By Emilie J DiChristina, MBA for PracticeFirst 

It will come as no surprise to anyone reading this that financial and time stressors are continuing to plague physicians and health care providers who are either in single provider of small practice settings.

Prior to the start of the ACA implementation it was predicted that the ACA would be the final straw for many physicians. Further, it was predicted that combining with the retirement of physicians, there would be a shortage of people entering the profession of medicine, a heavier reliance on mid-level or non-physician providers, and of course…an onslaught of newly insured.

Guess what, everything predicted is being proven correct to some extent, and with declining enrollments and a change from the “carrot & stick” approach to quality to a “STICK & really, really tiny carrot” approach – non-retiring physicians are scrambling for a way to survive.

So providers are facing choices. Which are you planning to choose? Are you:

  • Retiring or going into research?
  • Hiring large numbers of mid-levels to increase productivity (read # of patients seen per hour)?
  • Trying to become a PCMH?
  • Joining an ACO?
  • Selling your practice to a hospital?
  • Entering into some form of a Physician-Hospital arrangement (PHO)?
  • Considering joining a Management Services Organization (MSO)?

While the financial and life-style issues causing providers to adopt new ways of practicing are the same, some of the decisions by private practice physicians planning a change are in large part predicated on the age and/or specialty of the physician.

Younger physicians, fresh out of teaching environment take more readily to actual employment by a hospital or larger practice. Why? The primary reason is that they are not accustomed to autonomy fresh out of school, so they do not have an expectation of autonomy. Add to that set shifts, steady income (with or without bonuses) not reduced by the overhead of a private practice, and shared coverage and the “quality of life seems ideal. In many areas of the country, physicians working for hospitals even have union protection.

The physicians who are in the “middle age” of their practices are more likely to look for a PHO or MSO model to join in order to achieve efficiencies, economies of scale, and often, to insure there is a referral system established. This often seems to be a good model for specialty groups as well (e.g. radiologists, GYNs). An important decision point for this age group seems to be the ability to maintain full or partial autonomy, despite formalized linkages. The PHO or MSO model also requires governance and participation or buy-in from the providers who make up the entity, and the physicians in this age group understand the responsibility and the benefit of participation, even if it takes time away from the family.

The younger “middle aged” physicians are also those who feel most comfortable with establishing their practice as a PCMH, adding mid-levels and sharing space with specialists or support services to provide the “home” model for their patients.

The older, established physicians are indeed contemplating different models of practice as well. They however are looking to sell completely to a hospital or another provider, and step away from practicing entirely, or work part-time. They don’t want to work in an environment where that have no autonomy, they don’t want to worker harder as they should be facing an easier time of life, they are not as tech savvy and the EMR/Meaningful Use and ACA requirements are NOT what they got into medicine for…

So, where are you in the scheme of things? What moves have you made? What moves are you contemplating? Is someone making you feel like the choices they are offering is the best thing since sliced bread?

Well we can’t help you with making those decisions but over the next few months we will try to help you understand the pros and cons of the major practice models and linkages you may be considering.

Until then, if you have specific questions you wish answered, feel free to email them to us at

The Effect of The “Two-Midnights Rule” on Your Practice

By Emilie DiChristina, MBA for PracticeFirst

If your practice accepts Medicare and your providers admit those Medicare patients to hospitals you are aware of the Two-Midnight Rule for observation. The real question is…Is your practice ready for the ramifications of this rule’s effect on your patients?

Before we discuss the ramifications to the practice, we need to consider the what and why of the two-midnights rule. The why is that Medicare, in reviewing inpatient “admissions”, came to a conclusion that many of the admissions were not necessary. They did not go so far as to say that treatment or care in a higher level setting was not necessary, just that the conditions did not warrant admission.

As potential patients yourself, you may at this point be scratching your head and saying “Huh?”, but from this CMS finding arose the term “observation status” and since then, the ratio of observation stays to inpatient admissions increased at the rate of about 34% per year with current  discussion indicating that almost 20% of Medicare patients sent to the hospital for treatment are admitted under “observation status” versus “inpatient” stays.

Early on, hospitals and providers found that even though they were initially admitting patients as inpatients, retrospective reviews by CMS were resulting in a finding that “observation status would have been more appropriate”. The hospitals had money taken back for these admissions, the providers heard from the hospitals that observation should be used, and the system began to muddle as the financial ramifications clashed with the previously defined standards of care.

