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When Carol Pak-Teng, M.D., an emergency room doctor in New Jersey, hosted a fundraiser in December for Democratic freshman Rep. Tom Malinowski, her guests, mostly doctors, were pleased when she steered the conversation to surprise medical bills.

This was a chance to send a message to Washington that any surprise billing legislation should protect doctors’ incomes in their battle over payments with insurers. Lawmakers are grappling over several approaches to curtail the practice, which can leave patients on the hook for huge medical bills, even if they have insurance.

As Congress begins its 2020 legislative session, there is evidence the doctors’ message has been received: The bills with the most momentum are making more and more concessions to physicians.

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

As surprise medical billing has emerged as a hot-button issue for voters, doctors, hospitals and insurers have been lobbying to protect their own money flows. All that lobbying meant nothing got passed last year.

Television and internet ads are the most visible manifestation of the battle. But in taking their cause to politicians, doctors like Pak-Teng have waged an extraordinary on-the-ground stealth campaign to win over members of Congress. Their professional credentials give them a kind of gravitas compared with other lobbyists, who are merely hired guns.

Ending the practice of billing patients for the amount of their treatment not covered by insurance—sometimes triggered by unwittingly seeing a doctor out of network—is ultimately a fight between doctors and insurers over rate-setting and reimbursement. But as more patients balk at surprise bills—or suffer the enormous financial strain—lawmakers are under pressure to protect patients. In turn, powerful lobbying forces have activated to protect doctors and insurers who don’t want to pay the price for a fix.

The main message physicians are using to bring lawmakers into their corner? “We just want to be paid a fair amount for the services rendered,” Pak-Teng said.

Her congressman, Malinowski, has not endorsed any surprise billing legislation. In congressional testimony in July, he cited the “extra $420 million” in medical debt patients in New Jersey reckon with each year.

“There are many things that Republicans and Democrats sincerely disagree about in this body,” he said. “I don’t think that this is one of them. I don’t see any philosophical difference amongst us about whether people should be stuck with massive surprise medical bills.”

Doctors say they are taking the brunt of the criticism.

But little has been as powerful in shaping surprise billing legislation as the clout of hospitals and their doctors, many of whom are, in fact, employed by private equity-backed companies and armed with years of experience shaping surprise billing legislation at the state level.

 

They are throwing in a lot of money, too, funneling millions to lawmakers ahead of the 2020 elections. Four physician organizations that have heavily lobbied on surprise medical bills and have private equity ties—the American College of Emergency Physicians, Envision Healthcare, US Acute Care Solutions and U.S. Anesthesia Partners—gave roughly $1.1 million in 2019 to members of Congress, according to a Kaiser Health News analysis of Federal Election Commission records.

The biggest recipients, from all four PACs combined, were Reps. Donna Shalala and Stephanie Murphy, Florida Democrats who got $26,000 each. Sen. Thom Tillis (R-N.C.) took in $25,500, Senate Majority Leader Mitch McConnell got $25,000, and Rep. Brett Guthrie (R-Ky.) received $22,500.

That was in tandem with a ground game led by local doctors. ER doctors, anesthesiologists, radiologists and other specialists who most often charge out-of-network prices—and also are among the highest-compensated practitioners—fanned out to shape legislation in a way that maintains their pay, and to voice their concern to lawmakers that insurance companies would have too much leverage to control their compensation.

“We by necessity place a tremendous amount of trust in our physicians,” said Zack Cooper, an assistant professor at Yale University who has extensively researched surprise medical bills. “Frankly, they have an easier time lobbying members [of Congress] than the folks who are affected by surprise billing.”

Arguing over the fix

Lawmakers in both parties appear unified on the need to resolve the problem of surprise billing. But as was clear when all the air blew out of legislative proposals on the table at year’s end, that is largely where the agreement ends.

