The CFA Perspective

2010 is Here and “Most Cardiologists Lose, Some Lose Big”

Posted by Peter Rastello

2/10/10 5:06 PM

The CY 2010 Medicare Physician Fee Schedule (MFFS) Final Rule, as originally presented by the Centers for Medicare and Medicaid Services (CMS), passed into law January 2010 despite heavy lobbying efforts on the part of cardiologists, cardiac imagers and others. The new fee schedules, mandated by adjustments in the Sustainable Growth Rate (SGR) formula that governs physician payments, are phasing in sharp cuts in reimbursement for office-based imaging procedures; shifting payments from specialists to primary care practitioners; and changing coding and reimbursement for consultations, office visits and hospital visits; among other changes. The net result is an approximate overall cut of 21%. The RVU conversion factor drops from $36.0666 to $28.3895.

At the last minute, implementation of a portion of the reductions was put off until March 1, 2010. Intense lobbying and lawsuits questioning the rules methodology by the American College of Cardiology (ACC) and others are continuing in an effort to prevent full implementation. Only Congressional action can change the implementation schedule or the substance of the changes.

"Most cardiologists lose, some lose big," is a quote from a slide presentation put together by the ACC for its members before implementation was scheduled to take place at the beginning of the year.

As referenced in our last posting, a December 2009 a poll by the American College of Cardiology asked cardiologists to answer the question, "Did your practice integrate with a hospital in 2009?" As reported on the ACC website,

• 13% said yes, my practice integrated in 2009.
• 23% said no, but my practice has concrete plans to integrate.
• 50% said no, but my practice is thinking about it in the next 1-2 years.
• 15% said no, my practice has no plans to integrate with a hospital.

A month or so into the new reimbursement climate, what would the answers be if the same question were posed today? One could conclude that these substantial reimbursement changes may tip the scale in favor of a more concentrated effort at integration between physicians and hospitals. Certainly, when and if the full fee schedule changes are implemented, the concern for future income and practice revenue stability of those affected will grow.

CFA is aware of cardiology groups that have been thrown into turmoil over these changes because of, among other factors, the way the group compensates its members; their respective work assignments and subspecialties, and associated reimbursement; which members own or otherwise control ancillary and testing equipment and services; and related issues. These changes can shake the very foundation of cardiology practice compensation methodology. Group practice compensation is a critical issue for member stability and the ultimate success of the group. Variation in compensation and perceived inequities under the pressure of reduced reimbursement could cause a group to become unstable, split apart or possibly seek closer integration with a hospital or health system as a strategy to return the group to a semblance of economic stability and harmony.

If the fee reductions are mitigated in the near term, as has frequently been the case in the past, there will still be erosion of the financial performance of cardiology practices. As healthcare costs increase, the assault on physician payment is anticipated to continue unabated. In the mind of most physicians, governmental reimbursement will inevitably be eroded at their expense and the overall reimbursement environment will remain toxic.

CFA recommends that cardiovascular physicians monitor their professional societies for updated information on reimbursement changes. These would include, and, among others.

It is critically important that cardiovascular management and hospital administrative staff monitor the situation with their cardiovascular physician colleagues' practice circumstances. Hospital management should be open to evaluating alternatives for collaboration and more effective alignment and integration with their cardiovascular medical staff.

Topics: Heart Hospital Services Optimization, Cardiovascular Physician-Hospital Alignment, Cardiovascular Hospital Services Optimization

Hospital and Physician Alignment in the Cardiovascular Enterprise

Posted by Peter Rastello

12/1/09 10:30 AM


Hospital cardiovascular program managers and cardiology, cardiovascular surgery and vascular surgery practice administrators are well aware of the continuing evolution of cardiac and vascular medicine and the multitude of challenges facing each of us.  For cardiovascular program leaders across the country, the challenges of the past will continue into 2010, along with new circumstances requiring creative solutions.  The national debate over healthcare reform that is heating up is leading to more confusion and indecision about the future.  Hospitals and physician practices continue to be inundated with strategic, clinical, financial, operational, and competitive issues that require informed organizational responses.  The possible strategies to successfully address these issues are numerous and varied.

In such times, an approach that pools resources to solidify the program's foundation for the future is critical to short term and ongoing success.  Sound physician/hospital alignment has the potential to be a CV service line transformative strategy that can:

  1. Align strategic, operational and financial incentives between physicians and hospitals
  2. Provide a platform for developing customized integration strategies
  3. Improve operating performance and profitability
  4. Reduce/prevent competitive risk and predatory recruitment
  5. Gain competitive advantage; retain and expand market share

Experience in the field of cardiovascular physician/hospital alignment projects, leads to several key conclusions when planning for a cardiovascular program's future:

  • If you have seen one and done one, then you have seen just one and done just one. Unfortunately, what has worked in one city, for one hospital or group of physicians, may not work for you. A situation that seems similar to yours may be different in a crucial aspect that precludes your success.
  • While there is a major trend towards hospitals employing specialists like cardiologists and cardiovascular surgeons, this is not always doable-nor is it frequently the best answer in all circumstances and in all communities.
  • It isn't always about money. Yes, economics and aligned incentives are important, but a myriad of personal, political and other factors can impact physician thinking and hospital actions. How often has a physician said that he wishes he was in charge of the CV service line for just one day? Very often, the issue is the appropriate exercise of control and sharing of management responsibilities.
  • Do not think that establishing a physician/hospital alignment model is simple, straightforward and completed quickly-it can be a contentious, problematic, sometimes meandering, and occasionally disappointing process.
  • Incremental steps are not a bad strategy. Alignment options short of employing physicians offer hospitals and physicians a chance to work together more closely and experience a new collaborative business model. Experiencing what it is like to work together under a new arrangement can prove invaluable to both parties prior to employment should that be a consideration. This is especially true during this period of uncertainty about the implications of healthcare reform.

Interested in further information on the topic of Hospital and Physician Alignment in the Cardiovascular Enterprise?  Download a copy of CFA's article Physician and Hospital Alignment Strategies:

Free Hospital-Physician Alignment Paper


Topics: Cardiovascular Hospital-Physician alignment, Heart Hospital Services Optimization, Cardiovascular Services Consulting, Cardiovascular Hospital Services Optimization