1. A greater crackdown on fraud and abuse. One of the efforts of the healthcare reform initiatives currently circulating in Congress is for the government to reign in the overall cost of healthcare. According to Mr. Goldstein, one area the Department of Health and Human Services has and will be concentrating on is healthcare fraud and abuse.
"Every dollar the government spends on fraud and abuse enforcement yields a return, both in terms of real dollars and in terms of deterrence," Mr. Goldstein says. "The more money recovered from these efforts, and the more money allocated to fraud and abuse enforcement in any healthcare reform legislation, the more you are going to see the government enforcing the fraud and abuse laws."
As a result of this increased enforcement, Mr. Goldstein says that it is important for orthopedic and spine practices to become more vigilant with compliance in their practices.
"In the past, specialists typically did not feel the need for an in-house compliance program for their group. Many of these specialists worked very closely with their hospitals, so they were able to, in effect, piggy-back on the hospital’s compliance program. Given that the practice of orthopedics and spine is evolving into a more outpatient practice, orthopedic and spine surgeons are becoming more independent of the hospital. The more independent the surgeons become, the less able they will be to rely on their hospital’s compliance program."
CMS’s Recovery Audit Contractor program puts extra emphasis on the need for the implementation of a good compliance plan, as many orthopedic and spine practices may find themselves the subject of a RAC audit.
2. FTC’s Red Flags Rule. The Red Flags Rule, established by the Federal Trade Commission and scheduled to go into effect Nov. 1, will require businesses or entities defined as "creditors" to implement a written identity theft prevention program. Because physician practices often defer payments for their services, they fall under this definition.
"Similar to when HIPAA went into effect, physician groups are feeling a lot of uncertainty over the Red Flags Rule. They are not sure what it will mean for their practices, and they view it as yet another cost that will put them closer to being out of business. My feeling is that compliance with the Red Flags Rule will prove to be not that difficult, as best practices become known."
3. Consulting arrangements. Another area that may be of concern for orthopedic and spine practices are potential arrangements their physicians have with drug or device manufacturers. Recent media coverage has focused on these relationships, and Mr. Goldstein says that this has left many surgeons unsure as to what is and is not permissible.
"The government does not like any arrangement which has the appearance of being a paid sponsorship for a device," he says. "If a physician is being paid for his time and valuable know-how, that’s okay, but if the physician is being paid for, in effect, endorsing a product, that won’t fly with the government, especially in today’s environment."
Mr. Goldstein says that is important for patients to know whether their physician has a financial stake in a product the physician is recommending. "The disclosure probably won’t change the patient’s decision as to whether to proceed with that physician or that product. However, it adds transparency, which is good for the physician-patient relationship," he says.
Mr. Goldstein advises physicians to document in detail the work they do in their consulting relationships, so that the information is readily available if the government requests it. "Record-keeping is crucial," he says.
4. Greater focus on subspecialties and mergers. As a new generation of orthopedic surgeons enters the profession, the overall nature of the orthopedic physician practice has changed and will continue to change significantly, according to Mr. Goldstein.
"The idea of the fellowship didn’t begin until the late ’70s or early ’80s, and this meant there were quite a few general orthopedists who didn’t have fellowship training," Mr. Goldstein says. "Now, the general orthopedists are retiring, and the new physicians, because they are fellowship trained, tend to concentrate only on their subspecialty."
As a result of having more highly specialized physicians, Mr. Goldstein believes that smaller groups comprised only of sub-specialists will find it more difficult to survive in the future. "If a group has four super-specialists who don’t want to do general orthopedics, they will have a hard time capturing the bread-and-butter fracture cases. Those cases, while not necessarily exciting or high paying, do help keep the lights on, and the cases enable the group to solidify and expand relationships with referring doctors. The economics of a larger group are such that there is room for both the super-specialist and the specialist interested in doing general orthopedics."
Consequently, Mr. Goldstein thinks that the orthopedic and spine practice industry will see more mergers of smaller groups and the creation of larger groups so that all specialties are covered. Another result could be that more orthopedists will work for hospitals as opposed to private practice.
5. Operating with good business sense. In order for orthopedic and spine practices to be successful, Mr. Goldstein notes that operating using good business practices is critical, especially in the current market.
"Orthopedic and spine practices historically could do fine without employing the best business practices because they had good reimbursement and a high volume of patients," he says.
Mr. Goldstein says practices are now feeling the squeeze of rising overhead costs and malpractice premiums, which means that practices have to be smarter about how they run their businesses. "You have to be more mindful of your business practices," he says. "This is more than just slashing costs."
Mr. Goldstein suggests that practices look to middle-market businesses as their guides for good practices and the means to survive and thrive. Practices should also look at their infrastructure to help keep them running successfully.
Mr. Goldstein is a partner with Seyfarth Shaw based in Chicago. He focuses his practice on corporate law, with an emphasis on healthcare and closely held businesses. He regularly counsels physician group practices on healthcare business issues and fraud and abuse. Learn more about Seyfarth Shaw.
