FOCUS TOPICS 2019 HEALTHCARE FORECAST • OPHTHALMOLOGY • NEUROSCIENCE • HEALTH LAW
January 2019 >> $5 ON ROUNDS Not Much Sleep And No Retirement For Dr. Steve Charles Now well into his 70s, it’s still fullspeed ahead for this renowned vitreoretinal surgeon who’s been operating, teaching, writing and engineering for more than 45 years.
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Dr. Lauren Ditta’s Shrinking Specialty Grows Even Smaller As one of nation’s very few neuro-ophthalmologists, Dr. Lauren Ditta not only faces increasing challenges, but she’s also working in a field that’s slowly shrinking.
Experts’ Expectations for the New Year
The Financial and Business Case for Transformation By CINDY SANDERS
Despite a series of unexpected challenges to healthcare as 2018 drew to a close, experts who follow the industry in the United States forecast a number of trends for 2019 ranging from more investment in technology and artificial intelligence to business models driven by population health needs and a demand for increased access, value and convenience. In December, a Texas judge ruled the Affordable Care Act unconstitutional in its entirety after Congress removed the tax penalty associated with the individual mandate, thereby setting off what is anticipated to be a protracted legal challenge that will ultimately be answered by the U.S. Supreme Court. Judge Reed O’Connor, who handed down the decision, ordered a stay so that those covered under the ACA would continue to have access to healthcare while the case works its way through the appeals process. (CONTINUED ON PAGE 6)
Mancell Adds Another Leadership Hat to the Mix
Story on page 4.
Court’s Ruling On HHS’ Payment Cuts Gets a Closer Look
By JUDY OTTO
Two attorneys take a closer look at a federal court’s ruling that the Department of Health & Human Services (HHS) exceeded its authority by reducing Part B drug reimbursement to certain hospital.
The problem with being widely acknowledged as a leader in your field is that it can rapidly lead to a “functional multi-personality disorder,” Jimmie Mancell, MD, notes with a laugh. He admits it’s an affliction that makes it hard to say no to additional leadership opportunities. Dr. Mancell, the new president of the Memphis Medical Society (MMS), has a closet
Report on page 12.
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overflowing with additional “hats” he wears — and juggles – as he serves as chief of medicine and associate dean for clinical affairs for Methodist University Hospital; associate professor at the University of Tennessee Health Science Center, Department of Medicine; president and charter member of UT Methodist Physicians; team physician for the Memphis Grizzlies; medical consultant to the Injury Advisory Board of the NFL, and more. (CONTINUED ON PAGE 10)
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For Dr. Steve Charles There’s No Retirement Plan in Sight
Now in His 70s, It’s Still Full-Speed Ahead for This Renowned Physician By LAWRENCE BUSER
After more than 45 years of operating, teaching, writing and engineering, vitreoretinal surgeon Dr. Steve Charles has earned a well-deserved rest that he’ll never take. He rarely sleeps more than two hours at a time, he doesn’t take vacations, he has no hobbies, he doesn’t watch sports and he hasn’t seen a movie in 30 years. Instead, a typical week for Dr. Charles looks something like this recent marathon: See 60 to 65 patients on Monday and Wednesday at his Charles Retina Institute on Kimbrough Road in Germantown; operate on 10 patients on Tuesday and 10 more on Thursday; pilot his Sabre 65 twin-engine jet to Burbank, California, in time to give a one-hour speech Thursday evening to the Los Angeles Ophthalmologic Society; get up at 5 Friday morning and fly 15 minutes across town to Orange County for lengthy productdevelopment meetings with engineers at Alcon Laboratories, and fly back to Memphis on Sunday. Then he sets the alarm for 4:30 a.m. so he can lift weights at a fitness center before seeing more patients Monday morning. “I just turned 76 and the only thing that makes me mad is coming home and my mailbox has an ad for a hearing aid and one from a funeral company and another one from a retirement home,” says Dr. Charles. “I just throw it all in the trash. I’m not going to retire. My retirement plan is death.” For the record, he’s done pretty well so far. Dr. Charles the ophthalmologist is also a mechanical and electrical engineer who has more than 100 patents issued or pending for instruments and surgical sys-
