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Teaching Hospital Update - December 19-22, 2011


Email Alert

December 22, 2011

By Amy Kaufman*

Doctors 27% Medicare Pay Cut Will Not Be Unlinked From Tax Bill in U.S. House

U.S. House Republicans have no plans to move a stand-alone bill to reverse a 27% cut in Medicare fees to doctors that is set to go into effect January 1, a spokesman for House Speaker John Boehner (R-OH) said.

Both the House and Senate have opted to address Medicare payments to doctors as part of the impasse over extending a payroll tax cut set to expire at the end of the year. Congress is deadlocked over the tax, which has become the end-of-session vehicle for unrelated issues, including fees for Medicare, the U.S. insurer for those sixty-five and older and the disabled.

House Republicans are not planning to address physician fees in a separate bill, said Michael Steel, a spokesman for Boehner, in an email. If the cut is not reversed, doctors would absorb the largest single decline in federal reimbursements in the history of the program, raising concerns that physicians will limit how many new Medicare patients they accept.

"Medicare patients should not become the collateral damage of a political battle," said Joyce Rogers, senior vice president of AARP, the largest advocacy organization for the elderly. "Congress should pass legislation that reinforces doctors' faith in the Medicare payment system and gives current and future Medicare beneficiaries the security of knowing that they can get the care they need."

Medicare, in a statement sent to doctors and other healthcare providers yesterday, said it can use administrative tools to hold off on actually making payments at the lower rates for ten business days, through January 17. That would give Congress time to come back and act should the current effort fail entirely. "We continue to urge Congress to take action to ensure these cuts do not take effect," the statement said.

The American Medical Association, based in Chicago, has been coordinating lobbying by state medical associations and specialist societies against the cut. The group also ran TV and radio ads against the cuts. "Waiting until the last week of the legislative session to address a problem that Congress knew was looming all year is not the way to conduct our nation's business," said Peter Carmel, the group's president, in an emailed statement. "A permanent solution is the long overdue, fiscally responsible approach."

Drew Armstrong and Kathleen Hunter, Doctors 27% Medicare Pay Cut Won't Be Unlinked From Tax Bill in U.S. House, Bloomberg News (Dec. 20, 2011).

How States are Keeping Doctors From Moving Out

Widespread concerns about physician shortages have many states working to keep doctors trained in medical schools and residency programs there from crossing state lines to practice medicine. Nationwide, there were 258.7 active physicians per 100,000 people in 2010, according to new statistics from the Association of American Medical Colleges (AAMC). In individual states, ratios range from a high 415.5 physicians per 100,000 people in Massachusetts to a low of 176.4 per 100,000 in Mississippi.

On average, only 39% of U.S. physicians practice in the same state where they went to medical school. Forty-eight percent practice in the state where they completed graduate medical education (GME), said the report, released on December 2 by the AAMC Center for Workforce Studies. As a result, medical schools, hospitals, medical societies, and state legislatures are increasingly taking a practical approach to retain the physicians and doctors-in-training they already have, said Christiane Mitchell, AAMC director of federal affairs. "We see states becoming more and more sensitive to the physician shortage issue," she said. "People are beginning to recognize the need."

Physician shortages nationwide are projected to reach 62,900 doctors by 2015 and 91,500 by 2020, according to 2010 AAMC projections. Many states have responded by opening new medical schools or expanding existing ones. Several offer incentives such as bonuses, scholarships, or loan repayment programs to keep physicians from leaving.

Communities also are developing new residency programs in hopes that physicians will develop long-term professional and personal relationships during GME training that will tie them to the area, Mitchell said. Recruitment and retention often go hand in hand. For example, many medical schools recruit students from the states in which they are located, with the idea that students are more likely to practice in their home state. But such efforts can be thwarted if there are not enough GME positions for those students after graduation, Mitchell said.

"There are certain schools that their entire mission is to train physicians from their states to practice in their states," she said. "But if there are not enough [GME] training positions there, they are going to go somewhere else."

Carolyne Krupa, How States are Keeping Doctors From Moving Out, Am. Med News (Dec. 19, 2011).

Medicare Penalties for Readmissions Are Likely to Hit Hospitals Serving Poor

James Breedin cannot keep track of how often he has been admitted to Howard University Hospital for heart problems. "It's been so many," said Breedin, a seventy-five-year-old disabled former truck driver from Northeast Washington, DC. One reason for his frequent returns, he says, is that he often cannot afford the medications his doctor prescribes, "so I have to do without." Another is that he fears exercising outside because of neighborhood violence.

