Becker's Spine Review

22 ASC Physician groups are being snapped up — 5 reasons why By Patsy Newitt A s costs rise and the industry increasingly consolidates, physician practices are increasingly looking to hospitals, health systems and commercial groups for financial security, according to a report published June 7 by the American Hospital Association. Here are five major reasons physicians are looking to hospitals amid consolidation: 1. Managing a practice is increasingly difficult Ninety-four percent of physicians said it has become more financially and administratively difficult to operate a practice, according to a recent survey conducted on behalf of the AHA. Additionally, final-year medical students said hospital employment was the practice setting they were most open to pursuing. As the healthcare industry consolidates, accessing economies of scale for physician practices is becoming increasingly difficult. 2. e administrative burden of private-payer policies It is difficult for small practices to manage the complexity of payer policy — 84 percent of employed physicians said administrative burdens from commercial payers and government insurance programs had an effect on their employment decision, according to the AHA survey. In the same survey, 81 percent of physicians said payer policies interfered with practicing medicine. Additionally, 88 percent of physicians said the burden of prior authorizations was high or extremely high, according to a March survey by the American Medical Association. 3. e burden of public-payer regulations Policies such as the Promoting Interoperability Program, which requires eligible professionals to demonstrate meaningful use of certified EHR technology to avoid payment penalties, are also burdensome. e program requires physicians to provide electronic access to their health information, which is difficult for many practices, particularly smaller providers, the report said. 4. Escalating costs Managing a physician practice includes more costs in the digital age, including maintaining EHR records, patient portal and billing and claims submissions. Additionally, staffing costs and rent are increasing. According to the AMA survey, physicians and staff report spending an average of nearly two business days per week completing prior authorizations. Additionally, 3 out of 4 physicians said low public reimbursement rates are affecting their ability to practice medicine. 5. Changing physician practice patterns Physician practices are also being increasingly bought up by commercial groups over hospitals. In 2023, CVS Health acquired Oak Street Health and Signify Health in deals that were valued at nearly $20 billion combined, while Optum is the largest employer of physicians with a portfolio of 70,000 workers. Commercial groups that purchase physician practices are subject to fewer regulatory requirements, according to the report. n Stark law changes ramp up in 2023 By Patsy Newitt Here are four Stark law changes Becker's has reported on since Feb. 15: 1. The Consolidated Appropriations Act of 2023 updated exceptions to Stark law and anti-kickback law that will allow hospitals and healthcare providers to improve mental health services for physicians. The law issues a new exception for physician wellness programs offered by healthcare entities, including ASCs, hospitals and physician practices. To satisfy the exception, the program must also include a written policy, which must include a description of the content and duration of the program, a description of the evidence-based support, and the estimated costs, among other stipulations. 2. CMS added a Stark law waiver for physician owners of independent freestanding emergency departments that served Medicare patients during the COVID-19 pandemic. The waiver applies retroactively and is the first time CMS has modified its blanket Stark law waivers since 2020, according to the report. Independent, freestanding emergency departments will now receive similar protections to ASCs, which were also able to convert to hospitals during the pandemic. 3. CMS' 2024 Inpatient Prospective Payment System would require physician-owned hospitals to satisfy all Stark law hospital exceptions or rural provider exceptions to qualify for services referred by the physician owner or investor. The rule further specifies that physician-owned hospitals cannot increase the number of operating rooms, procedure rooms and beds above the level it was licensed for as of March 23, 2010, unless granted an exception by CMS. 4. CMS updated its voluntary self-referral disclosure laws Jan. 23, including an updated version of the self-referral disclosure protocol form, an updated physician information form and a new group practice information form. The new self-referral disclosure protocol form includes an update to signed certification — it no longer needs to be submitted as a hard copy and can now be submitted electronically. n

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