Fixing the problem comes down to settling on a system for deciding how much to pay for a disputed bill. One approach is to set up an outside arbitration process, in which doctors and insurance companies would negotiate payment—this is the model preferred by doctors, who contend it puts them on better footing against insurance companies. Another option would be to resolve surprise billing disputes by having insurance companies pay doctors based on the median in-network rate for the service, an approach known as benchmarking. Large employers, labor unions and insurance companies prefer this.

The failure to get legislation through Congress set up a potentially explosive battle in an election year. Republicans and Democrats who have vowed to do something about healthcare costs must reckon with powerful industry groups whose influence transcends party lines.

Meanwhile, physicians and hospitals have made their case in Washington and back home through in-person meetings and phone calls with lawmakers and congressional staff. They’ve hosted dinners and fundraisers and organized fly-ins to swarm Capitol Hill with in-person meetings. They’ve even led tours of their emergency rooms.

Pak-Teng is among them, coming to Washington this month with other physicians to petition lawmakers. She is employed by Envision, a physician staffing company backed by private equity firm KKR. She’s also on the board of the American Academy of Emergency Medicine, a trade organization representing ER doctors.

“There is a lot of anti-physician rhetoric out there,” said Pak-Teng, who is pushing her physician colleagues to be more active in shaping public policy by sharing stories about the reality of caring for patients.

The lobbying by hospitals and physicians trying to protect their reimbursements has divided key lawmakers, compounding disagreements among senior House Democrats over the policy details of a bill and turf wars in Congress. Three House committees have now unveiled legislation to ban surprise medical bills, each with different details.

“We are not trying to stop legislation. We are trying to stop bad legislation,” said Anthony Cirillo, M.D., an emergency medicine physician who describes a “bad” bill as one that favors insurance companies over doctors.

Cirillo is also a lobbyist for US Acute Care Solutions, a physician staffing company backed by private equity firm Welsh, Carson, Anderson & Stowe. WCAS, which manages $27 billion in assets and is focused on healthcare and technology investments, is based in New York City and co-founded US Acute Care Solutions in 2015.

In an interview, Cirillo said he met with lawmakers and their aides about “10 to 12 times” in Washington last year. Financial disclosures show he spent $340,000 between July and September lobbying on surprise billing on behalf of US Acute Care Solutions. USACS’ political committee also contributed $134,500 to lawmakers in 2019, according to FEC records.

Tilt toward doctors

Before the private equity-fueled dark-money group Doctor Patient Unity started running ads warning of the dangers of government price controls as an argument against legislation, surprise billing legislation being drafted in one of Congress’ most powerful healthcare committees was already tilting to be more favorable to doctors.

“People on the Hill are very sympathetic to hospitals and physicians because they’re actually providing the care itself,” said one Democratic aide, speaking on the condition of anonymity to candidly describe sensitive political dynamics. “Nobody wants to defend the insurers.”

In May, a House Energy and Commerce Committee draft proposal included no mention of outside arbitration. The same was true for a bill the Senate Health, Education, Labor and Pensions Committee approved in June. Instead, under those proposals, surprise billing disputes would be resolved by insurance companies paying doctors based on similar rates in that area.

By mid-July, though—roughly a week before Doctor Patient Unity registered as a business in Virginia—the Energy and Commerce legislation was amended to allow doctors to appeal to an independent arbiter if their payments exceed $1,250. The revision was pushed by two physicians on the committee—Democrat Raul Ruiz, M.D., of California and Republican Larry Bucshon, M.D., of Indiana—and was a moment Sherif Zaafran, M.D., a Texas anesthesiologist, describes as a “turning point” in negotiations over the bill.

“It’s all about fairness,” said Zaafran, who works for private equity-backed U.S. Anesthesia Partners. He has been involved for a decade in surprise billing fights in Texas, which enacted a new law with an arbitration process last year. U.S. Anesthesia Partners gave $197,900 in campaign contributions to members of Congress last year.

Zaafran chaired another coalition of medical specialists, Physicians for Fair Coverage, in 2019, and pressured Congress to pursue a surprise billing approach modeled on a New York law under which insurers and providers rely on arbitration. Under that process, if there is a payment dispute between doctors and insurers, the two sides submit a proposed dollar amount to an independent mediator, who then selects one.

