs, ruined that effort by requiring more time, employees and system upgrades to comply with the MU guidelines.

Beach: Can you explain the “conspiracy theory” that the reasons for such intrusions are to see fewer patients and thus cost the government and private insurers less?

McIntyre: The conspiracy theory stems from the idea that outright rationing of care would not be tolerated by Americans. According to the conspiracy theory, the government allegedly came up with a simple solution to the predicted backlash to rationing: A regulatory body with reimbursement authority creates an administrative burden (rules, regulations and procedures) significant enough to decrease physician productivity, decreasing overall health care costs in the process.

The chosen administrative burden activities appear to be to the betterment of care. This improves the cooperation of the health care providers being manipulated and, through coding regimens and policy coupled with regulatory burden, physician behavior is controlled without the outright rationing of care that exists in other systems.

Background information does support this theory. In August 2010, Nancy-Ann DeParle, the Obama administration’s top health care advisor, wrote that the Affordable Care Act is “likely to lead to the vertical organization of providers and accelerate physician employment by hospitals.” Because federal mandates for expensive EHRs and reporting on treatment processes and outcomes will be a financial and administrative burden, physicians are expected to close their independent practices and become employees of hospital systems and accountable care organizations. Others are rejecting the “big medicine” model and transitioning to third-party free medicine, although this out-of-network model will only be possible for a few surgical subspecialists.

Beach: What are some examples of regulatory intrusions on practice management?

Jack M. Bert, MD: Let’s say after routine precertification for a procedure has been performed, the surgeon performs procedures that differ from or are additional to those procedures that were precertified. It is mandatory the insurance company be contacted immediately after surgery, as most carriers only allow a 48-hour window in order to get an authorization changed. The new, additional or different CPT codes must also be added to the authorization. If this does not occur, there is a significant chance of denial.

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This mandate will require a significant change in most surgeon-business processes. For example, we performed a case on Feb. 3, 2016 that required additional procedures. The coding document was sent to the business office, and the claim was filed within a week of the procedure. On March 25, 2016, we received a denial for no authorization — different procedures were performed than were precertified. An appeal was filed the same day. We were informed 3 weeks later the appeal could take 60 days to 90 days. The net affect is payment could be delayed by 4 months, if not denied altogether. These denials may significantly alter cash flow and accounts receivable and also increase the number of appeals that need to be filed and followed.

Surgeons and their practices must modify their processes that support this onerous demand. The process may vary depending on surgeon preferences and written vs. electronic inter-office coding submissions. Time is of the essence in contacting the carrier with any changes or additions to the authorization. Surgical dictation must be performed on the date of service, and the billing office must receive the surgical CPT codes the same day or before noon of the next business day. The same information also must be returned to the precertification team in a similar time frame. This is best facilitated by a practice management system that allows communication among all who access the chart.

Beach: What reasons do insurance companies give for payment denials?

Bert: The most common denials are so frequently cited that the insurers now have codes for them:

CO22: This care may be covered by another payer per coordination of benefits. Patient has a new prefix for insurance plan, patient has a Medicare advantage plan and not Medicare, eligibility has not been verified.

N115: Denial decision was based on a local coverage determination.

CO97: The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.

CO197: Denial for precertification/authorization/notification absent.

PR27: Expenses incurred after coverage terminated.

CO4: The procedure code is inconsistent with the modifier used or a required modifier is missing.

CO50: These are non-covered services because this is not deemed a medical necessity by the payer.

N19: Procedure code incidental to primary procedure (59 modifier).

CO16: Claim/service lacks information or has submission/billing error, which is needed for adjudication.

Beach: Are there procedural difficulties with payment?

Bert: Not only are there difficulties, they are also extremely convoluted and time-consuming to manage. Insurers are free to impose any practice in processing and paying physicians, no matter how unfair. Here are some examples of large insurance companies and the maneuvers providers must often take to get paid:

1. A patient presents to the office with acute onset shoulder pain secondary to a fall. The surgeon suspected a shoulder dislocation/subluxation and spontaneous reduction with an associated acute rotator cuff tear and orders an MRI. The MRI was denied because the insurer has mandated the patient have 4 weeks of physical therapy. The patient paid out-of-pocket for the MRI, which revealed a large tear of the supraspinatus and infraspinatus. The patient is scheduled for surgery, which has been authorized by Anthem/eviCore.

