SHM's Policy Corner

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

In light of the recent elimination of consultation codes from the Medicare Physician Fee Schedule, physicians of all specialties are being asked to report initial hospital care services (99221-99223) for their first encounter with a patient.1 This leaves hospitalists with questions about the billing and financial implications of reporting admissions services.

Here’s a typical scenario: Dr. A admits a Medicare patient to the hospital from the ED for hyperglycemia and dehydration in the setting of uncontrolled diabetes. He performs and documents an initial hospital-care service on day one of the admission. On day two, another hospitalist, Dr. B, who works in the same HM group, sees the patient for the first time. What should each of the physicians report for their first encounter with the patient?

Each hospitalist should select the CPT code that best fits the service and their role in the case. Remember, only one physician is named “attending of record” or “admitting physician.”

When billing during the course of the hospitalization, consider all physicians of the same specialty in the same provider group as the “admitting physician/group.”

Admissions Service

On day one, Dr. A admits the patient. He performs and documents a comprehensive history, a comprehensive exam, and medical decision-making of high complexity. The documentation corresponds to the highest initial admission service, 99223. Given the recent Medicare billing changes, the attending of record is required to append modifier “AI” (principal physician of record) to the admission service (e.g., 99223-AI).

The purpose of this modifier is “to identify the physician who oversees the patient’s care from all other physicians who may be furnishing specialty care.”2 This modifier has no financial implications. It does not increase or decrease the payment associated with the reported visit level (i.e., 99223 is reimbursed at a national rate of approximately $190, with or without modifier AI).

Initial Encounter by Team Members

As previously stated, the elimination of consultation services requires physicians to report their initial hospital encounter with an initial hospital-care code (i.e., 99221-99223). However, Medicare states that “physicians in the same group practice who are in the same specialty must bill and be paid as though they were a single physician.”3 This means followup services performed on days subsequent to a group member’s initial admission service must be reported with subsequent hospital-care codes (99231-99233). Therefore, in the scenario above, Dr. B is obligated to report the appropriate subsequent hospital-care code for his patient encounter on day two.

Incomplete Documentation

Initial hospital-care services (99221-99223) require the physician to obtain, perform, and document the necessary elements of history, physical exam, and medical decision-making in support of the code reported on the claim. There are occasions when the physician’s documentation does not support the lowest code (i.e., 99221). A reasonable approach is to report the service with an unlisted E&M code (99499). “Unlisted” codes do not have a payor-recognized code description or fee. When reporting an unlisted code, the biller must manually enter a charge description (e.g., expanded problem-focused admissions service) and a fee. A payor-prompted request for documentation is likely before payment is made.

Some payors have more specific references to the situation and allow for options. Two options exist for coding services that do not meet the work and/or medical necessity requirements of 99221-99223: report an unlisted E&M service (99499); or report a subsequent hospital care code (99231-99233) that appropriately reflects physician work and medical necessity for the service, and avoids mandatory medical record submission and manual medical review.4

In fact, Medicare Administrator Contractor TrailBlazer Health’s Web site (www.trailblazerhealth.com) offers guidance to physicians who are unsure if subsequent hospital care is an appropriate choice for this dilemma: “TrailBlazer recognizes provider reluctance to miscode initial hospital care as subsequent hospital care. However, doing so is preferable in that it allows Medicare to process and pay the claims much more efficiently. For those concerned about miscoding these services, please understand that TrailBlazer will not find fault with providers who choose this option when records appropriately demonstrate the work and medical necessity of the subsequent code chosen.”4 TH

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She also is faculty for SHM’s inpatient coding course.

References

1. CMS announces payment, policy changes for physicians services to Medicare beneficiaries in 2010. Centers for Medicare and Medicaid Services Web site. Available at: www.cms.hhs.gov/apps/media/ press/release.asp?Counter=3539&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date. Accessed Nov. 12, 2009.
2. Revisions to Consultation Services Payment Policy. Medicare Learning Network Web site. Available at: www.cms.hhs.gov/MLNMattersArticles/downloads/ MM6740.pdf. Accessed Jan. 16, 2010.
3. Medicare Claims Processing Manual: Chapter 12, Section 30.6.5. CMS Web site. Available at: www.cms.hhs.gov/manuals/downloads/clm104c12.pdf. Accessed Jan. 16, 2010.
4. Update-evaluation and management services formerly coded as consultations. Trailblazer Health Enterprises Web site. Available at: www.trailblazerhealth.com/Tools/Notices.aspx?DomainID=1. Accessed Jan. 17, 2010.
5. Beebe M, Dalton J, Espronceda M, Evans D, Glenn R. Current Procedural Terminology Professional Edition. Chicago: American Medical Association Press; 2009;14-15.

In light of the recent elimination of consultation codes from the Medicare Physician Fee Schedule, physicians of all specialties are being asked to report initial hospital care services (99221-99223) for their first encounter with a patient.1 This leaves hospitalists with questions about the billing and financial implications of reporting admissions services.

Here’s a typical scenario: Dr. A admits a Medicare patient to the hospital from the ED for hyperglycemia and dehydration in the setting of uncontrolled diabetes. He performs and documents an initial hospital-care service on day one of the admission. On day two, another hospitalist, Dr. B, who works in the same HM group, sees the patient for the first time. What should each of the physicians report for their first encounter with the patient?

Each hospitalist should select the CPT code that best fits the service and their role in the case. Remember, only one physician is named “attending of record” or “admitting physician.”

When billing during the course of the hospitalization, consider all physicians of the same specialty in the same provider group as the “admitting physician/group.”

Admissions Service

On day one, Dr. A admits the patient. He performs and documents a comprehensive history, a comprehensive exam, and medical decision-making of high complexity. The documentation corresponds to the highest initial admission service, 99223. Given the recent Medicare billing changes, the attending of record is required to append modifier “AI” (principal physician of record) to the admission service (e.g., 99223-AI).

The purpose of this modifier is “to identify the physician who oversees the patient’s care from all other physicians who may be furnishing specialty care.”2 This modifier has no financial implications. It does not increase or decrease the payment associated with the reported visit level (i.e., 99223 is reimbursed at a national rate of approximately $190, with or without modifier AI).

Initial Encounter by Team Members

As previously stated, the elimination of consultation services requires physicians to report their initial hospital encounter with an initial hospital-care code (i.e., 99221-99223). However, Medicare states that “physicians in the same group practice who are in the same specialty must bill and be paid as though they were a single physician.”3 This means followup services performed on days subsequent to a group member’s initial admission service must be reported with subsequent hospital-care codes (99231-99233). Therefore, in the scenario above, Dr. B is obligated to report the appropriate subsequent hospital-care code for his patient encounter on day two.

Incomplete Documentation

Initial hospital-care services (99221-99223) require the physician to obtain, perform, and document the necessary elements of history, physical exam, and medical decision-making in support of the code reported on the claim. There are occasions when the physician’s documentation does not support the lowest code (i.e., 99221). A reasonable approach is to report the service with an unlisted E&M code (99499). “Unlisted” codes do not have a payor-recognized code description or fee. When reporting an unlisted code, the biller must manually enter a charge description (e.g., expanded problem-focused admissions service) and a fee. A payor-prompted request for documentation is likely before payment is made.

