Randi Minetor

	In January, the proposed $37 billion merger between Aetna and Humana was blocked by a judge. Weeks later, another federal judge  ruled against the proposed $54 billion merger between Anthem and Cigna, the second- and third-largest commercial health insurers in the country.

	All four payers have said that the deals have been called off as a result of the court decisions.

	The mergers would have reshaped the healthcare industry. Physicians and other healthcare experts have argued that they would have harmed insurance markets by increasing costs, narrowing networks and giving  payers too much bargaining power over healthcare providers. 

	The Anthem-Cigna merger would have created the largest health insurance company in the country. The U.S. Department of Justice brought the case against the merger, arguing that it would violate antitrust laws by creating a company so large that it would squelch competition from smaller companies in the health insurance market.

	Anthem had claimed that the cost savings achieved by the merger would actually reduce premium prices for consumers, because it would allow the merged company to cut its own operating costs. This, Anthem said, would result in a new ability to offer lower-priced options to customers.

	The judge’s order said that the merger had the potential to drive up costs to consumers, and to reduce choice for patients by creating a more restricted list of in-network healthcare providers.

	This would have potentially dire consequences for primary care physicians who chose to accept other insurance offered by the national and state healthcare exchanges.

	The Physicians Advocacy Institute (PAI) applauded the judge’s decision. The institute advocates for fair and transparent payment policies to doctors from insurance companies and others.

	“Big health insurers are zero for two when it comes to mergers, with federal courts delivering a resounding message that supports a competitive healthcare marketplace,” Robert W. Seligson, PAI president, said in a prepared statement. 

	“This merger would have resulted in higher prices and diminished innovation, which is bad news for patients already coping with narrow provider networks and increased out-of-pocket costs,” the statement added. “Competition helps keep premiums in check and allows more choice in which physicians patients choose to see for their medical care. This decision is a clear win for patients.”  

	With the merger off the table, competition for customers will continue between the two insurers. This means that primary care physicians will retain the power to negotiate on behalf of their patients, notes Randal Schultz, JD, a partner in the law firm of Lathrop & Gage LLP in Kansas City, Missouri, and chair of the firm’s Healthcare Strategic Business Planning Practice group.

	“By eliminating that potential market power, you have more room to have primary care doctors have some kind of voice in the marketplace,” Schultz says. The blocked merger signals that it’s time for doctors to think seriously about new delivery models that will reduce costs in the system as a whole, he notes.

	“We want to keep that corridor open for physicians, between historical costs and current costs,” he says.

	The health insurance system today is what drives costs for employers, who in turn provide a choice of insurance providers to employees, Schultz says. 

	When a primary care doctor finds ways to reduce healthcare costs-by treating a patient outside of the hospital, reducing the length of hospital stays, or foregoing  unnecessary tests, for example-the patient and the employer both save money.

	“That money should go right to the primary care doctor,” says Schultz. “The employer is thrilled because the cost doesn’t go up, and the primary care doctor is incentivized to keep the cost down,” he adds. “If the doctors really understand the nature of the business, there are a lot of ways to deliver healthcare services that create a better financial model for the doctors.”

	Preventing the Anthem/Cigna merger makes it possible for primary care doctors to think more creatively about working with insurance companies, says Schultz.

	“Because no merger occurs, it creates the opportunity for more insurance companies in each market,” he explains. “If I’m a primary care doctor, I want to find every way I can to be involved in the care of the patient, to get between the employer and the patient. The primary care doctors are in the driver’s seat.”

	With many consumers today paying high out-of-pocket costs because of rising  deductibles, he notes, the health insurance companies that win will do so by reducing  costs while increasing access to care. For example, it costs less to send a patient home with a nurse than to keep that patient in the hospital several days longer to recuperate after surgery.

	“If I were your doctor and I told you that your mother could go home a day early from the hospital and have a nurse go with her, wouldn’t that be better?” Schultz says. “She’s scared sitting in the hospital, and she’s in danger of infection. And it’s cheaper to have a nurse go home with her. That would save on cost and be better for the patient. Isn’t that what we want? It’s intuitive, it’s practical and it helps everybody.”  

Articles

Payer merger bubble pops: What it means for physicians

, however high on President Donald Trump's list on healthcare reform is the idea that patients should have the ability to compare prices before they decide on a doctor or facility for their healthcare.

What the Obamacare repeal bill means for physicians

	But the question remains-can doctors actually 

provide their patients with a price list?

