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Progressive Focus© Newsletter

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Volume 7, Number 1 Spring, 2006
Helping You Manage the Expectations of Managed Vision Care

In This Issue:

Legislatures and the judiciary at work: The good, bad, and ugly

(First of two parts)

Your clinical education prepared you to practice eye care, but it's likely that you came out of the training program under-prepared to deal with the business of eye care. Through the years and crisis to crisis you've learned via the "school of hard knocks" how to manage staff, deal with accounts payable and collections, buy or lease equipment and office space, contract with managed care payers, address health insurance and disability issues, OSHA, HIPAA, etc. Effectively managing all of that is essential to growing the practice.

Now add to that list of business issues you must address the laws and regulations promulgated by your elected officials, and ruled on by the courts. In this first of a two part series for Progressive Focus© I'll highlight some of the good, the bad, and the ugly that can affect your dealings with third party payers and patients.

1) Recent legislative folly: Utah SB176

This is quite remarkable, and it's happening now. All eye care professionals should be concerned about the implications of this proposed legislation and similar actions in other states.

As I write this edition of Progressive Focus© in late January 2006, Internet eye care list-servs have been lit-up for several weeks with discussions of controversial healthcare legislation. Just introduced Utah SB176 would add a layer of regulation and bureaucracy to the sale and distribution of contact lenses in that state, and it could seemingly work against the eye health interests of Utah contact lens wearers.

The Bill forbids an eye care practitioner from dispensing any brand of contact lenses not certified by the manufacturer to the Utah Attorney General as being "...available in a commercially reasonable and nondiscriminatory manner directly to and generally within all alternative channels of distribution." Those alternative channels include:

  • a mail order company,
  • an Internet retailer,
  • a pharmacy,
  • a buying club,
  • a department store,
  • a mass merchandise outlet.

Anyone who violates this "Contact Lens Consumer Protection Act" by dispensing a lens not certified by the Attorney General is "...subject to suspension or revocation of the individual's license."

Rather onerous, don't you think -- losing one's professional license not over a gross failure to provide appropriate care but, rather, for violating a commercial (business) regulation by dispensing a contact lens that a manufacturer did not make available for sale through any and all distribution channels, including non-professional sources?

Read the Bill at: http://www.le.state.ut.us/~2006/bills/sbillint/sb0176.htm

Update: In mid-February an amended Bill passed the Utah Senate. Among several changes the suspension/revocation penalties were removed. Read the amended Bill at: http://www.le.state.ut.us/~2006/bills/sbillamd/sb0176s01.htm

In whose interests was this Bill introduced?

This Bill clearly would serve the financial interests of Internet contact lens companies. Whether it would measurably benefit Utah consumers is another question all together.

Those supporting the Bill say that its intent is not to limit doctor options. Rather, it is to protect the consumer, and prevent patients being "held hostage" by the sale of doctor-only (custom labeled) lenses. But is that alleged problem a mountain or is it a molehill, or maybe no hill at all?

Quotables

It is true that you may fool all the people some of the time; you can even fool some of the people all the time; but you can't fool all of the people all the time.

Abraham Lincoln in
Alexander McClure
Lincoln's Yarns and Stories

Certainly we have to be realistic and recognize that some practitioners may dispense "doctor-only" lenses and do it for economic reasons. But in reality how many instead dispense limited distribution/exclusive brands for medically valid reasons vs. holding the patient hostage for profit? I would suspect there are more of the former and fewer of the latter.

In actuality, if enacted SB176 would prevent manufacturers from selectively authorizing who can retail their lenses, and it could facilitate the potentially dangerous sale of contact lenses over the Internet by non-professionals. Eye care professionals who are now concerned about widely reported failures of Internet vendors to properly verify and fill prescriptions, or who ship lens orders after the Rx expiration date would have additional reason to be alarmed at the prospects of this Bill creating further concerns over eye health safety.

Should ophthalmic manufacturers be compelled to supply all of their products for resale by anyone?

Limited distribution arrangements are common within the ophthalmic industry. For example, Essilor supplies Varilux lenses only through authorized laboratories rather than to anyone with an edger. And many frame manufacturers manage the retail distribution chain for their product lines. For example, you're just not going to see (authentic) Maui Jim or Oakley sunglasses sold on every street corner.

Postings on the ophthalmic list-servs make it clear that most doctors are strongly against SB176, or anything like it that might come along in other states. One noted: "Product distribution and the right of a manufacturer to determine that system is an important [part] of the US commerce system. It is found in every industry and in every demographic. Clear examples include designer fashion. There is a very good reason that designer fashions are not sold to anyone and everyone. Yet, contact lenses as medical devices should be held to a lower standard[?]"

