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Well, I figured it out ... I owe my soul to the company store
Going to sell you your practice?
You know I am certain that we physicians are never going to be paid much more than we get paid right now. Now we may get occasional 0.5% increases from Medicare, but after no pay increase for 15 years and with the new unachievable payments for quality, I am not optimistic. So, I have been talking to corporate physician buyout companies, specifically amalgamators of dermatologists. I mean, in the words of the “Fat Man” in “The House of God,” who wants to pass up a “fortuna”?
In June 2017, as far as I can tell, there were 17 corporate dermatology groups out there employing about 1,200 “providers” which includes extenders, and there are several “models” of assimilation.
There are extremes on either end. The least invasive is the group that buys you for a dollar, hopefully has better insurance contracts, and charges you a percentage for billing and management of your practice. If you want, you can buy yourself back for a dollar. In this setting, you just have to keep a close eye on how expenses are calculated. And there is no guarantee that this group won’t sell out to venture capital in the future, so you have to be prepared to reassume control of your practice if you don’t want to be acquired along with the group.
Another category is what I call the bottom feeders, who set up multiple dermatology shopfronts manned by nurse practitioners and physician assistants, who are loosely supervised by a physician, often remotely, who may not even be a dermatologist. The only requirement is that they have a medical license in that state. This group will come to town and bid for all the dermatology work from managed care companies. Typically, they are happy to settle for 85% of Medicare payments.
The more common model is based on acquiring practices, then selling them to other venture capital groups for a return to other venture capital groups. Venture capital groups are behind all the corporate practice acquisitions except for one, which funds out of a personal fortune. They all view medicine, particularly dermatology, as a fragmented industry that they can consolidate for a profit.
The basic plan of these groups is to pay you five to eight times EBITDA (earnings before interest, taxes, depreciation, and amortization) up front, which works out to be about 2 or 3 years net profits. Usually, they want you to take at least 40% of your “buyout” as company stock, which they promise may appreciate greatly, but has no liquidity until they sell to another venture capital group and maybe not even then. The cash you receive can mostly be treated as capital gains if you negotiate it correctly, which will be taxed at 23.8% (the 20% tax rate plus the Affordable Care Act 3.8% supplemental tax, instead of 39.6%, the top current federal bracket.
Generally, their expectations are that you will get 40% of the practice income as salary, overhead will be 40%, and their profit is 20%. So their buyout is really a loan from them, which will be paid off in 5 years. Admittedly, the buyout will be taxed less than your current income, with a possible equity kicker when they flip the practice, which they hope to do three or four times! Also, be aware, the physicians who got in early and represent them get a piece of what you would have been paid (usually $50,000-$100,000 in stock) for recruiting you. There is a reason they are working the company booth at meetings! It’s “Amway for Dermatologists.”
The company then owns your practice, you are an employee, and you owe them at least 5 years of service. They put you on a salary, which is less than you made previously – and interestingly, the difference again usually pays their original investment off in 5 years, usually with some interest. If you are a younger physician who owns the practice, with a longer practice future, you should receive a higher percentage of your former income. If the company can “boost” your practice income, you could make as much as or more than you did before, but most of these outfits do not have better insurance contracts. Their “boost” is based on hiring more physician assistants or nurse practitioners, and having you supervise them.
Once you sell and are owned by the company, they strongly suggest (but do not require, which is illegal) that you send your dermatopathology to your fellow employee, in another state, whom you have never met and probably never will. They will also suggest you send your Mohs cases to a fellow employee you’ve never heard of, who comes to town a couple of days a month to perform the surgeries. They take over your human resources, including your policies and payroll, which may be good if you have overpaid cranky employees you just can’t bear to fire because they have been with you so long. They will standardize everyone’s pay and benefits. They take over your billing, and may be able to get you more reasonable health insurance, and will have a standardized benefit plan. If you need to buy anything for the practice, you will fill out a requisition form. Major capital purchases must be approved in advance.
Your contract will specify that you have to work, on average, at least as many days per year as you have the last 3 years. If you leave early, you will have to pay the money you received, plus penalties. In addition, you may have a 2-year, 20-mile noncompete agreement clause (although this is negotiable) around all sites they operate, anywhere in the United States. If you die, they have an insurance policy on you.
Young employed doctors don’t get the “buy out” or the equity, although they can “buy in” later. They become cogs in the wheel.
The groups then try to roll up as many practices as possible so they can resell the amalgamation to a larger private equity fund eventually for 10-15 times EBITDA if the group is large enough. Maybe so, maybe not, but I have a strong feeling this is not going to end well. These equity funds work with borrowed money, and want double their investment and profit in 5 years or less.
The biggest losers, however, are the patients. They become a commodity, to be pushed through the office, and will not enjoy the benefits of the best consultants, but instead will have to select from the employees of the company store.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Going to sell you your practice?
You know I am certain that we physicians are never going to be paid much more than we get paid right now. Now we may get occasional 0.5% increases from Medicare, but after no pay increase for 15 years and with the new unachievable payments for quality, I am not optimistic. So, I have been talking to corporate physician buyout companies, specifically amalgamators of dermatologists. I mean, in the words of the “Fat Man” in “The House of God,” who wants to pass up a “fortuna”?
In June 2017, as far as I can tell, there were 17 corporate dermatology groups out there employing about 1,200 “providers” which includes extenders, and there are several “models” of assimilation.
There are extremes on either end. The least invasive is the group that buys you for a dollar, hopefully has better insurance contracts, and charges you a percentage for billing and management of your practice. If you want, you can buy yourself back for a dollar. In this setting, you just have to keep a close eye on how expenses are calculated. And there is no guarantee that this group won’t sell out to venture capital in the future, so you have to be prepared to reassume control of your practice if you don’t want to be acquired along with the group.
Another category is what I call the bottom feeders, who set up multiple dermatology shopfronts manned by nurse practitioners and physician assistants, who are loosely supervised by a physician, often remotely, who may not even be a dermatologist. The only requirement is that they have a medical license in that state. This group will come to town and bid for all the dermatology work from managed care companies. Typically, they are happy to settle for 85% of Medicare payments.
The more common model is based on acquiring practices, then selling them to other venture capital groups for a return to other venture capital groups. Venture capital groups are behind all the corporate practice acquisitions except for one, which funds out of a personal fortune. They all view medicine, particularly dermatology, as a fragmented industry that they can consolidate for a profit.
The basic plan of these groups is to pay you five to eight times EBITDA (earnings before interest, taxes, depreciation, and amortization) up front, which works out to be about 2 or 3 years net profits. Usually, they want you to take at least 40% of your “buyout” as company stock, which they promise may appreciate greatly, but has no liquidity until they sell to another venture capital group and maybe not even then. The cash you receive can mostly be treated as capital gains if you negotiate it correctly, which will be taxed at 23.8% (the 20% tax rate plus the Affordable Care Act 3.8% supplemental tax, instead of 39.6%, the top current federal bracket.
Generally, their expectations are that you will get 40% of the practice income as salary, overhead will be 40%, and their profit is 20%. So their buyout is really a loan from them, which will be paid off in 5 years. Admittedly, the buyout will be taxed less than your current income, with a possible equity kicker when they flip the practice, which they hope to do three or four times! Also, be aware, the physicians who got in early and represent them get a piece of what you would have been paid (usually $50,000-$100,000 in stock) for recruiting you. There is a reason they are working the company booth at meetings! It’s “Amway for Dermatologists.”
The company then owns your practice, you are an employee, and you owe them at least 5 years of service. They put you on a salary, which is less than you made previously – and interestingly, the difference again usually pays their original investment off in 5 years, usually with some interest. If you are a younger physician who owns the practice, with a longer practice future, you should receive a higher percentage of your former income. If the company can “boost” your practice income, you could make as much as or more than you did before, but most of these outfits do not have better insurance contracts. Their “boost” is based on hiring more physician assistants or nurse practitioners, and having you supervise them.
Once you sell and are owned by the company, they strongly suggest (but do not require, which is illegal) that you send your dermatopathology to your fellow employee, in another state, whom you have never met and probably never will. They will also suggest you send your Mohs cases to a fellow employee you’ve never heard of, who comes to town a couple of days a month to perform the surgeries. They take over your human resources, including your policies and payroll, which may be good if you have overpaid cranky employees you just can’t bear to fire because they have been with you so long. They will standardize everyone’s pay and benefits. They take over your billing, and may be able to get you more reasonable health insurance, and will have a standardized benefit plan. If you need to buy anything for the practice, you will fill out a requisition form. Major capital purchases must be approved in advance.
Your contract will specify that you have to work, on average, at least as many days per year as you have the last 3 years. If you leave early, you will have to pay the money you received, plus penalties. In addition, you may have a 2-year, 20-mile noncompete agreement clause (although this is negotiable) around all sites they operate, anywhere in the United States. If you die, they have an insurance policy on you.
Young employed doctors don’t get the “buy out” or the equity, although they can “buy in” later. They become cogs in the wheel.
The groups then try to roll up as many practices as possible so they can resell the amalgamation to a larger private equity fund eventually for 10-15 times EBITDA if the group is large enough. Maybe so, maybe not, but I have a strong feeling this is not going to end well. These equity funds work with borrowed money, and want double their investment and profit in 5 years or less.
The biggest losers, however, are the patients. They become a commodity, to be pushed through the office, and will not enjoy the benefits of the best consultants, but instead will have to select from the employees of the company store.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Going to sell you your practice?
You know I am certain that we physicians are never going to be paid much more than we get paid right now. Now we may get occasional 0.5% increases from Medicare, but after no pay increase for 15 years and with the new unachievable payments for quality, I am not optimistic. So, I have been talking to corporate physician buyout companies, specifically amalgamators of dermatologists. I mean, in the words of the “Fat Man” in “The House of God,” who wants to pass up a “fortuna”?
In June 2017, as far as I can tell, there were 17 corporate dermatology groups out there employing about 1,200 “providers” which includes extenders, and there are several “models” of assimilation.
There are extremes on either end. The least invasive is the group that buys you for a dollar, hopefully has better insurance contracts, and charges you a percentage for billing and management of your practice. If you want, you can buy yourself back for a dollar. In this setting, you just have to keep a close eye on how expenses are calculated. And there is no guarantee that this group won’t sell out to venture capital in the future, so you have to be prepared to reassume control of your practice if you don’t want to be acquired along with the group.
Another category is what I call the bottom feeders, who set up multiple dermatology shopfronts manned by nurse practitioners and physician assistants, who are loosely supervised by a physician, often remotely, who may not even be a dermatologist. The only requirement is that they have a medical license in that state. This group will come to town and bid for all the dermatology work from managed care companies. Typically, they are happy to settle for 85% of Medicare payments.
The more common model is based on acquiring practices, then selling them to other venture capital groups for a return to other venture capital groups. Venture capital groups are behind all the corporate practice acquisitions except for one, which funds out of a personal fortune. They all view medicine, particularly dermatology, as a fragmented industry that they can consolidate for a profit.
The basic plan of these groups is to pay you five to eight times EBITDA (earnings before interest, taxes, depreciation, and amortization) up front, which works out to be about 2 or 3 years net profits. Usually, they want you to take at least 40% of your “buyout” as company stock, which they promise may appreciate greatly, but has no liquidity until they sell to another venture capital group and maybe not even then. The cash you receive can mostly be treated as capital gains if you negotiate it correctly, which will be taxed at 23.8% (the 20% tax rate plus the Affordable Care Act 3.8% supplemental tax, instead of 39.6%, the top current federal bracket.
Generally, their expectations are that you will get 40% of the practice income as salary, overhead will be 40%, and their profit is 20%. So their buyout is really a loan from them, which will be paid off in 5 years. Admittedly, the buyout will be taxed less than your current income, with a possible equity kicker when they flip the practice, which they hope to do three or four times! Also, be aware, the physicians who got in early and represent them get a piece of what you would have been paid (usually $50,000-$100,000 in stock) for recruiting you. There is a reason they are working the company booth at meetings! It’s “Amway for Dermatologists.”
The company then owns your practice, you are an employee, and you owe them at least 5 years of service. They put you on a salary, which is less than you made previously – and interestingly, the difference again usually pays their original investment off in 5 years, usually with some interest. If you are a younger physician who owns the practice, with a longer practice future, you should receive a higher percentage of your former income. If the company can “boost” your practice income, you could make as much as or more than you did before, but most of these outfits do not have better insurance contracts. Their “boost” is based on hiring more physician assistants or nurse practitioners, and having you supervise them.
