3 Big Themes at the 2017 AHLA Physicians and Hospitals Law Institute

During AHLA’s Physicians and Hospitals Law Institute this week, we saw three recurring themes as sessions focused on issues affecting the industry.

  1. MACRA – While there is significant uncertainty surrounding the ACA, MACRA appears to be here to stay. And while the first year of reporting requirements began this year it is clear that a lack of knowledge and understanding of MACRA abounds. Key thoughts to consider:
  • MACRA will continue to drive consolidation - Most independent practices don’t have the infrastructure or capital to invest in required IT to support needed documentation requirements.
  • MACRA’s impact on physician compensation - Recent Sullivan Cotter survey reports increased physician compensation tied to quality (approximately 7% of total cash compensation for staff physicians) individuals developing physician compensation models should use caution not to double dip or use as a pay raise for physicians. The MIPS track of MACRA was established to be budget neutral with both winners and losers and the Advanced APM track requires more than nominal risk to qualify.
  • MACRA and the implications of fair market value and commercial reasonableness can be tricky - Advanced APM models include waivers for FMV but each model requires a different set of waivers and rules. One size does not fit all. Also, stacking should really be considered when reviewing total cash payments to physicians. Consider the pieces and parts and look at the whole. Finally, the question of whether or not it is commercially reasonable to compensate or share MACRA reimbursement increases with physicians not directly responsible for improving quality should be contemplated and properly documented on the front end.
  1. Mitigation and Risk Management Large dollar settlements continued to be a theme in 2016 and that’s expected to continue into 2017. Focus on establishing compensation compliance programs in light of payment reform reverberated throughout the conference. Key take a ways are:
  • Practice Losses and impact on fair market value and commercial reasonableness - Practice losses do not imply that a transaction is not FMV or CR. However, practice losses do spotlight potential high risk transactions. Therefore, strong compliance programs that document on the front end the need for a particular transaction, why any losses may occur and steps taken to mitigate losses are essential. While these compliance programs aren’t a “get out of jail free card” this type of compliance documentation certainly establishes a compliant mindset position.
  • Survey Data “Dos and Don’ts” - It has never more been true that pulling a survey off the shelf and using it as FMV documentation can cause serious compliance risks. Careful use and understanding of survey data continues to play a key role in establishing FMV. And payment reform will further highlight the need for informed survey users as the risk for double dipping and stacking issues will rise.
  1. Cybersecurity – Eduardo Monarez, Director of Intelligence at USAF said one of the most important challenges we face as a nation is cyber security. Monarez emphasized even basic attacks are getting more and more sophisticated mimicking nation state methods. That calls for organizations to seek expertise that understands malicious software, code, techniques and procedures. Knowing how an attacker attacks and the sharing of that information, even among competitors within the healthcare industry, can be used to develop lessons learned and apply those techniques to develop a compromise and monitor network flow.  Monarez closed his presentation stating that we are the weakest link, and to sustain an adversary attack and continue to function calls for a policy of resiliency.

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