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tems. He has performed more than 38,000 retinal surgeries in 25 countries, lectured in 51 countries and authored a textbook, Vitreous Microsurgery, now in its fifth edition in six languages. He recently was the recipient of the 2018 Laureate Recognition Award, the
highest award given by the American Academy of Ophthalmology for exceptional contributions to the advancement of eye care. Also, Dr. Charles will be featured in a book due for release this month by best-selling author James Moore called Give Back the Light, which chronicles Moore’s search to save sight in his right eye while also sharing his discovery of his doctor’s lifetime accomplishments. “I don’t worry about the fame game or making money,” Dr. Charles says. “I’ve never been the fancy doctor type with sports cars and a big house and flashy clothes like so many other doctors. That’s just not me. It’s not a passion. It’s about a sense of responsibility. I just know if I continue to improve my skill sets by learning, then I have a chance of helping a patient in India or China or downtown Memphis.” While many successful people can point to an important mentor early in their lives, Dr. Charles, not surprisingly, can point to several. His father was a college art history professor whose son was intrigued by his smooth, learned lecturing style. While his father served in the Navy in World War II, Dr. Charles tagged along with his mater-
nal grandfather, a mechanical engineer who designed diesels and ran a manufacturing facility. His paternal grandfather, who died before Dr. Charles was born, was a surgeon, as was his father’s older brother who was his godfather. “So I thought about maybe combining the careers of both grandfathers, my uncle and my dad,” Dr. Charles says. “I’ve always wanted to be a systems designer, something I’ve done throughout my career, but I wanted to figure out something that had meaning. I didn’t want to design something that makes cigarettes or whisky or gambling machines. So it was engineering, surgery and teaching.” As the son of a distinguished college professor, Dr. Charles also got to tag along and meet such luminaries as poet Robert Frost, architects Buckminster Fuller and Frank Lloyd Wright, undersea explorer Jacques Cousteau and former First Lady and human rights advocate Eleanor Roosevelt. “It does inspire you to be around people who are incredibly accomplished,” says Dr. Charles. “It’s about problem solving and trying to make a difference. I work my butt off, I’m nice to everybody and I play by the rules.” A native of Raleigh, North Carolina, who grew up mostly in Miami, Dr. Charles studied mechanical and electrical engineering and taught himself optical engineering after enrolling in medical school at the University of Miami. (CONTINUED ON PAGE 14)
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Growing Challenges in a Shrinking Field Memphis’ Dr. Lauren Ditta Is One of Nation’s Few Neuro-Ophthalmologists By BETH SIMKANIN
As one of only a very small number of pediatric neuro-ophthalmologists in the nation, in a field that medical experts say is in rapid decline, Lauren Ditta, MD, says versatility is key in her profession. A subspecialist in neurology and ophthalmology, Dr. Ditta believes her job brings with it a series of challenges that include: • A rising shortage in the profession. • The sizable amount of time required to determine the cause of a vast range of vision problems. • And the inability to prevent permanent blindness. In contrast, she said there are significant advantages that bring a high level of job satisfaction, including treating, and sometimes curing, patients with complex and uncommon vision issues and collaborating with a variety of specialists to treat patients. Even though her specialty is in pediatrics, she also treats adults. Her patients go to her from across the nation with conditions ranging from double vision to brain tumors. She sees them at Le Bonheur Children’s Hospital and the Hamilton Eye Institute, a nationally renowned ophthalmology institute through the University of Tennessee Health Science Center’s Department of Ophthalmology. Fellowship-trained in both pediatric ophthalmology and neuro-ophthalmology, she assists the departments of ophthalmology and pediatrics at UTHSC as
Dr. Lauren Ditta examines a patient’s eyes.
