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Publish Date: October 10, 2007   |  Tags:   News

Workers' Compensation Clampdown
Growing Number of States Capping Workers' Comp Facility Fees
The old saying that workers' comp pays slowly, but it pays well may no longer hold true for those surgical facilities in a growing number of states that have capped facility fees or are threatening to do so.

"When it comes to workers' compensation, there are two kinds of states: Those that have capped payments in relation to Medicare, and those that will," says FASA Executive Vice President Kathy Bryant.

South Carolina, Colorado, Louisiana, Georgia and New Mexico have imposed percent-of-charges policies for workers' compensation payments. Since 2002, when Washington and Oregon imposed laws to add Medicare-related caps to their workers' comp systems, three states have followed suit (California, Texas, North Dakota) and three more (Michigan, Tennessee, Vermont) are on the brink of doing so (see "States at a Glance").

In California and Texas, which have made the biggest headlines in recent months, the caps have been a mixed bag.

"Our workers' compensation reimbursement has gone down from an average of about $7,500 a case to about $3,500 a case," says Michael Sawyer, MBA, the administrator of Santa Barbara Surgery Center in Santa Barbara, Calif. "But our business model is multi-specialty, multi-payer, so it hasn't had a tremendous impact."

"For facilities built around the workers' comp system, the cap can be devastating."

The law doesn't address carveouts for implants, but Mr. Sawyer says he's not yet had a problem getting reimbursed for those. He's seen some payers decline to pay or refuse authorization on payment for workers' comp cases because of physicians' disclosure of financial involvement in their centers.

"It's really a misinterpretation of the law, because it doesn't say physician ownership is illegal, just that there must be disclosure," says Mr. Sawyer.

On the plus side, however, he's getting paid exponentially faster for the workers' comp cases his surgeons take on.

"We saw a lot of payers drag their feet before [the law was enacted]," says Mr. Sawyer. "We never knew when or how much we were going to get. Now the time is shortened and when we book a case, we know exactly what we'll be paid. That's taken some of the sting out of it."

According to FASA, hundreds of bills have been introduced to the California Legislature to revise the workers' comp law to include reimbursement for implants or to increase the cap. They can be tracked on the California Medical Society's Web site at www.calphys.org/ html/legislative_hot_list.asp.

In Texas, "the system is pretty much broken, and our workers' comp costs are high while our back-to-work numbers are low compared to other states," says John Pike, the executive director of the Texas Ambulatory Surgery Center Society. When only physician-fee caps were enacted in Sept. 2003, many providers continued to serve workers' comp patients because the facility fees let them be profitable. But once those were cut, "most ASCs didn't feel they could maintain profitability ... and more are dropping out," says Mr. Pike.

STATES AT A GLANCE: How Workers' Comp Policies and Laws Break Down

  • California. As of January, payments are capped at 120 percent of the Medicare HOPD rate. Physician owners are required to disclose this status to patients and insurers.
  • Colorado. 80 percent of billed charges.
  • Georgia. Payment is lesser of billed charges or fee schedule; unlisted codes reimbursed at 100 percent of charges.
  • Louisiana. 90 percent of covered charges.
  • Massachusetts. 100 percent of Medicare.
  • Michigan. A rule proposed over the summer could cap payments at 180 percent of the Medicare ASC rate and reimburse for implants at cost plus a to-be-determined percentage.
  • Nevada. 100 percent to 164 percent of Medicare.
  • New Mexico. Payment is workers' comp discount ration (between 0.8 and 1.0) multiplied by usual and customary charges.
  • North Dakota. No wage index adjustments; cap is 125 percent of Medicare HOPD.
  • Oklahoma. Percent of inpatient hospital DRG-based rates.
  • Oregon. 251 percent of Medicare.
  • South Carolina. 87.9 percent of total charges.
  • Tennessee. A formal proposal to cap payments at 176 percent of Medicare's ASC rate is expected to be presented Dec. 1.
  • Texas. As of September, payments top out at a facility fee of 213.3 percent of the Medicare ASC rate.
  • Vermont. Medicare-related fee schedule to be established by Feb. 1.
  • Washington. 231 percent of Medicare.

Note: These figures relate to facility fees only.
Sources: FASA, Tennessee Hospital Association

According to a survey of its members conducted by the Texas Orthopedic Association last year, 28 percent dropped out of the system, and of those who stayed, more than 57 percent were restricting acceptance of new patients.

As implementation of the new payment system has been a problem, the workers' comp commission is looking at including implants, covering omitted codes and possibly adjusting the 213 percent of Medicare facility fee. However, the legislature recently recommended the abolition and reformation of the commission under the board of insurance, "and no one knows how that's going to wind up after the legislature, which convenes in January, is through with it."

Any state that is tying payments to Medicare is "way behind in the thinking on fair payment for three reasons," says Craig Jeffries, the executive director of AAASC.