In USA Today (West Coast edition, page 10D, March 16, 2006) Stihl placed an ad for its chain saws that said, "Why is the world's number one selling brand of chain saw not sold at Lowe's or The Home Depot?" The ad listed several reasons why Stihl thinks it is important how and where its products are distributed, and ended with the words, "We won't sell you a chain saw in a box, not even a big one."

Certainly in the case of a medical device such as contact lenses there should be more rather than less control over authorized distribution channels. It just makes sense that contact lenses are not available from every Tom, Dick, and Harriet, but rather only from those who rigorously comply with the manufacturer's policies and protocols, with all regulatory/legislative requirements, and with appropriate regard for fitting, dispensing, and follow-up care.

Indeed. The dichotomy is absurd. But apparently some legislators in Utah don't see it that way.

What makes the introduction of this Bill all the more interesting is that Utah is home to 1-800-Contacts, and so the outcome of this legislation could have direct employment and economic impact in that state

Alabama, Indiana, West Virginia, Florida, and other states (coincidentally?) introduce similar bills

At the end of January SB379 was posted on the Alabama state legislature's website. Strikingly similar to Utah's SB176, Alabama's Bill would serve to accomplish the same goals as Utah's.

Read it at: http://alisdb.legislature.state.al.us/acas/ACASLogin.asp

Once at this URL click on "Bills," then "by sponsor," then select Senator "Means," then "get bills," then scroll to the bottom and select "SB379."

And (coincidentally?) at the end of January HB1308 was posted on Indiana's legislative website. HB1308 is hardly different in wording than either the Utah or Alabama Bills.

Read it at: http://www.in.gov/legislative/bills/2006/IN/IN1308.1.html

In mid-February SB617 was introduced in West Virginia. Again, the wording of this Bill closely mirrors legislation introduced in the other states. Both the WV Academy of Ophthalmology and WV Optometric Association oppose the Bill. Read it at:

http://www.legis.state.wv.us/Bill_Text_HTML/2006_SESSIONS/RS/BILLS/sb617%20intr.htm

Interestingly, the West Virginia Bill contains this frighteningly onerous provision: §46A-6L-9. Enforcement. "Knowingly and intentionally violating this article is gross malpractice ...and professional incompetence..."

Those words (threats) should concern all West Virginia eye doctors.

And in early March yet another similar Bill, SB2638, was introduced in Florida. Read it at:

http://www.flsenate.gov/data/session/2006/Senate/bills/billtext/pdf/s2638.pdf

Quotables

Imitation is the sincerest of flattery.

Charles Caleb Colton
Lacon, volume 1

Reading these Bills one would be hard pressed not to see the same influential entity "guiding" the sponsors in each state. Look no farther than the names of four of the five Bills:

West Virginia: Contact Lens Consumer Protection Act
Utah: Contact Lens Consumer Protection Act
Alabama: Contact Lens Consumer Protection Act
Florida: Contact Lens Consumer Protection Act

And it's highly unlikely that the Bills in Utah, Alabama, Indiana, West Virginia, and Florida are the end of this push by certain interests. Rather they're more likely only the first shots in what may prove to be a highly contentious, national battle pitting contact lens manufacturers and eye care professionals against certain retailers who seemingly would prefer that contact lenses be totally commercialized and perceived like a can of tomato soup -- nothing more than a simple commodity.

Of course consumers don't decide where to buy a can of tomato soup based on service or the product knowledge of a store's employees. Whether they shop at neighborhood supermarket "A" or "B," the purchaser of a can of tomato soup -- a commodity -- is not concerned about anything other than price.

And that makes it a bit frightening to realize those behind these Bills are hoping legislators can be convinced that a transaction for contact lenses, a medical device, is no more involved than for that can of tomato soup. And if this perceptual change, this commoditization of contact lenses comes to pass, it would be a very sad state of affairs for patient care.

Might vision plans and insurance companies be your allies in a battle against these intrusive Bills?

Talk about strange bedfellows... It could be that an important ally to the eye doctor in this battle might turn out to be the vision plans and insurance companies who cover the ophthalmic services provided to so many patients. How, you wonder?

Well consider that the vision plans and the insurers -- each and every one of them -- promote certain watchwords including quality, service, and individualized, professional care in their marketing efforts to attract employers and employees. Each of them also talks about credentialing, and how careful they are in selection process for panel providers.

How could that message of professionalism and quality and individualized care possibly be congruent with the idea that a highly perceived health care benefit, specifically a medical device, is commercialized? What lasting value will a vision plan have in the minds of eye care patients if the contact lens benefit is reduced to nothing more than a 1-800-Contacts commodity?

What would be next then for vision plans and insurers? "Spectacles-R-Us?" "LASIK-R-Us?"