Once you sell and are owned by the company, they strongly suggest (but do not require, which is illegal) that you send your dermatopathology to your fellow employee, in another state, whom you have never met and probably never will. They will also suggest you send your Mohs cases to a fellow employee you’ve never heard of, who comes to town a couple of days a month to perform the surgeries. They take over your human resources, including your policies and payroll, which may be good if you have overpaid cranky employees you just can’t bear to fire because they have been with you so long. They will standardize everyone’s pay and benefits. They take over your billing, and may be able to get you more reasonable health insurance, and will have a standardized benefit plan. If you need to buy anything for the practice, you will fill out a requisition form. Major capital purchases must be approved in advance.
Your contract will specify that you have to work, on average, at least as many days per year as you have the last 3 years. If you leave early, you will have to pay the money you received, plus penalties. In addition, you may have a 2-year, 20-mile noncompete agreement clause (although this is negotiable) around all sites they operate, anywhere in the United States. If you die, they have an insurance policy on you.
Young employed doctors don’t get the “buy out” or the equity, although they can “buy in” later. They become cogs in the wheel.
The groups then try to roll up as many practices as possible so they can resell the amalgamation to a larger private equity fund eventually for 10-15 times EBITDA if the group is large enough. Maybe so, maybe not, but I have a strong feeling this is not going to end well. These equity funds work with borrowed money, and want double their investment and profit in 5 years or less.
The biggest losers, however, are the patients. They become a commodity, to be pushed through the office, and will not enjoy the benefits of the best consultants, but instead will have to select from the employees of the company store.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The Maintenance of Certification wars come to your state
The struggle against mandatory maintenance of certification (MOC) is working its way across the country. Personally, I have always been opposed to mandatory MOC, and based on my experience with the Board of Directors of the American Academy of Dermatology, most of them also are opposed. . Practically, I have not wanted dermatologists to be the first specialty group to break ranks, refuse to participate and be branded as anti-quality and anti-improvement, although there is no good evidence MOC improves quality of care.
While several states have passed anti-MOC legislation, not all are as comprehensive as the proposal in Ohio. Notably, anti-MOC legislation failed in Florida, and is considered dead in Michigan and Mississippi. If you are planning to practice in those states in the near future, you had better stay on the MOC treadmill.
The following was excerpted from my testimony at the Ohio statehouse on Oct. 11 in favor of House Bill 273:
I have nothing personal to gain from passage of this legislation since I am old enough to be “grandfathered” in as lifetime board certified in internal medicine and dermatology. However, since I was serving as president of the American College of Mohs Surgeons and the American Academy of Dermatology, I did retake the certification exam and participate in MOC, just to walk the walk, so to speak ...
My personal experience with MOC has demonstrated how useless much of it is ... most of what I must study and retest on are diseases I will never see. The “quizzes” I pay for and self-score are silly, and the 10-year exam is terrifying since it has little relevance to my practice.
Please note that I am not saying that initial board certification is not of value ... I think the requirement for several years of certified residency training, and years of study do set a high quality bar for physicians, and believe it is a useful exercise for the physician and useful for public safety and quality assurance. I do not believe a practicing physician loses all of this [knowledge] every 10 years, in fact, they learn much more as they go. The MOC process assumes that we are all rusty scuba tanks that need to be pressure tested at 10-year intervals. I must also point out that Ohio physicians are required to complete 100 continuing medical education hours every 2 years for their medical licensure, which I have no complaint about. So even if there is some leakage, there is already some topping off.
I think one board certification gauntlet is enough. I note that physicians are the only professional group masochistic enough to self-flagellate with recertification in such a fashion. ... Lawyers pass their bar once. ...
Physician burnout has been identified as a major issue for Ohio physicians and relieving them of these onerous mandates can only help. These recertification requirements cost a lot of money, and take a lot of time. ... Ohio still has a shortage of physicians relative to other Midwestern states, and anything to make the environment more hospitable is welcome. Some physicians may argue that only physicians should regulate physicians, a position I agree with until it results in unreasonable tyranny by the few [physicians] who may materially profit from the rest [of us]. Then a legislative remedy such as this is called for.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The struggle against mandatory maintenance of certification (MOC) is working its way across the country. Personally, I have always been opposed to mandatory MOC, and based on my experience with the Board of Directors of the American Academy of Dermatology, most of them also are opposed. . Practically, I have not wanted dermatologists to be the first specialty group to break ranks, refuse to participate and be branded as anti-quality and anti-improvement, although there is no good evidence MOC improves quality of care.
While several states have passed anti-MOC legislation, not all are as comprehensive as the proposal in Ohio. Notably, anti-MOC legislation failed in Florida, and is considered dead in Michigan and Mississippi. If you are planning to practice in those states in the near future, you had better stay on the MOC treadmill.
The following was excerpted from my testimony at the Ohio statehouse on Oct. 11 in favor of House Bill 273:
I have nothing personal to gain from passage of this legislation since I am old enough to be “grandfathered” in as lifetime board certified in internal medicine and dermatology. However, since I was serving as president of the American College of Mohs Surgeons and the American Academy of Dermatology, I did retake the certification exam and participate in MOC, just to walk the walk, so to speak ...
My personal experience with MOC has demonstrated how useless much of it is ... most of what I must study and retest on are diseases I will never see. The “quizzes” I pay for and self-score are silly, and the 10-year exam is terrifying since it has little relevance to my practice.
Please note that I am not saying that initial board certification is not of value ... I think the requirement for several years of certified residency training, and years of study do set a high quality bar for physicians, and believe it is a useful exercise for the physician and useful for public safety and quality assurance. I do not believe a practicing physician loses all of this [knowledge] every 10 years, in fact, they learn much more as they go. The MOC process assumes that we are all rusty scuba tanks that need to be pressure tested at 10-year intervals. I must also point out that Ohio physicians are required to complete 100 continuing medical education hours every 2 years for their medical licensure, which I have no complaint about. So even if there is some leakage, there is already some topping off.
I think one board certification gauntlet is enough. I note that physicians are the only professional group masochistic enough to self-flagellate with recertification in such a fashion. ... Lawyers pass their bar once. ...
Physician burnout has been identified as a major issue for Ohio physicians and relieving them of these onerous mandates can only help. These recertification requirements cost a lot of money, and take a lot of time. ... Ohio still has a shortage of physicians relative to other Midwestern states, and anything to make the environment more hospitable is welcome. Some physicians may argue that only physicians should regulate physicians, a position I agree with until it results in unreasonable tyranny by the few [physicians] who may materially profit from the rest [of us]. Then a legislative remedy such as this is called for.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The struggle against mandatory maintenance of certification (MOC) is working its way across the country. Personally, I have always been opposed to mandatory MOC, and based on my experience with the Board of Directors of the American Academy of Dermatology, most of them also are opposed. . Practically, I have not wanted dermatologists to be the first specialty group to break ranks, refuse to participate and be branded as anti-quality and anti-improvement, although there is no good evidence MOC improves quality of care.
While several states have passed anti-MOC legislation, not all are as comprehensive as the proposal in Ohio. Notably, anti-MOC legislation failed in Florida, and is considered dead in Michigan and Mississippi. If you are planning to practice in those states in the near future, you had better stay on the MOC treadmill.
The following was excerpted from my testimony at the Ohio statehouse on Oct. 11 in favor of House Bill 273:
I have nothing personal to gain from passage of this legislation since I am old enough to be “grandfathered” in as lifetime board certified in internal medicine and dermatology. However, since I was serving as president of the American College of Mohs Surgeons and the American Academy of Dermatology, I did retake the certification exam and participate in MOC, just to walk the walk, so to speak ...
My personal experience with MOC has demonstrated how useless much of it is ... most of what I must study and retest on are diseases I will never see. The “quizzes” I pay for and self-score are silly, and the 10-year exam is terrifying since it has little relevance to my practice.
Please note that I am not saying that initial board certification is not of value ... I think the requirement for several years of certified residency training, and years of study do set a high quality bar for physicians, and believe it is a useful exercise for the physician and useful for public safety and quality assurance. I do not believe a practicing physician loses all of this [knowledge] every 10 years, in fact, they learn much more as they go. The MOC process assumes that we are all rusty scuba tanks that need to be pressure tested at 10-year intervals. I must also point out that Ohio physicians are required to complete 100 continuing medical education hours every 2 years for their medical licensure, which I have no complaint about. So even if there is some leakage, there is already some topping off.
I think one board certification gauntlet is enough. I note that physicians are the only professional group masochistic enough to self-flagellate with recertification in such a fashion. ... Lawyers pass their bar once. ...
Physician burnout has been identified as a major issue for Ohio physicians and relieving them of these onerous mandates can only help. These recertification requirements cost a lot of money, and take a lot of time. ... Ohio still has a shortage of physicians relative to other Midwestern states, and anything to make the environment more hospitable is welcome. Some physicians may argue that only physicians should regulate physicians, a position I agree with until it results in unreasonable tyranny by the few [physicians] who may materially profit from the rest [of us]. Then a legislative remedy such as this is called for.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Should you sell your dermatology practice?
There are about 16 existing dermatology groups, with about 700 dermatologists employed, backed by private equity money, that are eager to buy dermatology practices. They figure the market is highly fragmented, and they can bring efficiency and savings to make a profit. This is a highly complex topic, so bear with me; this may take a few columns. Entrepreneurial dermatologists initially set these groups up for practical reasons, such as bargaining power and cost efficiencies. Now, with low-cost money (look at interest rates) flooding the equity markets, large firms are looking to make a better, safe return on their money by buying these groups, and commoditizing them.
So who may this be a good deal for? Older physicians, say 5 years from retirement, may be able to capitalize on the value – usually calculated by EBITDA (a company’s earnings before interest, tax, depreciation, and amortization) – and sell their practices over time. EBITDA is a rough estimate of a practice’s profitability. Recall that a few years ago, some dermatologists were simply begging to find a buyer to get out or shuttering their offices and walking away into retirement.
Younger physicians usually have less to gain, since they may not have an equity stake in the practice being sold. Even the ones who do will be employed physicians for a longer time. Employees may have the opportunity to buy or bonus into an equity position later.
The buyout money is not a gift, and you will pay most of it back over the typical 5 years or more of minimum employment time specified in the sell contract. The equity firms estimate your salary at 40%, the overhead at 40%, and their profit at 20%.
What are the obvious disadvantages? You will not make as much in salary as you did before (recall that 20% profit above), you become an employee, and you lose control and flexibility. You must work as many days on average as you did in the 3-year period before your buyout, and you do not get to manage your employees as before. They will be managed by the buying company’s human resources department, which may make some things better.
You may have new employees assigned to you that you normally would not, and it is important in your negotiations that you spell out what kind and how many employees you are willing to supervise.
You will be strongly encouraged to send your pathology and Mohs cases to other members of the group, if available. You must justify major purchases (such as new lasers). The group will buy your existing equipment, hopefully for fair market value.
So is selling your practice a good deal for you? Obviously, it depends on many variables, which we will discuss further in future columns.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
There are about 16 existing dermatology groups, with about 700 dermatologists employed, backed by private equity money, that are eager to buy dermatology practices. They figure the market is highly fragmented, and they can bring efficiency and savings to make a profit. This is a highly complex topic, so bear with me; this may take a few columns. Entrepreneurial dermatologists initially set these groups up for practical reasons, such as bargaining power and cost efficiencies. Now, with low-cost money (look at interest rates) flooding the equity markets, large firms are looking to make a better, safe return on their money by buying these groups, and commoditizing them.
So who may this be a good deal for? Older physicians, say 5 years from retirement, may be able to capitalize on the value – usually calculated by EBITDA (a company’s earnings before interest, tax, depreciation, and amortization) – and sell their practices over time. EBITDA is a rough estimate of a practice’s profitability. Recall that a few years ago, some dermatologists were simply begging to find a buyer to get out or shuttering their offices and walking away into retirement.
Younger physicians usually have less to gain, since they may not have an equity stake in the practice being sold. Even the ones who do will be employed physicians for a longer time. Employees may have the opportunity to buy or bonus into an equity position later.