	“Sure we can,” says Ripley R. Hollister, MD, a family physician with a practice in Colorado Springs, Colorado, and a board member with the Physicians Foundation, which provides support and research to help physicians deliver high quality, cost-efficient healthcare. “We all have a pricing schedule-we know what are prices are based on CPT codes. So if I have a health maintenance visit with a patient between the ages of 40 and 64, there’s a code for that. A rapid strep test, there’s a code for that.”

	Some practices already post these prices on their websites, but the costs listed are not necessarily what the patient will pay. Patients with health insurance, for example, pay only what the insurance does not cover.

	“The most important decision is whether a practice accepts health insurance or not,” says Nitin S. Damle, MD, MS, MACP, president of the board of regents of the American College of Physicians and the managing partner of South County Internal Medicine in Rhode Island.

	Not all practices accept insurance, practicing direct pay instead.

	“At present, about 5 to 6% of practices do not accept insurance,” he says. “The patients may pay on a pure fee-for-service basis, or there may be a monthly payment irrespective of office visits, or there may be a retainer, or some combination of all of the 

.” Many of these doctors make deals with patients on an individual basis, providing pricing one-on-one based on the patient’s specific needs.

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	If practices that accept insurance publish their fee schedules, they will not reflect what the patient will actually pay, Damle explains. “So price list is less relevant, in that those are not actual payment in most cases,” he says. “If the practice does not accept insurance, then it is appropriate to disclose the cost of services.”

How to overcome the challenge of creating a price list

	The difference between what the practice charges and what the patient actually pays may make comparison-shopping for medical services particularly complicated. “Patients can try … but if the clinician accepts insurance, patients will not be getting an accurate picture,” Damle says.

How physicians can deal with policy uncertainty

	Adding further complexity to the issue, the Physicians Foundation reports in its 2016 Survey of America’s Physicians that only about 33% of practicing physicians are independent practice owners or partners.

	“There’s a whole movement among physicians where they are moving away from private practices and being employed by corporations, medical centers and hospitals,” says Hollister.

	Those whose practice is part of a larger network may receive their pricing structure from farther up in the organization, so decisions about what to charge are out of the practice’s hands. Whether this creates competitive pricing between medical centers and private practices may become apparent if they are all required to provide pricing schedules to patients.

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	Add Medicare and Medicaid to this mix, and providing patients with a realistic picture of what they will spend for medical exams, tests and procedures becomes both simpler and more complex. The Centers for Medicare & Medicaid Services (CMS) has a maximum allowable charge (MAC) for each CPT code, and other health insurance companies use this as a starting point for their own price structure, says Hollister.

	“They develop contracts with physician practices, and they develop percentages based on MAC, and that’s your fee structure,” he said. “This is not very patient-centric.”

	Patients also need to understand that a price for a single procedure may not be all-inclusive.

Physicians should rethink their revenue streams

	“It’s analogous to fixing a car,” says Hollister. “You go into the shop because your clock doesn’t work. The mechanic says, ‘I don’t know what’s wrong, I have to diagnose it.’ The same thing happens in a doctor’s office. I can say that a code includes an evaluation of the problem, and if the solution is very simple, then the pricing is easy. But the patient may require additional lab work, an injection of medication, a prescription, and so on. I think people can understand that.”

	As the need for tests, treatment, procedures and therapy grows larger, however, some patients may view each additional requirement as a hidden fee, just as they might view mounting costs at their mechanic’s shop. To find ways to be as comprehensive as possible with patients, some of the pricing techniques used in retail may find their way into medical practices. For example, retailers often bundle all of the potential costs of a product purchase, including the product, service contract, warranty and accessories in one price. Physicians may find a need to do the same.

	This is the approach taken by the Surgery Center of Oklahoma, a multispecialty facility in Oklahoma City, where about 40 surgeons and anesthesiologists share ownership. At the center’s website, patients can click on an illustration of a body part, choose the surgery they need from a drop-down menu and get an instant price quote. The pricing includes the facility fee, surgeon and anesthesiologist fees, as well as the initial consultation and routine follow-up.

	The website’s disclaimer itemizes the things that are not included in the price as well. “Our experienced surgical staff knows with almost certainty what will be needed to complete your surgery,” it confirms, but if hardware or implants are part of the procedure, they are provided “at invoice cost without any markup whatsoever.”

	As Damle and Hollister note, however, if the patient’s insurance will pay for the procedure, it’s an entirely different story. This holds true for the surgery center, as evidenced by their disclaimer: “If you are scheduled for surgery at our facility and we are filing insurance for you, the prices listed on this website do not apply to you.”

