WHY Does I-35 Capital Physician Management Group Want a Hospital Affiliation in Cleburne? (Glen Rose Medical Center)Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas
WHY Does I-35 Capital Physician Management Group Want a Hospital Affiliation in Cleburne? (Glen Rose Medical Center)
18 May 2019 at 8:48:18 AM
Margaret Drake, one of the board members of the Somervell County Hospital District, asked this question of I-35, the District (I believe illegally) is contracting with to provide clinics within various physican practices around the metroplex. The idea is that I-35 needs a hospital, any hospital, within X distance of the clinic in order to apparently be able to charge more for services. That is, hospital prices vs outpatient prices.
From the Somervell County Hospital District meeting of July 26, 2018
Drake: I'm having trouble figuring out why you need us in this mix.
I-35. As the crow flies, that dot, now that we opened up the parkway house we have a new dot that's in north Fort Worth and if you drag that out to Cleburne, you miss it by 3 1/2 miles.
? To be able to charge hospital prices, we have to have a hospital backing within 35 miles. Otherwise you're an outpatient service and your fees are minimal compared to what you can charge for a hospital.
Reynolds: And that's one of the things that, and they mentioned Kevin Reed, and we have visited with Kevin Reed on this on an ongoing basis and they're correct he signed off on it, forgot where I was heading. One of the things that we'll want to do is if we do this deal, we'll go ahead and submit that we are a hospital-based practice and that the billing will be hospital based, that's part of the process of entering into this deal, assuring that we will receive hospital-based pricing.
Just because an attorney is working on this doesn't mean this is legal. It only means that either no one has challenged this in court (as Andy Lucas suggested to me would need to happen because he won't go for an attorney general opinion when I complained in 2013 about Pecan Plantation in Hood County's hospital district) or other agencies haven't closely scrutinized this. Somervell County Hospital District is operating outside the boundaries of the territory which are the county borders, and, by operating for-profit services, is apparently violating their status as a non-profit public hospital. Saying again that either they are wanting to be a taxing hospital district that is itself tax-exempt or they want to be like Wise County and operate clinics all over the place for profit. But they can't do both, at least only until someone or some governmental entities challenge this grifter idea.
I-35. Kind of like a checklist ... and the first one for radiology needs to be within 35 miles as the crow flies
Drake: 35 miles of what?
I-35 of the front doors of your hospital. So, as our second facility that we put in north Fort Worth, with Wise, they came in a few miles short. That's kind of how we fell upon you guys .. It's always safe to have another option. If for some reason Wise, because they are growing rapidly in the market, if for some reason those contracts need readjusted or they felt that they needed ... some leverage... (unintelligible, secondary ? as leverage) .We have this very open conversation and so in that event if that ever happened potentially moving over the existing infrastructure we have with Wise, blue Cross, United and X Y and Z, we have other options to potentially move it over.
Reynolds: 3 or 4 weeks ago, Ron and I went with them to the site, Ron and I toured some of their facilities. We went to Cleburne and looked at that and they're right, it's very very limited in radiology services in that clinic right now but then we also went to Arlington to other facilities where they have an orthopedic process, they have an MRI in there. It is interesting, you walk in to one section of the building and it is a Wise County hospital. There's a sign there where you register, and Wise county employees are wearing the badges and you. It is unique in that it is our facility but located in another market.
Except that Wise County is not a hospital district constricted by territory. Somervell County Hospital District is.
So, do I understand this right? This is essentially a profit maker driven by I-35 Capital which apparently contracts with physicians who want to provide other services within their practices/family centers/clinics. I-35 wants to make more money than they would be able to (and the physicians as well) by charging more money for services. If they can't *brand* the service within the clinic with a hospital name (which apparently has to be within X many miles of an actual hospital), then they can't charge hospital prices and have to charge the patients a lower fee. (Feel free to comment on this if this looks wrong or you want to expand on this)
More on the *branding*
As a related note, this is Gary Marks talking about community hospitals in February 2009. At the time there were too many hospitals too close to us for us to qualify to be a community hospital. Doubt that has changed with the hospitals, don't know if the criteria for a community hospital has since the advent of the Affordable Health Care Act. Now, that isn't the same point as I'm making above, the point above is what whatever else Glen Rose Medical Center is designated, it is not just some free-standing rural hospital that a Here's A Buck management company can latch onto to charge people more money but is Somervell County Hospital DISTRICT dba (doing business as) Glen Rose Medical Center, and it's terroritorial boundaries are the county boundaries.
Medicare’s payment rates for the same service vary based on the setting. Services provided in a physician’s office are paid a single “global” fee from the physician fee schedule (PFS), which covers physician time, malpractice costs, and practice (or technical) costs. For services provided in facilities, such as hospital outpatient departments (HOPDs) or ambulatory surgical centers (ASCs), Medicare pays the practitioner a fee from the PFS—lower than the comparable fee had the services been delivered in the professional’s office—because the physician does not bear any practice (or technical) costs—and also pays a fee to the facility. Generally, the total payment rate for services provided in HOPDs is much higher than the rate for the same service provided in an office or ASC. Indeed, under the current payment system, total payment for services delivered in an HOPD often is 30 to 50 percent higher than payment for the same type of services delivered in the two other settings, and sometimes two to three times higher.
HOPDs do not need to be located on the campus of an inpatient facility. Rather, acute care hospitals (other than critical access hospitals) can operate HOPDs within 35 miles of the inpatient campus and structure them as “provider-based” hospital outpatient departments.
The Government Accountability Office (GAO) noted in December 2015 that this payment difference has encouraged hospitals to acquire physician practices, because hospitals could earn a much higher rate on office visits.a This strategy, which we refer to as “reimbursement arbitrage,” is commonly pursued on ancillary services. For example, by acquiring a cardiology practice with in-office diagnostics, the purchasing health system would be paid $1,189 rather than $495 (for an increase of $694, or 140 percent) per Nuclear Stress Test/TMST procedure using the same facility and staff after designating the diagnostics room as an HOPD. (For additional explanatory detail, see “Medicare’s Site-Neutral Payment for New Off-Campus Locations: Payment Details.”)
3. More than $2.3 billion in annual savings is generated when patients undergo certain preventive and surgical procedures at ASCs instead of HOPDs.
4. Hospitals receive $1,745 from Medicare for outpatient cataract surgery procedures; whereas ASCs are paid $976 for the same surgery.
5. "In a fee-for-services world, hospitals received an 81 percent higher reimbursement rate on services performed in the HOPD over those in an ASC," said Regent CEO Chris Bishop. "But those days are going fast. As health systems move toward deriving greater percentages of revenue from value-based care, the potential for higher reimbursement in an HOPD is outweighed by the advantages of leveraging a broader ambulatory platform."
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