JOINT NEGOTIATION LAWS PROMISE UNFULFILLED

One of the highest legislative priorities of physician organizations is the passage of legislation to allow physicians to jointly negotiate contract terms with health plans.  This year legislation is pending in the United States Congress and was considered in twelve states and the District of Columbia (AK, AZ, CA, CT, DC, IL, MA, NJ, NY, OH, RI and TN). 

The bill in the U.S. Congress, H.R. 3897, is still in committee and as of June 1 has 42 co-sponsors.  A joint negotiation bill in the last Congress passed out of the House of Representatives but failed to obtain a sponsor in the Senate.  

The Governor of New Jersey signed joint negotiation legislation into law in January of 2002.  In Alaska the bill has passed both Houses and awaits action by the Governor. If the bill in Alaska is signed into law, Alaska will join Washington, Texas and New Jersey as the only states that empower physicians to negotiate jointly.  The laws in New Jersey and Texas allow physicians to negotiate fees while the laws in Alaska and Washington limit the negotiation to quality of care issues.

Joint negotiation legislation is needed for two reasons:  first, to counteract the uneven bargaining power between individual physicians and large health plans and second, to provide an exemption from the federal Sherman Antitrust Act.  Without an exemption physicians who discuss contract terms with one another are guilty of price fixing under federal law.  If a bill passes in Congress it would carve out the exemption from the Sherman Act itself.

The United States Supreme Court has given the states the ability to exempt activities from federal antitrust law by creating a “state action” exemption.  If a state clearly enacts policy declaring that it is in the public’s interest for citizens to engage in activities that would violate the federal antitrust laws and if the state actively oversees these activities then there will be no federal offense.

To qualify for the “state action” exemption, joint negotiation bills must require the state Attorney General to approve each step of the joint negotiation process: approval of the physician group, approval of the request to negotiate and approval of the final contract.

The laws allow physicians to jointly negotiate quality of care and administrative issues in the provider contract, such as definition of medical necessity, referral procedures, utilization criteria, and the method of payment.  The Texas and New Jersey laws also allow negotiation over the amount of reimbursement for specific procedures if the Attorney General concludes that the health plan has “substantial market power.”  This is usually defined in terms of a plan insuring a certain percentage of covered lives in the relevant geographic region, though in New Jersey substantial market power is undefined.

Third, questions can arise regarding who owns data that clients have entered into the ASP’s computers.  Finally, practices and ASPs all need to consider the implications of Title II of HIPAA, which focuses on the privacy and security of confidential patient information.

An orthopaedic practice interested in pursuing a business arrangement with an ASP should engage in due diligence regarding the financial stability of every company it is considering doing business with.  The practice should also develop a request for proposal (RFP) regarding the scope and cost of needed services.  Finally, the practice should be certain to solicit and check references from the selected ASP before signing any agreement, and the agreement itself should be carefully reviewed by an attorney.  

THE CPT PROCESS

Have you ever wondered how codes are added, changed, or deleted in the Physicians’ Current Procedural Terminology (CPT)?  The American Medical Association (AMA) has developed a process to ensure CPT is updated to reflect current medical practice.  Below is a brief history and summary of this well-refined process.

The AMA developed the CPT system in 1966 to encourage the use of standard terms and descriptors in the medical record.  CPT provided a uniform language that described medical, surgical, and diagnostic procedures and services.  CPT evolved into a system that provided a method to quickly and accurately communicate information to physicians, patients, and payers.

Now, the AMA’s CPT Editorial Panel meets quarterly to review, revise, and update CPT.  The Panel has 16 physician members who represent a variety of viewpoints from various medical specialties, hospitals, the insurance industry, and the Centers for Medicare and Medicaid Services (CMS). 

To assist the CPT Editorial Panel in maintaining CPT, the CPT Advisory Committee was established to: 

1)       serve as a resource to the CPT Editorial Panel by giving advice on procedure coding and appropriate nomenclature;

2)       provide documentation to AMA staff and the CPT Editorial Panel regarding the medical appropriateness of various medical and surgical procedures under consideration for inclusion in CPT;

3)       suggest revisions to CPT;

4)       assist in the review and development of coding issues;

5)       prepare technical education material and articles pertaining to CPT; and

6)       promote and educate health care providers on the use and benefits of CPT.

The process to add a new code, change an existing code, or delete an unwanted code is complex.  However, physicians, medical specialty societies, and state medical associations should submit proposals to ensure that CPT reflects current medical practice. 

Over the years, the AAOS CPT Coding Committee has successfully submitted numerous orthopaedic codes that have been included in CPT.  The AAOS CPT Coding Committee has a vast wealth of experience with the CPT process and strongly recommends that orthopaedic surgeons contact and work with the AAOS CPT Coding Committee in developing any code proposals that are submitted to the CPT Editorial Board.

2003 HUMANITARIAN AWARD

Applications for the American Academy of Orthopaedic Surgeons’ 2003 Humanitarian Award are currently being accepted.  The Humanitarian Award recognizes orthopaedic surgeons who have distinguished themselves through outstanding musculoskeletal-related humanitarian activities in the U.S. or abroad.  Examples of humanitarian efforts eligible for this award include:

·         Championing the rights of the physically disabled

·         Staffing outreach clinics for the underserved U.S. populations

·         Overseas medical service

·         Leadership in disaster relief

·         Fund raising for summer camps for the physically disabled

The AAOS seeks to honor the outstanding humanitarian works of orthopaedic surgeons through this award.  The 2003 Humanitarian Award will be presented at the Opening Ceremony of the 2003 AAOS Annual Meeting in New Orleans, Louisiana.  The recipient of this award will receive a $5000 donation to his or her chosen cause. 

