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Medicare and commercial health insurers are moving from the traditional fee-for service reimbursement model to “value-based payment.”

It’s coming. Both Medicare and commercial health insurers are moving from the traditional fee-for service reimbursement model to “value-based payment.” How will this fundamental change impact reimbursement to physicians, other providers, practice groups, and hospitals?

The answer, I suspect, will depend on how “value” is measured. Take a simple example. When a physician provides diabetic counseling to her patients it may well result in less need for expensive services in the future surrounding diabetes complications. The health insurer, as a result, saves money by not having to pay those claims. But how do we measure the absence of claims? And if we cannot, how can we measure “value” on an individual basis for insurance reimbursement purposes if we are using value-based payment?

The same issue arises if we think of “value” from the point of view of a set of procedures. Under fee-for-service reimbursement, insurers criticize providers for prescribing what they believe are “needless” services, because they are paid by the service. Purportedly “value-based” payment would base reimbursement not on the number of services rendered and on the total value of whatever services are rendered. All well and good, but what exactly is “value” in this context? The patient recovering? Recovering faster than average? Reimbursement to the provider cheaper than previously?

Since patients come in an infinite number of shapes, sizes, ages, medical conditions, and other variables, what possible algorithm can we develop to calculate “value” for reimbursement purposes? And if there is a bad outcome, is that the absence of value?

It seems to me the answer may be to rewrite the contracts between providers and insurers to capture precisely what must be measured by a value-based payment structure. For in-network providers, then, reimbursement levels must be commensurate with the value of the medical services performed. “Value” is a matter of negotiation and contract. Failure to reimburse results in breach of contract.

Can A Health Insurer Receive a Vaccine that Confers Lifelong Immunity from Antitrust Liability?

Imagine the following scenario: You are a medical provider and decide to sue WellPoint (now Anthem) for antitrust conspiracy violations stemming from usual, customary and reasonable (UCR) reimbursement levels or exclusive territorial allocations, or both, either individually or as part of a class of similarly situated providers.  But WellPoint argues that you can’t, because the settlement of another class action many years ago (and where the settlement agreement long expired) released those antitrust claims and – here’s the kicker – all antitrust claims you may have against WellPoint in perpetuity.  And this even though you didn’t have – and couldn’t have had – the same antitrust claims then as you have now and therefore couldn’t have brought them then.  Nor did you ever receive a class settlement notice that specified that your antitrust claims against WellPoint would be released forever.

Sounds unfair?  Sounds like an abuse of the class action procedure?  That precise issue is the subject of an extraordinary petition to the Supreme Court of the United States. In it, the Medical Association of Georgia, the California Medical Association, the Connecticut Medical Society, and three physicians ask the Supreme Court to reverse the Eleventh Circuit’s ruling that the antitrust claims are “new, overt acts within an ongoing conspiracy, rather than new claims in and of themselves.”

But that makes no sense, both factually and legally.  Factually, it wasn’t entirely an ongoing conspiracy; it was in part a new conspiracy based on new misconduct.  Legally, the Supreme Court long held that you cannot release antitrust conspiracy claims in perpetuity; to do so represents a violation of the antitrust laws because it gives a defendant antitrust immunity (which is what WellPoint is seeking for itself).  So even if it were an ongoing conspiracy it doesn’t matter.

But that’s what the Eleventh Circuit did, and if it is not vacated by the Supreme Court the decision will have drastic consequences not only in this case but in the future.  All class action settlements against health insurers will ostensibly release antitrust (and possibly other claims) forever.  So if there’s a settlement, say, in 2015 and you have antitrust damages in 2037 you’re out of luck.  You couldn’t have sued this year for your 2037 injury but it doesn’t matter – WellPoint (and if the case is upheld other insurers) get an antitrust vaccine that confers lifelong immunity.

Here’s the passage from the petition:
The significance of the Eleventh Circuit’s decision is not limited to this case.  Rather is strips nearly one million physicians of their federal rights to challenge the continuing anticompetitive practices of many of the nation’s largest health insurers in perpetuity, as many of those insurers have entered into settlements substantially similar to WellPoint’s. . . . Finally, the decision opens the door to a new abuse of the class action, in which absent class members find that they have given up the right to challenge ongoing conspiracies forever, without receiving compensation or notice that they are doing so.

You can read the petition here, WellPoint’s brief in opposition here, and the brief in reply here.
(Axelrod & Dean LLP Co-Authored the briefs on behalf of Petitioners.)