In New York, the mediators were told to base their decisions on the 80th percentile of the prices set by the hospital or physician. Research has suggested that the model is broadly making healthcare more expensive for state residents because of higher payments to doctors, according to findings from the USC-Brookings Schaeffer Initiative for Health Policy.

Still, on Capitol Hill, doctors complained that many procedures would fail to cost enough to qualify for arbitration as proposed in the Energy and Commerce bill, bolstered by data ER doctors presented to lawmakers showing that prices mainly fall below $1,250.

“It’s largely out of reach,” said Laura Wooster, a lobbyist with the American College of Emergency Physicians, whose political action committee contributed $708,000 to lawmakers in 2019. “The problem with a threshold is, you just have one threshold. It’s going to impact different specialties so differently.”

By December, House Energy and Commerce Committee leaders and Sen. Lamar Alexander, a Republican who chairs the Senate HELP Committee, agreed to lower the arbitration threshold to $750 as part of a bipartisan agreement on a bill. Notably, several hospital lobbying organizations, such as the American Hospital Association and the Greater New York Hospital Association—the latter a strong financial backer of Senate Minority Leader Chuck Schumer—refused to back the deal.

Pak-Teng and other physicians also say that arbitration threshold is still too high. The House Education and Labor Committee has unveiled surprise billing legislation with a similar framework.

“I’m open to listening to all sides on this,” Rep. Greg Walden of Oregon, the top Republican on the House Energy and Commerce Committee, said in an interview. “We want to make sure doctors are adequately compensated.”

Walden had harsh words for private equity firms that have attacked the Energy and Commerce legislation in a series of TV and internet ads, saying they were “misleading and scaring people” and just made lawmakers dig in deeper. The ads prompted a bipartisan probe from Walden and committee Chairman Frank Pallone (D-N.J.) into how the companies have influenced surprise billing practices.

“I’m not trying to hurtle a rock at them, but they’ve been throwing a few my way,” he said.

What’s coming

Arvind Venkat, M.D., a Pittsburgh emergency physician employed by US Acute Care Solutions, traveled to Washington multiple times last year to meet with congressional offices representing Pennsylvania. But he also made sure to bring up surprise bills on his home turf, giving his congressman, freshman Democrat Conor Lamb, a tour of the emergency room at Allegheny General Hospital last summer.

“There are two issues here,” said Venkat, who leads the Pennsylvania chapter of the American College of Emergency Physicians and has practiced at Allegheny General for 12 years. “Patients need to be protected, [and] we need to avoid anything that disrupts in-network relationships between insurers and clinicians.”

The call seems to have been heard: Legislation is likely to change further this year as the House Ways and Means Committee pushes an approach that is friendlier to hospitals and doctors. It builds off a one-page document committee leaders issued Dec. 11 that blunted momentum for a bipartisan deal that was to be included in a December spending bill.

The latest proposal from the committee includes an arbitration process to resolve payment disputes, with no minimum dollar amount needed to trigger it, and doesn’t ban surprise billing from air ambulance companies—a win for yet another special-interest lobbying group. The patient protections would not take effect until 2022.

Richard Neal, a Massachusetts Democrat who chairs the committee, remains an ally of Massachusetts hospitals. He released the brief December surprise billing document two days after the Massachusetts Medical Society and Massachusetts Hospital Association wrote a joint op-ed in The Boston Globe arguing that benchmarking physician payments—as the Senate HELP and Energy and Commerce deal would do—would wreck the state’s healthcare system.

“The heavy hand of government would create an unfair imbalance in the healthcare marketplace and insurers would have no incentive to engage physicians in building robust healthcare networks. The connected system of care we have all been working toward in Massachusetts would immediately become fragmented and disjointed,” the two groups wrote in The Boston Globe.

“They weren’t asking for favorable treatment. They were asking for fair treatment, and there’s a big difference,” Neal said in an interview. “I don’t want to rule anything out, but I think that the momentum right now is arbitration.”