Some payors have more specific references to the situation and allow for options. Two options exist for coding services that do not meet the work and/or medical necessity requirements of 99221-99223: report an unlisted E&M service (99499); or report a subsequent hospital care code (99231-99233) that appropriately reflects physician work and medical necessity for the service, and avoids mandatory medical record submission and manual medical review.4

In fact, Medicare Administrator Contractor TrailBlazer Health’s Web site (www.trailblazerhealth.com) offers guidance to physicians who are unsure if subsequent hospital care is an appropriate choice for this dilemma: “TrailBlazer recognizes provider reluctance to miscode initial hospital care as subsequent hospital care. However, doing so is preferable in that it allows Medicare to process and pay the claims much more efficiently. For those concerned about miscoding these services, please understand that TrailBlazer will not find fault with providers who choose this option when records appropriately demonstrate the work and medical necessity of the subsequent code chosen.”4 TH

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She also is faculty for SHM’s inpatient coding course.

References

1. CMS announces payment, policy changes for physicians services to Medicare beneficiaries in 2010. Centers for Medicare and Medicaid Services Web site. Available at: www.cms.hhs.gov/apps/media/ press/release.asp?Counter=3539&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date. Accessed Nov. 12, 2009.
2. Revisions to Consultation Services Payment Policy. Medicare Learning Network Web site. Available at: www.cms.hhs.gov/MLNMattersArticles/downloads/ MM6740.pdf. Accessed Jan. 16, 2010.
3. Medicare Claims Processing Manual: Chapter 12, Section 30.6.5. CMS Web site. Available at: www.cms.hhs.gov/manuals/downloads/clm104c12.pdf. Accessed Jan. 16, 2010.
4. Update-evaluation and management services formerly coded as consultations. Trailblazer Health Enterprises Web site. Available at: www.trailblazerhealth.com/Tools/Notices.aspx?DomainID=1. Accessed Jan. 17, 2010.
5. Beebe M, Dalton J, Espronceda M, Evans D, Glenn R. Current Procedural Terminology Professional Edition. Chicago: American Medical Association Press; 2009;14-15.

In light of the recent elimination of consultation codes from the Medicare Physician Fee Schedule, physicians of all specialties are being asked to report initial hospital care services (99221-99223) for their first encounter with a patient.1 This leaves hospitalists with questions about the billing and financial implications of reporting admissions services.

Here’s a typical scenario: Dr. A admits a Medicare patient to the hospital from the ED for hyperglycemia and dehydration in the setting of uncontrolled diabetes. He performs and documents an initial hospital-care service on day one of the admission. On day two, another hospitalist, Dr. B, who works in the same HM group, sees the patient for the first time. What should each of the physicians report for their first encounter with the patient?

Each hospitalist should select the CPT code that best fits the service and their role in the case. Remember, only one physician is named “attending of record” or “admitting physician.”

When billing during the course of the hospitalization, consider all physicians of the same specialty in the same provider group as the “admitting physician/group.”

Admissions Service

On day one, Dr. A admits the patient. He performs and documents a comprehensive history, a comprehensive exam, and medical decision-making of high complexity. The documentation corresponds to the highest initial admission service, 99223. Given the recent Medicare billing changes, the attending of record is required to append modifier “AI” (principal physician of record) to the admission service (e.g., 99223-AI).

The purpose of this modifier is “to identify the physician who oversees the patient’s care from all other physicians who may be furnishing specialty care.”2 This modifier has no financial implications. It does not increase or decrease the payment associated with the reported visit level (i.e., 99223 is reimbursed at a national rate of approximately $190, with or without modifier AI).

Initial Encounter by Team Members

As previously stated, the elimination of consultation services requires physicians to report their initial hospital encounter with an initial hospital-care code (i.e., 99221-99223). However, Medicare states that “physicians in the same group practice who are in the same specialty must bill and be paid as though they were a single physician.”3 This means followup services performed on days subsequent to a group member’s initial admission service must be reported with subsequent hospital-care codes (99231-99233). Therefore, in the scenario above, Dr. B is obligated to report the appropriate subsequent hospital-care code for his patient encounter on day two.

Incomplete Documentation

Initial hospital-care services (99221-99223) require the physician to obtain, perform, and document the necessary elements of history, physical exam, and medical decision-making in support of the code reported on the claim. There are occasions when the physician’s documentation does not support the lowest code (i.e., 99221). A reasonable approach is to report the service with an unlisted E&M code (99499). “Unlisted” codes do not have a payor-recognized code description or fee. When reporting an unlisted code, the biller must manually enter a charge description (e.g., expanded problem-focused admissions service) and a fee. A payor-prompted request for documentation is likely before payment is made.

Some payors have more specific references to the situation and allow for options. Two options exist for coding services that do not meet the work and/or medical necessity requirements of 99221-99223: report an unlisted E&M service (99499); or report a subsequent hospital care code (99231-99233) that appropriately reflects physician work and medical necessity for the service, and avoids mandatory medical record submission and manual medical review.4

In fact, Medicare Administrator Contractor TrailBlazer Health’s Web site (www.trailblazerhealth.com) offers guidance to physicians who are unsure if subsequent hospital care is an appropriate choice for this dilemma: “TrailBlazer recognizes provider reluctance to miscode initial hospital care as subsequent hospital care. However, doing so is preferable in that it allows Medicare to process and pay the claims much more efficiently. For those concerned about miscoding these services, please understand that TrailBlazer will not find fault with providers who choose this option when records appropriately demonstrate the work and medical necessity of the subsequent code chosen.”4 TH

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She also is faculty for SHM’s inpatient coding course.

References

1. CMS announces payment, policy changes for physicians services to Medicare beneficiaries in 2010. Centers for Medicare and Medicaid Services Web site. Available at: www.cms.hhs.gov/apps/media/ press/release.asp?Counter=3539&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date. Accessed Nov. 12, 2009.
2. Revisions to Consultation Services Payment Policy. Medicare Learning Network Web site. Available at: www.cms.hhs.gov/MLNMattersArticles/downloads/ MM6740.pdf. Accessed Jan. 16, 2010.
3. Medicare Claims Processing Manual: Chapter 12, Section 30.6.5. CMS Web site. Available at: www.cms.hhs.gov/manuals/downloads/clm104c12.pdf. Accessed Jan. 16, 2010.
4. Update-evaluation and management services formerly coded as consultations. Trailblazer Health Enterprises Web site. Available at: www.trailblazerhealth.com/Tools/Notices.aspx?DomainID=1. Accessed Jan. 17, 2010.
5. Beebe M, Dalton J, Espronceda M, Evans D, Glenn R. Current Procedural Terminology Professional Edition. Chicago: American Medical Association Press; 2009;14-15.

Like so many things in HM, the story of how hospitalists first learned about the focused practice program is a modern one.

It started with a text message, which led to a blog post, which reached thousands of readers, many of them hospitalists interested in how to bolster their bona fides in a specialty known for its explosive growth in recent years.

Now, hospitalists certified in internal medicine have the opportunity to reinforce their commitment to the specialty by maintaining their certification through the Focused Practice in Hospital Medicine pathway offered by the American Board of Internal Medicine (ABIM). The Focused Practice in Hospital Medicine (FPHM) Maintenance of Certification (MOC) program enables hospitalists to distinguish their practice within the larger specialty of internal medicine.