The buyout money is not a gift, and you will pay most of it back over the typical 5 years or more of minimum employment time specified in the sell contract. The equity firms estimate your salary at 40%, the overhead at 40%, and their profit at 20%.
What are the obvious disadvantages? You will not make as much in salary as you did before (recall that 20% profit above), you become an employee, and you lose control and flexibility. You must work as many days on average as you did in the 3-year period before your buyout, and you do not get to manage your employees as before. They will be managed by the buying company’s human resources department, which may make some things better.
You may have new employees assigned to you that you normally would not, and it is important in your negotiations that you spell out what kind and how many employees you are willing to supervise.
You will be strongly encouraged to send your pathology and Mohs cases to other members of the group, if available. You must justify major purchases (such as new lasers). The group will buy your existing equipment, hopefully for fair market value.
So is selling your practice a good deal for you? Obviously, it depends on many variables, which we will discuss further in future columns.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
There are about 16 existing dermatology groups, with about 700 dermatologists employed, backed by private equity money, that are eager to buy dermatology practices. They figure the market is highly fragmented, and they can bring efficiency and savings to make a profit. This is a highly complex topic, so bear with me; this may take a few columns. Entrepreneurial dermatologists initially set these groups up for practical reasons, such as bargaining power and cost efficiencies. Now, with low-cost money (look at interest rates) flooding the equity markets, large firms are looking to make a better, safe return on their money by buying these groups, and commoditizing them.
So who may this be a good deal for? Older physicians, say 5 years from retirement, may be able to capitalize on the value – usually calculated by EBITDA (a company’s earnings before interest, tax, depreciation, and amortization) – and sell their practices over time. EBITDA is a rough estimate of a practice’s profitability. Recall that a few years ago, some dermatologists were simply begging to find a buyer to get out or shuttering their offices and walking away into retirement.
Younger physicians usually have less to gain, since they may not have an equity stake in the practice being sold. Even the ones who do will be employed physicians for a longer time. Employees may have the opportunity to buy or bonus into an equity position later.
The buyout money is not a gift, and you will pay most of it back over the typical 5 years or more of minimum employment time specified in the sell contract. The equity firms estimate your salary at 40%, the overhead at 40%, and their profit at 20%.
What are the obvious disadvantages? You will not make as much in salary as you did before (recall that 20% profit above), you become an employee, and you lose control and flexibility. You must work as many days on average as you did in the 3-year period before your buyout, and you do not get to manage your employees as before. They will be managed by the buying company’s human resources department, which may make some things better.
You may have new employees assigned to you that you normally would not, and it is important in your negotiations that you spell out what kind and how many employees you are willing to supervise.
You will be strongly encouraged to send your pathology and Mohs cases to other members of the group, if available. You must justify major purchases (such as new lasers). The group will buy your existing equipment, hopefully for fair market value.
So is selling your practice a good deal for you? Obviously, it depends on many variables, which we will discuss further in future columns.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The tyranny of E&M reimbursement cuts with same-day procedures
You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.
So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.
I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.
One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.
In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.
So, how can dermatologists respond to these “takings” by the insurance company?
First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.
Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.
Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.
The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.
The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.
So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.
I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.
One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.
In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.
So, how can dermatologists respond to these “takings” by the insurance company?
First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.
Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.
Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.
The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.
The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.
So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.
I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.
One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.
In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.
So, how can dermatologists respond to these “takings” by the insurance company?
First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.
Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.
Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.
The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.
The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Time for dermatologists in nine states to start submitting CPT code 99024
The Centers for Medicare & Medicaid Services survey period is upon us, and it’s time for dermatologists in nine test states to act.
In my April column, I discussed the CMS survey, which is intended to gather data on when follow-up visits for surgical procedures take place. Reporting started July 1st and will continue for several months, at least, possibly for a year.
All of you in these nine test states recently received a two-page letter from CMS telling you that, if you are in a practice with fewer than 10 dermatologists, you don’t have to report. That’s correct – you don’t have to – but is not reporting in the best interest of dermatology? I contend it is not; you can and must report!
Simply put, you need to generate and append code 99024 to your claims whenever possible. The 99024 code is a “no charge” code that informs CMS you did some follow-up work, either in person or on the phone.
That’s right, generate a 99024 after every visit when you or your staff do not bill for an evaluation and management code – and whenever you, or your physician assistant, nurse practitioner, nurse, medical assistant, or receptionist even speak to a patient on the phone. Yes, phone contacts count for a 99024.
So, when you or a member of your staff call back biopsy or lab results after a procedure, or call to schedule or change a postop appointment, speak to a relative, give instructions to the visiting nurse, or provide reassurance after a procedure, you or your staff member should generate a very brief note in the chart, plug in the working diagnosis, put that 99024 in there, and make sure the billing company posts it. Some of your billing systems may require that a physician finalize the receptionist note or that you charge a penny to get the software to cooperate, but you should still put in 99024.
(And I tell you what, I am personally good to cover all the 1-cent charges that get generated and you don’t want to write off. Just have the patients send the bill to good ole “Hotsteel” here in Cincinnati!)
Some of you may say, “Hey, a skin biopsy is a 0-day global, so why report a follow-up? Here’s why. How often do you do a skin biopsy using a shave code, or without freezing an actinic keratosis? Reporting the 99024 when you call back with the biopsy results correctly documents the actinic keratosis and shave-embedded follow-up visit, so you should do it.
When you see that patient back to remove her sutures after an excision, submit the 99024.
When you see him to inject a hypertrophic scar from an electrodessication, submit the 99024.
I know we see our patients at follow-up visits and communicate with them by phone – sometimes for years after a procedure, at no charge. I hope to see hundreds of thousands of 99024 codes generated from small groups and solo dermatologists. You need to make sure these services are acknowledged and that dermatologists get credit when credit is due. The future of our specialty depends on your doing so.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The Centers for Medicare & Medicaid Services survey period is upon us, and it’s time for dermatologists in nine test states to act.
In my April column, I discussed the CMS survey, which is intended to gather data on when follow-up visits for surgical procedures take place. Reporting started July 1st and will continue for several months, at least, possibly for a year.
All of you in these nine test states recently received a two-page letter from CMS telling you that, if you are in a practice with fewer than 10 dermatologists, you don’t have to report. That’s correct – you don’t have to – but is not reporting in the best interest of dermatology? I contend it is not; you can and must report!
Simply put, you need to generate and append code 99024 to your claims whenever possible. The 99024 code is a “no charge” code that informs CMS you did some follow-up work, either in person or on the phone.
That’s right, generate a 99024 after every visit when you or your staff do not bill for an evaluation and management code – and whenever you, or your physician assistant, nurse practitioner, nurse, medical assistant, or receptionist even speak to a patient on the phone. Yes, phone contacts count for a 99024.
So, when you or a member of your staff call back biopsy or lab results after a procedure, or call to schedule or change a postop appointment, speak to a relative, give instructions to the visiting nurse, or provide reassurance after a procedure, you or your staff member should generate a very brief note in the chart, plug in the working diagnosis, put that 99024 in there, and make sure the billing company posts it. Some of your billing systems may require that a physician finalize the receptionist note or that you charge a penny to get the software to cooperate, but you should still put in 99024.
(And I tell you what, I am personally good to cover all the 1-cent charges that get generated and you don’t want to write off. Just have the patients send the bill to good ole “Hotsteel” here in Cincinnati!)
Some of you may say, “Hey, a skin biopsy is a 0-day global, so why report a follow-up? Here’s why. How often do you do a skin biopsy using a shave code, or without freezing an actinic keratosis? Reporting the 99024 when you call back with the biopsy results correctly documents the actinic keratosis and shave-embedded follow-up visit, so you should do it.
When you see that patient back to remove her sutures after an excision, submit the 99024.
When you see him to inject a hypertrophic scar from an electrodessication, submit the 99024.
I know we see our patients at follow-up visits and communicate with them by phone – sometimes for years after a procedure, at no charge. I hope to see hundreds of thousands of 99024 codes generated from small groups and solo dermatologists. You need to make sure these services are acknowledged and that dermatologists get credit when credit is due. The future of our specialty depends on your doing so.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
The Centers for Medicare & Medicaid Services survey period is upon us, and it’s time for dermatologists in nine test states to act.
In my April column, I discussed the CMS survey, which is intended to gather data on when follow-up visits for surgical procedures take place. Reporting started July 1st and will continue for several months, at least, possibly for a year.
All of you in these nine test states recently received a two-page letter from CMS telling you that, if you are in a practice with fewer than 10 dermatologists, you don’t have to report. That’s correct – you don’t have to – but is not reporting in the best interest of dermatology? I contend it is not; you can and must report!
Simply put, you need to generate and append code 99024 to your claims whenever possible. The 99024 code is a “no charge” code that informs CMS you did some follow-up work, either in person or on the phone.
That’s right, generate a 99024 after every visit when you or your staff do not bill for an evaluation and management code – and whenever you, or your physician assistant, nurse practitioner, nurse, medical assistant, or receptionist even speak to a patient on the phone. Yes, phone contacts count for a 99024.
So, when you or a member of your staff call back biopsy or lab results after a procedure, or call to schedule or change a postop appointment, speak to a relative, give instructions to the visiting nurse, or provide reassurance after a procedure, you or your staff member should generate a very brief note in the chart, plug in the working diagnosis, put that 99024 in there, and make sure the billing company posts it. Some of your billing systems may require that a physician finalize the receptionist note or that you charge a penny to get the software to cooperate, but you should still put in 99024.
(And I tell you what, I am personally good to cover all the 1-cent charges that get generated and you don’t want to write off. Just have the patients send the bill to good ole “Hotsteel” here in Cincinnati!)
Some of you may say, “Hey, a skin biopsy is a 0-day global, so why report a follow-up? Here’s why. How often do you do a skin biopsy using a shave code, or without freezing an actinic keratosis? Reporting the 99024 when you call back with the biopsy results correctly documents the actinic keratosis and shave-embedded follow-up visit, so you should do it.
When you see that patient back to remove her sutures after an excision, submit the 99024.
When you see him to inject a hypertrophic scar from an electrodessication, submit the 99024.
I know we see our patients at follow-up visits and communicate with them by phone – sometimes for years after a procedure, at no charge. I hope to see hundreds of thousands of 99024 codes generated from small groups and solo dermatologists. You need to make sure these services are acknowledged and that dermatologists get credit when credit is due. The future of our specialty depends on your doing so.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Finally, a reproducible quality measure for Mohs
As chair of the American Academy of Dermatology’s Patient Access and Payer Relations Committee, I traveled around the United States for three years with other well-versed dermatologists and explained the value of dermatology to insurance company medical directors (thanks to James Zalla, Scott Collins, Howard Rogers, Alexa Kimball, Clifford Lober, Sabra Sullivan, Mark Lebwohl, Beth Lertzman, Bruce Brod, Carrie Kovarik, Brent Moody, George Hruza, and Carl Johnson).
We showed them the statistics, clinical guidelines, and clinical photos and explained how cost effective dermatologists are in treating skin disease. We argued against using blunt tools, like average provider expense, as a proxy for quality. I thought it was a pretty compelling story, but the medical directors always asked for a reproducible quality metric. Almost no one in specialty medicine has reproducible quality metrics, and these are very difficult to develop.
The average number of layers taken for Mohs surgery of head, neck, hands, feet, and genitalia was calculated for all physicians reporting the codes to Medicare from 2012 to 2014. The Accreditation Council for Graduate Medical Education training programs were separately analyzed, since theoretically, they should get referrals of the more complex and difficult cases.
The average proved to be 1.74 stages per case, with a median of 1.69. Of 2,305 physicians billing for Mohs surgery, there were 137 extremely high outliers in at least 1 of 3 years, and 49 persistent high outliers (greater than two standard deviations in all three years), who averaged more than 2.41 layers per case. There were also 92 extremely low outliers (1.28 stages per case, in at least 1 of the 3 years), 20 of whom were persistent in all 3 years. High outliers were more likely to work in a solo practice setting.
The Improving Wisely program is based on the concept that reducing unnecessary variations in care can improve patient safety and quality of care while also reducing costs. It works on the premise that many outliers are unaware they are an outlier, no one wants to be an outlier, and confidential, collegial education and peer mentoring within a medical specialty society can reduce unnecessary variations in care.
