GI PRACTICE MANAGEMENT
| ENDOSCOPIC AMBULATORY SURGERY CENTER (EASC): WHAT IS IT? WHAT ARE THE BENEFITS? HOW
DO YOU SET ONE UP?—Charles N. Friedlander, MD, Associate Professor of Medicine, New York University Medical
Center and Medical Director, Kips Bay Endoscopy Center, New York, NY
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| Typical EASC: small business with <20 employees, 2 to 3 procedure rooms, and 4000 to 6000 procedures annually;
within capabilities of large GI practice or 2 or 3 endoscopists cooperating; independently owned, successful, growing
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 | Decline in fees: fee for colonoscopy or endoscopy $400, down from $800 to $1300; speaker thinks physicians have lost
control of fee structure
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| Office-based surgery incidents: many instances of mortality and morbidity in office-based surgery, usually anesthesia
complications; hepatitis reportedly spread in endoscopy centers in Brooklyn and Bronx; New York state likely to demand
safer environment for anesthesia in near future
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| Declining reimbursement: Oxford Health Insurance recently informed provider physicians of $200 reduction per procedure
(reduction of one third)
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| Cost of performing office procedures: at least $85 to $100 per procedure; one physician with large office estimated cost
at $300 per procedure; Medicare and others reimburse ≈$175
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| Benefits: regain control; enhanced reimbursements; high patient satisfaction; patients feel safe and secure, do not want to
go back to office; Kips Bay internal studies—physicians’ productivity improves when block of time assigned, and physician
goes to site, carries out endoscopy, dictates notes, and leaves; contracts involve long-term financial commitments
from insurers, resulting in stability and building equity in business and state-of-art facility
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| Requirements for setting up EASC: group of committed physicians who trust one another (single most difficult thing
to find); need team that includes someone experienced in starting EASC, lawyers, accountants, and architects; certificate
of need (CON) required in New York; state process rational, rigorous, and “doable” with right people; takes 9 to 15 mo; if
rationale provided, eg, patient safety, state supports EASC
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| Marketing: not needed with physician-owners
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| Financing: easiest part, despite physicians’ worries; track record of EASCs nationwide shows many agents want to finance;
many ways to finance
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| ASC safe-harbor provisions: part of statute or regulation that reduces or eliminates liability under law for actions performed
in good faith; endoscopy center must be extension of physician’s office, so one third of cases seen in EASC;
make clear no kickbacks or bringing physicians in to pay them for cases
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| New York Article 28: public health law that regulates hospitals, nursing homes, and other medical facilities; need team
experienced with process and rigorous requirements, eg, medical director, board of directors, detailed policies and procedures;
heavy paperwork involved; guidelines written for surgery centers, not endoscopy, but must be followed
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| Cost: setup—3 procedure rooms doing 2 procedures per hour over 6 to 7 hr daily (12 to 14 procedures), or ≈40 procedures
daily, 200 procedures per week, ≈10 000 procedures annually; financial outlay—$3.5 million; ≈$900 000
working capital; assumes no reimbursements for ≈3 mo from start-up; as rule of thumb, can expect to spend $1 million
per room; financial model critical; know your practice, ie, how many patients and which insurance plans (Medicare,
Medicaid, HMOs, PPOs; reimbursement rates vary tremendously); volume of patients key to decision to participate or
not participate in given insurance plan (participating physicians agree to accept negotiated rates)
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| Anesthesia: speaker’s group regards anesthesiology as profit-generating part of EASC; anesthesiologists on staff, not independent;
propofol (Diprivan) given to every patient (no problems to date)
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| Profit forecast: for 3-room EASC, 4500 cases with typical 1:3 ratio of Medicare to commercial insurance; for procedure
that Medicare reimburses in low $500s, reimbursement (considering insurers in which EASC participating and not participating)
ranges from $1200 to $1400 per case; for 4500 cases, expect just under $5.5 million in revenue, $3.5 million
in expenses, and profit of $1.8 million; increased caseload sends revenues higher (conservatively, adding 1500 cases
raises profit to $3 million)
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| Summary: to set up EASC, need physician leadership, coordinated project development, and access to funding; launching
EASC straightforward process that requires commitment and some business sense
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| THE FUTURE OF REIMBURSEMENT—Ira S. Goldman, MD, Associate Professor of Clinical Medicine, New York
University School of Medicine, New York, NY