Surely those who market and pay for vision care benefits, even the "bean-counters" who worry about the bottom line, could not want this to be the direction the industry is headed. And just as surely it is up to eye care professionals to make sure that the vision plans and insurers (especially the insurers) understand the ramifications of this "dumbing-down" of contact lens dispensing as facilitated by these troublesome state laws.

The issues must be addressed. The payers need to be made aware of the long-term impact of such legislation. This is a battle that ultimately could affect a majority of vision and eye care professionals.

Make your voices heard so that certain influential parties cannot turn this into simply an economic issue. This is also about patient care.

Late updates -- Indiana HB1308 and Alabama SB379

The Indiana Optometric Association and the Indiana Academy of Ophthalmology worked cooperatively to oppose this Bill. HB1308 was "withdrawn" in early February, but it is unclear if it has been killed or only temporarily placed on a back burner.

In addition, Alabama's SB379 "died" in mid-February.

Still, the mere fact that such legislation was even being considered (or is still being introduced) in several states points out the urgent need for practitioners to be active in their professional societies both at the state and national levels. As a group, eye doctors have significant potential influence with their elected officials, but that "leverage" can only be effective if those elected officials hear from the doctors early in the legislative process

Side-stepping legislated caps on attorney fees

An absolutely fascinating situation is unfolding in Florida over contingency fees for plaintiffs' attorneys in medical malpractice actions. Here is a case where doctor-friendly legislation passed by the electorate seemingly has been undermined. Whether an optometrist or ophthalmologist, this should cause you concern for the possibility that something similar might come up in other states.

In November 2004 voters passed Amendment 3 that set caps on a plaintiff's attorney's fees at 30% of the first $250,000, and 10% of all awards in excess of that amount. But many attorneys argued that these fee caps would make it much harder for plaintiffs to pursue expensive medical malpractice litigation. Basically they said that attorneys would not take on valid cases unless there were the prospects of better payoffs at the end.

And so some attorneys started asking current and potential clients to sign documents waiving their Amendment 3 rights -- thereby allowing attorneys to collect in excess of the mandated limits. Doctors' groups challenged this end-run and asked the Florida Supreme Court to change its rules of professional conduct to preclude attorneys from using such waivers to contravene the electorate's wishes.

But in December 2005 the Court ruled unanimously, finding that clients have a right to waive the legislated limits as long as their attorneys advise them of the mandated fee caps. The Court asked the Florida Bar Association to draft appropriate rules of conduct for the use of such waivers.

Though the December decision was not described as a "final ruling," it certainly creates an expectation that the final announcement, when published, will free plaintiffs' attorneys to side step the legislated caps on malpractice awards.

This is an interesting turn of events -- one that should ring alarm bells in all states for doctors who are burdened by, or face the prospect of, the upwardly spiraling costs of malpractice insurance coverage.

3) Pay for Performance (P4P)

For more than a decade the word in health care, particularly in managed care, has been quality. Clinicians, industry think-tank experts, academicians, "bean counters," and others have produced study after study, each with its own definition of quality and how to measure it.

Yet for all that accumulated knowledge doctors and the payer community have not been close to agreement. And at the heart of it all is a huge complicating factor -- practice variation.

Doctors don't all treat patients the same. Techniques and skills vary, as does the availability of resources. And so around the nation the cost to deliver similar care to a patient differs greatly.

Building a better mousetrap?

The newest "sure-fire" solution from the payer side is Pay for Performance -- third party plans basing reimbursements on the specific accomplishments of a physician, group, hospital, or ancillary provider entity. Many if not most payers including Medicare are working to develop reimbursement methodologies that would move in this direction over the next few years.

Pay for Performance (P4P) is based on the supposition that if clinical performance can be accurately measured, categorized, and reported then payers will have an objective means by which to pay more to better performing providers. And patients will have an objective means by which to select their doctors, hospital, etc.

As always, the devil is in the details.

Quotables

Appearances often are deceiving.

Aesop
The Wolf in Sheep's Clothing

So far a significant number of health plans have implemented test programs, sometimes voluntary. Preliminary reports from the payer side speak of great success, particularly with hospitals, as demonstrated by improved quality in the selected metrics. Reports from the physician side speak of rather different results including a considerably increased administrative burden to collect and report the data.

Unfortunately for providers Pay for Performance typically is being implemented as a zero-sum game. That is, rather than the payers putting supplemental money into the compensation pool and rewarding superior results with additional funds, instead they're reducing payments to some doctors and passing that reduction over to others. But that's simply shifting from one pocket to the other.

Or, in a variation, a payer withholds a certain portion of every doctor's reimbursements, and then the doctors who are deemed to have provided superior care are eligible for a "bonus" payment. In other words, those who show the desired improvement get back that same money that they've already earned once and, perhaps, a bit of what was withheld from those whose performance is not deemed superior.