Last month, all ACMS members received confidential data reports with their own personal ratio in relation to the entire cohort. Educational and mentoring resources are available for members, and outliers are encouraged to engage with the ACMS to identify opportunities for modifying and improving their practice patterns.
Now, these numbers must not be taken as an indictment of anyone. They are for educational purposes, and the goal is to help identify physicians who are unaware of their deviation and bring these outliers back into the norm. Supporting this premise, solo practitioners were at greatest risk of being outliers, which may be explained by lack of collegial interaction, peer review, and feedback.
In addition, there may be good reasons for being an outlier depending on one’s patient population, and the ACMS is interested in examples. The Mohs College is devoting considerable resources to help outliers. Much of this variation may also result from incorrect coding or processing of specimens. Nonetheless, no patient, payer, or physician wants unnecessary surgery or avoidable charges.
Low outliers are particularly puzzling, since someone would need godlike abilities to almost never have a positive margin in Mohs. I have heard of some practices whose patients all present in the morning, one layer is performed, and the rest of the day is spent processing and interpreting their slides. (Mohs is time consuming.)
I am also aware of some rural providers who travel to distant sites, take a layer, return to the city to process the tissue, and return a few days later to complete the case. This may not indicate bad care, just an unusual practice pattern or adaptation to difficult circumstances. However, it must also be noted that not completing cases on the same day could result in increased payments because of the coding system that reimburses more for first stages than for additional ones.
You must be aware that all these numbers, with a two-year lag, are available to physicians, payers, and patients. If you don’t know your ratio of first to additional Mohs layers, I encourage you to look your numbers up and calculate your ratio (CPT code 17311 plus 17312/code 17311). The easiest website to use is provided by the Wall Street Journal. If you are an outlier, you should ask yourself why, and consider some peer review and other appropriate changes. If your patterns change, they will be noticed quickly, since Johns Hopkins and the Improving Wisely program has leveraged their relationship with the Robert Wood Johnson Foundation to gain more immediate access to current Medicare data.
Everyone is hoping we see normalization of the patterns in layer usage, since this will give great credibility to Mohs surgeons and be better for our patients and the health care system in general. Kudos to the ACMS and the Jama Dermatology paper’s senior author, John Albertini, MD, of Winston-Salem, NC, in particular, for making this benchmark become a reality.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
As chair of the American Academy of Dermatology’s Patient Access and Payer Relations Committee, I traveled around the United States for three years with other well-versed dermatologists and explained the value of dermatology to insurance company medical directors (thanks to James Zalla, Scott Collins, Howard Rogers, Alexa Kimball, Clifford Lober, Sabra Sullivan, Mark Lebwohl, Beth Lertzman, Bruce Brod, Carrie Kovarik, Brent Moody, George Hruza, and Carl Johnson).
We showed them the statistics, clinical guidelines, and clinical photos and explained how cost effective dermatologists are in treating skin disease. We argued against using blunt tools, like average provider expense, as a proxy for quality. I thought it was a pretty compelling story, but the medical directors always asked for a reproducible quality metric. Almost no one in specialty medicine has reproducible quality metrics, and these are very difficult to develop.
The average number of layers taken for Mohs surgery of head, neck, hands, feet, and genitalia was calculated for all physicians reporting the codes to Medicare from 2012 to 2014. The Accreditation Council for Graduate Medical Education training programs were separately analyzed, since theoretically, they should get referrals of the more complex and difficult cases.
The average proved to be 1.74 stages per case, with a median of 1.69. Of 2,305 physicians billing for Mohs surgery, there were 137 extremely high outliers in at least 1 of 3 years, and 49 persistent high outliers (greater than two standard deviations in all three years), who averaged more than 2.41 layers per case. There were also 92 extremely low outliers (1.28 stages per case, in at least 1 of the 3 years), 20 of whom were persistent in all 3 years. High outliers were more likely to work in a solo practice setting.
The Improving Wisely program is based on the concept that reducing unnecessary variations in care can improve patient safety and quality of care while also reducing costs. It works on the premise that many outliers are unaware they are an outlier, no one wants to be an outlier, and confidential, collegial education and peer mentoring within a medical specialty society can reduce unnecessary variations in care.
Last month, all ACMS members received confidential data reports with their own personal ratio in relation to the entire cohort. Educational and mentoring resources are available for members, and outliers are encouraged to engage with the ACMS to identify opportunities for modifying and improving their practice patterns.
Now, these numbers must not be taken as an indictment of anyone. They are for educational purposes, and the goal is to help identify physicians who are unaware of their deviation and bring these outliers back into the norm. Supporting this premise, solo practitioners were at greatest risk of being outliers, which may be explained by lack of collegial interaction, peer review, and feedback.
In addition, there may be good reasons for being an outlier depending on one’s patient population, and the ACMS is interested in examples. The Mohs College is devoting considerable resources to help outliers. Much of this variation may also result from incorrect coding or processing of specimens. Nonetheless, no patient, payer, or physician wants unnecessary surgery or avoidable charges.
Low outliers are particularly puzzling, since someone would need godlike abilities to almost never have a positive margin in Mohs. I have heard of some practices whose patients all present in the morning, one layer is performed, and the rest of the day is spent processing and interpreting their slides. (Mohs is time consuming.)
I am also aware of some rural providers who travel to distant sites, take a layer, return to the city to process the tissue, and return a few days later to complete the case. This may not indicate bad care, just an unusual practice pattern or adaptation to difficult circumstances. However, it must also be noted that not completing cases on the same day could result in increased payments because of the coding system that reimburses more for first stages than for additional ones.
You must be aware that all these numbers, with a two-year lag, are available to physicians, payers, and patients. If you don’t know your ratio of first to additional Mohs layers, I encourage you to look your numbers up and calculate your ratio (CPT code 17311 plus 17312/code 17311). The easiest website to use is provided by the Wall Street Journal. If you are an outlier, you should ask yourself why, and consider some peer review and other appropriate changes. If your patterns change, they will be noticed quickly, since Johns Hopkins and the Improving Wisely program has leveraged their relationship with the Robert Wood Johnson Foundation to gain more immediate access to current Medicare data.
Everyone is hoping we see normalization of the patterns in layer usage, since this will give great credibility to Mohs surgeons and be better for our patients and the health care system in general. Kudos to the ACMS and the Jama Dermatology paper’s senior author, John Albertini, MD, of Winston-Salem, NC, in particular, for making this benchmark become a reality.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
As chair of the American Academy of Dermatology’s Patient Access and Payer Relations Committee, I traveled around the United States for three years with other well-versed dermatologists and explained the value of dermatology to insurance company medical directors (thanks to James Zalla, Scott Collins, Howard Rogers, Alexa Kimball, Clifford Lober, Sabra Sullivan, Mark Lebwohl, Beth Lertzman, Bruce Brod, Carrie Kovarik, Brent Moody, George Hruza, and Carl Johnson).
We showed them the statistics, clinical guidelines, and clinical photos and explained how cost effective dermatologists are in treating skin disease. We argued against using blunt tools, like average provider expense, as a proxy for quality. I thought it was a pretty compelling story, but the medical directors always asked for a reproducible quality metric. Almost no one in specialty medicine has reproducible quality metrics, and these are very difficult to develop.
The average number of layers taken for Mohs surgery of head, neck, hands, feet, and genitalia was calculated for all physicians reporting the codes to Medicare from 2012 to 2014. The Accreditation Council for Graduate Medical Education training programs were separately analyzed, since theoretically, they should get referrals of the more complex and difficult cases.
The average proved to be 1.74 stages per case, with a median of 1.69. Of 2,305 physicians billing for Mohs surgery, there were 137 extremely high outliers in at least 1 of 3 years, and 49 persistent high outliers (greater than two standard deviations in all three years), who averaged more than 2.41 layers per case. There were also 92 extremely low outliers (1.28 stages per case, in at least 1 of the 3 years), 20 of whom were persistent in all 3 years. High outliers were more likely to work in a solo practice setting.
The Improving Wisely program is based on the concept that reducing unnecessary variations in care can improve patient safety and quality of care while also reducing costs. It works on the premise that many outliers are unaware they are an outlier, no one wants to be an outlier, and confidential, collegial education and peer mentoring within a medical specialty society can reduce unnecessary variations in care.
Last month, all ACMS members received confidential data reports with their own personal ratio in relation to the entire cohort. Educational and mentoring resources are available for members, and outliers are encouraged to engage with the ACMS to identify opportunities for modifying and improving their practice patterns.
Now, these numbers must not be taken as an indictment of anyone. They are for educational purposes, and the goal is to help identify physicians who are unaware of their deviation and bring these outliers back into the norm. Supporting this premise, solo practitioners were at greatest risk of being outliers, which may be explained by lack of collegial interaction, peer review, and feedback.
In addition, there may be good reasons for being an outlier depending on one’s patient population, and the ACMS is interested in examples. The Mohs College is devoting considerable resources to help outliers. Much of this variation may also result from incorrect coding or processing of specimens. Nonetheless, no patient, payer, or physician wants unnecessary surgery or avoidable charges.
Low outliers are particularly puzzling, since someone would need godlike abilities to almost never have a positive margin in Mohs. I have heard of some practices whose patients all present in the morning, one layer is performed, and the rest of the day is spent processing and interpreting their slides. (Mohs is time consuming.)
I am also aware of some rural providers who travel to distant sites, take a layer, return to the city to process the tissue, and return a few days later to complete the case. This may not indicate bad care, just an unusual practice pattern or adaptation to difficult circumstances. However, it must also be noted that not completing cases on the same day could result in increased payments because of the coding system that reimburses more for first stages than for additional ones.
You must be aware that all these numbers, with a two-year lag, are available to physicians, payers, and patients. If you don’t know your ratio of first to additional Mohs layers, I encourage you to look your numbers up and calculate your ratio (CPT code 17311 plus 17312/code 17311). The easiest website to use is provided by the Wall Street Journal. If you are an outlier, you should ask yourself why, and consider some peer review and other appropriate changes. If your patterns change, they will be noticed quickly, since Johns Hopkins and the Improving Wisely program has leveraged their relationship with the Robert Wood Johnson Foundation to gain more immediate access to current Medicare data.
Everyone is hoping we see normalization of the patterns in layer usage, since this will give great credibility to Mohs surgeons and be better for our patients and the health care system in general. Kudos to the ACMS and the Jama Dermatology paper’s senior author, John Albertini, MD, of Winston-Salem, NC, in particular, for making this benchmark become a reality.
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Why the Affordable Care Act will be greatly modified
Health care rationing is an uncomfortable topic, but one that responsible Americans should discuss. In particular, physicians should consider this topic, because our typical response to health care is that “everything should be covered.”
Health care has always been rationed. Historically, in the United States, health care has been apportioned capitalistically; that is, those who could afford health care got it and the rest – particularly the poor – scrambled. In Europe and Canada, universal or government health care is rationed by long wait times, limited range of services, and formulary restrictions. It is important to note that in almost all countries with universal health care, there is still the option of quick access and more comprehensive service via a neighboring country (to the United States from Canada, for example) or a separate additional private insurance option (England, Germany, and most of Europe).
In the United States, the Affordable Care Act (ACA) changed the dynamic regarding insurance by adding mandates to cover preexisting conditions, mental health and substance abuse disorders, behavioral health treatment, prescription drugs, rehabilitative services, preventive care, and pediatric services including oral and vision care for children. In addition, adult children now can remain on their parents’ insurance plans until age 26. Also, when the Cadillac tax on expensive health insurance coverage was delayed until 2020, the excise payments were classified as tax deductible to the employer. Whew, did I leave anything out?
Advocates for the poor and those previously considered uninsurable were delighted by the ACA. The middle class was mollified with false reassurances that their premiums would go down, and that they could keep their current insurance plans and doctors.
Currently under the ACA, “poor” is generally defined as a reported income of 150% or less of the federal poverty level ($22,000-$45,000). The poor are eligible for health care that is very nearly free, according to Medicaid.gov. They are also protected from claims against their property. They effectively have first-dollar coverage, though they usually can’t see a specialist unless they go through the emergency department.
At age 65, Medicare takes over. Medicare is an insurance benefit workers contribute to for all their working lives. It doesn’t cover everything, but the relatively low $183 Part B deductible for office-based care sure takes the edge off. The average retirees collect three times what they put in, but they arguably could have made more if they had invested anywhere other than in the federal government.
