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summary of responses to traditional referral relationships
Posted By: Eric Eisenberg on May 24, 2012
The below from a company providing these services in physician offices whos web site reads: Comprehensive Care...Infinite PossibilitiesProsthetic Care Programs For YOURSurgical Practice
I would like to provide you with an accurate and non-biased response to the post titled "traditional referral relationships?". To reply in order of comments, no, the free standing clinic isn't at all a dinosaur. Statistics show that over 80% of custom O&P is provided in free standing clinics. Providers receiving referrals for outstanding service and exemplary care are still very prevalent but are also kept in check by the patients themselves as consumers are more educated care savvy than in the past. I am not sure why the trend referred to is "alarming". It is more capitalistic patient care than problematic. Physicians referral patterns include factors of comfort, assurance, legal compliance and, if applicable, finances. Practices only lose out when the consumer chooses (as they legally have the right to) to use other
Practices in whichever form they exist. If Practices "lease" employees to physicians to legalize payment for referrals, there is definite and immediate consequence. That is a federal crime. The same way that it is illegal to incentivize referrals by gifts (i.e. free lunches, gift baskets, office supplies, etc) or solicit patients, it is illegal for payment for referral. Orthotists and Prosthetists have the legal and professional right to employ with physicians' office just as they have the right to employ with free standing Practices. Because of free market, there is no way to forever retain "all referrals" in any setting. As this is the basis of Capitalism, the trend is throughout the U.S. Many studies, probes, etc have been conducted to see the utilization in O&P in both licensure and non-licensure states. In the recent Special Advisory Bulletin published by HHS/OIG titled "QUESTIONABLE BILLING BY SUPPLIERS OF LOWER LIMB PROSTHESES" -" Medicare
paid an additional $61 million for beneficiaries with no claims from their referring physicians.
These beneficiaries had no Medicare Part A or Part B claims that included their referring physicians during the last five years. Billing for prostheses when the beneficiary had no claims from the referring physician raises questions about whether the physician ever evaluated the beneficiary and whether these devices were medically necessary. These payments accounted for 55,274 claims for 7,066 beneficiaries.
In 2009, 267 suppliers of lower-limb prostheses had questionable billing.
In 2009, 136 suppliers accounted for $22 million of the payments that did not meet certain Medicare requirements or were for beneficiaries with no claims from their referring physicians. An additional 131 suppliers had other questionable billing, such as billing for a high percentage of beneficiaries with no history of an amputation or missing limb or a high percentage of beneficiaries with unusual combinations of prostheses.
Two-thirds of these 267 suppliers were independently owned, and these suppliers were at least twice as likely as other suppliers to be located in Alabama, Mississippi, Puerto Rico, or Wyoming."
Other findings are: (1) Ineffective state licensure laws- 13 states have licensure laws with extreme inconsistencies amongst themselves (2) an estimated 80% of all prostheses are fit without direct physician oversight causing a disconnect and possible over-coding and inflated K-level (3) the ratio of prosthetic providers to qualified patients per year is phenomenally high at 10,000 to 60,000 (4) there is a federal concern (specifically HHS/OIG) of questionable billing in DMEPOS by DME Suppliers and lastly (5) HHS/OIG concern in overall Federal Payor Fraud by all enrolled DMEPOS Suppliers. The salaries that are derived from O&P professionals within the physician practices are, in my experience, at fair-market-value and consistent with the APOA Operating Performance Report. The industry will, of course, survive. It will just shift and morph as Supply and Demand dictate. I have personally spoken with various Payor, Federal, and Legal Representatives about
their thoughts for O&P in the future. The common thought conveyed is vertical integration is natural and survival of the fittest rules apply as well. In other words, the elite Practices will survive and even flourish while the mediocre will, as the dinosaur, become extinct. I hope this finds you well.
Sincerely to All,
Kip Hicks, CPO/LPO
Infinity O&P, Inc.
Director of O&P / DME
927 Franklin Street, 2nd Floor
Huntsville, Al 35801
2310-C Thornton Taylor Parkway
Fayetteville, TN 37334
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