The deadline for applications for the 2003 Humanitarian Award is August 31, 2002.  Please contact Joyce Knauss at the AAOS (847-384-4334) for more information.

The main problem with the joint negotiation laws is that the health plan is not required to participate.  The physicians can request the health plan to bargain with them collectively, but they have no power to force them to do so.  For this reason there have been no joint negotiations in any state.  Until a way is found to require health plans to participate in joint negotiations, these laws will be theoretically beneficial to physicians, but practically useless.     

THE APPLICATION SERVICE PROVIDER (ASP) BUSINESS MODEL

An innovative approach to conducting business that has been used for years in a number of industries is increasingly making inroads in the healthcare field, including orthopaedic offices.  The Application Service Provider (ASP) model allows offices to gain access to and utilize practice management software owned by third parties via the Internet.  The third party ASP can either be a company offering its own product(s) or an intermediary that offers one or more products developed by other organizations.

The practice management software typically resides on a computer maintained by the third party either at its location or a remote site.  Physicians and staff at the practice (and sometimes patients as well) gain access to the software via a secured connection.  It is usually the ASP’s responsibility to ensure the integrity of the software, to develop and implement software upgrades as they are needed, to store data on behalf of each client, and to maintain the network connections. 

Products currently offered by ASPs over the Internet include accounts payable, patient accounts management (billing and collections), capitation analysis, electronic medical records (EMR), coding assistance, payer contract management, patient education, disease/outcomes management, messaging, and inventory control. 

For orthopaedists, a key benefit of the ASP model is reduced cost in terms of the upfront capital expenditure and day-to-day operations.  Another advantage is that, because ASP services are Internet-based, the implementation process can be streamlined and software updates can be offered more quickly than would otherwise be the case.  Finally, orthopaedic practice managers do not need to worry about how best to plan for expansion, either in terms of number of users or amount of information to be processed and stored. 

The ASP industry is in its infancy, however, and the ASP model is not free from problems.  In the first place, there is a great deal of vendor instability, and companies that are aggressively soliciting business one day may be out of business the next. 

Second, since ASPs typically contract with multiple clients, their ability to tailor their software to one client’s specific needs may be limited. 

The Advisory Committee meets annually to discuss various coding issues that arise under CPT.  Advisory Committee members are usually physicians nominated by national medical specialty societies that are represented in the AMA House of Delegates.  Thus, the composition of the Advisory Committee closely mirrors national medical specialty society representation in the AMA House of Delegates. 

Anyone may submit a CPT proposal to the CPT Editorial Panel.  However, prior to submitting a proposal you should consider the following questions:

1)     Is the suggested code a fragmentation of an existing

        procedure/service?

2)       Can the suggested code be reported by using two or more existing codes?

3)       Does the suggested code represent a distinct service?

4)       Is the suggested code merely a means to report extraordinary circumstances related to the performance of a code already included in CPT?

If a code proposal is still warranted after considering these preliminary questions, a proposal may be submitted to the CPT Editorial Panel.  The Panel has a specific format for coding proposals.  Some of the information on the proposal includes:

1)       complete description of the procedure (e.g., describe in detail the skill and time involved.  If the code proposal is for a surgical procedure, include an operative report that describes the procedure in detail);

2)       a clinical vignette which describes the typical patient and work provided by the physician;

3)       copy(s) of peer reviewed articles published in U.S. journals indicating the safety and effectiveness of the procedure, as well as the frequency with which the procedure is performed; and

4)       copy(s) of additional published literature which further explains the request (e.g. practice parameters/guidelines or policy statements on the procedure).

Once a coding proposal has been submitted, the CPT Editorial Panel staff will then review and evaluate the proposal.  If the Editorial Panel has not previously addressed the issue(s) raised in the coding proposal, the CPT Advisory Committee reviews the proposal.  If the CPT Advisory Committee supports the proposal, the proposal is put on the Editorial Panel agenda for discussion.  The Editorial Panel can then accept, table, or reject a proposal.

The entire proposal review process can take several months.  Thus, if you want to see a new code in CPT, it is imperative to submit code proposals early and to comply with all Editorial Panel deadlines.  New CPT codes are published every year and CMS implements the new codes January 1 of each year.

OREF’S TOP 25 FUNDED INSTITUTIONS

1955 – 2002

Since 1955, the Orthopaedic Research and Education Foundation has funded more than $47.5 million to young and new investigators through more than 1,600 grants for quality, peer-reviewed research and education programs.  Below is a listing of U.S. institutions that have benefited from the Foundation’s funding.

INSTITUTION                                                           NUMBER

Case Western Reserve University                                               47

Children's Hospital, Boston                                                          14

Columbia Presbyterian Medical Center                                       26

Duke University                                                                              21

Hospital for Special Surgery                                                         34

Johns Hopkins University                                                             22

Mayo Clinic                                                                                     30

New York University-Hospital for Joint Diseases                     14

Rush-Presbyterian-St. Luke's Medical Center                            16

University of California at Los Angeles                                      26

University of California at San Diego                                          22

University of California at San Francisco                                   27

University of Iowa                                                                          30

University of Michigan                                                                  17

University of Minnesota                                                               20

University of North Carolina at Chapel Hill                                17

University of Pennsylvania                                                           41

University of Pittsburgh                                                                17

University of Rochester                                                                 15

University of Vermont                                                                    14

University of Virginia                                                                     25

University of Washington                                                            49

Vanderbilt University                                                                     16

Wake Forest University                                                                   8

Washington University School of Medicine                             24

Of the 274 grant applications received in 2001 (totaling over $14.7 million), OREF was able to fund 102 grants and awards (totaling $3.2 million) for 2002. Grant applications for 2003 are currently available through August 1^st on the OREF Web site: http://www.oref.org.