A Personal Remembrance of Robin Williams

It is fitting that a health care blog should take on the subject of Robin Williams’ suicide head on.  I was not aware, and I suspect most people were not aware until after his death, that Robin Williams suffered from depression of apparent long standing.  Depression is one of the last diseases that some people are still “ashamed” to have.  But clinical depression is just as organically based, that is, chemically and biologically based, as having an enlarged heart or an amputated right arm.  No one would think of keeping those conditions secret from friends and family.  But depression not only hurts. It is, needless to say, dangerous when untreated.  Maybe it’s time we understood the conduct of comics like Robin Williams and the behavior of many other people as the symptoms they may well have turned out to be – masking deep and fundamental emptiness.

I want to turn, though to a more positive personal remembrance of Robin Williams.  Many people shared their favorite Robin Williams movies.  My favorite movie of his was Awakenings, which came out in 1990.  Based on the book of the same name by one of my favorite authors, the neurologist Oliver Sacks (who later went on to write the bestseller The Man Who Mistook His Wife for a Hat) the movie was set in a Bronx hospital in 1969 where a group of patients were unable to make any voluntary movements at all.  They had been admitted as a result of the 1917-1928 encephalitis epidemic.  So there they sat, for decades, without effective treatment.  One such patient, who had apparently contracted encephalitis as a very young child, was played in the movie Robert De Niro. His mother faithfully visited her son every day.

Robin Williams played Dr. Malcom Sayer (Oliver Sacks) who realized that the absence of all voluntary movement was the result of Parkinson’s Disease – not the symptoms we’re used to seeing but Parkinson’s Disease so severe that it demonstrated that the encephalitis had likely destroyed all or a substantial portion of the neurons in the substantia nigra, the brain region where dopaminergic neurons are located. So he came up with the idea of treating his patients with L-Dopa, which had just been the subject of a 1969 article in the New England Journal of Medicine.  His patients “awoke” – thus the title of the movie.

Of course, all was not well forever.  In 1969 L-Dopa was not entirely understood. Because it is converted into dopamine not only in the central nervous system but within the peripheral nervous system it caused a host of adverse side effects (the movie featured dyskinesia) and dose resistance (what later became understood as dopamine dysregulation syndrome).

But as played by Robin Williams, Dr. Sayer was both humble in the face of victory over the hospital establishment that had initially doubted his patients could be treated, and deeply sympathetic to their individual spiritual needs when it became obvious that this treatment was not a cure after all.  They had their own unique physical and emotional needs when “awake”: to dance, to sing, to play an instrument (one of the patients was played by the famous jazz saxophonist Dexter Gordon), and to rebel and to educate in turn (De Niro’s character).  In the end, the rest of the hospital staff learn to treat the patients with equal compassion as they relapse.  Dr. Sayer continues to treat his patients who are all “frozen” and the mother of the patient played by De Niro (who never left his side) is there still, taking care of her boy.

Now, in the most tragic irony, we learn that Robin Williams had been diagnosed with Parkinson’s Disease himself and had kept it secret.  It may have been the catalyst for his suicide.  Maybe if Dr. Sayer had been at his side.

A “Manifesto”

This is my first blog for my firm, Axelrod & Dean LLP, and I thought it might make some sense to begin with what we will be trying to do here.  This is a healthcare litigation blog but I intend it to be different from the litigation blogs by healthcare law firms – at least that I’ve seen – and I read at least a dozen.

What strikes me most about these litigation blogs are two things: they seem to be aimed at lawyers, and they don’t seem to be all that interactive.

They all contain summaries of court opinions.  And that’s great.  But I’m a lawyer and frankly if an opinion is really important to me I’m not going to rely on someone else’s summary; I’m going to get the decision and read it myself.  But more importantly, if you’re not a lawyer – if you’re a doctor or head of a provider practice group or a hospital executive – I don’t think a lawyer summarizing some court opinion and leaving you to your own devices as to what it all means to your business is all that helpful to you.  What is more helpful in a blog is to get a timely understanding of how a court decision may impact your practice, and then hopefully review posts from others with similar issues.  Isn’t that what a blog is?

And that brings up the second issue I have: interactivity.  Some so-called blogs aren’t interactive at all, so readers can’t post responses and, of course, the blogger can’t interact.  A non-interactive blog is a book report.

So now that I’ve said what this blog isn’t, what is this blog specifically?

First, I intend to provide timely information about health care decisions and litigation strategy and most importantly describe how they may affect your practice.

Second, this blog is not some device simply to advertise my firm or its cases.

Third, I will encourage you to respond and I will reply.  The best outcome is for us to have a dialogue together.  You may disagree with me and, if you do I will learn from you.

Finally, on occasion and in true blog tradition, I may forgo describing cases every once in a while and just rant.

So, let us begin.