The Evolution of FPHM

The new pathway has been years in the making, and it reflects the growing influence of HM in healthcare, according to ABIM Chief Medical Officer Eric Holmboe, MD. He sees the FPHM as the result of a combination of factors, including the fact that the specialty now has more than 30,000 hospitalists practicing nationwide. “If you look at the past years, this has been a viable and vibrant practice,” he says. “If you look at the number of people doing hospital medicine, it’s a factor.”

For Holmboe, it also is a shift in how individuals are recognized based on their practice areas. “This is an acknowledgement by ABIM and the American Board of Medical Specialties to look at Maintenance of Certification in terms of what the individual actually does,” he explains. “Hospitalists play a very important role in the hospital.”

He also credits the leadership of the HM movement—especially pioneers like Robert Wachter, MD, FHM. One of HM’s most ardent champions, Dr. Wachter, chief of the hospital medicine division, professor, and associate chair of the Department of Medicine at the University of California at San Francisco, worked with ABIM to find a way to recognize hospitalists’ specialized skill sets and their commitment to inpatient medicine. After more than a decade of advocating for a board-certified process to recognize the field, Dr. Wachter, an ABIM board member, began receiving multiple text messages from colleagues announcing that ABIM had approved the focused-practice program. He wrote a post on his blog, Wachter’s World (www.wachtersworld.com), that outlined the need for the FPHM and the significance for aspiring hospitalists.

“In any case, this is an important milestone for the field,” Dr. Wachter wrote in his Sept. 23, 2009, blog entry, “Board Certification for Hospitalists: It’s Heeeere!” “In fact, when I first began speaking to groups of hospitalists nearly 15 years ago, I often showed a slide listing the elements of a true specialty, and one by one we’ve ticked them off,” wrote Dr. Wachter, a former SHM president. “The only unchecked box was recognition of the field as a legitimate ‘specialty,’ as codified by the ABMS board certification process.”

Unchecked, that is, until now.

In early 2011, the medical world will be introduced to the first internists recognized for their focus in HM. For Holmboe, the FPHM is the beginning of an even larger movement.

“The goal is continued interest: getting people involved in quality in their hospital and encouraging people to change behaviors and be recognized by patients and credentialists as valuable,” he says. “That’s the primary mission of ABIM: using certification to improve care.”

Fellow in Hospital Medicine Spotlight

O’Neil Pyke, MD, FHM

Dr. Pyke is a clinical instructor at Commonwealth Medical College and a medical director at the Wyoming Valley Health Care System in Wilkes-Barre, Pa. He also serves as a consultant for various hospitalist programs, most actively for his own private consulting company, AMP Hospitalist Consulting, which partners with Salem, N.H.-based physician staffing company Medicus Healthcare Solutions.

Undergraduate Education: Queens College, City University of New York, Flushing, N.Y.

Medical School: Ohio State University College of Medicine and Public Health, Columbus

Notable: Dr. Pyke was born in Jamaica and moved to New York during high school. He says he owes everything to his parents. His parents, who had no education beyond high school, pushed Dr. Pyke and his siblings to achieve more than they did. His sister is an OB-GYN and his brother is pursuing a medical degree.

FYI: Dr. Pyke enjoys playing golf, cheering for his beloved Ohio State Buckeyes, and spends every Friday night with his wife and two daughters—he even admits to watching “chick flicks” on family night.

For more information about the FHM designation, visit www.hospitalmedicine.org/fellows.

Requirements and Process

Shortly after the program’s approval, ABIM, which administers the FPHM program, went to work in defining the process for the FPHM application and building infrastructure to support the tests. Holmboe expects ABIM will be ready to process pre-applications by April or May. While some details may change, the FPHM application will dovetail with ABIM’s MOC process.

Although hospitalists’ MOC must be current in order to apply for FPHM, hospitalists can begin the FPHM application process at any time. Hospitalists do not need to wait until their next MOC renewal.

Before beginning the application process, hospitalists should ensure that they are eligible. ABIM requires FPHM candidates to have:

• A current or previous ABIM certification in internal medicine;
• A valid, unrestricted medical license and confirmation of good standing in the local practice community;
• ACLS certification; and
• At least three years of hospital medicine practice experience.

Candidates who meet the requirements can then begin the enrollment process by:

1. Submitting attestations. Both the hospitalist and a senior officer at the hospital must provide attestations that demonstrate the hospitalist’s experience in HM and his or her commitment to the principles of the specialty.
2. Performing a self-assessment. Hospitalists must quantify their experience in HM through an MOC self-assessment. Candidates must achieve at least 100 MOC points. Successful applicants must submit a new self-assessment every three years. The self-assessment can be conducted before or after the exam.
3. Taking the MOC examination in Hospital Medicine. Registration for the first HM examination will begin in May. The exam will be conducted in October, and diplomates can take the exam at any time in the process.

Passing the exam and completing the other requirements will earn ABIM diplomats recognition as “Board Certified in Internal Medicine with a Focused Practice in Hospital Medicine.” ABIM will notify successful applicants in late 2010 and ship personalized certificates in early 2011. TH

Brendon Shank is a freelance writer based in Philadelphia.

Like so many things in HM, the story of how hospitalists first learned about the focused practice program is a modern one.

It started with a text message, which led to a blog post, which reached thousands of readers, many of them hospitalists interested in how to bolster their bona fides in a specialty known for its explosive growth in recent years.

Now, hospitalists certified in internal medicine have the opportunity to reinforce their commitment to the specialty by maintaining their certification through the Focused Practice in Hospital Medicine pathway offered by the American Board of Internal Medicine (ABIM). The Focused Practice in Hospital Medicine (FPHM) Maintenance of Certification (MOC) program enables hospitalists to distinguish their practice within the larger specialty of internal medicine.

The Evolution of FPHM

The new pathway has been years in the making, and it reflects the growing influence of HM in healthcare, according to ABIM Chief Medical Officer Eric Holmboe, MD. He sees the FPHM as the result of a combination of factors, including the fact that the specialty now has more than 30,000 hospitalists practicing nationwide. “If you look at the past years, this has been a viable and vibrant practice,” he says. “If you look at the number of people doing hospital medicine, it’s a factor.”

For Holmboe, it also is a shift in how individuals are recognized based on their practice areas. “This is an acknowledgement by ABIM and the American Board of Medical Specialties to look at Maintenance of Certification in terms of what the individual actually does,” he explains. “Hospitalists play a very important role in the hospital.”

He also credits the leadership of the HM movement—especially pioneers like Robert Wachter, MD, FHM. One of HM’s most ardent champions, Dr. Wachter, chief of the hospital medicine division, professor, and associate chair of the Department of Medicine at the University of California at San Francisco, worked with ABIM to find a way to recognize hospitalists’ specialized skill sets and their commitment to inpatient medicine. After more than a decade of advocating for a board-certified process to recognize the field, Dr. Wachter, an ABIM board member, began receiving multiple text messages from colleagues announcing that ABIM had approved the focused-practice program. He wrote a post on his blog, Wachter’s World (www.wachtersworld.com), that outlined the need for the FPHM and the significance for aspiring hospitalists.

“In any case, this is an important milestone for the field,” Dr. Wachter wrote in his Sept. 23, 2009, blog entry, “Board Certification for Hospitalists: It’s Heeeere!” “In fact, when I first began speaking to groups of hospitalists nearly 15 years ago, I often showed a slide listing the elements of a true specialty, and one by one we’ve ticked them off,” wrote Dr. Wachter, a former SHM president. “The only unchecked box was recognition of the field as a legitimate ‘specialty,’ as codified by the ABMS board certification process.”

