OIG Approves ASC Joint Venture between Hospital and Surgeons
The Office of Inspector General (OIG) of the Department of Health and Human Services issued an advisory opinion sanctioning a joint venture arrangement between a group of orthopedic surgeons and a hospital to form an ambulatory surgery center (ASC). The requestors of the opinion sought the OIGs input on whether the proposed arrangement would violate the anti-kickback statute, which prohibits giving or receiving any remuneration in exchange for the referral of patients to receive items or services reimbursable under any federal health care program.
The agency has developed a number of safe harbors for arrangements that could technically violate the prohibition but that contain enough safeguards that they are unlikely to result in fraud or abuse. The proposed arrangement does not meet the relevant safe harbor for ASC joint ventures between hospitals and physicians for three reasons: 1) the hospital would be in a position to make referrals to the ASC and the surgeon investors; 2) the physicians would not hold their interests in the ASC directly but through a limited liability company; and 3) the hospital and the surgeons could potentially receive different returns on their investments. The OIG analyzed the arrangement and the safeguards the parties had built into their agreement. It determined that the risk of abuse would be low, and it would therefore not impose sanctions on the parties involved.
As with all advisory opinions, the analysis in this case is limited to the requestors of the opinion and cannot be relied upon by other parties.
BCBS of Louisiana Changes Their Reimbursement for Anesthesia
Blue Cross Blue Shield (BCBS) of Louisiana has recently begun holding meetings with Anesthesiologists across the state to discuss how they (BCBS) plan to change the reimbursement for anesthesia services. BCBS has indicated that they plan to increase the unit rate for anesthesia services. But, the other changes that come along with this proposed rate increase have the potential of putting BCBS at the very bottom of the commercial payers relative to the paid per unit reimbursement.
BCBS Reimbursement goals
- To more accurately reimburse the multiple anesthesia providers that participate during a surgical case.
- To gain similar clinical documentation as Medicare for the BCBS patient population.
- To increase the anesthesia reimbursement to physicians.
The Price for Increased Reimbursement
In exchange for increasing the anesthesia reimbursement rate to anesthesia providers, BCBS is proposing the following clinical documentation and claims filing requirements:
- Anesthesia providers (MDs, CRNAs & AAs) would be required to submit claims using modifiers that indicate which members of the care team participated in the surgical case.
- The guidelines that are currently used by Medicare Intermediaries for the qualification of Medical Direction of CRNAs and AAs by a physician would be employed for BCBS patients.
- A ratio would be implemented for physician to CRNAs or AAs during medical direction. It appears that BCBS would lower reimbursement for non-medically directed cases, similar to Medicare’s rules.
- BCBS would implement a split reimbursement schedule for all claims that have multiple providers participating in the case.
What’s the Impact for a Typical Anesthesia Group
Each anesthesia group should perform an analysis to determine the potential impact that these changes will have on their group practice. Based on what we currently know, the most basic analysis would be a comparison of the revenues from BCBS over the past twelve (12) months against the expected revenue under the proposed changes. I suggest that each practice calculate the split and unit rate that will allow for the group to breakeven under the newly proposed reimbursement. Most of the groups that I have estimated the impact for will break-even under the proposed changes if the split is 75/25 using a $54 unit rate. This is before you factor in a potential wild card.
The Wild Card
The wild card in this newly proposed reimbursement is the requirement to medically direct BCBS cases and use a ratio (4:1) when medically directing CRNAs and AAs. This single change has the potential to negatively affect the way anesthesia group’s staff and carry out their daily cases. The additional documentation and tighter medical direction requirements will not insure improved quality of anesthesia care. However, the changes will drive up the cost of anesthesia services due to the increased staffing required to meet the medical direction qualifications. The sample BCBS impact analysis above has Not taken into consideration a lowered reimbursement for those cases not medically directed by a physician.
What a Win-Win Looks Like
Win-win situations do not occur when one party leaves with all the marbles. A Win-Win for BCBS and anesthesia groups might look something like this:
|
BCBS Wins |
Anesthesia Groups Wins |
| Split reimbursement for each provider (MD & CRNA). | Anesthesia providers receive a 75/25 (MD/CRNA) split. |
| BCBS reimburses all cases using the same split without regard to medical direction. | Anesthesia providers receive a unit rate of $54 or higher. |
| BCBS agrees to make the changes budget neutral for the anesthesia groups for the next 18 months. | Anesthesia providers receive an automatic rate adjustment no later than 18 months following this proposed change. |
If a reasonable Win-Win is not achieved between BCBS and the anesthesia groups, the hospital can expect to receive a request for additional financial support for the anesthesia group.
Summary
Change is coming… those anesthesia group practices that are most knowledgeable about the proposed changes and how they will impact their group, will be in a better position to negotiate a favorable contract with one of the largest commercial payer in the market. For the rest of the US, be prepared for similar reimbursement changes by other BCBS state plans.