So, the real crunch hits the middle class under age 65. Under the ACA, those earning up to $97,000 for a family of four get insurance subsidies to buy insurance on the exchanges. The real problem arises when a high deductible – the maximum for 2017 is between $13,000 and $14,000 – is combined with that level of income. There are over 20 million health care savings accounts in the United States, which ameliorate the cost for some, but health care savings accounts do not cover the entire deductible, and many cannot afford to self-fund them if their employer does not fund it for them.People simply do not have that kind of money put away in a disaster fund, and a major medical expense can easily wipe them out. If possible, they will ignore a medical problem; and if they can’t, they could risk financial toxicity by running up high-interest credit cards – with the predictable spiral of debt, collection agencies, credit ratings ruined, wages garnished, and even their homes repossessed. They aren’t going to use their health care coverage unless forced to by a disaster – or worse for the system, they have been saving their elective surgeries up and are ready for a major tune-up. The long list of mandated benefits has triggered a meltdown in the exchange markets and huge increases in premiums and deductibles for all insurance buyers. Who is going to pay for it? To quote the late Russell B. Long, former U.S. Senator:
Don’t tax you,
Don’t tax me,
Tax that fellow behind the tree.
Raising taxes and pouring even more money into the system might be a solution, but this is not likely to happen.
In the United States, the rationing of health care has been shifted from the poor to the middle class, and the middle class doesn’t like it. The situation will only change when the howling from the middle class is louder than the wailing from the formerly uninsurable and poor. As insurance premiums and deductibles continue to rocket up, I expect the howling will get louder.
So, either we agree to let insurance premiums continue to increase, our state budgets to explode, our taxes to go up, or we pare down the list of mandated benefits.
I am going on the record stating that we simply cannot afford “medical everything” for everybody. I think we should tighten up the benefit list considerably. What do you think?
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Health care rationing is an uncomfortable topic, but one that responsible Americans should discuss. In particular, physicians should consider this topic, because our typical response to health care is that “everything should be covered.”
Health care has always been rationed. Historically, in the United States, health care has been apportioned capitalistically; that is, those who could afford health care got it and the rest – particularly the poor – scrambled. In Europe and Canada, universal or government health care is rationed by long wait times, limited range of services, and formulary restrictions. It is important to note that in almost all countries with universal health care, there is still the option of quick access and more comprehensive service via a neighboring country (to the United States from Canada, for example) or a separate additional private insurance option (England, Germany, and most of Europe).
In the United States, the Affordable Care Act (ACA) changed the dynamic regarding insurance by adding mandates to cover preexisting conditions, mental health and substance abuse disorders, behavioral health treatment, prescription drugs, rehabilitative services, preventive care, and pediatric services including oral and vision care for children. In addition, adult children now can remain on their parents’ insurance plans until age 26. Also, when the Cadillac tax on expensive health insurance coverage was delayed until 2020, the excise payments were classified as tax deductible to the employer. Whew, did I leave anything out?
Advocates for the poor and those previously considered uninsurable were delighted by the ACA. The middle class was mollified with false reassurances that their premiums would go down, and that they could keep their current insurance plans and doctors.
Currently under the ACA, “poor” is generally defined as a reported income of 150% or less of the federal poverty level ($22,000-$45,000). The poor are eligible for health care that is very nearly free, according to Medicaid.gov. They are also protected from claims against their property. They effectively have first-dollar coverage, though they usually can’t see a specialist unless they go through the emergency department.
At age 65, Medicare takes over. Medicare is an insurance benefit workers contribute to for all their working lives. It doesn’t cover everything, but the relatively low $183 Part B deductible for office-based care sure takes the edge off. The average retirees collect three times what they put in, but they arguably could have made more if they had invested anywhere other than in the federal government.
So, the real crunch hits the middle class under age 65. Under the ACA, those earning up to $97,000 for a family of four get insurance subsidies to buy insurance on the exchanges. The real problem arises when a high deductible – the maximum for 2017 is between $13,000 and $14,000 – is combined with that level of income. There are over 20 million health care savings accounts in the United States, which ameliorate the cost for some, but health care savings accounts do not cover the entire deductible, and many cannot afford to self-fund them if their employer does not fund it for them.People simply do not have that kind of money put away in a disaster fund, and a major medical expense can easily wipe them out. If possible, they will ignore a medical problem; and if they can’t, they could risk financial toxicity by running up high-interest credit cards – with the predictable spiral of debt, collection agencies, credit ratings ruined, wages garnished, and even their homes repossessed. They aren’t going to use their health care coverage unless forced to by a disaster – or worse for the system, they have been saving their elective surgeries up and are ready for a major tune-up. The long list of mandated benefits has triggered a meltdown in the exchange markets and huge increases in premiums and deductibles for all insurance buyers. Who is going to pay for it? To quote the late Russell B. Long, former U.S. Senator:
Don’t tax you,
Don’t tax me,
Tax that fellow behind the tree.
Raising taxes and pouring even more money into the system might be a solution, but this is not likely to happen.
In the United States, the rationing of health care has been shifted from the poor to the middle class, and the middle class doesn’t like it. The situation will only change when the howling from the middle class is louder than the wailing from the formerly uninsurable and poor. As insurance premiums and deductibles continue to rocket up, I expect the howling will get louder.
So, either we agree to let insurance premiums continue to increase, our state budgets to explode, our taxes to go up, or we pare down the list of mandated benefits.
I am going on the record stating that we simply cannot afford “medical everything” for everybody. I think we should tighten up the benefit list considerably. What do you think?
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
Health care rationing is an uncomfortable topic, but one that responsible Americans should discuss. In particular, physicians should consider this topic, because our typical response to health care is that “everything should be covered.”
Health care has always been rationed. Historically, in the United States, health care has been apportioned capitalistically; that is, those who could afford health care got it and the rest – particularly the poor – scrambled. In Europe and Canada, universal or government health care is rationed by long wait times, limited range of services, and formulary restrictions. It is important to note that in almost all countries with universal health care, there is still the option of quick access and more comprehensive service via a neighboring country (to the United States from Canada, for example) or a separate additional private insurance option (England, Germany, and most of Europe).
In the United States, the Affordable Care Act (ACA) changed the dynamic regarding insurance by adding mandates to cover preexisting conditions, mental health and substance abuse disorders, behavioral health treatment, prescription drugs, rehabilitative services, preventive care, and pediatric services including oral and vision care for children. In addition, adult children now can remain on their parents’ insurance plans until age 26. Also, when the Cadillac tax on expensive health insurance coverage was delayed until 2020, the excise payments were classified as tax deductible to the employer. Whew, did I leave anything out?
Advocates for the poor and those previously considered uninsurable were delighted by the ACA. The middle class was mollified with false reassurances that their premiums would go down, and that they could keep their current insurance plans and doctors.
Currently under the ACA, “poor” is generally defined as a reported income of 150% or less of the federal poverty level ($22,000-$45,000). The poor are eligible for health care that is very nearly free, according to Medicaid.gov. They are also protected from claims against their property. They effectively have first-dollar coverage, though they usually can’t see a specialist unless they go through the emergency department.
At age 65, Medicare takes over. Medicare is an insurance benefit workers contribute to for all their working lives. It doesn’t cover everything, but the relatively low $183 Part B deductible for office-based care sure takes the edge off. The average retirees collect three times what they put in, but they arguably could have made more if they had invested anywhere other than in the federal government.
So, the real crunch hits the middle class under age 65. Under the ACA, those earning up to $97,000 for a family of four get insurance subsidies to buy insurance on the exchanges. The real problem arises when a high deductible – the maximum for 2017 is between $13,000 and $14,000 – is combined with that level of income. There are over 20 million health care savings accounts in the United States, which ameliorate the cost for some, but health care savings accounts do not cover the entire deductible, and many cannot afford to self-fund them if their employer does not fund it for them.People simply do not have that kind of money put away in a disaster fund, and a major medical expense can easily wipe them out. If possible, they will ignore a medical problem; and if they can’t, they could risk financial toxicity by running up high-interest credit cards – with the predictable spiral of debt, collection agencies, credit ratings ruined, wages garnished, and even their homes repossessed. They aren’t going to use their health care coverage unless forced to by a disaster – or worse for the system, they have been saving their elective surgeries up and are ready for a major tune-up. The long list of mandated benefits has triggered a meltdown in the exchange markets and huge increases in premiums and deductibles for all insurance buyers. Who is going to pay for it? To quote the late Russell B. Long, former U.S. Senator:
Don’t tax you,
Don’t tax me,
Tax that fellow behind the tree.
Raising taxes and pouring even more money into the system might be a solution, but this is not likely to happen.
In the United States, the rationing of health care has been shifted from the poor to the middle class, and the middle class doesn’t like it. The situation will only change when the howling from the middle class is louder than the wailing from the formerly uninsurable and poor. As insurance premiums and deductibles continue to rocket up, I expect the howling will get louder.
So, either we agree to let insurance premiums continue to increase, our state budgets to explode, our taxes to go up, or we pare down the list of mandated benefits.
I am going on the record stating that we simply cannot afford “medical everything” for everybody. I think we should tighten up the benefit list considerably. What do you think?
Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.
How you can help avoid catastrophic cuts to dermatology
It seems like only yesterday we were celebrating the elimination of the Medicare sustainable growth rate and the continuation of “global periods.” Now we are facing the elimination of the global payment periods again, and if we don’t bill the proper CPT code (99024) for our follow-up visits, during an upcoming survey period, it will indeed be a challenge for the specialty.
You may not know it, but there is payment for follow-up visits – global periods – built into codes dermatologists frequently use. As you can see, a large part of our specialty is vulnerable, from destruction of actinics and warts, to malignant and benign excisions, to destructions, to reconstructive surgery. This is real money, about a billion (yes, with a “b”) paid to dermatologists every year in Medicare alone.
These embedded visits vary from one (actinic destruction) to five (full thickness graft of the nose) and make up a major part of your reimbursement. As part of MACRA (Medicare Access and CHIP Reauthorization Act), the CMS was directed to investigate the validity of these embedded visits.1
The CMS has decided to complete this data gathering by how often the CPT code 99024 is billed.
I am not worried that we don’t provide these visits. I know we do, but I am terribly worried that we won’t correctly report these visits and won’t get credit for them.
The problem is that 99024 pays nothing, it is simply a notation to indicate that the patient was seen in follow up. Since it pays nothing, and since billing anything has an inherent expense, and since 30% of dermatologists are still on paper claims, most dermatologists have never used this code and may not start. In addition, groups of under 10 physicians are not required to report, but can, and you must! Seventy percent of our members are in groups of under 10. That means there will be no data collected on most of these codes, which are almost all performed by dermatologists, the great majority of the time.
Let me say it clearly here: If you do not start filing 99024 every time you see a patient in follow-up (and perhaps for telephone follow-ups), the amount you are paid to perform the original procedure will be cut by 30%-75%. Since the CMS will erroneously think you are not seeing these follow-up patients, they will pull these embedded payments out of the codes. You will have to start billing patients (think additional copays and deductibles) for every suture removal and wound check visit.
Data on 99024 will be collected in only nine states (Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island). It will start July 1 and no one knows how long it will continue.
So, start preparing. You will not be penalized for adding this nonpaying code to every follow-up when you do not bill an evaluation and management code. I note that one electronic medical record vendor (Modernizing Medicine) has already started populating its bills with 99024. Good for them! You must report follow-up visits no matter the size of your practice. Report early and report often. Your future depends on it.