First, he says, Medicare is changing the way it pays for ASC orthopedic procedures, and "that's a very active process for the next two or three years. They're throwing out the entire system states are thinking of using." Second, says Mr. Jeffries, Medicare's list of approved procedures for the ASC is restrictive and doesn't include many core workers' comp procedures for both pain management and orthopedics. Logically, this means more workers' comp cases will be sent to hospitals. The American Hospital Association didn't return requests for comment on the issue. Finally, "Medicare has never properly recognized and paid for the additional implant costs incurred in many ortho procedures," says Mr. Jeffries.

"The states tie payments to Medicare," says Ms. Bryant, "because while it might be a bad system, it's a bad system they don't have to spend time and energy developing."

- Stephanie Wasek

Anesthesia Providers and Drug Abuse
Could Exposure to Secondhand Opiates Lead to Drug Abuse and Addiction?
It's no secret that anesthesia providers are up to four times more likely to be treated for drug addiction than other doctors because, the popular theory goes, they have easy access to drugs, addictive personalities and stressful jobs.

A new study offers quite a different explanation: Anesthesia providers who sit near a patient's head during surgery are subject to secondhand exposure of IV-administered fentanyl and propofol that patients' exhale. So in much the way that children of smokers are more likely to smoke, anesthesiologists who inhale trace amounts of secondhand opiates are more likely to crave drugs.

"We're thinking that anesthesiologists' intermittent exposure to second-hand opiates presents an alternative hypothesis that's worth testing," says Mark Gold, MD, a distinguished professor with the University of Florida's McKnight Brain Institute and the chief of addiction medicine at UF College of Medicine.

Dr. Gold and colleagues used highly sensitive detection equipment to collect and analyze multiple operating room air samples. They found that anesthetic drugs were present in air throughout the operating room, with the highest concentrations over the patient's mouth. Dr. Gold presented the findings last month at the Society for Neuroscience annual meeting in San Diego.

"Most people thought that in the evolution of anesthetic practice from inhaled gases - nitrous oxide and ether, and so forth - to drugs that are administered intravenously, there wouldn't be secondhand exposure," says Dr. Gold.

"[Now we see] that those narcotics, which may be 1,000 times more potent than heroin, get into the air, may reach their brain, may change their brain and make it more likely that they'll crave and want drugs, [become] depressed and may be more likely that they'll have a host of behavioral problems," says Dr. Gold.

Among physician drug-abusers in Florida, anesthesiologists are over-represented by some 500 percent. While only 5.6 percent of licensed physicians in Florida are anesthesiologists, they represent more than 25 percent of the state's "impaired physicians," says Dr. Gold.

"Trace levels of fentanyl and propofol cogeners may well be in the air, but this fails to explain why the majority of anesthesiologists do not become addicted," says California anesthesiologist Barry Friedberg, MD, when asked to comment on the study. "The combination of an addiction-prone personality in the setting of the high levels of stress associated with the care of critically ill patients requiring emergency surgery is a more probable explanation for the minority of anesthesiologists who become addicted."

Dr. Gold says the unintentional exposure might one day be determined an occupational hazard for anesthesia providers. But first he is calling for further studies and blood sampling to test his OR-as-occupational-hazard theory. As he asks, "Are anesthesiologists the canary in the mineshaft?"

- Dan O'Connor

Pennsylvania Department of Health Bans Laparoscopic Procedures in ASCs

The Pennsylvania Department of Health has told the state's 161 ASCs to stop performing laparoscopic procedures that enter the peritoneum, including lap cholecystectomies, tubals and appendectomies. State health officials are basing the ban on procedures Pennsylvania ASCs have hosted since the mid-1980s on their interpretation of Pennsylvania Code 551.21, a five-year-old regulation that says that ambulatory surgery surgical procedures may not "require major or prolonged invasion of body cavities," documents show.

"But we don't think lap choles meet the definition of major and prolonged invasion of a body cavity," says Kathy Bryant, FASA's executive vice president. "It's hard for me to understand how minimally invasive surgery is major and prolonged invasion of a body cavity."

Several sources believe state health officials are reacting to reports of a rising number of lap choles converting to open cases in ASCs. "Across the state, the complication/admission rate for lap choles is unacceptable," says a health official in a memo. FASA says less than 1 percent of the 44,000 lap choles performed annually in the outpatient setting are converted to open procedures - and that not all these were admitted or transferred to a hospital for recovery and additional stay. "Because the need to convert is rare and when it occurs it can be handled safely, this does not justify prohibiting the performance of laparoscopic cholecystectomies in ASCs," writes Ms. Bryant in a letter to Pennsylvania Secretary of Health Calvin B. Johnson, PhD.

Administrators say they've been told that it's still OK to perform lap hernias in ASCs. The ban doesn't apply to laparoscopic procedures performed in hospital-based surgery centers, says Ms. Bryant. "State health officials took great lengths to explain that they had no problem with these procedures being done in hospital surgery centers. When I asked them to explain why it's safe in an HOPD but not in an ASC, they could not do so." Health officials declined to comment. Several administrators say they're unaware of the lap ban.