For Medicare patients sent to a hospital, they filled out paperwork, received admission packets, had a bed, treatment, tests and medications so for all they knew, they had been admitted.

But just like the hospitals and providers facing the financial ramifications of observation versus inpatient, the patients who thought they had been “an inpatient” now found out about this “observation” status when they started receiving bills for medications, provider visits, labs, diagnostic tests, and more. If the patient was unfortunate enough to have had an observation admission for a condition requiring rehab, or a stay in a SNF, the patients also found out that would not be fully covered by Medicare.

When a Medicare patient is admitted as “observation” their care is not covered by Medicare Part A — which covers a complete hospital stay once a one-time deductible is met; but Part B, instead, meaning that patients must pay part of their provider’ fees, and co-payments for labs, scans and hospital drugs. Medicare also does not cover rehab at a skilled nursing facility for observation patients. .

On Oct. 1, 2013, and recently upheld by a new law, Medicare created a rule dubbed the “two midnights rule” went into effect as a method of clarifying what is an observation stay and what is an inpatient stay.

The Connecticut-based Center for Medicare Advocacy, which has long opposed the Medicare observation policy, has said the new rule does nothing to help patients. “Prior to this two-midnight rule, if you thought someone was sick enough to spend the night in the hospital, then the hospital got reimbursed,” said Dr. Dan Fisher, a surgeon and the chief of staff at Erlanger Health System.

“Now you have to be sick enough to spend two nights in the hospital for it to count toward that. If you’re not sick enough to spend two nights, then Medicare is starting to say that you’re not very sick at all.”

So what effects of the “Two-Midnights Rule” may hurt your practice?

Your providers have more paperwork, and hassle at the hospital:

  • If your provider feels that a patient really needs an inpatient admission, they may have to complete a “medical necessity” form justifying the admission and somehow guessing the expected findings of tests, the success of treatment, the rapidity of the patient’s improvement.
  • The hospital Utilization Review staff may be calling asking that an inpatient visit be changed by the provider to an order for observation status.
  • The doctors may decide to refer patients to Hospitalists, avoiding this one more hassle

Your patients will not be happy and translate this unhappiness to your practice:

  • When the patient receives the first packet of bills, or finds out that their rehab is not covered, the complaints will be directed to the physician who admitted them. After all, you sent them to the hospital, you directed their care, you had the power of writing “inpatient” versus “observation”.
  • Your practice will also suffer from the customer satisfaction measures required as part of the ACA, as an unhappy patient who does not understand the reasons they are bearing all of the costs will certainly blame you.

Your practice finances suffer:

  • Reimbursement for observation is lower than for inpatient, critical care, etc.
  • A patient who is on a fixed income now has to pay co-pays, and lab fees, and drug costs, and possible SNF fees, so paying you may not even be possible, let alone high on the list of importance.


You may want to think about preparing a packed for your Medicare patients advising them of the role CMS plays in directing how any potential hospital admissions or care may be “named” and subsequently billed.

Be prepared to document any patient refusal to go to the hospital, which is a good rule for any patient, but in the case of the Medicare patient who may be refusing because of fear of an inability to pay. As word of the two-midnights rule begins to be discussed in senior communities, senior magazines and even in families, you may face more patients making this difficult


By Becky Amann



As a reminder, effective August 1, 2013, Univera will cease mail delivery of many important communications and will begin to provide these bulletins through postings on their website.

To continue to receive these communications from Univera, it will be necessary for providers to access Univera’s “opt-in” process and complete their form which is located at:

Univera has indicated that it will still be necessary to distribute some communications by traditional mail and fax. Please note: This “opt-in” process is not the same as the access to their secure portion of their website.


MVP has launched their first mobile application. The MyMVP mobile app allows members to use a smart phone or other mobile device to display the front and back of their current MVP Member ID card.

What MVP wants health care providers to know:

  • If an MVP patient shows you an ID card  on a mobile device, you should treat it the same as you would an actual “hard copy” ID card.
  • Members have the ability to send you a copy of the ID card shown on their mobile device via email or fax, if you require a copy of the card.
  • What will the ID card look like? Since the ID card that members can display and forward from their mobile device comes from the same system that MVP uses, when they print and mail ID cards, a member’s electronic ID card will look the same as their hard copy ID card.
  • At this time, MVP will promote the MyMVP mobile app only to MVP employees and employees of General Electric (GE) who are covered by an MVP-administered health plan. The app will be promoted to the entirety of their membership this fall.

For Billing questions, please contact Becky Amann at 716-348-3902 or