an associate professor. Neuro-ophthalmologists require specialized training in problems of the eye, brain, nervous system and muscles. According to the North American NeuroOphthalmology Society (NANOS), a professional organization consisting of 600 ophthalmologists or neurologists, neuro-ophthalmologists complete at least five years of clinical training after medical school and are board-certified in neurology, ophthalmology or both disciplines. “We see with our eyes, but we process our vision with our brain,” Dr. Ditta said. “Neuro-ophthalmologists have an understanding of how the eye and brain work
together.” Despite the need for the subspecialty in both adults and children, Dr. Ditta said there is a local and national shortage of neuro-ophthalmologists due to the historical lack of lucrative surgical procedures in the discipline, the extra fellowship training required to practice in the field and the extensive time and effort it takes to diagnosis and treat a patient. “I am one of about 25 pediatric neuro-ophthalmologists in the country,” Dr. Ditta said. “The profession is extremely underserved in this region. There just aren’t many of us.” A recent national survey of ophthal-
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mology residents conducted by NANOS produced results that basically confirm Dr. Ditta’s assessment. Thirty-one percent of residents were not interested in neuro-ophthalmology because of a lack of surgery and surgical reimbursements, the difficult nature of the specialty and the time required to practice the discipline. “The process to determine what causes a patient discomfort is extensive,” Dr. Ditta said. “We don’t usually figure out what the cause of the problem is on the first visit. I don’t see a lot of patients in one day. By the time patients see me, they are extremely frustrated because they may have already seen several specialists.” Dr. Ditta performs various surgeries, including eye muscle surgery, but she said this is a recent development in the field. She treats patients with all kinds of acute issues through referrals from specialists all over the country, typically from neurologists and ophthalmologists. Some patients travel from as far as Florida, Missouri and Kentucky to see her at the Hamilton Eye Institute, which provides comprehensive eye exams and specialty eye care for patients. “I see patients with acute issues every day,” Dr. Ditta said. “Fifty percent may have a disease of some kind and 50 percent may have something else. It can be hard for me to easily determine what condition a patient has. I must do extensive testing, review records from several specialists and order scans to figure out if the problem is in the eye or brain. The first visit can take three or four hours. The earlier I’m referred the patient, the better.” Dr. Ditta said the key to treating patients is for physicians to refer them before the patient goes permanently blind. “Sometimes, I get patients too late,” she said. “I can’t do much for the patient if he or she has gone blind. I stress to all clinicians that if they see something that looks suspicious to refer their patients as soon as possible. I don’t want to see a patient become permanently blind, especially if I could have prevented it.” According to Dr. Penny Asbell, chair of the Department of Ophthalmology at UTHSC and director of the Hamilton Eye Institute, the Memphis area benefits from Dr. Ditta’s expertise. “We are able to treat more unusual and less common eye disorders in the Memphis area,” Dr. Asbell said. “We are fortunate to be able to provide an extra source of care for those patients at the Hamilton Eye Institute.” Dr. Ditta said that mostly she treats adult and pediatric patients with double vision and crossed eyes. “There are many reasons a patient may have crossed eyes or double vision,” she said. “The patient could have a brain tumor, a stroke, multiple sclerosis or an inflammation in the brain.” Over the past several years, she has seen a rise in adult women with idio(CONTINUED ON PAGE 8)
Healthcare 2019: Experts’ Expectations for the New Year, continued from page 1 While legislative and legal policy changes undoubtedly have a very real impact on consumers and the broader healthcare landscape, the shift away from fee-for-service to value-based care and an emphasis on population health strategies seem to transcend politics as the industry continues the steady movement toward a more holistic approach to efficient, effective care across the continuum.