2. United Healthcare uses a company called OrthoNet, which is partly owned and founded by orthopedic surgeons, to do claims review for correct coding. We now receive requests for operative notes and medical records on 90% of surgical cases, so an inordinate amount of time is spent contacting both OrthoNet and United Healthcare to find out the status of the claim and when it is going to be paid. Almost all calls to United Healthcare go to off-shore representatives. You are then referred to OrthoNet, which refers you back to United Healthcare.

PAGE BREAK

3. United Healthcare also has changed provider fee schedules by implementing certain payment policies. We have a contract in place with a fee schedule attached and referenced in the contract. United Healthcare makes a reference in the contract to its payment policies, but in the context of updating CPT and diagnosis codes, as well as multiple procedure discounts. Despite changes in fee schedules not implied in these policies, if you dig deep enough into the website, you may be able to find the changes in the fee schedule. In essence, the insurer can change the fee schedule and bundling package anytime.

4. In working with Tricare, we call and authorize a surgical case giving the procedure codes and outpatient facility. We file the claim and promptly receive a denial citing that procedures performed are only covered on an inpatient basis. When we call and ask how we were able to obtain authorization at an outpatient facility, we were told it is not their responsibility to notify the provider of medical policy. The provider is responsible for checking the website for every surgical case and reviewing medical policy before performing the procedure.

5. We routinely call and precertify codes 29877 and 29881 for all insurance providers. We then perform procedure codes 29879 and 29880. One specific claim was denied by Cigna for no authorization because the procedure codes performed were different than what was precertified. The first appeal has been denied by Cigna on the grounds we did not call medical management within a 48-hour time frame to update authorization, so a second-level appeal has been filed.

Beach: What is the solution? Is the reality that insurers are so large and their lobbying efforts so extensive that individual physicians, or even large groups of physicians, have no recourse? Can physicians bargain together?

David M. Glaser, JD: There are no easy answers. While insurers have considerable clout, that does not mean physicians cannot fight back. People still have a great deal of respect for physicians. When choosing between a physician and an insurer, people are likely to choose the physician. That said, it is easier for insurers to lobby, because while physicians need to organize and communicate to make such efforts occur, corporations do not have to take time off work to talk to a legislator.

An important part of the communication, however, is choosing a message. I think many physicians express frustration with the Affordable Care Act. It is easy to think “after this administration, things will improve.” On that front, I do not think the end of this administration will change things materially. Remember, the Affordable Care Act was once the Republican plan and I have not heard any meaningful discussion out of the Republicans for a clear alternative. There is discussion about repealing the law, but not much talk about what would come next. Perhaps more importantly, much of what frustrates physicians is rooted in private plans or in inconsistencies between various health plans. During the George W. Bush administration, I do not think there was any sense providers were being treated more fairly. The tightening of Stark regulations, for example, happened under his watch.

I know the Affordable Care Act is a trigger phrase that causes people to go a bit “nuts,” but many of the changes in the delivery system are market-driven rather than legal-driven. If the Affordable Care Act goes away, most of the things driving physicians crazy will be unchanged.

That said, I encourage physicians to band together to aggressively resist rules they do agree with. It is legal to band together for political advocacy. Direct negotiations with payers are more complicated and joint negotiation is potentially illegal in that respect. But each clinic can, and should, stand up for itself.

Disclosures: Beach reports he is a paid consultant for Arthrex, is board or committee member for Orthopedics Today, American Academy of Orthopaedic Surgeons and Arthroscopy Association of North America and is an unpaid consultant for Conmed Linvatec, Mitek and Smith & Nephew. Bert reports he is a paid speaker for Sanofi-Aventis, a paid consultant Smith & Nephew and Zimmer Biomet, a board member of Orthopedics Today and Arthroscopy Association of North America and an unpaid consultant for Exscribe, Luminus and Orthopedic Practice Management, Inc. McIntyre reports he holds stock or stock options in Tornier, is a paid consultant for Ceterix and Rotational Medical, is a paid speaker for Rotational Medical and a board member of Orthopedics Today, American Academy of Orthopaedic Surgeons, Arthroscopy Association of North America, Advocacy for Improvement in Mobility, Delegate Medical Society of the State of New York, Westchester County Medical Society and Orthopedic Practice Management Inc. Glaser reports no relevant financial disclosures.