Common procedures on which the CMS is collecting postoperative visit data
10040 Acne surgery
10060 Drainage of skin abscess
10061 Drainage of skin abscess
10120 Remove foreign body
10140 Drainage of hematoma/fluid
10160 Puncture drainage of lesion
10180 Complex drainage wound
11200 Removal of skin tags <w/15
11400 Exc tr-ext b9+marg 0.5 cm<
11401 Exc tr-ext b9+marg 0.6-1 cm
11402 Exc tr-ext b9+marg 1.1-2 cm
11403 Exc tr-ext b9+marg 2.1-3cm/<
11404 Exc tr-ext b9+marg 3.1-4 cm
11406 Exc tr-ext b9+marg >4.0 cm
11420 Exc h-f-nk-sp b9+marg 0.5/<
11421 Exc h-f-nk-sp b9+marg 0.6-1
11422 Exc h-f-nk-sp b9+marg 1.1-2
11423 Exc h-f-nk-sp b9+marg 2.1-3
11440 Exc face-mm b9+marg 0.5 cm/<
11441 Exc face-mm b9+marg 0.6-1 cm
11442 Exc face-mm b9+marg 1.1-2 cm
11443 Exc face-mm b9+marg 2.1-3 cm
11601 Exc tr-ext mal+marg 0.6-1 cm
11602 Exc tr-ext mal+marg 1.1-2 cm
11603 Exc tr-ext mal+marg 2.1-3 cm
11604 Exc tr-ext mal+marg 3.1-4 cm
11606 Exc tr-ext mal+marg >4 cm
11621 Exc s/n/h/f/g mal+mrg 0.6-1
11622 Exc s/n/h/f/g mal+mrg 1.1-2
11623 Exc s/n/h/f/g mal+mrg 2.1-3
11640 Exc f/e/e/n/l mal+mrg 0.5cm<
11641 Exc f/e/e/n/l mal+mrg 0.6-1
11642 Exc f/e/e/n/l mal+mrg 1.1-2
11643 Exc f/e/e/n/l mal+mrg 2.1-3
11644 Exc f/e/e/n/l mal+mrg 3.1-4
11646 Exc f/e/e/n/l mal+mrg >4 cm
11750 Removal of nail bed
11765 Excision of nail fold toe
12031 Intmd rpr s/a/t/ext 2.5 cm/<
12032 Intmd rpr s/a/t/ext 2.6-7.5
12034 Intmd rpr s/tr/ext 7.6-12.5
12041 Intmd rpr n-hf/genit 2.5cm/<
12042 Intmd rpr n-hf/genit2.6-7.5
12051 Intmd rpr face/mm 2.5 cm/<
12052 Intmd rpr face/mm 2.6-5.0 cm
13101 Cmplx rpr trunk 2.6-7.5 cm
13121 Cmplx rpr s/a/l 2.6-7.5 cm
13131 Cmplx rpr f/c/c/m/n/ax/g/h/f
13132 Cmplx rpr f/c/c/m/n/ax/g/h/f
13151 Cmplx rpr e/n/e/l 1.1-2.5 cm
13152 Cmplx rpr e/n/e/l 2.6-7.5 cm
13160 Late closure of wound
14020 Tis trnfr s/a/l 10 sq cm/<
14021 Tis trnfr s/a/l 10.1-30 sqcm
14040 Tis trnfr f/c/c/m/n/a/g/h/f
14041 Tis trnfr f/c/c/m/n/a/g/h/f
14060 Tis trnfr e/n/e/l 10 sq cm/<
14061 Tis trnfr e/n/e/l10.1-30sqcm
14301 Tis trnfr any 30.1-60 sq cm
15100 Skin splt grft trnk/arm/leg
15120 Skn splt a-grft fac/nck/hf/g
15240 Skin full grft face/genit/hf
15260 Skin full graft een & lips
15732 Muscle-skin graft head/neck
15734 Muscle-skin graft trunk
15823 Revision of upper eyelid
17000 Destruct premalg lesion
17004 Destroy premal lesions 15/>
17110 Destruct b9 lesion 1-14
17111 Destruct lesion 15 or more
17260 Destruction of skin lesions
17261 Destruction of skin lesions
17262 Destruction of skin lesions
17263 Destruction of skin lesions
17270 Destruction of skin lesions
17271 Destruction of skin lesions
17272 Destruction of skin lesions
17273 Destruction of skin lesions
17280 Destruction of skin lesions
17281 Destruction of skin lesions
17282 Destruction of skin lesions
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
References
1. Medicare Access and CHIP Reauthorization Act of 2015, HR 2, 114th Cong, 1st Sess (2015).
It seems like only yesterday we were celebrating the elimination of the Medicare sustainable growth rate and the continuation of “global periods.” Now we are facing the elimination of the global payment periods again, and if we don’t bill the proper CPT code (99024) for our follow-up visits, during an upcoming survey period, it will indeed be a challenge for the specialty.
You may not know it, but there is payment for follow-up visits – global periods – built into codes dermatologists frequently use. As you can see, a large part of our specialty is vulnerable, from destruction of actinics and warts, to malignant and benign excisions, to destructions, to reconstructive surgery. This is real money, about a billion (yes, with a “b”) paid to dermatologists every year in Medicare alone.
These embedded visits vary from one (actinic destruction) to five (full thickness graft of the nose) and make up a major part of your reimbursement. As part of MACRA (Medicare Access and CHIP Reauthorization Act), the CMS was directed to investigate the validity of these embedded visits.1
The CMS has decided to complete this data gathering by how often the CPT code 99024 is billed.
I am not worried that we don’t provide these visits. I know we do, but I am terribly worried that we won’t correctly report these visits and won’t get credit for them.
The problem is that 99024 pays nothing, it is simply a notation to indicate that the patient was seen in follow up. Since it pays nothing, and since billing anything has an inherent expense, and since 30% of dermatologists are still on paper claims, most dermatologists have never used this code and may not start. In addition, groups of under 10 physicians are not required to report, but can, and you must! Seventy percent of our members are in groups of under 10. That means there will be no data collected on most of these codes, which are almost all performed by dermatologists, the great majority of the time.
Let me say it clearly here: If you do not start filing 99024 every time you see a patient in follow-up (and perhaps for telephone follow-ups), the amount you are paid to perform the original procedure will be cut by 30%-75%. Since the CMS will erroneously think you are not seeing these follow-up patients, they will pull these embedded payments out of the codes. You will have to start billing patients (think additional copays and deductibles) for every suture removal and wound check visit.
Data on 99024 will be collected in only nine states (Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island). It will start July 1 and no one knows how long it will continue.
So, start preparing. You will not be penalized for adding this nonpaying code to every follow-up when you do not bill an evaluation and management code. I note that one electronic medical record vendor (Modernizing Medicine) has already started populating its bills with 99024. Good for them! You must report follow-up visits no matter the size of your practice. Report early and report often. Your future depends on it.
Common procedures on which the CMS is collecting postoperative visit data
10040 Acne surgery
10060 Drainage of skin abscess
10061 Drainage of skin abscess
10120 Remove foreign body
10140 Drainage of hematoma/fluid
10160 Puncture drainage of lesion
10180 Complex drainage wound
11200 Removal of skin tags <w/15
11400 Exc tr-ext b9+marg 0.5 cm<
11401 Exc tr-ext b9+marg 0.6-1 cm
11402 Exc tr-ext b9+marg 1.1-2 cm
11403 Exc tr-ext b9+marg 2.1-3cm/<
11404 Exc tr-ext b9+marg 3.1-4 cm
11406 Exc tr-ext b9+marg >4.0 cm
11420 Exc h-f-nk-sp b9+marg 0.5/<
11421 Exc h-f-nk-sp b9+marg 0.6-1
11422 Exc h-f-nk-sp b9+marg 1.1-2
11423 Exc h-f-nk-sp b9+marg 2.1-3
11440 Exc face-mm b9+marg 0.5 cm/<
11441 Exc face-mm b9+marg 0.6-1 cm
11442 Exc face-mm b9+marg 1.1-2 cm
11443 Exc face-mm b9+marg 2.1-3 cm
11601 Exc tr-ext mal+marg 0.6-1 cm
11602 Exc tr-ext mal+marg 1.1-2 cm
11603 Exc tr-ext mal+marg 2.1-3 cm
11604 Exc tr-ext mal+marg 3.1-4 cm
11606 Exc tr-ext mal+marg >4 cm
11621 Exc s/n/h/f/g mal+mrg 0.6-1
11622 Exc s/n/h/f/g mal+mrg 1.1-2
11623 Exc s/n/h/f/g mal+mrg 2.1-3
11640 Exc f/e/e/n/l mal+mrg 0.5cm<
11641 Exc f/e/e/n/l mal+mrg 0.6-1
11642 Exc f/e/e/n/l mal+mrg 1.1-2
11643 Exc f/e/e/n/l mal+mrg 2.1-3
11644 Exc f/e/e/n/l mal+mrg 3.1-4
11646 Exc f/e/e/n/l mal+mrg >4 cm
11750 Removal of nail bed
11765 Excision of nail fold toe
12031 Intmd rpr s/a/t/ext 2.5 cm/<
12032 Intmd rpr s/a/t/ext 2.6-7.5
12034 Intmd rpr s/tr/ext 7.6-12.5
12041 Intmd rpr n-hf/genit 2.5cm/<
12042 Intmd rpr n-hf/genit2.6-7.5
12051 Intmd rpr face/mm 2.5 cm/<
12052 Intmd rpr face/mm 2.6-5.0 cm
13101 Cmplx rpr trunk 2.6-7.5 cm
13121 Cmplx rpr s/a/l 2.6-7.5 cm
13131 Cmplx rpr f/c/c/m/n/ax/g/h/f
13132 Cmplx rpr f/c/c/m/n/ax/g/h/f
13151 Cmplx rpr e/n/e/l 1.1-2.5 cm
13152 Cmplx rpr e/n/e/l 2.6-7.5 cm
13160 Late closure of wound
14020 Tis trnfr s/a/l 10 sq cm/<
14021 Tis trnfr s/a/l 10.1-30 sqcm
14040 Tis trnfr f/c/c/m/n/a/g/h/f
14041 Tis trnfr f/c/c/m/n/a/g/h/f
14060 Tis trnfr e/n/e/l 10 sq cm/<
14061 Tis trnfr e/n/e/l10.1-30sqcm
14301 Tis trnfr any 30.1-60 sq cm
15100 Skin splt grft trnk/arm/leg
15120 Skn splt a-grft fac/nck/hf/g
15240 Skin full grft face/genit/hf
15260 Skin full graft een & lips
15732 Muscle-skin graft head/neck
15734 Muscle-skin graft trunk
15823 Revision of upper eyelid
17000 Destruct premalg lesion
17004 Destroy premal lesions 15/>
17110 Destruct b9 lesion 1-14
17111 Destruct lesion 15 or more
17260 Destruction of skin lesions
17261 Destruction of skin lesions
17262 Destruction of skin lesions
17263 Destruction of skin lesions
17270 Destruction of skin lesions
17271 Destruction of skin lesions
17272 Destruction of skin lesions
17273 Destruction of skin lesions
17280 Destruction of skin lesions
17281 Destruction of skin lesions
17282 Destruction of skin lesions
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
References
1. Medicare Access and CHIP Reauthorization Act of 2015, HR 2, 114th Cong, 1st Sess (2015).
It seems like only yesterday we were celebrating the elimination of the Medicare sustainable growth rate and the continuation of “global periods.” Now we are facing the elimination of the global payment periods again, and if we don’t bill the proper CPT code (99024) for our follow-up visits, during an upcoming survey period, it will indeed be a challenge for the specialty.
You may not know it, but there is payment for follow-up visits – global periods – built into codes dermatologists frequently use. As you can see, a large part of our specialty is vulnerable, from destruction of actinics and warts, to malignant and benign excisions, to destructions, to reconstructive surgery. This is real money, about a billion (yes, with a “b”) paid to dermatologists every year in Medicare alone.
These embedded visits vary from one (actinic destruction) to five (full thickness graft of the nose) and make up a major part of your reimbursement. As part of MACRA (Medicare Access and CHIP Reauthorization Act), the CMS was directed to investigate the validity of these embedded visits.1
The CMS has decided to complete this data gathering by how often the CPT code 99024 is billed.
I am not worried that we don’t provide these visits. I know we do, but I am terribly worried that we won’t correctly report these visits and won’t get credit for them.
The problem is that 99024 pays nothing, it is simply a notation to indicate that the patient was seen in follow up. Since it pays nothing, and since billing anything has an inherent expense, and since 30% of dermatologists are still on paper claims, most dermatologists have never used this code and may not start. In addition, groups of under 10 physicians are not required to report, but can, and you must! Seventy percent of our members are in groups of under 10. That means there will be no data collected on most of these codes, which are almost all performed by dermatologists, the great majority of the time.