The Money Trail
Duncan Dashiff, head of U.S. Healthcare Services & HCIT Investment Banking for global financial services firm Canaccord Genuity, LLC, said he typically doesn’t worry too much about legislative change impacting financing for companies looking to transform healthcare. In fact, he noted, disrupDuncan Dashiff tors in the private sector often set the stage for later transformation at the state and federal level. “We’re in a place where the private sector is driving real change. If you’re a company meeting the ever-increasing demand for better outcomes at improved cost, there will be capital for your solution,” Dashiff said of funding healthcare
services and IT companies that embrace disruption and innovation. “Stepping back, one of the relevant macro-level factors is what’s happening in the world of private equity,” said Dashiff. “There’s an abundance of capital. Healthcare is obviously a very large component of the economy, and as a result, there are a significant number of private equity firms seeking exposure to healthcare services and HCIT from an investment thesis standpoint.” However, he continued, there is also a rise in funds that have not traditionally been healthcare centric but recognize the role the industry plays in the economy and have decided to jump into the fray, as well. “So, not all the firms chasing healthcare have a lengthy track record of experience in the space,” he noted. Dashiff added, “The current state of private equity won’t last forever. After the next generation of fundraising takes hold in a more significant way over the next 12-24 months, I suspect that the amount of private equity capital chasing healthcare in the subsequent years may not be quite as significant.” For those ready to strike while the iron is still hot, Dashiff said there appear to be three main drivers in the current marketplace. “One is there is clearly a continued interest in the opportunity for consolidation, which has always existed in healthcare services … in particular because of the fragmented nature of the
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industry and the benefits of scale.” Dashiff said there is a broad recognition of economies of scale and the advantage of creating critical mass to create value. “The other dynamic is there’s an interest in playing on demonstrable sector trends ranging across aging demographic trends, the influences of consumerism in service delivery, employer-driven change and industry demand for more holistic population management strategies,” he
said of recent marketplace transactional activity. The third area where he sees interest is in companies that are willing to break away from ‘business as usual’ in healthcare and can demonstrate success in their approach. “We’re in this zone now where I think there are some transformative shifts taking place across healthcare services, healthcare IT … and importantly (CONTINUED ON PAGE 7)
Telemedicine and Artificial Intelligence Excitement for All the Right Reasons Duncan Dashiff, head of U.S. Healthcare Services & HCIT Investment Banking for global financial services firm Canaccord Genuity, LLC, recently observed, “If you’re a healthcare service delivery organization, you are thinking about the portion of the population you address, the co-morbidities they have, the patients at high risk, those at moderate risk, and how you become more relevant in the context of being a real solution or more important component part for that population as a whole and in a more integrated way. “To do that effectively, you have to tech-enable your business, and you are seeing the necessary investments by traditional services companies and companies with new business models.” Dashiff continued, “The pace at which technology is moving is resulting in some pretty accelerated capabilities that just frankly didn’t even exist three to five years ago.” Telemedicine and artificial intelligence are two areas where he said there is a lot of excitement for all the right reasons . . . both from an investment perspective and the possibilities to improve health and outcomes. Telemedicine is not just an IT play, he noted, as it spans across health technology and healthcare delivery. “There has been capital that has poured into that marketplace over the last five-plus years,” he continued, adding the business is morphing beyond initial direct-to-consumer expectations. “What you’re now seeing is that telemedicine, in a lot of ways, can be more of a B2B solution as well, in terms of creating integrated delivery models and leveraging virtual care as a way to get at addressing the broader needs of a population.” He added the virtual care component also offers a solution for key clinical areas where provider shortages exist. “If you’re going to try to be in the population health management business, you better have some telemedicine solutions wrapped around behavioral and other specialties because you’re never going to have the feet on the street to do all of that,” Dashiff noted. Just as telemedicine is gaining traction, the use of artificial intelligence has taken off to help quantify where a population currently stands, predict risks from both clinical factors and social determinants, and recommend early interventions to change the trajectory. “Everybody has sort of talked about artificial intelligence for a while. It’s becoming a reality, and you’re going to see a lot more of that in ’19 and even more in ’20. There are very real companies that are doing some very compelling things in enabling healthcare organizations to do more transformative health service delivery,” said Dashiff. PwC Health Industries Partner Nick Walker noted that investors pumped $12.5 billion into digital health ventures in both 2017 and 2018, which is a 200 percent increase in funding compared to five years ago. Like Dashiff, Walker said actionable data allows healthcare professionals to intervene earlier and allocate resources based on risk profiles. “It directs care to areas where it’s needed more,” he said. Walker added wearables and other digital engagement offerings have gained acceptance among providers and the public. “A majority of consumers surveyed are interested in FDA-approved apps or online tools to treat their medical conditions. I think that’s a change from three to five years ago,” he said. Walker added the PwC survey found 56 percent of physicians are now incorporating digital therapy discussions in their interactions with patients, highlighting an increasing comfort level with data-sharing technology. Byproducts of sharing information at greater rates include the need for solutions to improve interoperability across the continuum and enhance cybersecurity measures to protect data flow.
Healthcare 2019, continued from page 6 … tech-enabled healthcare services where there are pockets of opportunity to invest in things that are highly disruptive for the betterment of the delivery system,” Dashiff explained.