“We need to get a little bit more balance,” added Shalala, who endorsed the Ways and Means legislation unveiled earlier this month.

Shalala has at least two hospitals in her Miami-area district that rely on private equity-supported physician staffing companies.

“I’m worried about the hospitals,” she said. “And the providers obviously include the docs.”

Victoria Knight contributed to this story.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

U.S. emergency departments (EDs) nationwide are often overburdened by a high volume of patient visits, resulting in lengthy wait times.

This can be especially harmful for those most urgently in need of care. It’s clear that when lifesaving care is delayed, a patient’s medical condition can worsen, leading to poorer clinical outcomes and excess spending on services that could have been prevented.

Harvard Business Review estimates that the number of patients who leave without being seen has almost doubled in recent years, and further research indicates that 24% of those patients return to the ED within seven days. 

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

What’s more, a study published in Clinical and Experimental Emergency Medicine directly ties ED crowding to increases in patient morbidity and mortality, and the study also notes adverse impacts on patient satisfaction. Overworked staff may also experience burnout and discontentment, leading to high ED turnover rates, which further compounds the problem.  

So, what can be done to reduce ED crowding?

Skills shortages and financial constraints mean that increased ED staffing levels are rarely a suitable solution. Instead, organizations seeking to smooth the flow of patients through the ED can focus on the effective utilization of technology and human resources, enhancing care delivery models, and ensuring a successful continuum of care upon patient discharge from the ED.

Here are several strategies organizations can apply to manage ED demand through local interventions at the department and organization level, and through improved engagement with partners across the wider healthcare ecosystem.

Understand and act on data-driven insights 

At the core of ED crowding is a hospital’s ability to deliver strategies for ED optimization by applying healthcare technologies and business intelligence and analytics to streamline performance improvement initiatives. Health systems can match ED resources to patient demand by modeling various skill mix and rostering approaches and by proactively forecasting patient traffic and capability requirements. Advanced analytics can also enable for rapid deployment of clinical or administrative resources from other areas of the healthcare system into the ED to respond to an unexpected surge in patient volume.

Analytical insights can also serve as a foundation for quantitative targets and metrics that help to measure and improve upon ED performance over time. The Journal of Hospital Medicine recommends incorporating Key Performance Indicators (KPIs) to improve quality and workforce capabilities, such as reducing discharge wait times to under 20 minutes and increasing the number of discharges from inpatient to 30% or greater by midday.

This second KPI, otherwise known as the “discharge by noon” concept, can improve the capacity of ED staff to address afternoon visits in a timely fashion by efficiently closing out patient encounters from earlier in the day. As EDs tend to be busiest from 11 a.m. to 5:00 p.m., the greatest bottleneck of admissions occurs in the late afternoon between 2 p.m. and 4 p.m.

Staff occupied with the major influx of admissions are not able to attend to awaiting inpatient discharges, which has an impact on both ED crowding and long wait times.

Within clinical settings outside of the ED, health systems can incorporate business intelligence and analytics tools to help promote long-term patient health and lower overall ED utilization. Cutting-edge analytical capabilities can support early detection of diseases by recognizing patterns in health data that can be used to predict the onset of disease, alerting providers to act early, and lowering the risk of a future ED visit.

Enhance clinical processes and workflows 

Technology also offers solutions for ED process redesign and optimization. For example, the use of electronic checklists with built-in clinical decision support capabilities can help to reduce the uncertainty of diagnosis and treatment alternatives.

Point-of-care testing in the ED for nonacute conditions can deliver real-time diagnostic results to enable for swift clinical decision-making, treatment, and discharge. Operational processes can also be streamlined with technology to reduce administrative overhead. These are only a few of the many possible applications of technology that can help to enhance clinical and administrative outcomes. Health systems can begin by documenting the existing processes to identify potential pain points and areas of inefficacy.

This information can then be applied to develop targeted improvements through the application of innovative technology solutions.

