AAOS Now

Published 7/1/2016

Second Look – Advocacy

These items originally appeared in AAOS Headline News Now, a thrice-weekly enewsletter that keeps AAOS members up to date on clinical, socioeconomic, and political issues, with links to more detailed information. Subscribe at www.aaos.org/news/news.asp (member login required)

Physician-owned distributorships
A report from the U.S. Senate Finance Committee argues that physician-owned distributorships (PODs) "present an inherent conflict of interest that can put the physician's medical judgment at odds with the patient's best interests." The committee notes that PODs are most prevalent in the field of spinal surgery and that patients "are strongly inclined to follow their doctor's recommendation. […] Unchecked, this position of power can give POD spinal surgeons the opportunity to grant themselves a steady stream of income by increasing the use of the products supplied by their POD." An analysis conducted by the committee suggests that, compared to non-POD surgeons, POD surgeons are more likely to perform fusion surgeries and surgery overall compared to non-POD surgeons. As reported in Bloomberg BNA, the committee's recommendations include the following:

  • revising federal law to require physicians to disclose any interest they have in a POD
  • requiring hospitals and ambulatory surgery centers to review Open Payments data and document that they have used the data when making purchasing decisions
  • expanding law enforcement efforts to investigate and prosecute hospitals and PODs that violate the law

IRS ruling on ACOs
According to The New York Times, a determination by the U.S. Internal Revenue Service (IRS) may serve as a significant obstacle to the formation of accountable care organizations (ACOs) called for under the Affordable Care Act (ACA). In a recent ruling, IRS denied a tax exemption sought by an ACO that coordinates care for patients with commercial insurance, saying that the organization did not meet the test for tax-exempt status because it was not operated exclusively for charitable purposes and provided private benefits to certain physicians. The paper states that the ruling does not affect ACOs formed solely to participate in Medicare, but could affect similar entities serving privately insured patients. A spokesperson for the American Hospital Association states that the ruling "is in conflict with the direction that the Department of Health and Human Services has given to the hospital field" and argues that the federal government must clarify how hospitals can participate in ACOs without "incurring the catastrophic loss of their tax-exempt status."

HHS sued over ACA rule interpretation
The American College of Emergency Physicians (ACEP) has filed a lawsuit against the U.S. Department of Health and Human Services (HHS), arguing that the agency's interpretation of a provision of the ACA gives private insurers latitude to determine out-of-network rates based on their proprietary databases of historical charges, forcing providers to choose between billing out-of-network patients for the balance of unreimbursed charges or being driven out of business. As reported in Modern Healthcare, the ACA bars insurers from charging patients higher coinsurance and copayments for out-of-network emergency care, but does not prohibit balance billing or require insurers to cover such bills. Under the HHS interpretation, out-of-network providers should be paid whatever amount is the greatest of three options: the Medicare rate; the median in-network rate; or the usual, customary and reasonable (UCR) charge. ACEP states that HHS has dismissed repeated pleas for an objective standard for UCR charges, offering insurers too much room to "game the numbers."

FDA draft guidance on use of EHR data
As reported by HealthcareITNews, the U.S. Food and Drug Administration (FDA) has issued a draft guidance for industry on the use of data from electronic health records (EHRs) in clinical investigations regulated by the FDA. The draft guidance, which is intended to assist sponsors, clinical investigators, contract research organizations, institutional review boards (IRBs), and other interested parties, provides FDA recommendations focused on the following areas:

  • Whether and how to use EHRs as data sources in clinical investigations
  • Using interoperable EHRs with other electronic systems that support clinical trials
  • Safeguarding the integrity and quality of EHR data
  • Ensuring that electronic source data meet FDA requirements for record keeping and retention

"In general, EHRs are not under the control of FDA-regulated entities (eg, sponsors, clinical investigators), because in most instances, these systems belong to healthcare organizations and institutions," the document states. "However, FDA's acceptance of data from clinical investigations for decision-making purposes depends on FDA's ability to verify the quality and the integrity of data during FDA on-site inspections and audits."

Insurers join opioid fight
Health insurance companies are taking measures to combat the growing opioid epidemic in the United States, targeting the overprescribing of prescription painkillers such as oxycodone, hydrocodone, and morphine, CNN reports. Cigna plans to flag customers they deem high risk for abuse—those who are prescribed large amounts of opioid medications, get narcotic prescriptions from more than one doctor, or take these medications for long periods of time—and contact their physicians. Aetna and Blue Cross Blue Shield have already instituted similar measures. According to a leading expert on opioid addiction, actions such as these may make a large impact due to the financial role insurance companies play in health care.