Unchecked, that is, until now.

In early 2011, the medical world will be introduced to the first internists recognized for their focus in HM. For Holmboe, the FPHM is the beginning of an even larger movement.

“The goal is continued interest: getting people involved in quality in their hospital and encouraging people to change behaviors and be recognized by patients and credentialists as valuable,” he says. “That’s the primary mission of ABIM: using certification to improve care.”

Fellow in Hospital Medicine Spotlight

O’Neil Pyke, MD, FHM

Dr. Pyke is a clinical instructor at Commonwealth Medical College and a medical director at the Wyoming Valley Health Care System in Wilkes-Barre, Pa. He also serves as a consultant for various hospitalist programs, most actively for his own private consulting company, AMP Hospitalist Consulting, which partners with Salem, N.H.-based physician staffing company Medicus Healthcare Solutions.

Undergraduate Education: Queens College, City University of New York, Flushing, N.Y.

Medical School: Ohio State University College of Medicine and Public Health, Columbus

Notable: Dr. Pyke was born in Jamaica and moved to New York during high school. He says he owes everything to his parents. His parents, who had no education beyond high school, pushed Dr. Pyke and his siblings to achieve more than they did. His sister is an OB-GYN and his brother is pursuing a medical degree.

FYI: Dr. Pyke enjoys playing golf, cheering for his beloved Ohio State Buckeyes, and spends every Friday night with his wife and two daughters—he even admits to watching “chick flicks” on family night.

For more information about the FHM designation, visit www.hospitalmedicine.org/fellows.

Requirements and Process

Shortly after the program’s approval, ABIM, which administers the FPHM program, went to work in defining the process for the FPHM application and building infrastructure to support the tests. Holmboe expects ABIM will be ready to process pre-applications by April or May. While some details may change, the FPHM application will dovetail with ABIM’s MOC process.

Although hospitalists’ MOC must be current in order to apply for FPHM, hospitalists can begin the FPHM application process at any time. Hospitalists do not need to wait until their next MOC renewal.

Before beginning the application process, hospitalists should ensure that they are eligible. ABIM requires FPHM candidates to have:

• A current or previous ABIM certification in internal medicine;
• A valid, unrestricted medical license and confirmation of good standing in the local practice community;
• ACLS certification; and
• At least three years of hospital medicine practice experience.

Candidates who meet the requirements can then begin the enrollment process by:

1. Submitting attestations. Both the hospitalist and a senior officer at the hospital must provide attestations that demonstrate the hospitalist’s experience in HM and his or her commitment to the principles of the specialty.
2. Performing a self-assessment. Hospitalists must quantify their experience in HM through an MOC self-assessment. Candidates must achieve at least 100 MOC points. Successful applicants must submit a new self-assessment every three years. The self-assessment can be conducted before or after the exam.
3. Taking the MOC examination in Hospital Medicine. Registration for the first HM examination will begin in May. The exam will be conducted in October, and diplomates can take the exam at any time in the process.

Passing the exam and completing the other requirements will earn ABIM diplomats recognition as “Board Certified in Internal Medicine with a Focused Practice in Hospital Medicine.” ABIM will notify successful applicants in late 2010 and ship personalized certificates in early 2011. TH

Brendon Shank is a freelance writer based in Philadelphia.

Like so many things in HM, the story of how hospitalists first learned about the focused practice program is a modern one.

It started with a text message, which led to a blog post, which reached thousands of readers, many of them hospitalists interested in how to bolster their bona fides in a specialty known for its explosive growth in recent years.

Now, hospitalists certified in internal medicine have the opportunity to reinforce their commitment to the specialty by maintaining their certification through the Focused Practice in Hospital Medicine pathway offered by the American Board of Internal Medicine (ABIM). The Focused Practice in Hospital Medicine (FPHM) Maintenance of Certification (MOC) program enables hospitalists to distinguish their practice within the larger specialty of internal medicine.

The Evolution of FPHM

The new pathway has been years in the making, and it reflects the growing influence of HM in healthcare, according to ABIM Chief Medical Officer Eric Holmboe, MD. He sees the FPHM as the result of a combination of factors, including the fact that the specialty now has more than 30,000 hospitalists practicing nationwide. “If you look at the past years, this has been a viable and vibrant practice,” he says. “If you look at the number of people doing hospital medicine, it’s a factor.”

For Holmboe, it also is a shift in how individuals are recognized based on their practice areas. “This is an acknowledgement by ABIM and the American Board of Medical Specialties to look at Maintenance of Certification in terms of what the individual actually does,” he explains. “Hospitalists play a very important role in the hospital.”

He also credits the leadership of the HM movement—especially pioneers like Robert Wachter, MD, FHM. One of HM’s most ardent champions, Dr. Wachter, chief of the hospital medicine division, professor, and associate chair of the Department of Medicine at the University of California at San Francisco, worked with ABIM to find a way to recognize hospitalists’ specialized skill sets and their commitment to inpatient medicine. After more than a decade of advocating for a board-certified process to recognize the field, Dr. Wachter, an ABIM board member, began receiving multiple text messages from colleagues announcing that ABIM had approved the focused-practice program. He wrote a post on his blog, Wachter’s World (www.wachtersworld.com), that outlined the need for the FPHM and the significance for aspiring hospitalists.

“In any case, this is an important milestone for the field,” Dr. Wachter wrote in his Sept. 23, 2009, blog entry, “Board Certification for Hospitalists: It’s Heeeere!” “In fact, when I first began speaking to groups of hospitalists nearly 15 years ago, I often showed a slide listing the elements of a true specialty, and one by one we’ve ticked them off,” wrote Dr. Wachter, a former SHM president. “The only unchecked box was recognition of the field as a legitimate ‘specialty,’ as codified by the ABMS board certification process.”

Unchecked, that is, until now.

In early 2011, the medical world will be introduced to the first internists recognized for their focus in HM. For Holmboe, the FPHM is the beginning of an even larger movement.

“The goal is continued interest: getting people involved in quality in their hospital and encouraging people to change behaviors and be recognized by patients and credentialists as valuable,” he says. “That’s the primary mission of ABIM: using certification to improve care.”

Fellow in Hospital Medicine Spotlight

O’Neil Pyke, MD, FHM

Dr. Pyke is a clinical instructor at Commonwealth Medical College and a medical director at the Wyoming Valley Health Care System in Wilkes-Barre, Pa. He also serves as a consultant for various hospitalist programs, most actively for his own private consulting company, AMP Hospitalist Consulting, which partners with Salem, N.H.-based physician staffing company Medicus Healthcare Solutions.

Undergraduate Education: Queens College, City University of New York, Flushing, N.Y.

Medical School: Ohio State University College of Medicine and Public Health, Columbus

Notable: Dr. Pyke was born in Jamaica and moved to New York during high school. He says he owes everything to his parents. His parents, who had no education beyond high school, pushed Dr. Pyke and his siblings to achieve more than they did. His sister is an OB-GYN and his brother is pursuing a medical degree.

FYI: Dr. Pyke enjoys playing golf, cheering for his beloved Ohio State Buckeyes, and spends every Friday night with his wife and two daughters—he even admits to watching “chick flicks” on family night.