Let me say it clearly here: If you do not start filing 99024 every time you see a patient in follow-up (and perhaps for telephone follow-ups), the amount you are paid to perform the original procedure will be cut by 30%-75%. Since the CMS will erroneously think you are not seeing these follow-up patients, they will pull these embedded payments out of the codes. You will have to start billing patients (think additional copays and deductibles) for every suture removal and wound check visit.
Data on 99024 will be collected in only nine states (Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island). It will start July 1 and no one knows how long it will continue.
So, start preparing. You will not be penalized for adding this nonpaying code to every follow-up when you do not bill an evaluation and management code. I note that one electronic medical record vendor (Modernizing Medicine) has already started populating its bills with 99024. Good for them! You must report follow-up visits no matter the size of your practice. Report early and report often. Your future depends on it.
Common procedures on which the CMS is collecting postoperative visit data
10040 Acne surgery
10060 Drainage of skin abscess
10061 Drainage of skin abscess
10120 Remove foreign body
10140 Drainage of hematoma/fluid
10160 Puncture drainage of lesion
10180 Complex drainage wound
11200 Removal of skin tags <w/15
11400 Exc tr-ext b9+marg 0.5 cm<
11401 Exc tr-ext b9+marg 0.6-1 cm
11402 Exc tr-ext b9+marg 1.1-2 cm
11403 Exc tr-ext b9+marg 2.1-3cm/<
11404 Exc tr-ext b9+marg 3.1-4 cm
11406 Exc tr-ext b9+marg >4.0 cm
11420 Exc h-f-nk-sp b9+marg 0.5/<
11421 Exc h-f-nk-sp b9+marg 0.6-1
11422 Exc h-f-nk-sp b9+marg 1.1-2
11423 Exc h-f-nk-sp b9+marg 2.1-3
11440 Exc face-mm b9+marg 0.5 cm/<
11441 Exc face-mm b9+marg 0.6-1 cm
11442 Exc face-mm b9+marg 1.1-2 cm
11443 Exc face-mm b9+marg 2.1-3 cm
11601 Exc tr-ext mal+marg 0.6-1 cm
11602 Exc tr-ext mal+marg 1.1-2 cm
11603 Exc tr-ext mal+marg 2.1-3 cm
11604 Exc tr-ext mal+marg 3.1-4 cm
11606 Exc tr-ext mal+marg >4 cm
11621 Exc s/n/h/f/g mal+mrg 0.6-1
11622 Exc s/n/h/f/g mal+mrg 1.1-2
11623 Exc s/n/h/f/g mal+mrg 2.1-3
11640 Exc f/e/e/n/l mal+mrg 0.5cm<
11641 Exc f/e/e/n/l mal+mrg 0.6-1
11642 Exc f/e/e/n/l mal+mrg 1.1-2
11643 Exc f/e/e/n/l mal+mrg 2.1-3
11644 Exc f/e/e/n/l mal+mrg 3.1-4
11646 Exc f/e/e/n/l mal+mrg >4 cm
11750 Removal of nail bed
11765 Excision of nail fold toe
12031 Intmd rpr s/a/t/ext 2.5 cm/<
12032 Intmd rpr s/a/t/ext 2.6-7.5
12034 Intmd rpr s/tr/ext 7.6-12.5
12041 Intmd rpr n-hf/genit 2.5cm/<
12042 Intmd rpr n-hf/genit2.6-7.5
12051 Intmd rpr face/mm 2.5 cm/<
12052 Intmd rpr face/mm 2.6-5.0 cm
13101 Cmplx rpr trunk 2.6-7.5 cm
13121 Cmplx rpr s/a/l 2.6-7.5 cm
13131 Cmplx rpr f/c/c/m/n/ax/g/h/f
13132 Cmplx rpr f/c/c/m/n/ax/g/h/f
13151 Cmplx rpr e/n/e/l 1.1-2.5 cm
13152 Cmplx rpr e/n/e/l 2.6-7.5 cm
13160 Late closure of wound
14020 Tis trnfr s/a/l 10 sq cm/<
14021 Tis trnfr s/a/l 10.1-30 sqcm
14040 Tis trnfr f/c/c/m/n/a/g/h/f
14041 Tis trnfr f/c/c/m/n/a/g/h/f
14060 Tis trnfr e/n/e/l 10 sq cm/<
14061 Tis trnfr e/n/e/l10.1-30sqcm
14301 Tis trnfr any 30.1-60 sq cm
15100 Skin splt grft trnk/arm/leg
15120 Skn splt a-grft fac/nck/hf/g
15240 Skin full grft face/genit/hf
15260 Skin full graft een & lips
15732 Muscle-skin graft head/neck
15734 Muscle-skin graft trunk
15823 Revision of upper eyelid
17000 Destruct premalg lesion
17004 Destroy premal lesions 15/>
17110 Destruct b9 lesion 1-14
17111 Destruct lesion 15 or more
17260 Destruction of skin lesions
17261 Destruction of skin lesions
17262 Destruction of skin lesions
17263 Destruction of skin lesions
17270 Destruction of skin lesions
17271 Destruction of skin lesions
17272 Destruction of skin lesions
17273 Destruction of skin lesions
17280 Destruction of skin lesions
17281 Destruction of skin lesions
17282 Destruction of skin lesions
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
References
1. Medicare Access and CHIP Reauthorization Act of 2015, HR 2, 114th Cong, 1st Sess (2015).
Why can’t my patient have that miracle drug?
Modern medicine is truly blessed. Dermatology is no exception. With the development of more precise medications, our patients with severe psoriasis and atopic dermatitis no longer have to suffer in misery and social isolation. There is new hope for patients with metastatic melanoma. I recently watched President Jimmy Carter – a man with melanoma in his brain, certainly dead except for the advent of new drugs that are truly miraculous – release a rehabilitated sea turtle.
What is the drawback to such miracles? Cost! The cost of these medications can be extraordinary (hundreds of thousands of dollars a year); and guess what, everyone wants and needs their insurance plans to foot the bill for them. Biosimilars are not going to solve the cost issue, since biologic drugs are difficult to manufacture and get approved. The biosimilars are pricing in at only 5%-10% less than costs of the original biologic.
Drug costs obviously drive part of the increase in health care premiums. Insurance companies often make drug coverage as difficult as possible, which makes sense from the insurers’ point of view. They require prior authorizations, have restricted formularies, or even insist patients switch biologics in midstream for cost savings or because of manufacturer rebates.
Sometimes a patient has an adverse event, or even dies, because of insurance plan delays. How can this be legal? Isn’t this the practice of medicine? There ought to be a law!
There is a law. Meet the Employee Retirement Income Security Act (ERISA) of 1974 (Meyer JA. ERISA Preemption: Protecting Employer Laboratories of Health Care Reform. Washington, DC: New Directions for Policy; 1995).
ERISA not only protects pensions (and established individual retirement accounts) but also health benefits. ERISA restricts compensation in lawsuits against insurers to the value of the services withheld or delayed and supersedes state laws (State regulation of managed care and the Employee Retirement Income Security Act. Mariner WK, N Engl J Med. 1996 Dec 26;335[26]:1986-90). This minimal payout makes such lawsuits unattractive to law firms. This is why insurers have become so bold in ignoring physician requests for treatment of their patients. The insurers attitude is: “Go ahead, sue me! You won’t get anything!”
Now, as physicians, we are not only patient advocates, but we also must be husbanders of scarce resources. Should we not pursue 100% clearance of that patient with psoriasis? This issue is worth debating, as the medical reimbursement pond gets sucked dry by medication costs.
Still, if you really hate prior authorizations, demented formularies, step therapy, drug denials, and outright stalling of medical care, you should ask Congress to amend ERISA. In writing about Justice Ruth Bader Ginsburg’s concurring Supreme Court opinion in a 2004 case regarding ERISA (Aetna Health Inc. v. Davila 542 U.S. 200), legal expert David S. Senoff said that amending ERISA “may be the only mechanism to provide patients with adequate compensation for damages as a result of coverage decisions by employer-sponsored health plans.” (Senoff DS. An anticipated decision with far-reaching results. Legal Intelligencer. 2004;230:5-7).
Amending ERISA is not going to happen in our current political environment. I’m not even sure I would want it to happen, since it would raise insurance costs even higher, and could make insurance unaffordable for many more people. Still, you and your patients deserve to know the cause of medication denials. Also, I suspect you have no idea how much an insurance executive will twitch (and a liberal member of Congress will smile) when you mention the possibility of amending ERISA. So if you are having a particularly acrimonious argument with an insurance executive about patient drug coverage, pull this nuke out of your arsenal and rap him or her with it.
Dr. Coldiron is past president of the American Academy of Dermatology. He is currently in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
Modern medicine is truly blessed. Dermatology is no exception. With the development of more precise medications, our patients with severe psoriasis and atopic dermatitis no longer have to suffer in misery and social isolation. There is new hope for patients with metastatic melanoma. I recently watched President Jimmy Carter – a man with melanoma in his brain, certainly dead except for the advent of new drugs that are truly miraculous – release a rehabilitated sea turtle.
What is the drawback to such miracles? Cost! The cost of these medications can be extraordinary (hundreds of thousands of dollars a year); and guess what, everyone wants and needs their insurance plans to foot the bill for them. Biosimilars are not going to solve the cost issue, since biologic drugs are difficult to manufacture and get approved. The biosimilars are pricing in at only 5%-10% less than costs of the original biologic.
Drug costs obviously drive part of the increase in health care premiums. Insurance companies often make drug coverage as difficult as possible, which makes sense from the insurers’ point of view. They require prior authorizations, have restricted formularies, or even insist patients switch biologics in midstream for cost savings or because of manufacturer rebates.
Sometimes a patient has an adverse event, or even dies, because of insurance plan delays. How can this be legal? Isn’t this the practice of medicine? There ought to be a law!
There is a law. Meet the Employee Retirement Income Security Act (ERISA) of 1974 (Meyer JA. ERISA Preemption: Protecting Employer Laboratories of Health Care Reform. Washington, DC: New Directions for Policy; 1995).
ERISA not only protects pensions (and established individual retirement accounts) but also health benefits. ERISA restricts compensation in lawsuits against insurers to the value of the services withheld or delayed and supersedes state laws (State regulation of managed care and the Employee Retirement Income Security Act. Mariner WK, N Engl J Med. 1996 Dec 26;335[26]:1986-90). This minimal payout makes such lawsuits unattractive to law firms. This is why insurers have become so bold in ignoring physician requests for treatment of their patients. The insurers attitude is: “Go ahead, sue me! You won’t get anything!”
Now, as physicians, we are not only patient advocates, but we also must be husbanders of scarce resources. Should we not pursue 100% clearance of that patient with psoriasis? This issue is worth debating, as the medical reimbursement pond gets sucked dry by medication costs.
Still, if you really hate prior authorizations, demented formularies, step therapy, drug denials, and outright stalling of medical care, you should ask Congress to amend ERISA. In writing about Justice Ruth Bader Ginsburg’s concurring Supreme Court opinion in a 2004 case regarding ERISA (Aetna Health Inc. v. Davila 542 U.S. 200), legal expert David S. Senoff said that amending ERISA “may be the only mechanism to provide patients with adequate compensation for damages as a result of coverage decisions by employer-sponsored health plans.” (Senoff DS. An anticipated decision with far-reaching results. Legal Intelligencer. 2004;230:5-7).
Amending ERISA is not going to happen in our current political environment. I’m not even sure I would want it to happen, since it would raise insurance costs even higher, and could make insurance unaffordable for many more people. Still, you and your patients deserve to know the cause of medication denials. Also, I suspect you have no idea how much an insurance executive will twitch (and a liberal member of Congress will smile) when you mention the possibility of amending ERISA. So if you are having a particularly acrimonious argument with an insurance executive about patient drug coverage, pull this nuke out of your arsenal and rap him or her with it.
Dr. Coldiron is past president of the American Academy of Dermatology. He is currently in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
Modern medicine is truly blessed. Dermatology is no exception. With the development of more precise medications, our patients with severe psoriasis and atopic dermatitis no longer have to suffer in misery and social isolation. There is new hope for patients with metastatic melanoma. I recently watched President Jimmy Carter – a man with melanoma in his brain, certainly dead except for the advent of new drugs that are truly miraculous – release a rehabilitated sea turtle.