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| Medicare physician reimbursement: complex, formula-based system comprising resource-based relative value
scale (RBRVS) fee schedule, volume controls linked to sustainable growth rate (SGR), and balance billing restrictions
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| RBRVS system: creates weighted values for procedures, based on time, effort, and complexity involved; weighted values
then converted to dollar amounts in physician fee schedule; information on procedures gathered from physicians via surveys;
many physicians do not return surveys, while some brag about how quickly they perform procedures
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| SGR formula: introduced in Balanced Budget Act of 1997; Congress intended SGR to control growth in Medicare spending;
based on 4 factors, 1) fees for physician service, 2) average number of Medicare fee-for-service beneficiaries, 3)
growth in real gross domestic product (GDP), 4) expenditures due to changes in laws or regulations
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| SGR volume controls not effective: SGR complex, flawed, and fails to factor in yearly increases in practice costs;
volume of physician services rose 22% between 1999 and 2003, while Medicare showed 15.2% increase in spending for
physician services in 2004, causing conversion factor to drop to $36.18; because expenditure targets volume-related,
when physicians exceed volume projections, reimbursements decrease in following year, eg, screening colonoscopy well
publicized, so volume went up, but due to fixed pool of money for Medicare reimbursement, physician reimbursement
declined
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| Congressional intervention: critical due to flaws in SGR formula; Congress intervened in 2002 and 2004 to prevent
significant scheduled cuts in physician payments, but unclear whether cuts will occur in 2006
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| Medicare: plans 26% reduction in physician payment in next 5 yr; reduction of 4.4% already in books for 2006; Medicare provider
fees and other nonphysician fees, eg, hospital fees, not subject to SGR, and hospital fees projected to increase ≈3% over
next year
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| Medicare Payment Advisory Committee (MEDPAC): advised Congress to eliminate SGR and implement
Medicare Economic Index (MEI), which adjusts payments for physician practice costs and general wage levels; estimated
cost at $154 billion over next 10 yr; because of spending in Iraq and rebuilding after hurricane Katrina, Congress
not likely to approve this expenditure
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| Pay for performance: new catch phrase; in studies, clear trend emerging toward “value-based payment,” linking payment
to quality improvement; part of British health care system; being implemented by physician groups and major employers
in some US states
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| Centers for Medicare and Medicaid Services (CMS) pay for performance: CMS, American Gastroenterological
Association (AGA), and others working to identify useful quantifiable measures for GI practice; physicians
who choose to participate will help capture data about quality of care provided to Medicare beneficiaries; CMS has defined
set of Healthcare Common Procedure Coding System (HCPCS) codes (G-codes; not billing-related) to report
data for calculating quality measures
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| Electronic health records (EHRs): CMS working to get EHRs adopted in physicians’ offices; in future, CMS and other insurance
payors could include positive updates (reimbursement increase of 1%-2% for compliance, ie, adopting EHRs), and negative
update (1%-2% less than published fee schedule) if EHRs not adopted; may be implemented as early as 2007
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| LITIGATION AGAINST THE ENDOSCOPIST—Jerome H Siegel, MD, Clinical Professor of Medicine, Albert Einstein
College of Medicine, New York, NY
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| Preventing litigation: any physician engaged in endoscopy or practicing medicine at risk; physicians should be careful
not to exceed capabilities or undertreat; physicians can prevent litigation with attentive care, concern, conferencing
with family, and being available to discuss issues
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| Explain to patient: risks, alternatives, and benefits of procedures, including risk for death and expectations of treatment,
when obtaining informed consent; many malpractice suits allege physician never spoke to patient; answer all questions
without evasiveness
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| Maloccurrence: not really negligence, but affects patient’s outcome; differs from malpractice because theoretically, no
wrongdoing on physician’s part; physician should ask attorney if maloccurence defense valid in given case
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| Summons: physician served should send copy to insurance carrier immediately with return receipt; carrier informs physician
of investigator’s visit and assigns attorney
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| Documentation: keep complete legible notes; document findings, discussions, telephone conversations and all patient
contacts; avoid documenting disagreement with colleague in notes; do not accuse hospital or staff or blame equipment;