For more information about the FHM designation, visit www.hospitalmedicine.org/fellows.

Requirements and Process

Shortly after the program’s approval, ABIM, which administers the FPHM program, went to work in defining the process for the FPHM application and building infrastructure to support the tests. Holmboe expects ABIM will be ready to process pre-applications by April or May. While some details may change, the FPHM application will dovetail with ABIM’s MOC process.

Although hospitalists’ MOC must be current in order to apply for FPHM, hospitalists can begin the FPHM application process at any time. Hospitalists do not need to wait until their next MOC renewal.

Before beginning the application process, hospitalists should ensure that they are eligible. ABIM requires FPHM candidates to have:

• A current or previous ABIM certification in internal medicine;
• A valid, unrestricted medical license and confirmation of good standing in the local practice community;
• ACLS certification; and
• At least three years of hospital medicine practice experience.

Candidates who meet the requirements can then begin the enrollment process by:

1. Submitting attestations. Both the hospitalist and a senior officer at the hospital must provide attestations that demonstrate the hospitalist’s experience in HM and his or her commitment to the principles of the specialty.
2. Performing a self-assessment. Hospitalists must quantify their experience in HM through an MOC self-assessment. Candidates must achieve at least 100 MOC points. Successful applicants must submit a new self-assessment every three years. The self-assessment can be conducted before or after the exam.
3. Taking the MOC examination in Hospital Medicine. Registration for the first HM examination will begin in May. The exam will be conducted in October, and diplomates can take the exam at any time in the process.

Passing the exam and completing the other requirements will earn ABIM diplomats recognition as “Board Certified in Internal Medicine with a Focused Practice in Hospital Medicine.” ABIM will notify successful applicants in late 2010 and ship personalized certificates in early 2011. TH

Brendon Shank is a freelance writer based in Philadelphia.

The amount and complexity of medical knowledge we need to keep up with is changing and growing at a remarkable rate. I was trained in an era in which it was taken as a given that congestive heart failure patients should not receive beta-blockers; now it is a big mistake if we don’t prescribe them in most cases. But even before starting medical school, most of us realize that things will change a lot, and many of us see that as a good thing. It keeps our work interesting. Just recently, our hospital had a guest speaker who talked about potential medical applications of nanotechnology. It was way over my head, but it sounded pretty cool.

While I was prepared for ongoing changes in medical knowledge, I failed to anticipate how quickly the business of medicine would change during my career. I think the need to keep up with ever-increasing financial and regulatory issues siphons a lot of time and energy that could be used to keep up with the medical knowledge base. I wasn’t prepared for this when I started my career.

Because it is the start of a new year, I thought I would highlight one issue related to CPT coding: Medicare stopped recognizing consult codes as of Jan. 1 (see “Consultation Elimination,” p. 31).

What It Means for Hospitalists

The good news is that we can just use initial hospital visit codes, inpatient or observation, for all new visits. For example, it won’t matter anymore whether I’m admitting and serving as attending for a patient, or whether a surgeon admitted the patient and asked me to consult for preoperative medical evaluation (“clearance”). I should use the same CPT code in either situation, simply appending a modifier if I’m the admitting physician. And for billing purposes, we won’t have to worry about documenting which doctor requested that we see the patient, though it is a good idea to document it as part of the clinical record anyway.

But it gets a little more complicated. The codes aren’t going away or being removed from the CPT “bible” published by the American Medical Association (AMA). Instead, Medicare simply won’t recognize them anymore. Other payors probably will follow suit within a few months, but that isn’t certain. So it is possible that when asked by a surgeon to provide a preoperative evaluation, you will need to bill an initial hospital (or office or nursing facility) care visit if the patient is on Medicare but bill a consult code if the patient has other insurance. You should check with your billers to ensure you’re doing this correctly.

Medicare-paid consults are at a slightly higher rate than the equivalent service billed as initial hospital care (e.g., when the hospitalist is attending). So a higher reimbursing code has been replaced with one that pays a little less. For example, a 99253 consultation code requires a detailed history, detailed examination, and medical decision-making of low complexity; last year, 99253 was reimbursed by Medicare at an average rate of $114.69. The equivalent admission code for a detailed history, detailed examination, and low-complexity medical decision-making is a 99221 code, for which Medicare pays about $99.90. This represents a difference of about 14%.

However, the net financial impact of this change probably will be positive for most HM groups because you probably bill very few initial consult codes, and instead were stuck billing a follow-up visit code when seeing co-management “consults” (i.e., a patient admitted by a surgeon who asks you to follow and manage diabetes and other medical issues). Now, at least in the case of Medicare, it is appropriate for us to bill an initial hospital visit code, which provides significantly higher reimbursement than follow-up codes.

In addition, there is a modest (about 0.3%) proposed increase in work relative value units attached to the initial hospital visit codes, which will benefit us not only when we’re consulting, but also when we admit and serve as a patient’s attending.

Some specialists may be less interested in consulting on our patients because the initial visit codes will reimburse a little less than similar consultation codes. I don’t anticipate this will be a significant problem for most of us, particularly since many specialists bill the highest level of consultation code (99255), which pays about the same as the equivalent admission code (99223).

Although I think elimination of the use of consultation codes seems like a reasonable step toward simplifying how hospitalists bill for our services, keeping up with these frequent coding changes requires a high level of diligence on our part, and on the part of our administrative and clerical staffs. And it consumes time and resources that I—and my team—could better spend keeping up with changes in clinical practice.

Perhaps when all the dust settles around the healthcare reform debate, we will begin to move toward new, more creative payment models that will allow us to focus on what we do best. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

The amount and complexity of medical knowledge we need to keep up with is changing and growing at a remarkable rate. I was trained in an era in which it was taken as a given that congestive heart failure patients should not receive beta-blockers; now it is a big mistake if we don’t prescribe them in most cases. But even before starting medical school, most of us realize that things will change a lot, and many of us see that as a good thing. It keeps our work interesting. Just recently, our hospital had a guest speaker who talked about potential medical applications of nanotechnology. It was way over my head, but it sounded pretty cool.

While I was prepared for ongoing changes in medical knowledge, I failed to anticipate how quickly the business of medicine would change during my career. I think the need to keep up with ever-increasing financial and regulatory issues siphons a lot of time and energy that could be used to keep up with the medical knowledge base. I wasn’t prepared for this when I started my career.

Because it is the start of a new year, I thought I would highlight one issue related to CPT coding: Medicare stopped recognizing consult codes as of Jan. 1 (see “Consultation Elimination,” p. 31).

What It Means for Hospitalists

The good news is that we can just use initial hospital visit codes, inpatient or observation, for all new visits. For example, it won’t matter anymore whether I’m admitting and serving as attending for a patient, or whether a surgeon admitted the patient and asked me to consult for preoperative medical evaluation (“clearance”). I should use the same CPT code in either situation, simply appending a modifier if I’m the admitting physician. And for billing purposes, we won’t have to worry about documenting which doctor requested that we see the patient, though it is a good idea to document it as part of the clinical record anyway.