But that's certainly disingenuous, and sort of like saying that your state or federal tax refund is a "bonus" when, in fact, it's nothing more than recovering money that was yours to begin with. This double-talk is hardly the sort of thing to make providers want to work even harder to improve the quality of patient care.

We're from the government, and we're here to help!

Anytime legislators at either the federal or state level get involved in healthcare policy development the results are likely to be problematic for those who provide the care. With P4P it's no different.

CMS is testing P4P (euphemistically referred to as "value-based purchasing") to see how it might be applied to federally funded programs. And states are looking to see how it might be applied to financially strapped Medicaid.

CMS has initiated pilot demonstration projects, and is working with many medical specialty societies to formulate standards for measuring and reporting the information that will be used to decide who does and does not provide "superior" care. Not surprisingly, the earliest metrics have focused on Primary Care and chronic disease management.

Despite overtures from ophthalmology (six broad measures re: cataract, glaucoma, diabetic retinopathy, etc. were proposed by the American Society of Cataract and Refractive Surgery and the American Academy of Ophthalmology), at least initially CMS has shuffled eye care to the side and is not including it in the pilot program launched January 1, 2006. Other specialties also were not made part of the initial pilot program.

It seems likely that eventually eye care metrics will be included in CMS' P4P initiative and in those of private insurers. In the short term some eye doctors can expect to be asked to collect and report data voluntarily (i.e., the results will not impact on their reimbursements but will be used for systems testing). Already plans are under development to implement special "G" codes for reporting specific ophthalmic services and procedures. But when all of this will come to pass for eye doctors is anyone's guess.

It's also pretty obvious that by virtue of the mix of services provided ophthalmologists will be more significantly impacted by P4P than optometrists. But that is not to say that ODs should consider themselves safe from the potential ravages of yet another questionable solution to the rising costs of healthcare.

As more optometrists provide increasing numbers of medical eye care services they, too, will feel the uncomfortable squeeze of the health plan "bean counters" who would try to decide what is quality care.

So what's the bottom line in P4P?

Quotables

Between the idea and the reality
Between the motion and the act
Falls the Shadow.

T.S. Eliot
The Hollow Men

Will quality improve? Will money be saved? Will patients benefit?

Payers seem convinced that the answers will be yes. And if government (i.e., Congress) is convinced that this is the way to go -- and so far it seems as if Congress is convinced -- then eye care professionals can't afford to stand passively on the sidelines even if eye care is currently back burnered and out of view. Instead, they must get involved -- at a minimum in the development of local payer metrics to measure and report quality.

And all eye care professionals should talk to their elected state and federal representatives about the high costs of technology needed to participate in P4P programs. Few practices, certainly not solo and small group practices, will be able to afford the full-blown electronic medical records systems that will be mandatory for collecting and reporting large volumes of data to each payer. Perhaps government-assisted financial incentive programs might be developed to help practitioners justify the information technology (IT) investments.

Finally, doctors should speak with health plan policy makers so that local P4P compensation systems are based on positive incentives rather than negative withholds -- a carrot approach rather than the stick. Unless P4P adequately and fairly compensates those who excel then it is doomed as a means to improve quality.

After all, who in their right mind is going to spend tens of thousands of dollars and commit considerable resources to participate in P4P unless it holds the promise of significant additional income? If the incremental "bonus" payments amount to very little then investments in information technology infrastructure simply are not going to happen.

Quick Quiz

1) Indiana HB1308, Utah SB176, Alabama SB379, West Virginia SB617, and Florida SB2638 would all:

  1. make it an offense to prescribe/dispense a contact lens not on the Attorney General's list of commercially available lenses,
  2. create a situation where the financial interests of non-professionals could adversely affect the doctor's professional judgment,
  3. guarantee more competition and lower prices, thereby benefiting patients,
  4. all of the above
  5. both a and b.

2) Pay for Performance (P4P):

  1. is being tested in pilot programs, for the most part initially focused on Primary Care and chronic diseases,
  2. is a compensation methodology that will reward significantly better clinical care with significant bonus payments,
  3. is sure to be adopted into Federally funded programs such as Medicare, but is unlikely to become common with commercial (private) insurers,
  4. is based on metrics that are relatively simple to measure and report for comparing progress over time,
  5. none of the above.

3) P4P:

  1. is something that will significantly affect other specialties but is unlikely to have much of an impact on eye care services or practitioners,
  2. will mean additional administrative and financial burdens on participating practitioners,
  3. is viewed by payers as essential to bringing down the costs of healthcare,
  4. all of the above,
  5. both b and c

Answers:

1) e

2) a

3) e

Education is what you get when you read the fine print.

Experience is what you get when you don't.

Copyright © 2003-2007, Gil Weber, MBA. No part of this newsletter may be reproduced or distributed in any form whatsoever without the author’s prior written authorization.

These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.

The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice. Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.

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