do not alter notes without dating and signing additions or corrections before summons served; do not alter office
records after sending copies
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| Attorney: carrier provides attorney, but physician can hire own attorney; if carrier’s attorney defending >2 physicians, eg,
partners, physician should request own attorney to avoid conflict of interest; important to assist attorney with research and
trial preparation; at trial and deposition, attend every day and provide succinct answers without anger or exaggeration
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| Endoscopic retrograde cholangiopancreatography (ERCP): currently, GI procedure responsible for most lawsuits;
missed diagnosis of colon cancer second most common; use barium enema to ensure examination complete; avoid
complications in ERCP and sphincterotomy by using short segment of wire to avoid perforation; many physicians
stopped doing ERCP because of possible lawsuits; ERCP affects insurance rates (physicians pay higher rate if performing
ERCP)
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| Posttrial litigation: physician who wins case cannot usually sue patient; physician who loses case can sue defense lawyer
to retrieve portion of losses; physician can sue carrier for bad faith if consent was signed, carrier did not present it,
and physician lost case; carrier should settle and continue to insure physician in same category; when award exceeds coverage,
work with lawyer and accountant to protect assets from creditors
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| VIRTUAL COLONOSOCOPY IN CLINICAL PRACTICE—Carol A. Burke, MD, Director, Center for Colon Polyp and
Cancer Prevention, Department of Gastroenterology and Hepatology, Cleveland Clinic Facility, Cleveland, OH
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| CT colonography (CTC): innovative radiographic technique; in 1994, showed potential for evaluating colorectal neoplasia;
uses combination of 2-dimensional (2-D) and and 3-dimensional (3-D) imaging with computed tomography (CT) and
postprocessing techniques; technical requirements—multidetector scanner gives better results (many magnets spinning simultaneously);
up-to-date work station with latest in software for postprocessing techniques; fecal tagging—used in Cleveland
Clinic; small amounts of barium ingested 5 meals before purge to incorporate barium into stool for more accurate
imaging
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| Procedure: bowel preparation required; in radiology suite, rectal tube inserted, colon maximally distended by insufflation
with CO2 or air; interpretation generally done within 1 hr
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| Rationale for new colorectal cancer screening test: colon cancer second leading cause of cancer incidence and
mortality in American men and women and can be avoided if polyps detected and removed; underscreening— 40% of eligible
Americans not properly screened within last 10 yr (colonoscopy), last 5 yr for sigmoidoscopy, or last 1 to 2 yr for fecal
occult blood testing, leaving 42 million Americans unscreened; patient and physician factors— fear of test, pain, sedation,
missing day of work, and risk; no recommendation by physician most highly correlated factor for not being screened;
many patients, especially those 50 to 65 yr of age, uninsured
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| Potential uses for virtual colonography: screening; incomplete colonoscopy; presurgical evaluation of patients
with obstruction; staging of colorectal malignancies
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| Evidence for utility: radiologist’s study—>1200 individuals; 86% sensitivity for all polyps >6 mm; for lesions >1 cm,
accuracy compared to colonoscopy 92%; gastroenterologist’s study—615 individuals; accuracy 32% for lesions >4
mm and 52% for large lesions; meta-analysis—found wide disparity in sensitivity for polyps in virtual colonography;
sensitivity in all studies for polyps <6 mm ≈48%; when size increased from 6 to 9 mm, sensitivity increased to ≈70%,
and for lesions ≥1 cm, sensitivity ≈90%; specificity high (≥80%) and relatively independent of size; causes of variable
sensitivity—technical factors (eg, type of scanner, number of magnets, collimation width); patient factors (adequacy
of colon distention, adequacy of preparation, motion artefacts); experience of radiologist
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| Controversy: who gets referred for colonoscopy? no consensus on what polyp size should be reported by radiologists;
when experts in virtual colonography queried, nearly 60% thought polyps <5 mm should be ignored
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| Impact on gastroenterologist’s practice: if screening increased by 15%, ≈10% of colonoscopies lost if small lesions
(≤6 mm) referred; if only large lesions (≥10 mm) referred (small percentage of patients), ≈25% of referrals lost; no business
lost if population’s screening rate increased to ≈35%
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Educational Objectives
| The goal of this activity is to educate the listener about developments in endoscopic ambulatory surgery centers
(EASCs), Medicare reimbursement, malpractice litigation, and viability of computed tomography (CT) virtual
colonoscopy as a colorectal cancer screening tool. After hearing and assimilating this program, the clinician will be
able to:
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| 1. Identify features of EASCs and requirements for how to set up an EASC.
