Health Care Reform Means Legal and Practical Changes for Doctors
By Rabiah Alicia Burks and Ira Pilchen
American Bar Association News Service
June 16, 2011
CHICAGO – Health care reform calls for sweeping changes that will upend doctors’ business models. Now physicians and their lawyers are seeking solutions for growing concerns about how their practices will change.
“Physicians will have to come together … to deliver care on a basis that is accountable in terms of both healthcare and cost,” said Sidney Welch, chair of the American Bar Association Health Law Section’s Physicians – Legal Issues Conference, which met June 16–17 at Loyola University Chicago School of Law.
The Patient Protection and Affordable Care Act, the health care law passed in March 2010, requires that physicians implement a health care delivery system that involves more coordinated care, patient engagement and a more efficient delivery system, said Catherine Hanson, vice president of the Private Sector Advocacy and Advocacy Resource Center at the American Medical Association.
The ultimate goal of the system is for patients to be much more actively engaged in their health care regardless of their facility, said Hanson, who spoke at the conference’s opening panel.
The system is designed to ensure that patients will have more information about their health, Hanson said. “They will be able to access their lab results, perhaps keep an ongoing log of their vital statistics, track their blood sugar if they are diabetic, their weight and their blood pressure.”
AMA President Cecil B. Wilson, an internist from Winter Park, Fla., told lawyers and doctors at the conference that the medical association commented on draft rules related to the health care act. “If well crafted, the new health care delivery model has the potential to improve the quality of patient care while increasing the value of health care spending,” he said.
To adjust to these changes, lawyers should be familiar with the new provisions of health care reform, said Welch, a partner with Arnall Golden Gregory in Atlanta. Attorneys who represent physicians have to know the portions of the law that specifically impact their clients, she added.
“[Lawyers] have to be responsive to what the market is doing as a result of health care reform so they can address the opportunities their clients have to evaluate,” Welch said.
Physicians are looking into different options to meet the new health care reform requirements, from expanding their practices; becoming employees of hospitals; creating smaller, more high-tech health care facilities called micro practices; partnering with hospitals or health insurance companies; and in some cases creating their own insurance companies, said Hanson, a co-panelist with former ABA Health Law Section chair David W. Hilgers, a partner with Brown McCarroll in Austin, Tex.. Hilgers emphasized that most doctors, with their lawyers’ counsel, will eventually need to make decisions on the future of their practices in light of health care reform.
“Some physicians are looking at creating their own accountable care operations or some other type of system,” Hanson said. “That is obviously a very expensive undertaking. The estimates range from a low of $2 million to ten times that amount.”
The physicians who would be most affected by the changes are those in smaller practices, who are not on the verge of retirement, or who are in a specialized niche that excludes them from the requirements.
Physicians who work in institutional agencies that already have sophisticated technology will have the least amount of transition, said Hanson.
An important aspect of health care reform is the prevention, detection and prosecution of health care fraud, said Lewis Morris, chief counsel to the inspector general of the U.S. Department of Health and Human Services. Fraud drives up health care costs and robs taxpayers of funds that go to illegitimate Medicare, Medicaid, and other claims, he told conference attendees.
Lawyers advising doctors and health care organizations should be aware of the types of investigations the Office of the Inspector General conducts so they can prepare their clients and set up anti-fraud compliance programs, Morris said, pointing to resources at the OIG’s revamped website at http://oig.hhs.gov.
The new health care law also requires that physicians issue a repayment to patients within 60 days of discovering an error the doctor made in the billing or the coding of services they provide. It’s a small window between the time of discovering the error and having to refund it in the appropriate manner required by the government, said Welch. “There are nuances in how you return the money without flagging yourself for another audit or investigation, but now you have to make those decisions and refund the money within 60 days.”
Patients have already experienced a shift in procedures resulting from the law. Some physicians have sold their practices to hospitals, affecting the way patients are billed.
“Patients that used to get a single bill from their physicians are now getting two bills, one from the physician and one from the hospital for the facility charge,” said Hanson. “That’s a change that most patients are not too thrilled about.”
Some patients who have traditionally gone to small physician practices may end up going to delivery settings that are larger, even if they are not hospital-based, Hanson said.
The type of delivery setting may not be entirely clear, because there are ways for physicians to collaborate and expand their practices without actually creating a central facility, Hanson said. Because of the collaboration that can occur online or virtually, “you could have a larger physician-integrated practice where the physicians are practicing in their offices.”
But physician networks are now under strict regulations, which could hamper physicians from creating the collaborations. Networks could cost more to operate than they would net.
“There are broad exceptions [to the regulations] for hospitals but not for physician networks,” Hanson said. ”In many cases, there is not enough of an upside to creating a network. If you are going to spend between two and $20 million to create one of these organizations, you need to know that in order to be successful, you are going to have to recoup quite an investment.”