HCI3 Update from the Field: Tough to Be Good

Submitted by francois.debrantes@hci3.org on Friday, August 10, 2012 - 12:09

Newtown, CT – Aug 10, 2012

It's tough to be good when you're encouraged to be very very bad – and two recent investigative reports highlight the very very bad behaviors of physicians from coast to coast. In California, the supposed mecca of ACOs, a creative entrepreneur, self-proclaimed a "Robin Hood of physicians", decided that the best way to negotiate with "greedy plans" was to not negotiate, and not contract. As such, they get paid out of network charges minus the plan member's co-pay. The result: they're getting paid – yes, the "greedy plans" are actually paying – 200% to 400% more for a simple orthopedic procedure than any other contracted physician or facility. The physicians that are performing the procedures are getting a windfall, and they're attracting patients by waiving the co-pays. In Florida, some cardiologists are performing cardiac imaging and procedures on completely asymptomatic patients, extracting excess payments from Medicare and private sector payers. In a fabulous twist of fate, the crookster in chief of yesteryear, now turned manager in chief of the state, has the dubious distinction of investigating the organization in which he perpetrated his previous craft, and that is back to its old ways. Yes folks, HCA, which Rick Scott raised to infamy, is again the perpetrator of fraud in its favorite hunting ground, Florida, while other crooksters disguised as benevolent bandits are poaching in California.

What this means to you – crooks, disguised or not, are still crooks, and any incentive program that encourages anyone to be very very bad, will invariably bring out the worst in anyone. So at this point, it's difficult to figure out what's more shocking, the stupidity of those who pay the crooks or the extent of the crookery. It's probably a toss-up because the recipes to stop these crooks are pretty simple. Let's take the California bandits. They've gotten away (and presumably are still getting away) with thievery because payers have failed to implement simple reference pricing for common procedures for all providers, in network or not. If plan members were notified clearly that any payment for these procedures would be limited to the published reference price for that procedure, then the crooks wouldn't be able to steal, at least not from the payer. Of course that would mean making changes to benefit designs and creating better incentives for both providers and plan members. Let's consider Florida. The answer there lies in a program recently designed by the ACC to encourage the appropriate use of imaging and procedures for asymptomatic patients. Basically, it's a bundle that covers all cardiac-related resources (including procedures) for those patients. The expected cost would reflect current average use. As such, overutilizers, like the Florida crooks, would be heavily penalized by their overutilization and have a natural incentive to curb it instead of growing it. Of course that would mean that Medicare and private plans implement bundled payment arrangements for something else than procedures. These solutions are ready to roll out, yet they're not. So which behavior is worse? That of the perpetrator of the fraud or that of the ones who allow the fraud to be perpetuated?


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org