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MGMA Addresses the Price of Operating a Practice
By Neil Versel
For The Record
Vol. 17 No. 25 P. 36

Whether pay-for-performance and other quality-based reimbursement plans gain a foothold among physician groups depends greatly on the cost of data collection and—perhaps more importantly—who picks up the tab for information technology (IT), according to a leading medical practice organization.

At its annual conference in late October, the Englewood, Colo.-based Medical Group Management Association (MGMA) reported that operating margins were shrinking for primary care practices—save pediatrics—and that all provider-side organizations were being squeezed by higher operating costs and the prospect of a 4.4% reduction in Medicare reimbursements for 2006.

Approximately 5,300 people turned out and more than 350 companies exhibited at the conference, held in Nashville, Tenn.

The advent of pay-for-performance only heightens anxiety for group practices, according to MGMA Chief Executive and President William Jessee, MD. He said members have been asking him how much it may cost for them to collect data for pay-for-performance programs and that it is “dicey” whether many groups would participate if it is voluntary—unless there is a quick return on investments in health IT.

The MGMA reported in September that roughly 14.1% of group practices had electronic medical records (EMRs) in place and only 11.5% had clinical systems fully implemented at all practice locations. The former number is actually down from surveys in 2001 and 2002, though Jessee said the current study, conducted in conjunction with the Federal Agency for Healthcare Research and Quality and the University of Minnesota, is better designed, more comprehensive, and likely more accurate than in past years. “The real message is, the rate has not gone up,” he said.

“Cost is a big barrier,” Jessee explained at a conference. The MGMA estimates that IT systems require a median one-time expense of $32,000 per physician—which often comes directly out of physician income—plus $1,200 per doctor in monthly maintenance fees.

“They probably will recoup those costs,” Jessee said, “but the initial outlay is big.”

His message for practice administrators: “Picking an EHR can be a career-limiting experience.” It is unlikely there will be a “one-size-fits-all” product anytime soon.

Jessee also talked about the MGMA’s participation in a new group of healthcare and business interests, dubbed the Healthcare Administrative Simplification Coalition, that is calling on the Centers for Medicare & Medicaid Services (CMS) to adopt a standard process for enrolling healthcare providers in Medicare—one that already is in wide use in the private sector.

The coalition, led by the MGMA, the American Academy of Family Physicians, and the AHIMA, wrote in October to acting CMS Medical Director Barry Straube, MD, requesting that the Medicare agency make use of the Universal Credentialing DataSource for verifying the credentials of physicians, nurses, and more than 24 other categories of healthcare professionals.

The Universal Credentialing DataSource is an Internet-based, standardized credentialing application and service recognized by health insurance companies belonging to the Council for Affordable Quality Healthcare (CAQH).

“As the largest insurance company in the world, the Medicare program can play a central role in further reducing the physician credentialing burden,” the letter says. “Our goal would be for CMS to integrate the Medicare physician enrollment process into the CAHQ service.”

According to MGMA government affairs manager Robert Tennant, Medicare has “no real standard” for clinician eligibility, creating an unnecessary administrative burden on healthcare providers nationwide.

However, Jessee said credentialing is “only a tiny piece of the whole picture” as far as Healthcare Administrative Simplification Coalition members are concerned. The group took its name from Title II of HIPAA, which authorized the privacy, security, and transactions rules.

Also signing the October letter were the Healthcare Financial Management Association, American College of Physicians, America’s Health Insurance Plans, the National Business Coalition on Health, and the U.S. Chamber of Commerce.

Another study from MGMA, cosponsored by Visa USA, looked at attitudes toward health savings accounts (HSAs). The study said 97% of medical practices allow patients to pay with credit or debit cards. A statement from Visa suggested that healthcare organizations are rapidly moving toward electronic payment cards for HSAs and employer-sponsored flexible spending accounts.

Former House Speaker Newt Gingrich, now an advocate of computerizing health information, delivered a keynote address in which he repeated his oft-spoken mantra, “Paper kills.” He said healthcare needs to take a lesson from travel Web sites such as Expedia and Travelocity and let consumers see all medications and prices for a given disease state.

Gingrich also called health IT a national security issue, in that the ready availability of information could help head off a flu pandemic or let public health officials quickly identify the presence of a bioterror agent.

Among vendors, iMedica, which last year expanded beyond its earlier focus on electronic medical records (EMRs) software by bringing in a number of former Millbrook Corporation executives and engineers, unveiled an integrated clinical-management package called iMedica Patient Relationship Manager.

McKesson Corporation continued its push into ambulatory EMR by launching application service provider-type versions of its e-prescribing and secure patient-physician communications packages. The program, called Connecting Physicians, is aimed at practices taking the incremental approach to clinical IT implementation.

Away from the exhibit floor, discussions were dominated by talk about pay for performance and the price and power of health IT, topics that will remain on every healthcare professional’s mind for quite some time.

— Neil Versel is a journalist in Chicago specializing in healthcare information technology.

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