	So while physicians know their fee structures and can provide price lists to patients if required to do so, only those who are not covered by health insurance are likely to find this information 

	“The informed consumer is one thing,” says Hollister, “but when consumers have information, they don’t always know what to do with it. Or if they do, that doesn’t mean they get charged less. What does the patient get for what they’re paying? That’s what is most important.”

Randi Minetor is an author and freelance journalist based in upstate New York.

The details of what will come when the Affordable Care Act is repealed are not yet finalized, however high on President Donald Trump's list on healthcare reform is the idea that patients should have the ability to compare prices before they decide on a doctor or facility for their healthcare.

The perils of price lists for private practices

	Last month, federal judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ruled against the proposed $54 billion 

, the second- and third-largest commercial health insurers in the country.

 How did Medicare become the highest paying carrier?

The merger would have created the largest health insurance company in the United States.

 The U.S. Department of Justice brought the case against the merger, arguing that it would violate antitrust laws by creating a company so large that it would squelch competition from smaller companies in the health insurance market.

	Anthem had claimed that the cost savings achieved by the merger would actually reduce premium prices for consumers, because it would allow the merged company to cut its own operating costs. This, Anthem said, would result in a new ability to offer lower-priced options to customers..

	Judge Jackson rejected this argument, however, noting that Cigna itself found Anthem’s cost savings claim lacking in credibility.

	“Cigna officials provided compelling testimony undermining the projections of future savings, and the disagreement runs so deep that Cigna cross-examined the defendants’ own expert,” Jackson wrote in her ruling. “The Court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial.”

	This would have dire consequences for primary care physicians who chose to accept other insurance offered by the national and state healthcare exchanges.

As insurers leave Obamacare exchanges, doctors pay the price

Next: Keeping the corridor open for physicians

	"Big health insurers are zero for two when it comes to mergers, with federal courts delivering a resounding message that supports a competitive healthcare marketplace,” said Robert W. Seligson, PAI president, in a prepared statement. “This merger would have resulted in higher prices and diminished innovation, which is bad news for patients already coping with narrow provider networks and increased out-of-pocket costs. Competition helps keep premiums in check and allows more choice in which physicians patients choose to see for their medical care. This decision is a clear win for patients."  

Is the success of physician-led ACOs sustainable?

	With the merger off the table, competition for customers will continue between the two corporations. This means that primary care physicians will retain the opportunity to negotiate on behalf of their patients, notes Randal Schultz, JD, a partner in the law firm of Lathrop & Gage LLP in Kansas City, Missouri, and chair of the firm's Healthcare Strategic Business Planning Practice group.

	“By eliminating that potential market power, you have more room to have primary care doctors have some kind of voice in the marketplace,” Schultz says. The blocked merger signals that it’s time for doctors to think seriously about new delivery models that will reduce costs in the system as a whole, he noted.

	The health insurance system today drives cost to the employer, who provides a choice of insurance providers to its workers, Schultz says. When a primary care doctor finds ways to reduce the patient’s healthcare costs-by treating a patient outside of the hospital, reducing the length of hospital stays, or foregoing  unnecessary tests, for example-the patient and the employer both save money.

	“That money should go right to the primary care doctor,” says Schultz.

	“The employer is thrilled because the cost doesn’t go up, and the primary care doctor is incentivized to keep the cost down,” he continued. “If the doctors really understand the nature of the business, there are a lot of ways to deliver healthcare services that create a better financial model for the doctors.”

Top tips for physicians to deal with uncertainty

	With so many consumers paying high out-of-pocket costs because of rising  deductibles, he continues, the health insurance companies that win will do so by reducing overall costs while increasing access to care. For example, it costs less to send a patient home with a private duty nurse than to keep that patient in the hospital several days longer to recuperate after surgery.

	“If I were your doctor and I told you that your mother could go home a day early from the hospital and have a nurse go with her, wouldn’t that be better?” Schultz says. “She’s scared sitting in the hospital, and she’s in danger of infection. And it’s cheaper to have a nurse go home with her. That would save on cost and be better for the patient. Isn’t that what we want? It’s intuitive, it’s practical and it helps everybody.”

	Anthem announced on February 9 that it would appeal the U.S. District Court’s decision, requesting an expedited hearing. A date for the hearing has not yet been set.

Earlier this month, federal judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ruled against the proposed $54 billion merger between Anthem and Cigna, the second- and third-largest commercial health insurers in the country.