Health systems can also implement rapid assessment and triage models, stationing experienced providers within the ED waiting room to quickly identify and deliver care to the most acute patients. This approach eliminates the need for an initial severity assessment by a more junior-level clinician. Mount Sinai Medical Center in New York City is blazing the path for emergency geriatric medicine by redesigning their ED to simultaneously accommodate low- to medium-acuity patients so doctors can attend to the high-acuity patients.

Effective internal escalation, review, and referral processes can also help to shorten consult lengths and time to diagnosis, by removing non-value adding time, such as gaps between request and delivery. Additionally, EDs can offer patients the opportunity to preregister online en route to the hospital so that low- or medium-acuity patients are redirected to visit with an independently licensed provider such as a nurse practitioner or physician assistant upon arrival. 

Collaborate with the wider health ecosystem to preserve ED resources for acutely ill patients 

Within many health systems, ED wait times are inflated by a high volume of patients who present to the ED unnecessarily. Treating low- to medium-acuity patients in an ED setting diverts critical resources away from the treatment of high-acuity patients in greatest need of lifesaving care.

According to the International Journal for Quality in Health Care, the three primary causes of preventable ED visits in the United States are alcohol abuse, mood disorders, and dental complications. The researchers point out, “Our most striking finding is that a significant number of avoidable visits are for conditions the ED is not equipped to treat. Emergency physicians are trained to treat life- and limb-threatening emergencies, making it inefficient for patients with mental health, substance abuse, or dental disorders to be treated in this setting.” Similarly, patients with chronic conditions are likely to present to the ED for visits that could have been avoided through improved care management in non-ED settings.

To better manage ED resourcing and adapt ED pathway delivery to enable assessment, diversion, and triage, hospitals can incorporate frameworks that facilitate a mutually beneficial partnership with emergency services providers and payers. An exemplar program is Medicare’s five-year Emergency Triage, Treat, and Transport (ET3) pilot program, which addresses the problem of too many low- to medium-acuity patients in the ED by changing the reimbursement model for emergency transport for participating provider systems.

The ET3 program offers emergency services providers equivalent reimbursement to that which they would earn for transporting patients to the ED when they instead transport low- to medium-acuity patients to an appropriate alternative destination for the level of care they require or connect patients to a telehealth visit onsite. Medicare predicts that ET3 participating healthcare systems could lower ED utilization among Medicare patients by 16%.

To prevent patients from returning to the ED unnecessarily, healthcare systems can connect patients to ongoing care, resources, and/or observation programs upon discharge from the ED. For example, community paramedics programs can send a clinician to conduct regular check-up visits at a patient’s home, where the clinician records the patient’s vital signs, collects routine laboratory samples, provides ongoing medication support, helps a patient to understand potential “red flags” in his or her condition, and monitors the progress of the condition over time.

If a patient’s medical condition worsens, the clinician can deliver medication to the patient’s home or direct the patient to an outpatient care setting, helping to prevent a medical emergency and a possible trip to the ED. Evidence shows that this framework can be especially effective for patients who have behavioral or mental health conditions, including chemical dependency, and are at a statistically higher risk of presenting to the ED.

Realize the benefits of lowered ED utilization

Long ED wait times reduce the quality of patient care, increase healthcare costs, and lower patient and staff satisfaction—and are often entirely preventable. Healthcare systems can act to combat these issues through an emphasis on preventative care, technology-informed decision-making, interstakeholder collaboration, and a willingness to introduce innovative care delivery models to ensure that patients receive the appropriate level of care based on the acuity of their condition. Moreover, hospitals can drive financial performance to streamline ED optimization initiatives, allowing an increase in revenue per visit by removing low-acuity patients, and in turn improving health system performance.

A holistic approach that simultaneously optimizes the way EDs operate and when patients should be treated within this setting will ensure an improved patient experience for those most in need of emergency services.

Charlie Paterson, Meghan Marx, and Nadeem Fazal are healthcare experts at PA Consulting.