The Business Model
Just as financing is flowing into innovation, the healthcare business model is also transforming. Last month, the PwC Health Research Institute released their 13th annual “Top Health Industry Issues” report, which includes survey findings from 1,750 U.S. adults representing a cross-section of the population. This year’s report, subtitled “The New Health Economy Comes of Age,” explores how the industry is transforming to more closely resemble changes that have been occurring for several years in other industry sectors. “The headline is that the U.S. health industry is finally demonstrating real progress in modernizing to be more digital, more consumer friendly and more transparent,” said PwC Health Industries Partner Nick Walker. “It’s finally starting to behave like other organizations,” he continued. “We feel like that is fueled by consumers.” With healthcare beginning to fall in line with other industries, Nick Walker Walker said this year’s report focuses on issues common across many sectors. “In every industry, there is the concept of digital transformation,” he pointed out. In healthcare, Walker said the movement is seen both in individual engagement and in larger population health and payment models. “Much more innovative partnership models are emerging,” he said of risk assessment and actionable data. Workforce issues, which have been a growing concern for healthcare, are similarly a concern across all industry sectors. The country’s low unemployment rates and a workforce that largely isn’t prepared for today’s technology exacerbate the problem. “The traditional education model hasn’t really been able to prepare for the digital transformation,” Walker explained. “It’s become imperative to retrain and re-skill employees to get the most out of investments in technology.” It’s something employees are willing to undertake. In fact, 75 percent of those participating in the PwC survey said it was ‘very’ or ‘somewhat’ important that an employer offer training in emerging technologies, and 74 percent said they were more likely to stay with an employer that offers up-skill programming. Walker noted, “You have to have a workforce that’s able to move with you.” This is true across the spectrum of healthcare employees from administrative staff to providers. He added, “Clinicians are going to have to learn to work closely with technology to get the most out of it.” memphismedicalnews
Another key takeaway on the changing business model is the push to create a ‘Southwest Airlines’ culture in healthcare where value and transparency play a prominent role while still meeting customer expectations. The report points to other examples, including Costco and Uber, as companies that have successfully created a ‘value line’ of products or services. “Those companies have optimized value, lowered cost, and most importantly have still figured out how to turn a profit,” said Walker. “Southwest was a disrupter in the industry,” he noted of the upstart Texas company that turned the airline industry upside down. While healthcare continues to be on a slow journey to greater price transparency, consumerism and efficiency, Walker said there has been significant movement over the last few years. “The interplay between regular industries and healthcare is greater than it’s ever been, and that’s also driving lower cost and greater efficiency,” he stated. “We know so much more now than we did about healthcare cost. We’re engaging the consumer in more efficient ways to deliver healthcare.”
Underscoring an earlier point, Dashiff said transformation often happens in the private marketplace where there is more flexibility and a direct value proposition. An example is the worksite clinics that employers have historically used to improve productivity and reduce absenteeism. “What’s happened over the span of a couple of decades is you have employers, particularly self-insured employers, who are probably the most in control of their destiny as it relates to improving outcomes and bending the cost curve. They are probably the most motivated party participating in the healthcare delivery system to pursue significant change,” said Dashiff. He added their position allows them to look at the unique intersection of the patient, provider, and ultimate employer payor coming together in a way that can use the onsite or shared-site clinics as a hub to serve an entire population health management strategy when wrapped with the appropriate analytics capabilities and tech-enabled solutions for engagement and virtual care outside the walls of the clinic. While worksite clinics have been around for decades, Dashiff said what has changed is the ability and desire of self-insured employers to be able to bring the various component parts of a population health strategy under one umbrella, coupled with the technology to stratify risk and identify employees and family members who might benefit from specific interventions. The beginning of last year saw Amazon, Berkshire Hathaway and JPMorgan Chase announce their plans to form an independent healthcare company for their employees, and a number of other (CONTINUED ON PAGE 8)
Healthcare 2019, continued from page 7 large employers have begun exploring population health management projects, as well. In addition, Dashiff continued, “The more sophisticated players in employersponsored healthcare are doing more holistic things like narrow network management in connection with their approach. I believe this is an area where you’re going to see employer-sponsored healthcare evolve rapidly over the next several years and emerge as one of the more disruptive things that has happened to healthcare service delivery in a very long time. Not surprisingly, it will be another area of disruption that has been around a long time but simply had its model of care evolve.” He added, “As this all plays out, it won’t be at all surprising if you see similar models that address the commercial population, address the Medicare population, the Medicaid population. That’s not happening overnight, but the self-insured employer marketplace is happening now, and it’s pretty exciting.”