What Anthem-Cigna merger rejection means for your practice

	Most medical practices welcome the major federal holidays and the opportunity for the entire staff to take a day off.  A day when the doors are locked, however, is also a day that

 It begs the question: Should the practice 

How doctors can overcome payment obstacles in 2017

	It may come as a surprise that the Fair Labor Standards Act (FLSA) administered by the U.S. Department of Labor does not require employers to pay for time not worked, “such as vacations or holidays (federal or otherwise),” according to the department’s website. “

These benefits are generally a matter of agreement 

	The Society for Human Resource Management (SHRM) conducts an annual survey of holiday schedules among American businesses. Its 2017 survey discovered that more than 90 percent of businesses offer employees six paid holidays per year:  New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

	The Bureau of Labor Statistics records higher numbers of paid holidays. For full-time employees in 2016, employers offered an average of 7.6 paid holidays, while employees in the professional, technical and related fields averaged 8.5 paid holidays.

How important are paid holidays to employees?  

It turns out that paid time off is a more valuable benefit that most employers realize. A survey conducted by the human resources software development firm CakeHR found that chief financial officers believe that benefits packages, scheduling flexibility and professional development were the most important factors in employee retention-but when their employees were asked the same question, they put paid time off at the top of their priorities.

	Not every practice makes paid holidays part of its benefits package, and this can come as an unpleasant surprise if it’s not spelled out when an employee is hired. Employees need to know upfront if they will be paid for holidays, which holidays the practice considers to be paid days off, and what the level of compensation will be for those days.

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	If the practice chooses not to pay for holidays, it may influence a potential employee’s decision to take a job with the practice.

	For Donna Tuttle, MD, a family practitioner and one of three partners with Five Corners Family Practice in Schenectady, New York, paying employees for federal holidays is an important element in the benefits package. “It’s one of those things that I never considered not doing,” she says.

	Tuttle came into the practice while it was owned by the local hospital system, which offered employees seven paid holidays annually, including two days for Thanksgiving. When she and her partners became independent of the hospital, they added Christmas Eve to the benefits package.

Next:  "It really comes down to how much I am willing to work and when"

	The holidays add to the practice’s overall expenses, but they see the return on this investment. “We make money seeing patients, so it really comes down to how much I am willing to work and when,” Tuttle said. “Employees get as much vacation and as much holiday time as I do.” Working more hours to provide this benefit to employees pays off in other ways, she says. “I do realize that I probably get paid less than a lot of other providers in primary care, but it’s one of the reasons that we have very little turnover.”

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	Anita L. Jones, DDS, who runs a solo oral surgery practice in Fall River, Mass., concurs with Tuttle. “When I bought the practice, the doctor I bought it from already paid seven holidays,” she says. “I couldn’t take benefits back from employees, so I kept doing that. I expect that if I’m working, they’re working-but if I close the office on a day when they would be working, the employees get paid,” she said.

	Jones’ practice sees many school-aged children and working people, some of whom would be pleased to come in on Memorial Day, Labor Day or the day after Thanksgiving when they have the time off to undergo oral surgery. “I often feel like I should not take those holidays, that we should be working,” she says. “But when those days come around, I want them so much that I’m glad to close the practice and take them off.”

	Both Tuttle and Jones observe holidays that fall on a non-work day-such as when Christmas Day falls on a Saturday and Sunday, as it did in 2016-by giving employees either the Friday before or the Monday after the holiday as their day off. A schedule goes out early in the year to let employees know which days the practice plans as holidays in that year.

 Here is the PCP crisis solution and it's simple

	Not all practices can offer holidays off, especially if they are affiliated with a hospital and are operating on major holidays. In these cases, employees may earn additional pay for working on a holiday. Double time for holidays or another day off at the employee’s discretion can make working on Christmas a more attractive option, especially for those who are looking to earn extra money or flexible personal time.  SHRM’s survey determined that 57 percent of businesses offer employees additional pay when they are required to work on a holiday, with 40% of these offering double-time pay and 21 percent providing time-and-a-half. Another 19% offered an unspecified amount of overtime.

Most medical practices welcome the major federal holidays and the opportunity for the entire staff to take a day off.  A day when the doors are locked, however, is also a day that generates no income for the practice. It begs the question: Should the practice pay its employees a day’s wages for the holiday?

Author | Randi Minetor

Articles

Payer merger bubble pops: What it means for physicians

The perils of price lists for private practices

What Anthem-Cigna merger rejection means for your practice

It’s a mistake if you don’t pay employees for federal holidays