10 Big Healthcare Policy Trends for Spine Surgeons to Know

1. Medicare reimbursements and SGR fix. Physicians will now feel the impact of sequestration, as Medicare has begun its 2 percent payment reduction on April 1. Since the Democrats and Republicans have failed to agree upon a solution that would prevent sequestration, the Centers for Medicare and Medicaid will be part of the across-the-board cuts aimed a shrinking the federal deficit. The reduction could mean patients will need to pay more out-of-pocket, and CMS advises physicians who have nonparticipation status in Medicare to discuss the impact of sequesterized checks with patients before providing care, according to a Medscape report.

While the 2 percent reduction will be challenging for physicians and patients, the coming 24.4 percent Medicare rate decreases scheduled for January 1, 2014, would be devastating. A 26.5 percent pay cut scheduled for 2013 was avoided, in part due to advocacy efforts for physician groups including the American Academy of Neurological Surgeons and Congress of Neurological Surgeons. According to the group's "A Snapshot of Neurosurgery's Advocacy Successes in 2012-13," these efforts will translate into realizing $155 million, which would be about $43,000 per neurosurgeon.

The rate cuts are scheduled to meet the SGR formula, which reflect the reductions that have been postponed every year beginning in 2003. Both political parties have supported repealing the SGR formula, and a bipartisan bill gaining traction would "gradually phase out fee-for-service Medicare reimbursement," according to the Medscape report. However, the 2014 budget passed by the Senate would freeze Medicare rates at their current level for 10 years after repealing the SGR.

2. ICD-10 conversion and meaningful use. ICD-10 conversion deadlines have been pushed back in the past, but industry experts are predicting the October 2014 deadline will stand. CMS has released an ICD-10 transition planning timeline, suggesting small and medium-sized practices begin transition planning now, which should include budgeting for and training coders, discussing updates with electronic health record vendors and improving internal systems to meet the new coding system.

Stage 1 of meaningful use has already been implemented and some providers have received financial incentives for meeting the requirements early. CMS agreed to delay the start of stage 2 until 2013 and announced last month it will delay stage 3 meaningful use requirements until 2014.

AANS and CNS, along with other groups, have advocated for allowing participation in clinical registries to satisfy the Physician Quality Reporting System requirements. CMS is considering allowing participation to also satisfy the Medicare Electronic Health Record Program meaningful use requirements, according to the AANS/CNS report. The organization has launched the National Neurosurgery Outcomes Database; the North American Spine Society has also begun efforts to organize a registry.  

3. Independent Payment Advisory Board. One of the provisions of healthcare reform was the Independent Payment Advisory Board, designed to make recommendations to Medicare about payment rates after considering evidence-based research and outcomes. The panel would work to limit Medicare spending if costs grow too high. Many groups have advocated for IPAB's repeal, and Senate Republicans recently introduced a bill that would do it, but several attempts at repeal have failed over the past four years.

Early in 2013, the "Protecting Seniors Access to Medicare Act" has led the charge this year for repealing IPAB.

4. Physician specialist shortages. Much of the focus on physician shortages has been for primary care, but specialists could also face shortages as experienced physicians are choosing to retire early and fewer medical students opt to become specialists. AANS and CNS have spent time advocating in Washington so policy makers understand shortages are eminent in both primary and specialty care, and legislation has been introduced in both the House and Senate to take on some of these challenges.

The "Training Tomorrow's Doctors Today" act would increase the number of Graduate Medical Education slots by 15,000 through the next five years, according to a Schwartz House report. Medicare would primarily fund the new slots. A second piece of legislation "Resident Physician Shortage Reduction Act" seeks to increase the nation's physician training capacity by 15 percent over the next three years and encourages establishing new residency programs. The bill also promotes training in non-hospital settings.

This year, the House of Representatives has also passed the "Children's Hospital GME Support Reauthorization Act" which would amend the Public Health Services Act to authorize payments to children's hospitals to operate training programs and authorize $330 million per fiscal year from 2013 to 2017 for the programs, according to a Congressional Budget Office report. The bill would cost $45 million this year.

5. Medical liability reform. Physicians have long advocated for medical liability reform and were disappointed when the Patient Protection and Affordable Care Act did not include any tort reforms. Individual states, such as Texas, that have implemented progressive tort reform have experienced some success, leading advocates to suggest similar legislation be implemented at a national level.

The "Protecting Access to Healthcare Act" was passed in 2012, which is based on California's MICRA on medical liability provisions, and supported by groups including AANS/CNS. PATH includes a $250,000 cap on economic damages, three-year statute of limitations and contingency fee reforms, according to the AANS/CNS report. The "Health Care Safety Net Enhancement Act," an amendment to PATH, also passed to provide neurosurgeons involved in EMTALA-related care with medical liability protections, "at the request of AANS and CNS."

An additional provision supported by AANS/CNS was passed to provide liability for care given during national emergencies or disasters. A 2012 study reported that defensive medicine added $2 billion to the nation's annual healthcare costs from orthopedics alone, according to an AAOS Now report.