The Upside of Upheaval
“There continues to be a lot of areas in healthcare that have taken their licks over the years but are ubiquitous,” said Dashiff. Diagnostic imaging is an example where reimbursements took a pretty significant hit for several years. “That being said, imaging as a diagnostic modality
is not going away. In fact, it’s a critical path area for effective and efficient care,” he pointed out. Dashiff added there isn’t much left to be taken away at this point so those reimbursement headwinds that battered the sector have faded. He continued, “What you have left is a universe where the really good management teams figured out how to survive and come out on the other side. They figured out interesting strategies and are now at a point where they can grow with the market from a trend standpoint … and if
they have the right strategy, they can grow market share.” That lean, mean model has become interesting to private equity firms looking for value. Dashiff said transactions are once again happening in areas like diagnostics and infusion that have weathered the storm. While change comes slowly … and sometimes painfully … in healthcare, Dashiff and Walker both pointed to very real signs of transformation and a growing willingness by industry stakeholders to
innovate and rethink the business model to create a more efficient, more intuitive delivery system with a greater emphasis on wellness, early intervention and smarter disease management. “I think it’s a very exciting time in the industry both as a professional and as a patient,” said Walker. “The industry has just needed this efficiency for so long, and the innovation that’s taking place using best practices from other industries is creating new success stories across the healthcare continuum.”
Growing Challenges in a Shrinking Field, continued from page 4 pathic intracranial hypertension, which is a condition that occurs when pressure in the skull increases and the optic nerve becomes swollen. The symptoms mimic a brain tumor, but a brain tumor isn’t present. Patients experience a headache behind the eyes, ringing in the ears and brief episodes of blindness. According to Dr. Ditta, researchers aren’t exactly sure why this condition typically occurs in overweight women of child bearing age, but they suspect it may correlate to progestin-containing contraceptives that are found in contraceptive implants and birth control injections. “I am seeing a massive rise in 28- to 30-year-old women with this disease who are experiencing vision loss, and it’s wor-
risome,” she said. “There is a change in hormonal regulation which causes a swelling in the optic nerve. I’ve seen patients with 20/20 vision slowly lose their vision.” In addition to the Hamilton Eye Institute, Dr. Ditta is in charge of the neuro-ophthalmology program inside the Le Bonheur Neuroscience Institute at Le Bonheur Children’s Hospital. Named one of the nation’s top neuroscience programs by U.S. News & World Report, the institute treats pediatric patients with various neurological conditions. Surgeons performed 200 brain surgeries there in 2016. In 2017, the institute treated pediatric patients from 32 states. Dr. Ditta sees pediatric patients with common neuro-ophthalmologic conditions and eye-related issues related to
neurologic conditions on an inpatient and outpatient basis at Le Bonheur. She said one of the most rewarding aspects of her job is collaborating with other specialists. She works closely with a variety of medical specialists, including pediatricians, genetists, nephrologists, neurosurgeons and occupational therapists. Despite her busy schedule and the amount of research and testing it takes to treat each patient, she said she achieves high job satisfaction through her profession. “This is not a glamorous subspecialty; it’s definitely a labor of love,” Dr. Ditta said. “It’s gratifying to help a patient who has double vision to be able to have normal vision again. I have adult patients tell me, ‘I have a life again.’ It’s highly satisfying to get them functioning again.”