But it gets a little more complicated. The codes aren’t going away or being removed from the CPT “bible” published by the American Medical Association (AMA). Instead, Medicare simply won’t recognize them anymore. Other payors probably will follow suit within a few months, but that isn’t certain. So it is possible that when asked by a surgeon to provide a preoperative evaluation, you will need to bill an initial hospital (or office or nursing facility) care visit if the patient is on Medicare but bill a consult code if the patient has other insurance. You should check with your billers to ensure you’re doing this correctly.

Medicare-paid consults are at a slightly higher rate than the equivalent service billed as initial hospital care (e.g., when the hospitalist is attending). So a higher reimbursing code has been replaced with one that pays a little less. For example, a 99253 consultation code requires a detailed history, detailed examination, and medical decision-making of low complexity; last year, 99253 was reimbursed by Medicare at an average rate of $114.69. The equivalent admission code for a detailed history, detailed examination, and low-complexity medical decision-making is a 99221 code, for which Medicare pays about $99.90. This represents a difference of about 14%.

However, the net financial impact of this change probably will be positive for most HM groups because you probably bill very few initial consult codes, and instead were stuck billing a follow-up visit code when seeing co-management “consults” (i.e., a patient admitted by a surgeon who asks you to follow and manage diabetes and other medical issues). Now, at least in the case of Medicare, it is appropriate for us to bill an initial hospital visit code, which provides significantly higher reimbursement than follow-up codes.

In addition, there is a modest (about 0.3%) proposed increase in work relative value units attached to the initial hospital visit codes, which will benefit us not only when we’re consulting, but also when we admit and serve as a patient’s attending.

Some specialists may be less interested in consulting on our patients because the initial visit codes will reimburse a little less than similar consultation codes. I don’t anticipate this will be a significant problem for most of us, particularly since many specialists bill the highest level of consultation code (99255), which pays about the same as the equivalent admission code (99223).

Although I think elimination of the use of consultation codes seems like a reasonable step toward simplifying how hospitalists bill for our services, keeping up with these frequent coding changes requires a high level of diligence on our part, and on the part of our administrative and clerical staffs. And it consumes time and resources that I—and my team—could better spend keeping up with changes in clinical practice.

Perhaps when all the dust settles around the healthcare reform debate, we will begin to move toward new, more creative payment models that will allow us to focus on what we do best. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

The amount and complexity of medical knowledge we need to keep up with is changing and growing at a remarkable rate. I was trained in an era in which it was taken as a given that congestive heart failure patients should not receive beta-blockers; now it is a big mistake if we don’t prescribe them in most cases. But even before starting medical school, most of us realize that things will change a lot, and many of us see that as a good thing. It keeps our work interesting. Just recently, our hospital had a guest speaker who talked about potential medical applications of nanotechnology. It was way over my head, but it sounded pretty cool.

While I was prepared for ongoing changes in medical knowledge, I failed to anticipate how quickly the business of medicine would change during my career. I think the need to keep up with ever-increasing financial and regulatory issues siphons a lot of time and energy that could be used to keep up with the medical knowledge base. I wasn’t prepared for this when I started my career.

Because it is the start of a new year, I thought I would highlight one issue related to CPT coding: Medicare stopped recognizing consult codes as of Jan. 1 (see “Consultation Elimination,” p. 31).

What It Means for Hospitalists

The good news is that we can just use initial hospital visit codes, inpatient or observation, for all new visits. For example, it won’t matter anymore whether I’m admitting and serving as attending for a patient, or whether a surgeon admitted the patient and asked me to consult for preoperative medical evaluation (“clearance”). I should use the same CPT code in either situation, simply appending a modifier if I’m the admitting physician. And for billing purposes, we won’t have to worry about documenting which doctor requested that we see the patient, though it is a good idea to document it as part of the clinical record anyway.

But it gets a little more complicated. The codes aren’t going away or being removed from the CPT “bible” published by the American Medical Association (AMA). Instead, Medicare simply won’t recognize them anymore. Other payors probably will follow suit within a few months, but that isn’t certain. So it is possible that when asked by a surgeon to provide a preoperative evaluation, you will need to bill an initial hospital (or office or nursing facility) care visit if the patient is on Medicare but bill a consult code if the patient has other insurance. You should check with your billers to ensure you’re doing this correctly.

Medicare-paid consults are at a slightly higher rate than the equivalent service billed as initial hospital care (e.g., when the hospitalist is attending). So a higher reimbursing code has been replaced with one that pays a little less. For example, a 99253 consultation code requires a detailed history, detailed examination, and medical decision-making of low complexity; last year, 99253 was reimbursed by Medicare at an average rate of $114.69. The equivalent admission code for a detailed history, detailed examination, and low-complexity medical decision-making is a 99221 code, for which Medicare pays about $99.90. This represents a difference of about 14%.

However, the net financial impact of this change probably will be positive for most HM groups because you probably bill very few initial consult codes, and instead were stuck billing a follow-up visit code when seeing co-management “consults” (i.e., a patient admitted by a surgeon who asks you to follow and manage diabetes and other medical issues). Now, at least in the case of Medicare, it is appropriate for us to bill an initial hospital visit code, which provides significantly higher reimbursement than follow-up codes.

In addition, there is a modest (about 0.3%) proposed increase in work relative value units attached to the initial hospital visit codes, which will benefit us not only when we’re consulting, but also when we admit and serve as a patient’s attending.

Some specialists may be less interested in consulting on our patients because the initial visit codes will reimburse a little less than similar consultation codes. I don’t anticipate this will be a significant problem for most of us, particularly since many specialists bill the highest level of consultation code (99255), which pays about the same as the equivalent admission code (99223).

Although I think elimination of the use of consultation codes seems like a reasonable step toward simplifying how hospitalists bill for our services, keeping up with these frequent coding changes requires a high level of diligence on our part, and on the part of our administrative and clerical staffs. And it consumes time and resources that I—and my team—could better spend keeping up with changes in clinical practice.

Perhaps when all the dust settles around the healthcare reform debate, we will begin to move toward new, more creative payment models that will allow us to focus on what we do best. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

There is no doubt we are getting healthcare reform, and in the end, Democrats will declare victory for the first meaningful progress since the 1960s, when Medicare and Medicaid were passed. Of course, in the interim, we have had legislation facilitating the development of HMOs under President Nixon and a senior pharmacy benefit under President George W. Bush, but many presidents have flailed at taking a crack at making major changes.

Republicans will declare victory, too, for stopping many bad ideas and trying to hold the line on costs. And everyone will complain about all the things that are not in the bill President Obama will sign this year.

And everyone will be right.

One Out of Three

To oversimplify things, all of the talk about healthcare reform has focused on three main areas:

• Increasing access for the uninsured and underinsured;
• Reigning in healthcare costs; and
• Designing a new system that rewards performance and safety.

At best, all we are getting is a down payment on access—and it will come with a substantial cost.

But what we are more likely beginning is an unraveling of business as usual and a reshuffling of the deck—and some key stakeholders won’t like the cards they will be dealt. The best way to think of what is happening in 2010 is that this is the first step toward having the healthcare system we will have in 2020.

Civic Obligation

It is a national embarrassment for the U.S. to be the only developed country that has not come up with a solution that offers most of its citizens access to healthcare. As a culture, we have decided that every child deserves a free education, that all families should have access to fire and police protection, and that we all should have access to due process and “an attorney who will be appointed to you if you cannot afford one.”

