I like to share anything I can finda bout fee-splitting. This also covers ACO’s, which I’ve noticed you all really like to read about. Thanks, Dave, for another great blog post! Just please note – this doctor he talks about is NOT a real person. Just an example he made up to show his point.
Written by Dave Racer:
Despite the fact that I have written 25 books, a thesis, and hundreds of papers, apparently, I am a failure at writing this kind of information. Why? Because already, a number of you who have contacted me about this piece have missed the whole point. So I am going to beg you, please, please, read the whole story. Do not make any judgment until you read it all. Then write down the point: The point is that the federal law declares that what doctors are taught and what they believe, even what the law says is illegal, is suddenly okay because it is practiced in a government-approved mega-corporation. Now, if you cannot get that out of this article, please write me immediately so I know that I am compelled to go take a “Blog Composition 101” course.
I am going to illustrate how the Affordable Care Act of 2010 throws ethics overboard to replace them with institutional behavior that would land a corporate leader in prison.
What I am about to say uses a make believe doctor to tell a story. As you will hear shortly, what he does is immoral, unethical, illegal, and even evil. But almost no doctors do these things.
For purposes of this story, we’ll call your doctor Smith. How would you respond if Dr. Smith looked you in the eye and said: “You need an MRI for your sore finger, and I want you to use my clinic, the Smith Radiology Clinic across the hall.” Unless you own a piece of Smith Radiology, you would probably be incensed, not that the doctor owns another medical practice, but that he seemed to be forcing you to use his facility.
Let’s try another. “That really is a nasty rash you have there,” Dr. Smith says, “and I want you to go to Dr. Jones, the dermatologist, to have her look at it.” He fails to mention that Dr. Jones sends him $25 every time he does this. If you knew that Dr. Smith got a kick back (called fee splitting) from Dr. Jones, you would certainly find two new doctors.
And one more. “You appear to have hurt your right arm and left foot,” Dr. Smith says after examining you. “Let’s look at your arm today, then I want you to come back tomorrow so I can examine your foot.” He winks and adds, “That way I can charge two office call fees. But don’t worry, your insurance covers the cost.” That would be the last straw. Good bye Dr. Smith.
Dr. Smith, in this scenario, is motivated to do as many procedures as possible to wrestle away health insurance money, or your own. This is a nasty idea, and despite what Big Government planners want you to believe, the practice is limited to a tiny percentage of doctors.
If you discovered that Dr. Smith did self-referrals, fee-splitting, and manipulated the system to get more than one office fee, you would report him to President Obama, the FBI, and worse yet, Nancy Pelosi. What an outrage this would be.
This behavior is also illegal in most states, and unethical, immoral, and evil in all…until, well, until Congress passed the new health care law.
An Affordable Care Organization, called an ACO, is one of three lynchpins of the new law (the other two are insurance exchanges and the inevitable reduction in the number of health insurance companies). Here is how the ACO works:
Medicare, and eventually all medical payers, pays a flat fee to the ACO to pay for your medical services. You have access to all the doctors and other medical providers under contract or employed by your ACO.
If Dr. Smith is employed by or under contract to the ACO, he makes more money by providing fewer medical procedures. The fewer procedures Dr. Smith does, the more money retained by his ACO, and ergo, his bonus is greater. This is really the same thing Dr. Smith used to do when we called it evil, but it is in reverse. Before, more medical care and more money. In the ACO, less medical care and more money.
Rather than fee split with a doctor friend, however, Dr. Smith now does his fee splitting with the ACO, and the federal government blesses him for it. When Dr. Smith sends you to a dermatologist or radiologist under contract with his ACO, he receives a gold medal for sticking to the plan, and incidentally, the ACO gets paid. It is true that Dr. Smith would probably examine both your arm and leg the same day, but he would do it as quickly as possible. Or, more likely, the ACO will have Nurse Practitioner Johnson or Physician’s Assistant Peterson see you – they cost the ACO less, and leave more on the table for Dr. Smith.
Studies show that when doctors work under contract where they earn a salary their productivity falls – often as much as 50 percent. In the new ACO, Dr. Smith can work less, make more, and still be able to self-refer and fee split, plus get back door fees from his ACO peers. What a deal.
The federal reformers tell you the ACO is a better way to deliver health care than a fee-for-service plan: It is true if your doctor is immoral, evil, and unethical, like an ACO. The purpose of the ACO is to consolidate services in a closed system to cut cost. While it may be true it would be effective helping people with chronic illness get more coordinated care, it does so using the very reimbursement arrangements it labels illegal or immoral when done by individual doctors.
ACOs that rely on self-referral and fee splitting, which they do, should be judged by the same standard you use on Dr. Smith. But if you complain to President Obama, he will “call you out,” and Nancy Pelosi will whine and shake her finger at you.
Over time, I plan to share the 50,000 foot picture of the ultimate intent of ACOs, Exchanges, and massive consolidation of care and insurance. Just stay well, please!