Laurie Deitrick, RN, MBA, the administrative director of the Evangelical Ambulatory Surgical Center in Lewisburg, Pa., says a state health surveyor told her in late summer to stop performing laparoscopic procedures immediately. "Our surgeons were very disappointed," says Ms. Deitrick. "Their reason for being a surgery center was to have the capacity to do these cases and offer to the public the conveniences of a freestanding ambulatory surgery. They like doing [laparoscopic procedures] here. It's more efficient than in the hospital setting." Ms. Deitrick estimates that the banned procedures represent 8 percent of her center's cases.

The state Department of Health says the ban applies to all procedures that enter body cavities, not just invasive laparoscopic procedures. "These regulations apply to any type of procedure that is invasive, which includes open heart surgery, the removal of a gall bladder or the removal of an appendix," says spokeswoman Jessica Seiders.

- Dan O'Connor

Post-op Phone Calls
Patient's Death Two Days After Surgery Puts Focus on Follow-up Procedures
Does your staff make every effort to telephone every patient after surgery? As one hospital recently found out, failing to contact patients post-operatively could spell trouble for your facility.

Two days after he underwent gall bladder surgery at Rhode Island Hospital in Providence, Peter Sepe, 80, died July 17 due to complications, according to published reports. The hospital's nursing staff tried to reach Mr. Sepe via telephone following his procedure, but failed to do so, says hospital spokeswoman Nicole Gustin.

The Rhode Island Department of Health surveyor who examined a sample of nine outpatient cases discovered that the hospital failed to contact five of them post-op, says Bob Marshall, MD, the assistant director of the health department. The reasons hospital staff cited for failing to speak to patients included disconnected phones and answering machines, according to the health department report.

In the report, the health department proposes several changes to the hospital's policy for post-ambulatory surgery phone calls:

  • The ambulatory PACU assistant clinical manager will monitor and report to the clinical manager that all ambulatory patients were included in attempts to make post-op phone calls and that all attempts should be clearly documented in patients' records.
  • The PACU will add monitoring of post-op phone calls to its unit-based quality improvement indicators. It will be an ongoing indicator.
  • The PACU staff is required to notify the manager on call if they have insufficient resources to call patients post-op.

Based on the health department's recommendations, the hospital is now documenting post-op phone calls in patients' charts and considering the following changes, says Ms. Gustin:

  • requiring a second phone call if the patient is not reached the first time;
  • creating a form that asks a patient for permission to leave a message on a telephone answering machine; and
  • extending to 48 hours the time nurses have to reach a patient (the national recommendation is 24 hours to 48 hours, according to Ms. Gustin).

Ms. Gustin also says the hospital is collecting data for quality improvement and that after one month's worth of staff re-education on post-op contact policies, staff reached 94 percent of the hospital's patients by phone within 24 hours of discharge.

Follow-up phone calls after outpatient surgery aren't required by JCAHO standards, which leave room for facilities to define what data and information they gather during assessment and reassessment, as well as timeframes for reassessment based on patient needs and services provided, according to 2004 accreditation manuals for hospitals and ambulatory care facilities. However, JCAHO requires you to be able to justify the effectiveness of the means you choose.

Facilities that choose post-op phone calls as their follow-up procedure must consider how they'll accomplish reassessment for patients they need to contact on weekends or at other times when staffing is an issue, according to the JCAHO manuals.

There is no evidence linking the death of Mr. Sepe to Rhode Island Hospital's inability to reach him by phone, says Dr. Marshall. Still, it's best to ensure your staff is adequately equipped to reach patients after surgery. "The post-op call is important to see if problems occurred with a surgery," says Dr. Marshall. "There's lots of good reasons to follow up with patients, and this case is a reminder of that."

- Daniel Cook

Inside The Numbers
Cosmetic Surgery

  • 1.23 million Number of men who had plastic surgery in 2003
  • 7.45 million Number of women who had plastic surgery in 2003
  • $2,224 Average physician fee for liposuction
  • $3,188 Average physician fee for rhinoplasty
  • $3,375 Average physician fee for breast augmentation
  • 56% Percentage of cosmetic procedures done in an office
  • 28% Percentage of cosmetic procedures done in a hospital
  • 16% Percentage of cosmetic procedures done in a free-standing ASC
  • 45% Percentage of cosmetic patients who are repeat patients
  • 32% Percentage of cosmetic patients undergoing multiple procedures at the same time

SOURCE: American Society of Plastic Surgeons 2004 Report of the 2003 Procedural Statistics

For the Record
The "2004 Manager's Guide to Surgical Supplies" contained the following errors:

  • The toll-free number for Southern Anesthesia Surgical is (800) 624-5926. Southern Anesthesia Surgical should have been included in the directories for drapes, gloves, gowns and masks, hand hygiene, wound closure, blades and knives, surgical packs and preps.
  • The toll-free phone number for Medical Concepts Developments is (800) 345-0644.
  • Alcon should have been included in the drapes, knives, suture and prep sections.
  • Molnlycke's Web address is www.molnlycke.net.

The Malignant Hyperthermia Association of the United States advised Harloff on the correct equipment and drugs to include in its Malignant Hyperthermia Cart, but it didn't help design the product and is not promoting one cart over others. ("Product News," October 2004).