But right now in our country, about 47 million people live sicker and die quicker because of a healthcare system that doesn’t include them. A more sorry aspect is the “underinsured,” the constantly employed person with “good” insurance who is unfortunate enough to be diagnosed with cancer only to find out that their $1 million lifetime benefit runs out in year two or three. Those families face the tough choices between bankruptcy and foreclosure, or allowing Mom or Dad to give up another year or two or three of life. Is this the America we are living in?

Reform, Part I

To get this partial loaf of healthcare reform, Obama and Congressional leaders had to be creative. What has torpedoed previous efforts has been the vast power and reach of large, well-funded stakeholders who see any change as a threat and take a “what’s in it for me” approach. These industries have not been shy about using power and money to influence Congress and the White House, and even more insidiously have gone “direct” with advertisements and commentators who use “Harry and Louise” tactics to frighten an underinformed public about this complex process.

But this time, Obama promised the doctors, the insurance industry, the pharmaceutical companies, the hospitals, the device-makers, and just about anybody who would listen that “they” would not be hurt by these reforms. In fact, in the access discussion for many of these stakeholders, the initial result would be 47 million more customers paying for healthcare products and services. Is it any wonder that the price tag must go up, and by trillions of dollars?

It is the price of admission, at least to get the ball rolling. Now we all are in the box. With a price tag approaching $3 trillion a year, and an aging population and a taxpaying workforce shrinking relative to those they must support with entitlements (think Medicare and Social Security), the die is cast for “Healthcare Reform: The Sequel.”

Trust me—the next round of change will be more cataclysmic. In the aggregate, physicians will make less than the nearly $500 billion we make now. Sure, the primary-care physicians (PCPs) and lower-paid specialties might not be hit (and could even move up), but some physicians will see a marked change in their compensation.

Hospitals will need to adapt as well. They must become more efficient. We saw this in California, Washington, Oregon, Massachusetts, and elsewhere, as capitation and managed care ratcheted down on the old “cost-plus” payment method and moved the industry to reward value and efficiency. Those who are efficient and effective will do very well. Those who have lived by just doing more and more without demonstrating their performance or achieving standards will suffer and be dissatisfied.

More Reforms Possible

The future of the insurance industry will be very different as well, maybe because of government’s more intrusive role (think Medicare for most people) or by evolving to a model like Germany’s, where 200 nonprofit insurance companies compete for business. We will demand that insurance companies return $0.95 on the dollar for patient care, not $0.75 or less, as is common practice today.

Device-makers and Big Pharma might start to see a glimpse into the future as comparative-effectiveness research looks at the value of new, expensive technology and advances in treatments. As medications become “included” in the standard benefits bundle, just like physician fees and hospitalizations, we will see a relentless push downward on pricing. Drugs will become just one more line item to be budgeted for, especially if MedPAC and Congress are involved. We will get what we can afford, not everything that is possible or available.

Because this is 21st-century America, under the cacophony of Glenn Beck and Keith Olbermann and Rush Limbaugh and Rachel Maddow, the potential losers will be loud. They will trumpet any fact or pseudo-fact to alarm the populace. Phrases like “government takeover” and “you will lose the great healthcare you have,” and “death squads” and “illegal immigrants” and “back to 19th-century healthcare,” will bounce around the 24-hour news cycle. They will make real, positive change difficult.

But the beauty of what we are passing now, in 2010, is that the train is leaving the station. We are burning the boats. The healthcare system shakeup officially is under way. There is no turning back.

HM was not borne of a new law or mandate. We are an innovation of a system that must change and evolve. And while HM is not all it eventually will be, there are hints of what we can become. For a new healthcare system that offers greater access and is grounded in documented performance and efficiency, HM will be a solution for hospitals with hospitalist groups.

A lot of uncertainty remains out there, and the next decade promises to be even more turbulent, but hospitalists are as well positioned as any stakeholder in healthcare.

We are ready to be an active, contributing, and solution-oriented profession that will add value to our patients and our healthcare communities.

Stay tuned. TH

Dr. Wellikson is CEO of SHM.

There is no doubt we are getting healthcare reform, and in the end, Democrats will declare victory for the first meaningful progress since the 1960s, when Medicare and Medicaid were passed. Of course, in the interim, we have had legislation facilitating the development of HMOs under President Nixon and a senior pharmacy benefit under President George W. Bush, but many presidents have flailed at taking a crack at making major changes.

Republicans will declare victory, too, for stopping many bad ideas and trying to hold the line on costs. And everyone will complain about all the things that are not in the bill President Obama will sign this year.

And everyone will be right.

One Out of Three

To oversimplify things, all of the talk about healthcare reform has focused on three main areas:

• Increasing access for the uninsured and underinsured;
• Reigning in healthcare costs; and
• Designing a new system that rewards performance and safety.

At best, all we are getting is a down payment on access—and it will come with a substantial cost.

But what we are more likely beginning is an unraveling of business as usual and a reshuffling of the deck—and some key stakeholders won’t like the cards they will be dealt. The best way to think of what is happening in 2010 is that this is the first step toward having the healthcare system we will have in 2020.

Civic Obligation

It is a national embarrassment for the U.S. to be the only developed country that has not come up with a solution that offers most of its citizens access to healthcare. As a culture, we have decided that every child deserves a free education, that all families should have access to fire and police protection, and that we all should have access to due process and “an attorney who will be appointed to you if you cannot afford one.”

But right now in our country, about 47 million people live sicker and die quicker because of a healthcare system that doesn’t include them. A more sorry aspect is the “underinsured,” the constantly employed person with “good” insurance who is unfortunate enough to be diagnosed with cancer only to find out that their $1 million lifetime benefit runs out in year two or three. Those families face the tough choices between bankruptcy and foreclosure, or allowing Mom or Dad to give up another year or two or three of life. Is this the America we are living in?

Reform, Part I

To get this partial loaf of healthcare reform, Obama and Congressional leaders had to be creative. What has torpedoed previous efforts has been the vast power and reach of large, well-funded stakeholders who see any change as a threat and take a “what’s in it for me” approach. These industries have not been shy about using power and money to influence Congress and the White House, and even more insidiously have gone “direct” with advertisements and commentators who use “Harry and Louise” tactics to frighten an underinformed public about this complex process.

But this time, Obama promised the doctors, the insurance industry, the pharmaceutical companies, the hospitals, the device-makers, and just about anybody who would listen that “they” would not be hurt by these reforms. In fact, in the access discussion for many of these stakeholders, the initial result would be 47 million more customers paying for healthcare products and services. Is it any wonder that the price tag must go up, and by trillions of dollars?

It is the price of admission, at least to get the ball rolling. Now we all are in the box. With a price tag approaching $3 trillion a year, and an aging population and a taxpaying workforce shrinking relative to those they must support with entitlements (think Medicare and Social Security), the die is cast for “Healthcare Reform: The Sequel.”

Trust me—the next round of change will be more cataclysmic. In the aggregate, physicians will make less than the nearly $500 billion we make now. Sure, the primary-care physicians (PCPs) and lower-paid specialties might not be hit (and could even move up), but some physicians will see a marked change in their compensation.

Hospitals will need to adapt as well. They must become more efficient. We saw this in California, Washington, Oregon, Massachusetts, and elsewhere, as capitation and managed care ratcheted down on the old “cost-plus” payment method and moved the industry to reward value and efficiency. Those who are efficient and effective will do very well. Those who have lived by just doing more and more without demonstrating their performance or achieving standards will suffer and be dissatisfied.