6. Medical device tax. A new 2.3 percent excise tax has been levied on the sale of medical devices, which paced a strain on device companies and innovation. Several advocates from the healthcare sector have worked toward repealing the tax, which was levied in part to help pay for healthcare reform. The Senate has passed an amendment to the 2014 Senate Budget Resolution that calls for repealing this tax.

The tax went into effect in January, and could create "an uncalculated transaction cost of understanding what the tax means for the entire industry," according to a Becker's Spine Review report. Several device companies have discussed sweeping layoffs and facility closings as a result of the tax. Stryker said it would layoff 5 percent of its workforce to "provide efficiencies and realign resources in advance of the new medical device excess tax."

The higher tax could impact innovation as well, if companies have less capital to pour into research and technology development. According to a Twin Cities Business report, the tax has collected $388 million from device company revenues since implemented earlier this year. Orthopedic device manufacturers expect to pay $175 million per year in excise tax, according to the report.

7. In-office ancillaries. The Senate Finance Committee recently "requested that the Congressional Budget Office score the removal of the in-office ancillary services exemption to the Stark Law as it applies to physical therapy, clinical laboratory services and advanced diagnostic imaging," according to an AAOS Now report. A U.S. Government Accountability Office has also released a report on physician-owned practice utilization of advanced imaging.

American Academy of Orthopaedic Surgeons President John R. Tongue, MD, requested a meeting with the CBO director and has urged members to support the integrated care model with the IOAS exception, and contact their representatives with this support. The call to action resulted in more than 1,100 messages to Congress, according to the report.

"Eliminating the IOAS exception would be detrimental to orthopedic patients because they would no longer be able to receive the continuum of care necessary to recover from musculoskeletal conditions," said Dr. Tongue in the report. "Fragmentation of care means lower quality and higher costs."

8. Patient satisfaction requirements. As part of the movement toward pay-for-performance, Medicare reimbursement for hospitals will now have ties to patient satisfaction surveys. Some feel this rating system is unfair and could lead to alternate incentives, such as providing unnecessary care, so patients are "satisfied" with their experience.

A recent consumer report found that 44 percent of patients were "highly satisfied" with their back pain treatment and advice from physician specialists. Around 59 percent were highly satisfied with their treatment and advice from chiropractors. Another 51 percent reported high satisfaction with spinal injections.

Private payors are also focusing on patient satisfaction, including a program between Cigna HealthCare, Wyoming Neurosciences and Spine and Elkhorn Rehabilitation Hospital in Casper, Wyo. According to David E. Mino, MD, MBA, Cigna HealthCare National Medical Director, Orthopedic Surgery and Spinal Disorders, "It's a very customer-centric program which focuses on patient satisfaction. That has been a key metric of the program, along with developing an interdisciplinary approach to care."

9. New payment systems. Healthcare markets across the country are seeing accountable care organizations and bundled payment agreements sprout up in an effort to control costs and pass risk from insurance companies to providers. The initial attempt at these new payment models, Acute Care Episodes, focused on cardiac and orthopedic procedures. Pilot initiatives from the government to bundle payment for improved quality and efficiency yielded low physician participation.

Medscape's 2012 Orthopedist and Orthopedic Surgeon Compensation Report showed only 2 percent of orthopedic surgeon respondents were participating in an ACO at the time data was collected, but another 5 percent said they expected to join one last year. Around 64 percent felt ACOs would cause a decline in income, with 38 percent feeling it would be a large decline. The Annual Compensation and Employment Survey completed in the Spring of 2012 reported that 24 percent of orthopedic surgeons preferred Medicare as the ACO payor, compared to 21 percent who preferred a private insurer. Still, the report found 61 percent would rather not participate in ACOs.

Orthopedics has also been a leader in bundled payments with joint replacements. For bundled payments, providers negotiate a global fee for care with insurance companies and decide which patients will be eligible to participate in the bundle. When patients need care exceeding the global cost, such as in the case of complications, providers must take on the extra cost. While there aren't many pilot programs specifically focusing on spine, some feel it could trend toward including spine coverage in the future, especially since the cost for back pain contributes greatly to the overall healthcare dollars spent in the United States.

The Annual Compensation and Employment Survey also reported orthopedic surgeons are more comfortable with bundled payments than shared savings and value-based programs, and would be even more comfortable with bundled payments that have risk protection. However, only 38 percent reported bundled payments as their preferred model.

10. Health insurance exchange. Under healthcare reform, states were directed to propose "health insurance exchanges," loosely designed as a system to promote competition between insurance companies. States that declined to coordinate an HIE would cede all control and oversight on the online marketplace to the federal government, which would set up the exchange for them. The deadline for proposing an HIE passed in February, and most states opted for a state-run or federal-state partnership HIE.

However, some Republican governors have opted not to put forth an HIE, therefore their state will have a federally-operated exchange. The Department of Health and Human Services recently reported that the agency will meet the Oct. 27 deadline to establish insurance exchanges in 27 states that will begin enrolling coverage by Jan. 1, 2014.

The full impact of health insurance exchanges remains to be seen, and since each state will have a different exchange system, the impact could vary from one state to the next. However, Sarah Vennekotter, assistant vice president in Moody's not-for-profit healthcare division, said recently that "reimbursements for patients insured via online health insurance exchanges are expected to be less than employer-sponsored group plans."

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