What is the drawback to such miracles? Cost! The cost of these medications can be extraordinary (hundreds of thousands of dollars a year); and guess what, everyone wants and needs their insurance plans to foot the bill for them. Biosimilars are not going to solve the cost issue, since biologic drugs are difficult to manufacture and get approved. The biosimilars are pricing in at only 5%-10% less than costs of the original biologic.
Drug costs obviously drive part of the increase in health care premiums. Insurance companies often make drug coverage as difficult as possible, which makes sense from the insurers’ point of view. They require prior authorizations, have restricted formularies, or even insist patients switch biologics in midstream for cost savings or because of manufacturer rebates.
Sometimes a patient has an adverse event, or even dies, because of insurance plan delays. How can this be legal? Isn’t this the practice of medicine? There ought to be a law!
There is a law. Meet the Employee Retirement Income Security Act (ERISA) of 1974 (Meyer JA. ERISA Preemption: Protecting Employer Laboratories of Health Care Reform. Washington, DC: New Directions for Policy; 1995).
ERISA not only protects pensions (and established individual retirement accounts) but also health benefits. ERISA restricts compensation in lawsuits against insurers to the value of the services withheld or delayed and supersedes state laws (State regulation of managed care and the Employee Retirement Income Security Act. Mariner WK, N Engl J Med. 1996 Dec 26;335[26]:1986-90). This minimal payout makes such lawsuits unattractive to law firms. This is why insurers have become so bold in ignoring physician requests for treatment of their patients. The insurers attitude is: “Go ahead, sue me! You won’t get anything!”
Now, as physicians, we are not only patient advocates, but we also must be husbanders of scarce resources. Should we not pursue 100% clearance of that patient with psoriasis? This issue is worth debating, as the medical reimbursement pond gets sucked dry by medication costs.
Still, if you really hate prior authorizations, demented formularies, step therapy, drug denials, and outright stalling of medical care, you should ask Congress to amend ERISA. In writing about Justice Ruth Bader Ginsburg’s concurring Supreme Court opinion in a 2004 case regarding ERISA (Aetna Health Inc. v. Davila 542 U.S. 200), legal expert David S. Senoff said that amending ERISA “may be the only mechanism to provide patients with adequate compensation for damages as a result of coverage decisions by employer-sponsored health plans.” (Senoff DS. An anticipated decision with far-reaching results. Legal Intelligencer. 2004;230:5-7).
Amending ERISA is not going to happen in our current political environment. I’m not even sure I would want it to happen, since it would raise insurance costs even higher, and could make insurance unaffordable for many more people. Still, you and your patients deserve to know the cause of medication denials. Also, I suspect you have no idea how much an insurance executive will twitch (and a liberal member of Congress will smile) when you mention the possibility of amending ERISA. So if you are having a particularly acrimonious argument with an insurance executive about patient drug coverage, pull this nuke out of your arsenal and rap him or her with it.
Dr. Coldiron is past president of the American Academy of Dermatology. He is currently in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Write to him at dermnews@frontlinemedcom.com.
Pig-in-a-poke health insurance, dermatologists never say never!
One of the most acute issues facing dermatologists is the implementation of narrow networks by health insurers. Inaccurate physician rosters have long been a problem that insurers have been indifferent to, but this was not an acute problem since almost all providers were included in the networks.
However, the recent “ramp up” because of increased costs and cuts associated with the Affordable Care Act (ACA) has resulted in the delisting of many thousands of physicians (including hundreds of dermatologists) from insurance plans and refusal to allow them to enroll in new plans. All in a time of physician shortages and an acute shortage of dermatologists.
When I was president of the American Academy of Dermatology, I made it a priority that patients and the government, who pay or subsidize insurance companies for this hollow insurance, understand how they were being cheated on their health care dollars – or, as we say in Kentucky, being sold a “pig in a poke.” A pig in a poke is a pig (or another small farm animal) carried to market in a bag with only the head sticking out, disguising the skinny product within.
The AAD staff and I went to the White House, Congress, the Centers for Medicare and Medicaid Services (CMS), AHIP (America’s Health Insurance Plans trade association), PhRMA (Pharmaceutical Research and Manufacturers of America), and the Medicare Payment Advisory Commission (MedPac); and spoke to the Office of Inspector General (OIG), which agreed to investigate. We and the dermatology patient advocacy groups organized a letter writing campaign and solicited letters and complaints from members. We contacted the state health insurance commissioners and testified at their hearings. Our fellow dermatologist and AMA board of trustee member Jack Resneck, MD, researched and wrote an article in JAMA Dermatology, demonstrating how pathetically inaccurate the insurance company physician networks are (2014;150[12]:1290-7). We beat the drum loud and long, and it worked!
The OIG issued a scathing report about the lack of follow through by CMS on billions of health care dollars being paid by the federal government to Medicare Advantage plans. CMS agreed with their report, and agreed to investigate. A CMS survey reported in October 2016 that almost half of the doctor listings in their Medicare Advantage (Humana, Aetna, United, and Anthem senior plans) directories contained incorrect information, including inaccurate names and addresses; multiple, duplicate listings; and doctors who have died. CMS concluded that they expect this performance to improve over the next three study periods – or they will start to assess $25,000 a day in penalties.
Also published last year, a “secret shopper” survey of primary care providers in five insurance marketplace pricing regions found that fewer than 30% of consumers were able to schedule an appointment with the physician they had first selected (Health Aff [Millwood]. 2016 Jul 1;35[7]:1160-6).
Folks, the only way to improve the accuracy is to delete duplicated listings, delete physicians no longer seeing new patients, delete physicians incorrectly listed, and delete those who have died or moved on. We have to continue this effort on a state by state level, or insurers will quickly backslide, because if there are no doctors to see, there are no bills for them to pay.
Accurate rosters will reveal huge gaps in their directories, and insurers will be forced to recontract with delisted physicians. Physicians should watch for and anticipate this, and should not sign up at a disadvantage. Patients must continue to pressure their health insurers both personally and through their human resources departments at work. No one should have to buy “a pig in a poke.” This is huge national victory, for patients and physicians. Dermatologists, you should be proud of your AAD leading the charge, and following through on getting this issue addressed and fixed.
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics.
One of the most acute issues facing dermatologists is the implementation of narrow networks by health insurers. Inaccurate physician rosters have long been a problem that insurers have been indifferent to, but this was not an acute problem since almost all providers were included in the networks.
However, the recent “ramp up” because of increased costs and cuts associated with the Affordable Care Act (ACA) has resulted in the delisting of many thousands of physicians (including hundreds of dermatologists) from insurance plans and refusal to allow them to enroll in new plans. All in a time of physician shortages and an acute shortage of dermatologists.
When I was president of the American Academy of Dermatology, I made it a priority that patients and the government, who pay or subsidize insurance companies for this hollow insurance, understand how they were being cheated on their health care dollars – or, as we say in Kentucky, being sold a “pig in a poke.” A pig in a poke is a pig (or another small farm animal) carried to market in a bag with only the head sticking out, disguising the skinny product within.
The AAD staff and I went to the White House, Congress, the Centers for Medicare and Medicaid Services (CMS), AHIP (America’s Health Insurance Plans trade association), PhRMA (Pharmaceutical Research and Manufacturers of America), and the Medicare Payment Advisory Commission (MedPac); and spoke to the Office of Inspector General (OIG), which agreed to investigate. We and the dermatology patient advocacy groups organized a letter writing campaign and solicited letters and complaints from members. We contacted the state health insurance commissioners and testified at their hearings. Our fellow dermatologist and AMA board of trustee member Jack Resneck, MD, researched and wrote an article in JAMA Dermatology, demonstrating how pathetically inaccurate the insurance company physician networks are (2014;150[12]:1290-7). We beat the drum loud and long, and it worked!
The OIG issued a scathing report about the lack of follow through by CMS on billions of health care dollars being paid by the federal government to Medicare Advantage plans. CMS agreed with their report, and agreed to investigate. A CMS survey reported in October 2016 that almost half of the doctor listings in their Medicare Advantage (Humana, Aetna, United, and Anthem senior plans) directories contained incorrect information, including inaccurate names and addresses; multiple, duplicate listings; and doctors who have died. CMS concluded that they expect this performance to improve over the next three study periods – or they will start to assess $25,000 a day in penalties.
Also published last year, a “secret shopper” survey of primary care providers in five insurance marketplace pricing regions found that fewer than 30% of consumers were able to schedule an appointment with the physician they had first selected (Health Aff [Millwood]. 2016 Jul 1;35[7]:1160-6).
Folks, the only way to improve the accuracy is to delete duplicated listings, delete physicians no longer seeing new patients, delete physicians incorrectly listed, and delete those who have died or moved on. We have to continue this effort on a state by state level, or insurers will quickly backslide, because if there are no doctors to see, there are no bills for them to pay.
Accurate rosters will reveal huge gaps in their directories, and insurers will be forced to recontract with delisted physicians. Physicians should watch for and anticipate this, and should not sign up at a disadvantage. Patients must continue to pressure their health insurers both personally and through their human resources departments at work. No one should have to buy “a pig in a poke.” This is huge national victory, for patients and physicians. Dermatologists, you should be proud of your AAD leading the charge, and following through on getting this issue addressed and fixed.
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics.
One of the most acute issues facing dermatologists is the implementation of narrow networks by health insurers. Inaccurate physician rosters have long been a problem that insurers have been indifferent to, but this was not an acute problem since almost all providers were included in the networks.
However, the recent “ramp up” because of increased costs and cuts associated with the Affordable Care Act (ACA) has resulted in the delisting of many thousands of physicians (including hundreds of dermatologists) from insurance plans and refusal to allow them to enroll in new plans. All in a time of physician shortages and an acute shortage of dermatologists.
When I was president of the American Academy of Dermatology, I made it a priority that patients and the government, who pay or subsidize insurance companies for this hollow insurance, understand how they were being cheated on their health care dollars – or, as we say in Kentucky, being sold a “pig in a poke.” A pig in a poke is a pig (or another small farm animal) carried to market in a bag with only the head sticking out, disguising the skinny product within.
The AAD staff and I went to the White House, Congress, the Centers for Medicare and Medicaid Services (CMS), AHIP (America’s Health Insurance Plans trade association), PhRMA (Pharmaceutical Research and Manufacturers of America), and the Medicare Payment Advisory Commission (MedPac); and spoke to the Office of Inspector General (OIG), which agreed to investigate. We and the dermatology patient advocacy groups organized a letter writing campaign and solicited letters and complaints from members. We contacted the state health insurance commissioners and testified at their hearings. Our fellow dermatologist and AMA board of trustee member Jack Resneck, MD, researched and wrote an article in JAMA Dermatology, demonstrating how pathetically inaccurate the insurance company physician networks are (2014;150[12]:1290-7). We beat the drum loud and long, and it worked!
The OIG issued a scathing report about the lack of follow through by CMS on billions of health care dollars being paid by the federal government to Medicare Advantage plans. CMS agreed with their report, and agreed to investigate. A CMS survey reported in October 2016 that almost half of the doctor listings in their Medicare Advantage (Humana, Aetna, United, and Anthem senior plans) directories contained incorrect information, including inaccurate names and addresses; multiple, duplicate listings; and doctors who have died. CMS concluded that they expect this performance to improve over the next three study periods – or they will start to assess $25,000 a day in penalties.
Also published last year, a “secret shopper” survey of primary care providers in five insurance marketplace pricing regions found that fewer than 30% of consumers were able to schedule an appointment with the physician they had first selected (Health Aff [Millwood]. 2016 Jul 1;35[7]:1160-6).
Folks, the only way to improve the accuracy is to delete duplicated listings, delete physicians no longer seeing new patients, delete physicians incorrectly listed, and delete those who have died or moved on. We have to continue this effort on a state by state level, or insurers will quickly backslide, because if there are no doctors to see, there are no bills for them to pay.
Accurate rosters will reveal huge gaps in their directories, and insurers will be forced to recontract with delisted physicians. Physicians should watch for and anticipate this, and should not sign up at a disadvantage. Patients must continue to pressure their health insurers both personally and through their human resources departments at work. No one should have to buy “a pig in a poke.” This is huge national victory, for patients and physicians. Dermatologists, you should be proud of your AAD leading the charge, and following through on getting this issue addressed and fixed.
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics.