In 2008, when physician leaders of large urology practices began to recognize the need for a formal association to help meet the challenges of the future, the Large Urology Group Practice Association (LUGPA) was established with the purpose of enhancing communication among large groups, allowing for benchmarking of operations, promoting quality clinical outcomes, developing new opportunities, and improving advocacy in the legislative and regulatory arenas.
LUGPA Says Administration’s Federal Budget IOASE Provision is Counter to Its Alternative Payment Model Initiatives
Independent Urologists Say IOASE Repeal is an Inconsistent with Value-Based Health Care
Washington, D.C. – LUGPA, a national organization representing urologists practicing in independent, integrated practices, today said the provision in the Obama Administration’s Budget to repeal the In-Office Ancillary Services Exception (IOASE) is fundamentally flawed and directly conflicts with efforts to move the Medicare program from fee-for-service to a value-based payment system.
“Repealing the IOASE is simply inconsistent with the move towards compensating value rather than volume of care,” said Dr. Gary Kirsh, president of LUGPA.
Kirsh said the Administration and Congress have made important strides toward value-based care, most recently with the Medicare Access and CHIP Reauthorization Act (MACRA), which creates opportunities to participate in models in which practices take on financial risk to manage a patient population. Moreover, Kirsh noted that the Administration encourages the type of physician relationships protected by the IOASE and necessary to deliver coordinated care by offering Stark law waivers to Accountable Care Organizations participating in the Medicare Shared Saving Program.
Kirsh also said the Administration’s purported savings estimate from IOASE repeal is fundamentally flawed because it does not recognize that care is less expensive when delivered in the physician office rather than the hospital and that utilization is growing slower in the physician office than in the hospitals.[i] “Eliminating the IOASE will simply force patients to receive services in the more expensive, less convenient hospital setting – given the rise in deductibles and co-insurances, this could result in tremendous increases in patient out-of-pocket costs,” continued Kirsh.
Last year, in a letter to Congressional Leadership, the GOP Doctor’s Caucus rejected the repeal of the In-Office Ancillary Exception (IOASE) to Federal Stark regulations “as an offset for any future legislation.” In its analysis, the Doctor’s Caucus cited data on cost and quality as a reason for their continued support of the IOASE. They referenced a study published in the Journal of the American Medical Association which reviewed 4.5 million HMO patients in California. This study found that expenditures/patient were 10.3 percent higher for physician groups owned by hospitals when compared to independent physicians. The difference in expenditures was even higher for physician groups owned by multi-hospital systems – 19.8 percent.[ii]
Support for the IOASE is not confined to physicians in Congress – in 2014, 31 medical societies representing a broad cross section of the house of medicine joined together voicing their support for the IOASE.
“LUGPA is looking forward to working with Congress as they work in a bicameral fashion to modernize the Stark law,” said Dr. Deepak Kapoor, LUGPA’s chairman of health policy. “In our recent letter to Finance Chairman Hatch and Ways and Means Chairman Brady, we describe specific examples of how the existing law can be updated to be more consistent with the goals articulated by both Congress and the Administration – preservation of the IOASE is central to that objective.”
[ii] Robinson JC, Kelly Miller K. Total expenditures per patient in hospital-owned and physician-owned physician organizations in California. JAMA 312.16 (2014): 1663-1669.