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| 2. Discuss trends and issues in Medicare reimbursement.
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| 3. Interpret the catch phrase “pay for performance.”
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| 4. List modifications in practice that may help prevent a malpractice lawsuit.
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| 5. Assess CT virtual colonoscopy as a potential screening tool for colorectal cancer.
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Discussed in This Program
Diprivan [Propofol]
Suggested Reading
| Adams E: Update on codes and reimbursements for GI practice.Clin Gastroenterol Hepatol. 1:237, 2003; Basson
MD et al : Informed consent for screening sigmoidoscopy in a Veterans Administration population. Dis Colon Rectum
47 :1939, 2004; Cifarelli PS: Gastroenterology and the law. Am J Gastroenterol 1984 (6):496, 1984; Cotton P
et al: Computed tomographic colonography (virtual colonoscopy): a multicenter comparison with standard colonoscopy
for detection of colorectal neoplasia. JAMA 291: 1713, 2004; Frakes JT: A corporate partner in the endoscopic
ambulatory surgery center. Is it worth the cost? Gastrointest Endosc Clin N Am 12:269, 2002; Gazelle G et
al: An analysis of the potential impact of computed tomographic colonography (virtual colonoscopy) on colonoscopy
demand. Gastroenterology; 127: 1312, 2004; Hur C, Lieberman D: Colonoscopy: As good as gold? Ann Intern
Med 141: 401, 2004; Johanson JF: Continuous quality improvement in the ambulatory endoscopy center.
Gastrointest Endosc Clin N Am 12:351, 2002; Mamel JJ, Nord HJ: Endoscopic ambulatory surgery centers in the
academic medical center. We can do it too! Gastrointest Endosc Clin N Am 12:275, 2002; Overholt BF et al: Revenue
enhancement for the practice and the endoscopic ambulatory surgery center.Gastrointest Endosc Clin N Am
12:385, 2002; Overholt BF: A corporate partner in the endoscopic ambulatory surgery center. A business relationship
that works. Gastrointest Endosc Clin N Am. 12:259, 2002; Rockey D et al: Analysis of air contrast barium enema,
computed tomographic colonography, and colonoscopy: prospective comparison. Lancet 365:9456, 2005. Seef
L et al: Is there endoscopic capacity to provide colorectal cancer screening to the unscreened population in the
United States? Gastroenterology 127:1661, 2004; Stillman BC: Hospital and health plan liability in granting privileges
for endoscopy. Am J Gastroenterol 100:2146, 2005; Stout PL: Coding and billing for gastrointestinal endoscopy.
Gastrointest Endosc Clin N Am 12:335. 2002.
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Faculty Disclosure
In adherence to ACCME guidelines, the Audio-Digest Foundation requests all lecturers to disclose any significant financial
relationship with the manufacturer or provider of any commercial product or service discussed. For this issue,
the speakers reported no conflict.
Drs. Friedlander, Goldman, and Seigel were recorded December 15, 2005, in New York, NY at the 29th Annual New
York Course, sponsored by the Albert Einstein College of Medicine and the New York Society of Gastrointestinal
Endoscopy. Dr Burke was recorded October 7, 2005 in Clevelend, OH at the 41st Annual Gastroenterology Update,
sponsored by the Cleveland Clinic’s Department of Gastroenterology and Hepatology and the American College of
Gastroenterology.
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