More Reforms Possible

The future of the insurance industry will be very different as well, maybe because of government’s more intrusive role (think Medicare for most people) or by evolving to a model like Germany’s, where 200 nonprofit insurance companies compete for business. We will demand that insurance companies return $0.95 on the dollar for patient care, not $0.75 or less, as is common practice today.

Device-makers and Big Pharma might start to see a glimpse into the future as comparative-effectiveness research looks at the value of new, expensive technology and advances in treatments. As medications become “included” in the standard benefits bundle, just like physician fees and hospitalizations, we will see a relentless push downward on pricing. Drugs will become just one more line item to be budgeted for, especially if MedPAC and Congress are involved. We will get what we can afford, not everything that is possible or available.

Because this is 21st-century America, under the cacophony of Glenn Beck and Keith Olbermann and Rush Limbaugh and Rachel Maddow, the potential losers will be loud. They will trumpet any fact or pseudo-fact to alarm the populace. Phrases like “government takeover” and “you will lose the great healthcare you have,” and “death squads” and “illegal immigrants” and “back to 19th-century healthcare,” will bounce around the 24-hour news cycle. They will make real, positive change difficult.

But the beauty of what we are passing now, in 2010, is that the train is leaving the station. We are burning the boats. The healthcare system shakeup officially is under way. There is no turning back.

HM was not borne of a new law or mandate. We are an innovation of a system that must change and evolve. And while HM is not all it eventually will be, there are hints of what we can become. For a new healthcare system that offers greater access and is grounded in documented performance and efficiency, HM will be a solution for hospitals with hospitalist groups.

A lot of uncertainty remains out there, and the next decade promises to be even more turbulent, but hospitalists are as well positioned as any stakeholder in healthcare.

We are ready to be an active, contributing, and solution-oriented profession that will add value to our patients and our healthcare communities.

Stay tuned. TH

Dr. Wellikson is CEO of SHM.

There is no doubt we are getting healthcare reform, and in the end, Democrats will declare victory for the first meaningful progress since the 1960s, when Medicare and Medicaid were passed. Of course, in the interim, we have had legislation facilitating the development of HMOs under President Nixon and a senior pharmacy benefit under President George W. Bush, but many presidents have flailed at taking a crack at making major changes.

Republicans will declare victory, too, for stopping many bad ideas and trying to hold the line on costs. And everyone will complain about all the things that are not in the bill President Obama will sign this year.

And everyone will be right.

One Out of Three

To oversimplify things, all of the talk about healthcare reform has focused on three main areas:

• Increasing access for the uninsured and underinsured;
• Reigning in healthcare costs; and
• Designing a new system that rewards performance and safety.

At best, all we are getting is a down payment on access—and it will come with a substantial cost.

But what we are more likely beginning is an unraveling of business as usual and a reshuffling of the deck—and some key stakeholders won’t like the cards they will be dealt. The best way to think of what is happening in 2010 is that this is the first step toward having the healthcare system we will have in 2020.

Civic Obligation

It is a national embarrassment for the U.S. to be the only developed country that has not come up with a solution that offers most of its citizens access to healthcare. As a culture, we have decided that every child deserves a free education, that all families should have access to fire and police protection, and that we all should have access to due process and “an attorney who will be appointed to you if you cannot afford one.”

But right now in our country, about 47 million people live sicker and die quicker because of a healthcare system that doesn’t include them. A more sorry aspect is the “underinsured,” the constantly employed person with “good” insurance who is unfortunate enough to be diagnosed with cancer only to find out that their $1 million lifetime benefit runs out in year two or three. Those families face the tough choices between bankruptcy and foreclosure, or allowing Mom or Dad to give up another year or two or three of life. Is this the America we are living in?

Reform, Part I

To get this partial loaf of healthcare reform, Obama and Congressional leaders had to be creative. What has torpedoed previous efforts has been the vast power and reach of large, well-funded stakeholders who see any change as a threat and take a “what’s in it for me” approach. These industries have not been shy about using power and money to influence Congress and the White House, and even more insidiously have gone “direct” with advertisements and commentators who use “Harry and Louise” tactics to frighten an underinformed public about this complex process.

But this time, Obama promised the doctors, the insurance industry, the pharmaceutical companies, the hospitals, the device-makers, and just about anybody who would listen that “they” would not be hurt by these reforms. In fact, in the access discussion for many of these stakeholders, the initial result would be 47 million more customers paying for healthcare products and services. Is it any wonder that the price tag must go up, and by trillions of dollars?

It is the price of admission, at least to get the ball rolling. Now we all are in the box. With a price tag approaching $3 trillion a year, and an aging population and a taxpaying workforce shrinking relative to those they must support with entitlements (think Medicare and Social Security), the die is cast for “Healthcare Reform: The Sequel.”

Trust me—the next round of change will be more cataclysmic. In the aggregate, physicians will make less than the nearly $500 billion we make now. Sure, the primary-care physicians (PCPs) and lower-paid specialties might not be hit (and could even move up), but some physicians will see a marked change in their compensation.

Hospitals will need to adapt as well. They must become more efficient. We saw this in California, Washington, Oregon, Massachusetts, and elsewhere, as capitation and managed care ratcheted down on the old “cost-plus” payment method and moved the industry to reward value and efficiency. Those who are efficient and effective will do very well. Those who have lived by just doing more and more without demonstrating their performance or achieving standards will suffer and be dissatisfied.

More Reforms Possible

The future of the insurance industry will be very different as well, maybe because of government’s more intrusive role (think Medicare for most people) or by evolving to a model like Germany’s, where 200 nonprofit insurance companies compete for business. We will demand that insurance companies return $0.95 on the dollar for patient care, not $0.75 or less, as is common practice today.

Device-makers and Big Pharma might start to see a glimpse into the future as comparative-effectiveness research looks at the value of new, expensive technology and advances in treatments. As medications become “included” in the standard benefits bundle, just like physician fees and hospitalizations, we will see a relentless push downward on pricing. Drugs will become just one more line item to be budgeted for, especially if MedPAC and Congress are involved. We will get what we can afford, not everything that is possible or available.

Because this is 21st-century America, under the cacophony of Glenn Beck and Keith Olbermann and Rush Limbaugh and Rachel Maddow, the potential losers will be loud. They will trumpet any fact or pseudo-fact to alarm the populace. Phrases like “government takeover” and “you will lose the great healthcare you have,” and “death squads” and “illegal immigrants” and “back to 19th-century healthcare,” will bounce around the 24-hour news cycle. They will make real, positive change difficult.

But the beauty of what we are passing now, in 2010, is that the train is leaving the station. We are burning the boats. The healthcare system shakeup officially is under way. There is no turning back.

HM was not borne of a new law or mandate. We are an innovation of a system that must change and evolve. And while HM is not all it eventually will be, there are hints of what we can become. For a new healthcare system that offers greater access and is grounded in documented performance and efficiency, HM will be a solution for hospitals with hospitalist groups.

A lot of uncertainty remains out there, and the next decade promises to be even more turbulent, but hospitalists are as well positioned as any stakeholder in healthcare.

We are ready to be an active, contributing, and solution-oriented profession that will add value to our patients and our healthcare communities.

Stay tuned. TH

Dr. Wellikson is CEO of SHM.