EMR 101: An Overview of Key Benefits

It’s no secret the Internet is everywhere, so it is a contradiction that millions of Americans feel secure enough to do their banking online, but the U.S. healthcare system is still wary of transitioning health and medical records into an electronic format.

As I sat with Ron Pelletier, vice president of market strategy, at a SourceMedical conference in Las Vegas, he stated, healthcare in general, grossly underutilizes the internet. We discussed one of the main reasons outpatient centers have been slow to change. “On the ASC side, things may not have been broken. Reimbursements were good, now that is changing. These centers are under pressure with reimbursements shrinking and costs going up. Many are saying, ‘In order to stay competitive and keep my business afloat, I need to find better ways of doing this.’ The necessity now is driving them.” states Pelletier.

This series of articles will cover some of the key points that need to be addressed when considering the implementation of an EMR in your ASC, including key benefits of EMRs, what to look for in a provider, how to get your staff ready for this impending transition.

To begin, we should consider the many definitions of an EMR. “There have been so many people out there that have said ‘I am selling an EMR’ and all it is is scanning in your paper and saving it to a computer,” says Craig Veach, senior vice president of operations for Amkai. “Then there are others who have a forms-based system. In the PIIM study, of the original 50 that were considered, none of those were even the forms-based systems because PIIM thought they were not commercially viable. You want something that is a true work-flow manager. Our EMR handles communications within the organization using an internal email and instant message (IM) that allows people to pass info and stay HIPAA compliant. It’s customizable on how it is set up to manage an individual organization’s workflow,” Veach adds. The Parsons Institute for Information Mapping (PIIM) study Veach refers to recently reviewed the top six EMR systems available on the market today.

This brings us to some of the key benefits a facility can gain through implementing an EMR. Michael Nolte, vice president and general manager of marketing for GE Healthcare IT, is aware that there are many questions and concerns from administrators and staff, but says that the long-term benefits will by far surpass the short-term apprehension. “In particular, for a smaller business, it’s a pretty big transition. There are three key benefits. First is the quality of care that you can deliver as a provider; when an EMR is used effectively it’s a really powerful tool. Both from a medical and a legal perspective, you have ensured that you have the right documentation in place that you are making good care decisions and that you have the ability to deliver the best quality of care for your patients. Second, is when our providers get really good at using a piece of software, and are transitioning from something that is usually more paper-based, it makes them more efficient. The ability to use their time more effectively, spending more time in the operating room and less time in the office is definitely enhanced by use of the software. And third is accuracy from a billing and reimbursement standpoint. In terms of getting a clear, well documented perspective on activity so that clinicians are getting paid for what they do everyday.”

On a more fundamental level, there are cost benefits in paper saving. “A lot of these centers are drowning in paper,” affirms Sean Benson, co-founder of ProVation Medical, part of Wolters Kluwer Health. “They are documenting everything on paper and with that come a lot of cost and inefficiencies. That includes the cost of paper, storage of charts, doing a chart pull, and assembling charts. All of those costs are really taken out of the system when you move to an electronic medical record. You are taking a lot of the redundancies out of the system.”

Oftentimes, hearing the benefits from peers can be most beneficial. Daren Smith, BSN, administrator at Fremont Surgical Center in Fremont, Neb., also shares his thoughts about the benefits. “It has so much capability to increase the level of quality of care that you are able to give to your patients. The EHR system capabilities to cross-check medications and make sure that the required information is there. Also, the ability for that information to be shared widely makes it very important. We have also found that it lends some credibility to your organization; that you are ahead of the game, ahead of the curve.”

What should an ASC look for in a provider? Administrators may want to consider what type of ASC in which they are working. If the ASC is a brand-new facility, it makes sense to start with an EMR. “For new ASCs, it’s almost a no brainer in terms of EMR and full-automation. We find that it is a straight forward conversation when you ask a new ASC, ‘why would you start by duplicating the old paper-based workflow when you have a chance to start fresh?’ The question is usually positively viewed since it just makes sense to go electronic from the outset. Existing ASCs are also interested, but have a little more adaptation to existing processes that they might see necessary. Actually, it’s an opportunity to look at current workflow and adapt it a little to realize the benefits from the software,” Don Fallati, senior vice president of marketing, Amkai states.

The existing ASC wanting to convert to an EMR has various items to address. While a new staff in a new ASC can face the implementation of an EMR with ease, staff members in current less technology-based facilities may be quick to decline the idea of learning anything new. The biggest part of getting ready for an EMR system is to realize there will be change. “If the staff, especially the internal champions or the leaders of the organization are resistant to change then they are going to be real problems. If you can identify key leaders within the organization, who understand that change is an important part of the process, and the short term challenges are worth the longer term benefits moving to an electronic system then you are really on the right track.”, states Benson.

Joe Macies, CEO of Amkai adds, “These systems today are modular. You don’t have to swallow the entire package and it doesn’t have to change every single facet of workflow. My two words of advice would be: get started. The EMR benefits are so great over such a long term, and eventually so necessary, I think, in any healthcare provider organization that you can get started and have a fairly graceful migration of your people at a reasonable pace over time when you’ve got modular software that fits users needs. It’s helpful not to approach EMR as having to find the perfect solution.”

Stay tuned to the second part of this series, EMR 202: How to Get Ready for Implementation where SurgiStrategies speaks to some ASCs that are in the process of EMR implementation or have an EMR in place where they discuss concerns challenges and advice.

The Building Blocks of Patient Safety

Patient Safety Awareness Week is March 7-13, 2010, and this observance is always a good opportunity to review the patient safety initiatives you currently take at your ambulatory surgery center (ASC), as well as ask yourselves what you could do to take safety to the next level. I like what Doni Haas, RN and Lorri Zipperer, MA, have created in their “ABCs of Patient Safety” to remind healthcare professionals of common-sense ways to protect patients. With kudos to Haas and Zipperer and the National Patient Safety Foundation (NPSF), here are the ABC’s they recommend:

Accountability is not always about a person.

Blame hides the truth about error.

Cultures must change.

Document facts.

Error is our chance to see weakness in our systems and people.

Focus on prevention.

Gather evidence to support facts.

Hear when you listen.

Investigate cause.

Justice should include compassion, disclosure and compensation.

Knowledge must be shared.

Learning from others’ mistakes benefits all.

Make the effort to look beyond the obvious.

Nothing will change until you change it.

Opportunities for solutions are lost by blame.

Partner with patients and practitioners.

Question until you can no longer ask “why?”

Reporting error is suppressed by blame.

Systems are where practitioners practice.

Think about the blunt and sharp end.

Understand the role of accountability.

Value the patient’s perspective.

Why, Why, Why, Why, Why = root cause.

X-ray vision sees the deeper story.

You can make a difference.

Zeroing in on cause brings us one error closer to zero error.

For more resources, visit the NPSF at www.npsf.org.

Source: Haas D, Zipperer L. ABCs of patient safety. Focus Patient Safety. 2000;3(1):3.

Know Your APCs for ASCs

APCs for outpatient procedures performed in ambulatory surgery centers (ASCs) are part of an averaging and bundling system using CPT® procedure, HCPCS Level II and revenue codes submitted to Medicare on CMS=1500 forms, with UB-04 claim forms used by ASCs to file claims to most other payors. The APC system utilizes “packages” of CPT® and HCPCS Level II codes, based on clinical and facility resources and establishes payment rates for each APC grouping. This means the physical and human resources needed to provide the service and the geographic costs are bundled together using annually adjusted formulae, much as in hospital inpatient billing. Certain medications, services, and durable medical equipment are considered “pass through” and can be reported separately from an APC revenue code.

APCs are assigned based on the CPT® and HCPCS Level II codes reported by the provider for each service. Usually, more than one code will fall into an APC category. More than one CPT® and HCPCS Level II codes can be reported if needed.

But not all CPT® and HCPCS Level II codes qualify. They are all assigned a status indicator denoting the code’s relation to APCs — whether they qualify and how. The ASC must be careful to avoid reporting a code denoted as not reimbursable for ASC services unless a modifier and documentation support it. As a result, a limited group of modifiers are recommended as well. The status indicators can be found on CMS files including the CPT and HCPCS Level II codes, and most commercially published codebooks include them as icons.

Examples of the indicators include the following:

• A: Services furnished to a hospital outpatient that are paid under a fee schedule or payment system other than OPPS. This means fiscal intermediaries are reimbursing this code via a fee schedule not under APCs.
• C: Inpatient procedures. This is the kiss of death for an ASC claim’s success. This procedure is expected to be done in a hospital with the appropriate resources and an overnight stays.
• N: Items and services packaged into APC rates. This is paid under the APC OPPS and payment is packaged into payment for other services; there is no separate payment for this.

Restricted CPT® modifiers include:

• 50: Used when the exact same procedure is done on the exact body part of the opposite side. Also known as “bilateral”. Some insurance companies prefer the biller use the CPT® code twice instead. Ex: 10220-RT, 10200-LT. Check with carrier on which to use. Payment should be 150 percent.
• 51: Indicates multiple procedures were performed. The 51 appends to the second CPT® code and all CPT® codes thereafter. Medicare does not recognize modifier 51 for ASC services as this modifier is for use on physician claims only.
• 52: Indicates reduced services. Use when procedure is not completed as described in the official CPT® description.
• 73: Used when a procedure is discontinued before the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 50 percent of the Medicare allowable rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 74: Used when a procedure is discontinued after the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 100 percent of rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 78: Used when the patient has to return to the operating room during the global period for a procedure related to the first procedure, such as control of bleeding following a colonoscopy or sinus procedure.
• 79: Unrelated procedure or service by the same physician during the postoperative period. (Same day for an ASC setting.)

Rhonda Buckholtz, CPC, CPC-I, CGSC, COBGC, CPEDC, CENTC, is vice president of business and member development for the American Academy of Professional Coders (AAPC).

Innovation & Excellence Intersect at Renaissance Surgical Arts of Newport Harbor

Even before the Centers for Medicare and Medicaid Services (CMS) issued its new conditions for coverage relating to improved infection control practices in ambulatory surgery centers (ASCs), Bruce Wallace and Anthony Pings knew that infection prevention would be the cornerstone of their latest development project — a world-class multi-specialty ASC that would be destined to set the bar enormously high in terms of innovation, patient care, and surgeon and staff satisfaction.

Wallace, the CEO of Congero Development, architect Ping, the CEO of Anthony C. Pings and Associates, and Kathy Just, vice president of Congero and interior designer on the project were the driving forces behind Renaissance Surgical Arts of Newport Harbor, LLC, designed to be a preeminent medical facility led by notable surgical specialists working with cutting-edge operating room technologies within an innovation-rich, patient-focused, healing environment.

“This facility was truly designed around exceptional patient outcomes,” Wallace says, “and much of that has to do with integration of some newer equipment and emerging technologies that were not readily available before in the U.S. It also more fully addresses the needs of healthcare providers, as we have identified the challenges that their lifestyles incur and we have provided solutions for them.” In addition, Congero desired to bring a center of excellence to Orange County, California, as well as a project that was scalable to emerging technologies as they became available, with minimum invasiveness to the operations overall.

This 360-degree approach starts with the patient. “I conduct a lot of direct research with patients and physicians to determine what makes them happy,” Pings says. “We don’t ask patients what they want; instead, we ask them to describe their experiences and that’s when they are going to tell you what works and what doesn’t. Nobody wants to have surgery, so when we work on a project like this, we want to provide patients with the physical and emotional support they need.” To that end, Just worked to ensure that Renaissance was designed as a healing environment, with a sophisticated and rich décor that promotes pre-operative calm and facilitates post-operative recovery. To maintain normothermia and ward off post-surgical complications, patients are provided with forced-air heated garments and blankets, as well as IV solution warmers.

Pings adds, “We start a project like this from a patient-focused standpoint and blend that with needs of the clinical staff to create solutions that supports both parties in the best possible way.” For example, the center places a high priority on patient privacy; patient entrances and exits are separated, and private spaces have been created all throughout the pre- and post-surgical experience. “We believe in giving patients separate waiting areas,” Wallace says. “Because we are multi-specialty facility we don’t want patients sitting just anywhere — we don’t want a woman who has had a mastectomy sitting next to a woman having augmentation.” Wallace continues, “We accommodate patients in a tremendous number of ways, including doing what we can to make them feel welcome, lower their anxiety and make them comfortable. I want them to feel as though the staff and center was there for each of them personally.”

From the time the patient is prepped for surgery until recovery, aseptic technique is an omnipresent concern. “Infection control considerations were integrated into every decision we made,” Wallace affirms. That starts with the replacement of traditional gurneys with operating tables that first function as patient transport systems and then transfer – along with the patient – to a fixed base in the OR. Not only does this system – the first of its kind in the U.S. — save as much as 40 minutes in transfer time, but it helps eliminate cross-contamination during patient transfer. What’s more, the German-made tabletops by Trumpf can be completely sterilized.

“The tabletop you are on was never shared by another person between being sterilized,” Wallace emphasizes. “A classic place where bacteria transfers is the OR table itself. At other facilities, someone goes in with a squirt bottle between patients and they have 5 minutes to sterilize the table and the fact of the matter is that the table is definitely not sterilized in 5 minutes.”

Recognizing that proper decontamination and sterilization of medical devices and surgical instruments eliminates infections and produces operational cost-savings, the facility features a system that has taken patient and staff safety to the next level. Driven by selective automation, Renaissance’s sterile processing department, supported by Belimed equipment, is able to achieve efficiencies in the way surgical instruments are transported, washed and decontaminated, sterilized, reassembled and contained. Upholding the dedication to stringent infection control practices, instruments are sealed in trays and then pass from a “dirty” room to a “clean” room where they are sterilized and processed further, all in a department that has been designed with the goal of becoming more environmentally responsible in water and energy usage. All instruments have been marked with RFID technology, bar-coded, catalogued and tracked from purchase, and when an instrument approaches a sterilizer, the cycle is automatically set to the individual manufacturer’s care parameters – thus ensuring a longer instrument life and a repeatable sterilization process that ensures uniform processing and meets infection prevention standards. According to Pings, the backbone of the facility is a chamber sterilization system comprised of two discreet, low-intensity, stand-alone sterilization areas located between the operating rooms, and a central, high-intensity processing area in the operating corridor. The combined effect of the chamber system, sterilization process and smart utility use, allows for the elimination of up to eight full-time employees, with processing cut to a fraction of standard times while delivering vastly improved sterility assurance.

“Our system reduces staffing in central sterile (CS) and eliminates a lot of the cross-paths that exist elsewhere,” Pings says. People think if you are six feet away from dirty, you are OK, but those numbers don’t work anymore. Hospital CS departments are essentially one big room with workstations, and even the best-trained staff will violate those boundaries. That’s why the chamber sterilization concept works.”

Contributing to maintaining the line between sterile and unsterile is Congero’s proprietary LED system built into the floor and walls with a laser that resembles a light fixture placed before each terminal end of the OR corridor; this system replaces the traditional red-line tape used to delineate non-sterile areas from sterile areas. The center also features sterile lounges in the sterile corridor for staff to use on surgery days without having to gown out into non-sterile cover-ups to conduct business outside of the OR corridor. Staff can use phones and computers in the area while saving vast amounts of time in gowning out both ways; it adds up to a cost savings of approximately $8 per trip per staff member.

Contributing further to physician convenience is an adjacent, separate entity, the “hot office” area, instead of a conventional medical office building set-up where surgeons can have a place for pre-op and post-op patient consults, a design that extends the full use of the facility to office-based surgery convenience, according to Pings, who notes, “When you provide ways for physicians and staff not to work harder but to work more efficiently, they prefer it, and they are happier people.”

Pings continues, “What I push for the most is an understanding of the different needs of everyone involved at the center, and that includes surgeons. That physician lounge is one way to provide them with the productivity tools they need without having to leave substerile. We wanted to give them the support tools they need within their domain; for example, while they chart they can observe monitors that assist them in real-time tracking of pre-op and post-op patients. Go into the average surgical corridor and you see surgeons sitting on stools trying to have some sort of defendable territory between cases, and that’s neither appropriate nor conducive to surgeon satisfaction.”

The center is powered by a sophisticated IT platform that enables a number of progressive processes such as ultrasonic tracking of patients, staff and physicians for quick-location purposes; biometrics identification for narcotics dispersion; Bluetooth wireless monitoring of patient vitals; advanced telemedicine capabilities; RFID-driven nurse call system and much more. The IT capabilities extend to center management and operations such as inventory control, setting par levels and supplies ordering, plus patient scheduling, patient flow and H&P, and coding and billing, all handled with HIPAA-approved transmittal processes. The center’s eight ORs are equipped with state-of-the-art LCD displays, booms and an audiophile system, as well as CT and MRI in-room imaging. Renaissance is also home to a showroom and telemedicine center of excellence for Olympus Corp., which has installed a digital integration system utilizing rigid and flexible scopes, with one cart handling multiple surgical specialties.

How Renaissance fit into the existing Pacific Medical Plaza building is an achievement in itself, Pings says, since the entire project was a retrofit and where the anchor of the building was the nearly 19,000-square-foot ASC. “We were able to be extremely aggressive in our design in the allotted square footage,” he says. “The original ASC design had elements that were extremely challenging when you realized our space limitations. The design had to be created around the main stairwell in the very center of the structure and we relocated a second stairwell from one side of the building to the other.”

The innovations abound at Renaissance, which required a coordinated process of value engineering driven by the collective experience of the development team to deliver a cutting-edge ASC for very close to the cost of a standard facility. “We knew the challenges related to cost control for an ASC as ambitious as this,” noted Wallace. “However, what we could not have anticipated was trying to accomplish this amid one of the worst economic environments in U.S. history.” The upfront effort will continue to be realized through much lower operating costs thanks to better outcomes, automation and other inherent cost controls. “Cost is an overriding concern at any center but you must remember that upfront costs are ameliorated by cost savings in patient safety and efficiency,” Pings notes.

Key to Renaissance’s success is the partnership between stakeholders, according to Wallace. “This center is a culmination of many years of collaboration with Tony and Kathy as well as the relationship with a cooperative landlord who was of tremendous help in the development process and extremely supportive through the financial crisis. It was also critical to have physicians buy into your vision. We couldn’t have done it without the overwhelming support of the physicians; most of them put their money in, signed on the dotted line and sat back, leaving us to do what we were supposed to do.”

According to Wallace, the center is 70 percent physician owned, with Congero operating as a minority management company. Being a physician-driven facility, the opportunity to do things differently presented itself repeatedly, including how the center was staffed. “We created our own registry and share our staff with other facilities in the area,” Wallace explains. “By doing so we can reduce the labor-related load on the facility; for instance, on slower days with a lower case volume, we can share our staff with other facilities in the area. We believe having people standing around is bad for morale and bad for efficiency’s sake, and this arrangement is better for staff, if they need to take a day to meet personal or family obligations. The registry concept is a better way to accommodate staff who can work the hours they would like to work. And it allows physicians to have a schedule that fits their lives, too. It creates a real team spirit. We also incentivize staff to help increase the efficiency and profitability of the center, linking together their individual success and the success of the center for even better outcomes and operations.”

Making Infection Control Central to an ASC’s Operations

In my parallel life, I also edit one of our company’s sister publications, Infection Control Today (ICT) magazine, so as you can imagine, infection prevention in all healthcare environments is dear to my heart. I have been following closely the new conditions for coverage (CfCs) issued last year by the Centers for Medicare and Medicaid Services (CMS) addressing infection control in ambulatory surgery centers (ASCs), and the sense of panic that these CfCs have triggered. ASCs have traditionally enjoyed a very low infection rate, but some rather high-profile infectious outbreaks at outpatient facilities prompted a greater investigation by the government into the state of infection control at surgery centers and a few bad apples have forced a new regime. But perhaps that’s a very good thing in disguise. It’s true that human nature being what it is, people don’t always do what they are supposed to do, and so rules are made to enforce mandatory compliance. It’s always a shame when doing the right thing must be legislated instead of met voluntarily, but the bright spot in the new CfCs relating to infection control is the hope for even better patient outcomes — a distinct hallmark of the ASC industry in the first place.

In this issue you’ll meet Bruce Wallace and Anthony Pings, two people who have made infection control the focus of every decision they have made in the design and development of Renaissance Surgical Arts at Newport Harbor, LLC, a brand new multi-specialty ASC that will surely be a destination for healthcare in the Orange County, California region. Central to the center’s long list of innovations is the numerous concessions made to making infection control an imperative, from the multi-chamber sterile and substerile areas in between the operating rooms, to the extensively automated surgical device and instrument sterilization systems, to the use of touchless scrub sinks and surfaces impervious to bacteria.

Working with Distributors What You Need to Know

According to the Healthcare Distribution Management Association (HDMA), the U.S. healthcare system saves nearly $32 billion each year with distributor’s streamlined, aggregated ordering and efficient shipping logistics. SurgiStrategies spoke with ERI, a medical imaging equipment distributor to discuss some key components of what a distributor has to offer.

Q: describe the key roles of a distributor in the outpatient marketplace — how do they serve the niche between manufacturers and the end user?

Simply stated, a distributor must know what they are selling and the products’ appropriate applications. This permits a customer to receive accurate answers to presale questions allowing them to purchase with confidence. Furthermore, post sale support is just as critical. We often work with customers to properly integrate their new equipment and use it to its fullest potential. Given our extensive experience and our close working relationships with manufacturers, we can recommend best installation and operating practices to provide an optimal end-user experience.

Another important role for vendors is to serve as the flexible middleman between manufacturers and end-users. Given the manufacturers’ high overhead, they typically require significant minimum orders and demand very specific payment methods. Furthermore, manufacturers will often implement irregular production cycles, causing inventory surplus and shortages that are not readily apparent to the customer. This in turn may cause significant delays when ordering equipment and supplies. We anticipate these cycles and account for additional environmental factors. For example, we see a significant increase in gel-warmer sales as winter approaches and we adjust our inventory accordingly.

Q: can distributors bring value – added services that a direct – from – manufacturer approach can’t, and why?

In addition to providing purchasing advice and post-sale support, we also offer free equipment demonstrations and trials. This has been a very effective sales tool for our company and illustrates our confidence in our products and support. Customers are afforded the opportunity to put our equipment through their daily processes and workload. Relative to the manufacturers, our company is small by comparison but we believe that works to our advantage. Customers won’t become lost in the inherent bureaucracy of large companies, which allows for immediate and straight forward service. Customers frequently call in with a desperate need for equipment to be delivered the next morning. Our small stature allows us to quickly process and ship their order for overnight delivery.

Q: how are distributors addressing the perception that distributors are the expensive middleman in the healthcare supply chain, so to speak?

The first obvious solution to the “expensive middleman” perception is to not be expensive. We maintain low prices by controlling our overhead business expenses and make smart purchasing decisions from our manufacturers. The next step is to fighting this perception is to promote our value added services discussed above, i.e., equipment demonstrations, flexibility, and prompt customer service. Lastly, we believe we save our customers money by advising the right equipment for their needs and not pushing equipment that is disproportionate to their requirements.

Q: what advice can distributors offer to customers in terms of savvy purchasing practices?

Shop around for lower prices! This difficult economy has caused a strain on everyone’s budget and you may be pleasantly surprised to find that you can save a significant amount of money by searching the Internet for a better deal. Also, ask your distributors for bulk discounts or flat rate shipping options. You may be able to save money on shipping costs by combining regular orders. Do not be afraid to call and ask questions if it’s your first time ordering this particular piece of equipment. It also helps to be knowledgeable about the equipment’s intended application and any other equipment that it will be connected to. If you feel outside your comfort level, encourage the end user to ask these questions directly.

Advocacy Committee Creating Unified Voice for the ASC Industry

In an effort to continue to represent the ASC industry on Capitol Hill and to create a bridge between two existing organizations, the ASC Advocacy Committee was launched last August and has been busy educating Washington policymakers about the value of ambulatory surgery centers. The committee is sponsored by the ASC Association and by the ASC Coalition, an affiliation of ASC associations and ASC management companies.

The Advocacy Committee includes ASCA, some of the largest state ASC associations, and more than a dozen major ASC companies. The funding is provided by the members; separately, ASCA, many state ASC associations, and many companies have their own PACs for direct political giving, according to Andrew Hayek, president and CEO of Surgical Care Affiliates and chair of this new committee.

Despite a health reform-related injection of chaos on Capitol Hill, Hayek says that the committee’s objectives have remained steadfast: “First, to create a clear, compelling message of how ASCs benefit the healthcare system; second, to hire the resources to help communicate this message (e.g,. PR firm, lobbyists, external studies); third, to create an active grassroots network among ASCs to communicate with legislators and policymakers; and, fourth, to create an open, collaborative organization, in which any parties interested in supporting ASCs are welcome to join us and participate.”

One of the most important roles of the committee is to educate lawmakers and to tell the ASC story. Hayek says the committee is in the design process of a PR campaign that will launch early next year. “We have added greater lobbying resources to help us communicate with legislators, policy makers and regulators in Washington, D.C.,” Hayek adds. “We have activated a much greater degree of coordinated grassroots efforts, and we are in the design phase of a grassroots database that will help us take this coordination to a much higher level. Lastly, we are coordinating our messaging across ASCA, state ASC associations, and companies to a greater degree. All of these components work together to help us tell our story in Washington, D.C.”

Another critical item on the committee’s agenda is to help define and promulgate the role that ASCs can play within the context of healthcare reform, and to continue to address key issues of reimbursement and physician ownership. “We have been active in communicating the very positive role that ASCs play in the healthcare system — providing outstanding clinical care at a lower cost to beneficiaries and Medicare,” Hayek says. “We have been active both on the Hill and with the Administration in advocating for higher ASC reimbursement rates, to help facilitate a greater migration of surgical cases from the HOPD setting to ASCs, which will help improve care and save beneficiaries and Medicare money.”

Hayek continues, “We have also engaged in conversations sharing the value of physician ownership in ASCs — ensuring the highest levels of patient care and greater efficiency in the delivery of services. One of the reasons that ASCs provide such outstanding care and simultaneously operate so efficiently is that physicians are ultimately responsible for the operations of the ASCs — clinically, operationally and financially. This leads to aligned interests in ensuring outstanding care, delivered in the most efficient manner.”

Counted among the ranks of the most ardent supporters of the committee is William Kennedy, senior vice president of business development. “We were original members of the ASC Coalition and are now active and enthusiastic supporters of the new group headed by Andy Hayek,” Kennedy confirms. “What we hope to accomplish is to make our industry known in Washington, and that includes CMS as well, so that they understand the good work that surgery centers are doing in terms of delivering low-cost, high-quality patient care to the community. And that we are also a very attractive surgical service at a very attractive price for very attractive outcomes. We want to ensure that our voice is heard above all of the noise made by the hospital associations.”

Kennedy emphasizes the importance of advocacy efforts at the grassroots level as well, something that physicians, administrators and nurses can accomplish to help protect their livelihoods. Because so many issues are springing up at the state level, Kennedy encourages ASC owner/operators to kick complacency to the curb and get involved.

“Many people think that issues impacting our industry are going to start at the state level and will proliferate, rather than coming down from Washington,” Kennedy says, “so there’s a critical need to be involved in your state ASC association.” Kennedy points to the restrictions on ASCs in New Jersey as a recent example. “Legislators are looking to restrict physician ownership and limit the surgery center industry. Grassroots advocacy will ensure that your voice is being heard by your Congress members. There are numerous ways to do this, and our industry has become much better at writing letters to legislators and providing some Congressional pressure. Holding open houses is a great way to get our story to the community; and when it does get out, it is very appealing to healthcare consumers. ASCs make good sense because we deliver the same results for about 40 percent less.”

While not every physician feels that he or she is cut out to be an industry advocate, Kennedy says the industry cannot afford to be bereft of its physician champions. “There’s a core group that galvanizes around advocacy efforts and then there are other people who say someone else can do the work — it’s kind of like public radio,” Kennedy says. “It’s critical to show physicians how not becoming involved can hurt them in dollars and cents. But at the same time it’s also about giving them a sense that they can make a difference. One of the things we are spending a lot of time on now is going back to people who have sent e-mails and letters to legislators to ensure they know their work has paid dividends.”

Hayek welcomes any ASCs or organizations with an interest in the ASC community to join the ASC Advocacy Committee’s efforts. “The Advocacy Committee is designed to be open and transparent — and we welcome both financial support and grassroots support,” he says.

Hayek can be reached at (205) 545-2755 or andrew.hayek@scasurgery.com. Or contact the committee’s executive director, Marian Lowe, at (202) 266-2606 ormarian.lowe@shcare.net.

Battleground New Jersey: Is an “Anti-ASC Pandemic” Possible?

On March 23, 2009, revisions were made to the New Jersey anti-self-referral statute (the “Codey Law”), which prohibits New Jersey physicians from referring patients to healthcare services in which the physicians have a significant beneficial interest unless an exception exists. Although heralded as a victory in the wake of Garcia v. Health Net, in which a New Jersey Superior Court held that referrals to ASCs were prohibited by the then-current version of the Codey Law, the so-called “Codey Amendment” contains, among other provisions, a moratorium on the development of new physician-owned ASCs.

A question arises in the amendment’s adoption — will other states in the country follow? The answer to that question may lie in the degree of vigilance exercised by state ASC associations in proactively examining the anti-referral language of their states’ statutes and the ability of those in the ASC industry to capitalize on positive recent events which have occurred with regard to relationships with third-party payors.

As originally enacted, the Codey Law contained a broad prohibition on physician referrals to healthcare services in which such physicians held a significant beneficial interest. Exceptions were permitted for referrals for specific services which did not include referrals for services performed within an ambulatory surgical center. Despite the lack of an express exception applicable to ASCs, physician ownership in New Jersey ASCs proliferated as investors relied upon unpublished and informal guidance given by the Board of Medical Examiners (BME) to a couple of separate projects. This informal guidance indicated that physician owned ASCs would be viewed by the BME as extensions of the physicians’ medical practices. Relying upon such informal guidance certainly involved taking the path of least resistance, as opposed to attempting to effect an amendment to the Codey Law or secure more formal guidance from the BME. Unfortunately, such reliance seems to have been misplaced.

New Jersey has traditionally been an out-of-network (OON) state with ASC providers receiving on average three times the reimbursement for being out-of-network than in-network. Not surprisingly, payors have used various tactics to fight against having to pay the higher OON reimbursement, including (i) filing suit against OON providers asserting claims of insurance fraud under the New Jersey Insurance Fraud Protection Act and tortious interference with contract; (ii) threatening in-network physicians who refer to OON facilities with termination of network provider agreements, (iii) ignoring assignments of benefits and making payment directly to health plan beneficiaries, and (iv) attempting to require OON facilities to provide additional disclosure statements to patients who schedule services there.

In Garcia v. Health Net of New Jersey, Inc., 2007 WL 5253484 (Ch. Div. 2007), a New Jersey ASC and its individual surgeon-owners filed suit against Health Net of New Jersey, charging that Health Net had improperly declined to renew individual surgeon-owner’s provider contracts. Although the surgeons had been in-network with Health Net, the center itself was OON. Health Net counterclaimed that the center and its owners had committed insurance fraud in submitting claims for reimbursement for services which were provided in violation of the Codey Law.

Although the court held that the requisite intent to commit insurance fraud was not present, the judge called into question the physicians’ reliance on the informal guidance issued by the BME finding that a plain reading of the Codey Law did not support the BME’s position that ownership in an ASC was excepted from the referral prohibition.¹

As a result of the court’s non-binding statements in the Garcia decision, the approximately 40 physician-owned ASCs operating within New Jersey suddenly found themselves “skating on thin ice.” Frantic efforts to address the situation began immediately.

After several iterations, a final version of the Codey Amendment was adopted which unequivocally legitimized physician ownership in ASCs in New Jersey, provided certain conditions are met. Specifically, P.L. 2009, c.24 requires ASCs to be or become accredited by the Centers for Medicare and Medicaid Services (CMS) as an ASC in order to qualify for exception under the anti-self-referral provisions.

In addition, under the Codey Amendment physicians may continue to refer to ASCs in which they have a beneficial interest if (1) the referring physician personally performs the services, (2) income received from the ASC is directly proportional to the physicians’ ownership interest, (3) all clinical decisions at a facility owned in part by non-physicians are made by physicians and (4) the referring physician discloses his or her interest in the ASC to the patient, in writing, including whether the services provided at the ASC will be reimbursed at an OON rate, and posts a sign prominently in his or her office indicating the ownership interest.

The Codey Amendment also imposes a moratorium on the issuance of new licenses to ASCs by the New Jersey Department of Health and Senior Services (DHSS), except in the case of a change of ownership of an existing center; relocation of an ASC to within 20 miles or to a “Health Enterprise Zone” with the DHSS commissioner’s approval and with no expansion in the scope of services provided; ASCs for which architectural plans were filed with the municipality in which the center will be located or with the Health Care Plan Review Unit of the New Jersey Department of Community Affairs by Sept. 23, 2009 (six months within the effective date of the Codey Amendment); entities owned in whole or in part by a New Jersey hospital; and entities owned in whole or in part by a New Jersey medical school.

Payor attacks on ASCs in New Jersey have not been limited to questioning the legitimacy of such entities under state law. Blue Cross Blue Shield of New Jersey (BCBSNJ) introduced a new small business health plan that caps payment for out-of-network ASCs services at $2,000 per person per year. The New Jersey Association of Ambulatory Surgery Centers and the Alliance for Quality Care, a coalition of ASCs and other healthcare providers, contested the state Department of Banking and Insurance (DOBI)’s approval of the plan, arguing that the cap violated state law regulating small employer health benefit plans. DOBI denied the request to prohibit its sale and both the Appellate Division and the state Supreme Court denied stays of the sale pending litigation. The new small plans, although the subject of litigation, have been sold to employers and are affecting ASCs’ ability to receive fair reimbursement for OON services. Other payors may be jumping into the fray. For example, Aetna has instituted a freeze on reimbursement for in-network ASC services and may be in the process of implementing a cap on out of network reimbursement similar to BCBSNJ’s.

The situation started by the Garcia case can generally be summed up in a few simple sentences. The physician-owned ASC industry in New Jersey was content to grow in a murky regulatory environment while generally using aggressive OON tactics against powerful and hostile payors. When the “tremors” caused by the Garcia case struck, New Jersey ASCs were forced to seek hurried redress from the legislature in a national climate that is generally hostile to physician ownership of providers. This hostility is evidenced by provisions curtailing ownership by physicians in hospitals which are contained in all versions of the national healthcare reform bills circulating around Washington. In the end, existing physician-owned ASCs received what they needed but not without paying a significant price. A quasi certificate of need regime has been set in place in New Jersey largely to the benefit of hospital and payor lobbies in that state. The situation is worsened when the payors’ attempts to unilaterally impose caps on OON reimbursement is considered.

Whether the situation in New Jersey will prove to be “contagious” may depend on how nimble ASC advocates in any given state can be when facing similar challenges. For example, recent events in California have created a “foggy climate” similar to that which existed for ASCs in New Jersey before the Codey Amendment was executed. Following the decision in Capen v. Shewry, 155 Cal. App. 4th 378 (2007), the California Department of Public Health (DPH) issued a policy statement instructing district offices not to license, or renew licenses for, physician-owned ASCs. DPH’s position is that, in accordance with Capen, it does not have the authority to license physician-owned ASCs as they fall under a statutory exception to the definition of “surgical clinic.” As a result of the Capen case, ASCs in California are faced with a surreal situation in which Medicare-certified ASCs can continue to open and operate while the state cannot license such facilities.

The California Ambulatory Surgery Association (CASA) has not been content with operating in the gray area created by the Capen case.

“What we learned in California was being complacent was not good,” notes Scott Leggett, the immediate past-president of CASA. Leggett states that his previous involvement with CASA taught him that the association should have been more proactive in confronting changes in the state’s worker’s compensation laws when it had the opportunity to do so several years ago. Leggett says that such experience has taught him that failing to be proactive means that “… you are on the menu rather than having a seat at the table.” According to Leggett, CASA is using the Capen case as an opportunity to educate lawmakers as it aggressively seeks to correct the uncertainty left in the Capen decision’s wake.

ASCs around the country would also be well advised to actively monitor positive developments on the OON reimbursement front if they encounter tactics such as those being implemented in New Jersey by BCBSNJ as previously described. For example, New York Attorney General Cuomo announced on Oct. 27, 2009, that a new not-for-profit company, FAIR Health, Inc. and an upstate research network headquartered at Syracuse University have been established which, collectively, will develop a new independent database of “usual and customary” rates for consumer reimbursement for OON charges to replace the widely used Ingenix, Inc. system which was earlier debunked in Cuomo’s report, “The Consumer Reimbursement System is Code Blue.” This new reimbursement system will be funded by the almost $100 million in settlement money received by the state from insurers like United HealthGroup and CIGNA after assertions by the Attorney General that such companies had under-reimbursed consumers and providers by hundreds of millions of dollars for OON services. Further, ASCs should require that their counsel track the class action lawsuits underway on OON issues in Georgia and California.

Although the battles occurring in New Jersey and California are the result of a confluence of factors unique to each state, ASCs are well-advised to be ever vigilant in removing ambiguity from their state’s anti-referral statutes at the earliest possible opportunity and in assessing the status of state-specific reimbursement plans and legislation. The lessons of New Jersey and California teach us that efforts to exert change are best made proactively, rather than reactively once laws have been passed, regulations have been promulgated and physician-owned ASCs’ rights have been eroded.

Lorin E. Patterson is a partner in the Falls Church, Va. office of Reed Smith LLP and a member of the firm’s Life Sciences Health Industry Group, practicing in the area of healthcare regulatory law.

Lisa S. Albright is a senior healthcare associate in the Princeton, N.J. office of Reed Smith LLP who specializes in regulatory and transactional matters for ambulatory surgery centers, hospitals, physician groups, skilled nursing facilities and other healthcare clients.

Reference:

1. Health Net appealed the decision and, on Nov. 17, 2009, the Appellate Division affirmed. Garcia v. Health-Net of New Jersey, Inc., No. A-2430-07T3 (N.J. Super. Ct. App. Div. Nov. 17, 2009). While the affirmation of the lower court’s holding is very positive news for ASCs operating on an OON basis it does nothing to mitigate the ramifications of the Codey Amendment.

 

Online Defamation and Libel: The Modern Faceless Crime

The hallmark of the Internet is its ability to increase the free exchange of ideas. The ease with which information is proliferated increases the damage caused by false or harmful information, stretching the bounds of defamation.

The Internet gives the average person an opportunity to express their opinion, anonymously, well beyond any other venue. An individual now has the ability to publish statements and articles across the world in an instant, without the guidelines or checks and balances of traditional publishing. Thereafter, online erroneous statements may linger for months, or even years, almost impossible to recover, amend and remove. Internet defamation lawsuits are on the rise and the number of people sued over online speech is increasing sharply, according to statistics from the Citizen Media Law Project at Harvard’s Berkman Center for Internet and Society.

As a physician, you know that your reputation is one of your most valuable assets. It takes years to cultivate impeccable credentials and positive public perception. Unfortunately, one disgruntled patient can destroy that hard work in minutes with a few clicks of the computer mouse. In these difficult and challenging times, protecting your most valuable assets becomes top-of-mind priority.

Disgruntled patients, or those posing as patients, can easily publish content to the Web — regardless of the veracity of that content. Increasingly, physicians are experiencing the damage caused to their hard-earned reputations from these posts, blogs and doctor rating sites.

Below you will find the tips and tools to make it easier to track, control and manage your online reputation.

Purchase Domain Names

Buy iterations of your name and practice name as domain names. Imagine a potential patient going to “your name”.com and reading horrible statements about you posted by a disgruntled patient or competitor. Unfortunately, this happens more than you think. Buying iterations of your name is a simple and inexpensive way to prevent such attacks. If your name is common and the exact match is unavailable, look for a combination of your name and either a location or a professional title (example: johndoemd.com,doctorjohndoe.com or johndoedallas.com). Also, check to see if your name is available with hyphens (example: john-doe-md.com). You can buy a .com domain for as little as $7.95 a year from site providers such as GoDaddy or DreamHost; even cheaper if the “.com” extension is not a priority.

Keep a Watchful Eye

Proactively monitor the Internet. If you wait until someone notifies you of a questionable online post or rating before you begin a proactive monitoring campaign, then you are too late. The damage is already done. Perform monthly (minimum) checks to see if there is any information about you that could be potentially harmful. Search for your name, practice name as well as key staff members. Medical Justice’s Web Anti-Defamation service includes proprietary technology that proactively monitors the top physician rating Web sites. The software immediately notifies its members of any new postings or ratings containing member physicians’ name or practice names.

Act Fast

If you do find something posted about you online that could be potentially damaging, take action immediately. Whether it is a friend posting photos you do not like or an anonymous person slandering your business, taking care of it sooner rather than later is best. The longer it stays on the Web, the more people see it and the more damage it can do. Certain attorneys specialize in cyber issues and can assist with legal redress if necessary.

Your Google Reputation

Consciously create a clear and positive image of yourself and monitor the Internet for any type of commentary – good, bad or indifferent. Be contentious while creating and updating content on your practice, professional or social Web sites. Ambiguous comments or statements can be used misinterpreted. Make sure that your content is clear and unmistakable. In today’s world, Google is more than a search engine — it is a reputation engine. When a prospective patient, professional partner or investor wants more information about you, they ultimately turn to Google for information. Some individuals, with flawed online reputations, try to manage the situation by creating copious content to “push down” negative information on Google. This tactic can take many weeks — sometimes months — before your new positive image rises up through the ranks of Google. Do not wait until you are knee-deep in a crisis to decide you need to take charge of your online reputation. A proactive strategy is more effective than reactive tactics.

Assume Everything Can Get on the Web

Both in your personal and professional life, what you say online and offline can come back to haunt you. Be safe and assume any e-mails, conversations, articles or photos may eventually end up on the Web. If you are blogging, writing editorials, running a Web site or just have a social media profile, be careful what you post. you say may cause you problems in the future. If you do want to keep a non-practice affiliated blog or engage on social internet message boards, create a pseudonym for yourself so you cannot be tracked.

Keep Social Networks Private and Actively Monitor

Thirty percent of online physicians in developed markets report that they use Facebook, according to the Medimix International Report. Keep your social networking profiles private to all except those you approve. This will keep casual or even malicious viewers from seeing your personal information. Keep in mind that the influence of connections made on the Internet can be much more impactful for high-visibility individuals, such as physicians, than had been previously perceived. Create custom RSS feeds based on keyword searches: Feedster.com, Technorati.com, IceRocket.com,Google.com/blogsearch, Blogpulse.com, MSN Spaces, Yahoo! News, Google News, MSN News and PubSub. RSS stands for “Really Simple Syndication” — it’s a format for distributing and gathering content from sources across the Web, including newspapers, magazines, and blogs. RSS feeds are an efficient way to monitor and track content that affects your practice.

Put Your Best and Most Accurate Foot Forward

Make sure that your online presence will not be mistaken for someone else’s or used against you.  Sign up for social network sites, starting with the most popular like LinkedIn and Facebook.  Complete your social network identities with valid information and data that you want to be “known” about you (e.g., specialty, practice information, credentials, location). Do not forget to link to your own Web site(s). While signing up and setting up your identity on these social networks, make sure you pay special attention to the privacy settings.  Set certain features, like personal pictures and posts, to private.

 

Link, Link, Link…

Google sets a high ranking priority to Web pages that contain active links.  This is an easy way to address the search engine optimization (SEO) for yourself as an individual or your medical practice. Make it a priority to link your Web site to your social networking identity links as well as other web pages that you are associated with (e.g., medical societies, alumni organizations, non-profit affiliations). Anonymity is part of the Internet. Unfortunately, anonymity creates a willingness and boldness to criticize. When online criticism (anonymous or not) strays over the line into libel, questions surrounding freedom of speech arise.  Traditional remedies and approaches do not apply to cases involving physicians. First, physicians are bound by state confidentiality laws and HIPAA. They are forbidden from defending against reputational assaults by posting the medical record as a correction. Second, under traditional legal principles, one who is defamed can sue not only the originator of the libelous comments, but also the distributor- such as a newspaper or a television station. Using that analogy, a natural target would be the digital distributor, the Internet Service Provider (ISP). However, in 1996, Congress foreclosed that option by granting broad immunity to ISPs for the tort of defamation. In general, physicians have few practical after-the-fact remedies against Internet assaults on their reputation.

 

Ambulatory Surgery Center Outlook for 2010

With 2009 closed, the preparation for a successful 2010 is here. Most centers have considered the trends and utilization by surgeons and begun the budgeting process to establish goals and objectives for 2010. When setting those goals, the greatest factor for existing centers is capturing the appropriate cases from prior utilizers and recruiting new cases from surgeons seeking the efficiency of an ambulatory surgery center (ASC). Management team members need to assess their individual challenges at their center and work to contain cost, improve production and eliminate waste. Similarly, physician partners need to assess their role in the center in assisting the cost control, reviewing data on cost, preference items and consider case adoption when appropriate.

For centers under development or under consideration, team members should be recasting projections, timelines and fully understanding the progression from planning to operations making assurances that the plan reflects today’s environment. As the economy continues to remain slower than anticipated, the economic downturn results in the need for all members of the partnership to personally guarantee loans, there is additional scrutiny of the deal points, terms are aggressive and the process is slower than in past history.

In general, 2010 has many positive aspects to consider. From an operational aspect the decrease in professional fees result in surgeons seeking an ambulatory setting for partnership as well as the need for efficiencies to impact their total practice. The investment in an ASC is often a great stabilizer to a physician base attempting to control their surgical environment and production. An ASC could be formed easily around a smaller core group of physicians to assist in attaining their goals. As with any partnership, the greater affinity for the groups’ cohesiveness the greater focus on core principles and alignment.

As hospitals continue to have pressures and cuts in personnel, the ASC environment can recruit registered nurses and surgical techs more easily by bringing quality offerings with less pressure on elevated salaries. This will allow ASCs the ability to recruit and retain talented employees and bring value to those employees seeking part-time and PRN work schedule. The ASC setting can be of great value to registered nurses, as the flexibility of part-time and PRN work can fill current needs of local resources. Surgeons will continue to seek potential avenues for an ASC and hospitals may consider expanding the potential for joint-venture opportunities. A counter measure by hospitals may be to employ specialists and reducing the potential for surgical intervention outside the hospital catchment entities. This could reduce the availability of specialists needed to expand or develop existing or future ASCs.

Currently, building and labor costs are lower due to the economic pressures and the need for contractors to keep crews active, resulting in lower costs and rental rates. This is a critical point for existing center remodeling and expansion allowing for tired assets to be updated and keep pace in the local standard of care. Additionally, the start-up facility has the opportunity to increase margin by lower cost space and lower lease rates as the entire construction cost is decreased. This drives great value, as the fixed cost is often over a longer time frame and the savings great over the life of the lease. Additionally, the availability of new, used and refurbished equipment remains of value with the current pressures on companies to move existing equipment and reduce inventory in all categories. Equipment and surgical instrumentation companies are increasing the ability to provide valuable terms and payment methods to meet centers needs.

Reimbursement is always a challenge in any healthcare entity. In the ASC industry the negotiation of contracts and details that must be included in each negotiation is critical to the success of a center. Each year, a careful evaluation of the centers managed care contracts, covered codes, multiple procedures, carve-outs and implant reimbursement must be reviewed and negotiated. Beyond the contracting, the appropriate billing and collections- to-contract standards must be complied to receive each dollar on every case. As the consolidation of payors continues and contract language becomes more complex, it is essential that your team has the appropriate resources to grow net revenues. The collection of co-pay and deductibles must also be conducted in a proactive manner. Each patient must be notified of the expectations at time- of-service and associated costs of the surgical encounter. The evaluation of in and out-of-network must be weighed, justified and aligned with each state’s regulatory guidelines. As the co-pay and deductible becomes more burdensome on the population, the potential for the delay in elective cases being scheduled timely may occur.

As the healthcare debate continues, ASCs continue to be the lower-cost environment to assist in keeping healthcare costs from climbing into the future. Assuring the right case for the right environment is often an indicator that is overlooked in an ASC. Having partners understand the appropriate case type, acuity, co-morbidities and implant reimbursement is key to assisting in the profitability of cases. ASC management teams must communicate trends and encourage participation in the process allowing all employees become knowledgeable in the aggregate center costs. All team members must have the necessary attention to detail, high customer service and clinical excellence required of today’s successful ASC. The center’s management team must proactively manage the center to optimal levels to assure the clinical and financial performance of the center.

At Practice Partners in Healthcare we specialize in de novo and turn-around opportunities, providing a unique development process and management arrangements. Practice Partners is a minority equity holder, leaving the majority to physicians and hospital partners. We bring success-proven management expertise to the clinical, financial and regulatory performance of new and existing surgery centers. Experienced in both CON and non-CON states our team provides seasoned talent for developing and managing physician-owned and hospital-physician joint ventured surgery centers.

Larry Taylor is president and CEO of Practice Partners in Healthcare, Inc.

 

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