Medicare is preparing to penalize hospitals with frequent, potentially avoidable readmissions, which by one estimate costs the government $12 billion a year. Medicare's aim is to prod hospitals to make sure patients get the care they need after discharge. But this new policy is likely to disproportionately affect hospitals that treat the most low-income patients, according to a Kaiser Health News analysis of data from the Centers for Medicare & Medicaid Services.

Hospitals that served the most poor Medicare patients were nearly three times as likely as others to have substantially high readmission rates for heart failure, the analysis found. At these hospitalswhich include Howard, Prince George's Hospital Center in Cheverly, and Johns Hopkins Bayview Medical Center in Baltimore, as well as such well-known medical centers as New York-Presbyterian Hospital and Mount Sinai Medical Center, both in Manhattanlow-income people comprised a greater share of the patients than they did at 80% of hospitals. Many of those hospitals already operate on tight margins and fear the new penalties could make it even harder for them to properly care for impoverished patients.

Avoiding readmissions is a particular challenge in the Washington, DC, area, where a government study reported last year that readmission rates are higher than in most parts of the country. Even at places such as Washington Hospital Center, which Medicare says has average readmission rates, physicians contend with large numbers of poorer patients who have both chronic congestive heart failure and such other maladies as obesity, hypertension, and diabetes. Because they often do not see doctors regularly, these patients tend to arrive at the hospital later in their deterioration, some with their limbs bloated with excess water and barely able to walk.

"Their problems tend to be more advanced," said James Diggs, Breedin's cardiologist at Howard. "We have patients who are readmitted almost every two months for heart failure. We almost save a bed for them."

Jordan Rau, Medicare Penalties for Readmissions Are Likely to Hit Hospitals Serving Poor, Washington Post (Dec. 19, 2011).

Beth Israel CEO: Partnership, Not Patient Referrals, is Future Model

Hospitals should move away from the mindset of increasing patient referrals to a culture of provider collaboration as the model for the future, according to Dr. Kevin Tabb, who took his post at the helm of Boston's Beth Israel Deaconess Medical Center in October. The chief executive officer spent his first two months as head of the renowned institution meeting with almost every hospital in the city, including rival facilities, reports WBUR's Common Health blog.

"I spent time outside the four walls of this hospital because the really important changes are going to happen externally as well," Tabb told the NPR affiliate. From his rounds of the Commonwealth's hospitals, Tabb found that most organizations are both optimistic and anxious about the current and changing healthcare landscape. "[A] lot of parties [are] trying to understand their own place in an ecosystem that hasn't yet formed," he said. The ecosystem Tabb mentioned refers to a larger system in which all benefit from shared risk models. "We need to be part of a larger ecosystem so that we can do the things that are really appropriate to do here," he said. "We need to share in risk models so when there is benefit, we share in that as well."

Massachusetts is the state credited for being the model for national healthcare reform, as well as the epicenter for hospital mergers, acquisitions, and partnerships. Although much of healthcare change revolves around legislation, Tabb suggested that partnerships come from the need to move away from fee-for-service, as well as collaboration.

"It's not new that academic medical centers want to partner with physician groups and community hospitals, but the type of partnership we're talking about is very different from the types of partnerships we talked about in the past. In the past, we thought about, 'How do we get more referrals here downtown?'" Tabb said. "We need to learn to partner with others in a variety of different models. It's going to require huge change. . . . Those of us that understand and change quickly will thrive."

Karen M. Cheung, Beth Israel CEO: Partnership, Not Patient Referrals, is Future Model, Fierce Healthcare (Dec. 21, 2011).

High Court to Hear Healthcare Reform Case in March

U.S. Supreme Court arguments over President Barack Obama's healthcare overhaul will stretch over three days, beginning March 26, the Court said Monday.

A typical case is allotted an hour for argument, but the Court scheduled five and a half hours for the healthcare reform case, reflecting how novel some of the questions are and the importance of a dispute that could define the limits of federal power for decades to come.

The main part will take place on Tuesday, March 27, with a two-hour argument over the minimum-coverage provision, which starting in 2014 will require most Americans to carry health insurance.

Jeff Bravin, High Court to Hear Healthcare Case in March, Wall Street Journal (Dec. 20, 2011).

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

*We would like to thank Amy Kaufman, Esquire (Community Health System, Nashville, TN), for providing this week's update.

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