Medical bill redesign challenge
HHS has announced a challenge to encourage healthcare organizations and other stakeholders to design a medical bill that is simpler, cleaner, and easier for patients to understand and to improve patients' experience of the overall medical billing process. The challenge will issue two awards: one for the innovator that designs the bill that is easiest to understand and a second for the innovator that designs the best transformational approach to improve the medical billing system, focusing on what the patient sees and does throughout the process. Submissions will be judged based on understandability, creativity, and how well they address the challenges outlined by patients, providers, and payers, among other criteria explained on the challenge website. The challenge will accept submissions until Aug. 10, 2016. Winners will receive cash prizes of $5,000 each.

Hospital scorecards
Hospital safety scorecards such as those issued by U.S. News & World Report and the federal government provide patients with an unreliable picture of the quality of care at a given institution, according to new research from Johns Hopkins' Armstrong Institute for Patient Safety and Quality, The Baltimore Sun reports. The researchers found that just one of the 21 most common measures used by the ratings—accidental punctures or lacerations in surgery—met a scientific threshold to be a true indicator of hospital safety. A major problem with the scorecards is their reliance on billing data rather than clinical data, the report stated. "Patients should have measures that reflect how well we care for patients, not how well we code that care," said Peter Pronovost, MD, PhD, director of the Armstrong Institute. A report from the Institute last year found that hospital safety rankings varied considerably from scorecard to scorecard because of inconsistencies in rating criteria.

Physician burnout
According to a study published in Mayo Clinic Proceedings (April), physician burnout and declining satisfaction may be associated with reductions in professional work effort. The research team reviewed administrative and payroll records to longitudinally evaluate the professional work effort of faculty physicians at a single, large, healthcare organization, from Oct. 1, 2008, to Oct. 1, 2014. Over the term of the study, they found that the proportion of physicians working less than full-time increased from 13.5 percent to 16.0 percent. Compared against physician surveys conducted in 2011 and 2013, the research team found that burnout and satisfaction scores correlated with actual reductions in full-time employment (FTE) over the following 24 months. After adjustment, they found that each 1-point increase in the 7-point emotional exhaustion scale and each 1-point decrease in the 5-point satisfaction score were associated with a greater likelihood of reducing FTE over 24 months.

Noncompete provisions in Connecticut
The Connecticut General Assembly has passed a plan that places new restrictions on noncompete provisions for physicians. The bill places the following conditions on a physician covenant not to compete, noting that it must be:

  • Necessary to protect a legitimate business interest
  • Reasonably limited in time, geographic scope, and practice restrictions as needed to protect that interest
  • Otherwise consistent with the law and public policy.

The statute, covering covenants made after July 1, 2016, also places the burden of proof on the party seeking to enforce a noncompete agreement, according to the law firm Jackson Lewis. It prohibits restrictions on a physician's activities for longer than 1 year and those extending 15 miles or more beyond the primary site where a physician practices. It also spells out limits on agreements between physicians and hospitals, health systems, and medical schools.

Data breaches
Healthcare organizations are experiencing more data breaches and other cybersecurity problems than ever, and the situation does not seem to be improving, according to a study by the Ponemon Institute. The report states that data breaches cost the healthcare industry $6.2 billion a year. "In the last six years of conducting this study, it's clear that efforts to safeguard patient data are not improving," said Larry Ponemon, chairman and founder of the institute. One-half of breaches are the result of criminal activity, with the others occurring from negligence, including employee mistakes, problems at third-party vendors, and stolen and lost devices. The most frequently exposed data are medical records, billing and insurance records, and payment details.

Value-based payment models
An article in HealthLeaders Media looks at physician efforts to move commercial payers toward value-based payment models. The writer notes that many insurers offer little or no support in funding innovative clinical models required to move away from a fee-for-service payment system. The article profiles one healthcare system's efforts to collaborate with insurers on value-based models. In at least one instance, the insurer allowed the health system to select the metrics by which physicians will be measured on quality and outcomes, which has helped improve physician buy-in to the transition.

Rural access to care
Patients in rural areas of Iowa gained increased access to orthopaedic care through visiting consultant clinics (VCCs) staffed by orthopaedic surgeons who traveled to these sites from their regular practice locations, a study in The Journal of Bone & Joint Surgery reports. In 2014, traveling orthopaedic surgeons—representing 45 percent of orthopaedists in the state—traveled about 32,000 miles per month to 80 predominantly rural VCC sites, providing 4,596 clinic days. The result was an increase in the number of Iowa counties with an orthopaedic surgeon presence (primary practice or VCC) from 35 to 88 counties out of 99, increasing access to orthopaedic surgeons for as many as 670,000 Iowa residents out of 3 million. Driving distance to the nearest orthopaedic surgeon decreased from 19.2 miles to 8.4 miles.