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Mancell Adds Another Leadership Hat to the Mix, continued from page 1 He is on a three-year track to become president of the NBA Physicians Association. In August 2017, he was also tapped by Methodist Le Bonheur Healthcare CEO Michael Ugwueke to step in as interim president of Methodist University Hospital and served until March 2018, when current president Roland Cruickshank assumed the role. The request to serve was an appreciated honor, but one that brought with it a challenging learning curve for one who has been physician leader, executive and employee. “Although I was familiar with certain operations at University Hospital, everything in a hospital does not only involve physicians. I had to quickly become familiar with other aspects and background operations in order to gain a broader perspective,” he said. A U.S. Army brat born in El Paso, Texas, Dr. Mancell spent much of his childhood in Europe. Impressed as a small child by the empathy doctors showed during his mother’s non-critical hospital stay, Dr. Mancell made his career choice early and started medical school at UTHSC 29 years ago. He’s called Memphis home ever since. His focus on leadership began early, too. “I was a medical student representative to the TMA and to the medical student section of the AMA back in the ’90s. I always appreciated that the Memphis Medical Society was supportive of those
efforts. I believed if you’re going to lead change, you need to be representative of that change you would like to lead.” Some of his toughest challenges involve representing the interests of the diverse groups he serves. As president of UTMP, he builds consensus by resolving conflicting priorities among independent, employed and academically focused physicians. The challenges vary with each role, but he enjoys them all. “As we continue to grow and hire physicians and/or other allied health providers such as NPs or PAs, we find the newer generation of healthcare workers looking for better work-life balance,” he said. “That’s something we have to accommodate.” Evolving relationships also present challenges. Originally, the plan for Methodist’s new tower incorporated a West Clinic comprehensive cancer initiative between the three partners — West, UT and Methodist, he explained. “Because that relationship is unwinding, we’ll have to change our strategy. We’re growing our cardiac services within the Methodist system, with some recruitments. On the adult side we want to head in a direction similar to what has been achieved at Le Bonheur — where they have a top 10 nationally recognized cardiac program. The intent is to fully optimize and utilize that tower in a new direction.” As Memphis Medical Society president, Dr. Mancell will add further respon-
sibilities and strategies to his list. “Medical students have been a big part of the societies where there are medical schools,” he said. “We’re researching a plan to help debt-burdened medical students, some of whom are coming out with upwards of a quarter-million dollars in debt. We’re exploring creative finance solutions that would enable employer hospitals or practices to match young physicians’ contributions to pay off their debt — similar to a 401K or 403B retirement plan — thus paying off their debt quicker and starting their retirement fund earlier in their career.” MMS will also work on increasing membership through providing value not only to independent physicians but also to the increasing number of employed physicians in the Memphis area, he noted. “We don’t want them to lose the value of being part of the society.” Dr. Mancell is proudest of accomplishments that don’t necessarily win awards: • The growth of UTMP since its beginnings in 2013 to about 130 physicians and 45 extenders, making it one of the largest multi-specialty groups in the area; • Methodist Hospitals of Memphis recognized as a best regional hospital in the Memphis metro area by U.S. News & World Report for the eighth consecutive year; • The hospitalist program begun at
Methodist University Hospitals in 2004 with five physicians (of which Dr. Mancell was a founding member), which now includes 49 physicians and 20 NPs and PAs. “As more healthcare systems around the country began developing more hospitalist programs — with physicians based in the hospital to care for those patients — we successfully built that internal strategy into a program which cares for patients in all the Methodist Le Bonheur Healthcare adult hospitals,” he said. • Being chosen as the main academic campus for the training programs of UTHSC and consistently being ranked as the No. 1 site by the residents who call MUH the place where they most enjoy training. Dr. Mancell continues moving forward under full steam. His to-do list includes keeping the momentum going in all those currently successful directions, and kicking off some new ones, like working with the Campbell Clinic to provide medical care for the Memphis Express, a new Alliance of American Football team, when their league begins play in February. Leadership is built by earning the respect of your peers for being an ethical, honorable person of high integrity, Mancell believes, with the wisdom and insight to be a good advisor, but the leavening of humor and humility he adds to the mix doesn’t hurt. An effective leader also learns from
(CONTINUED ON PAGE 14)
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Court Rules HHS Payment Cuts Unlawful; HHS Seeks Stay in Proceedings
Federal Court Ruled Department of Health & Human Services Exceeded Its Authority By JEFF DAVIS and TRACY WEIR
In an opinion issued December 27, 2018, a Federal District Court ruled that the Department of Health & Human Services (HHS) exceeded its authority by reducing Part B drug reimbursement to certain hospitals in the 340B drug pricing program by nearly 30 percent. At issue were payment cuts implemented by the Centers for Medicare and Medicaid Services (CMS) in the rule that went into effect January 1, 2018. The Court sided with the hospital association and hospital co-plaintiffs challenging the legality of the payment cuts, granting the plaintiffs’ motion for a permanent injunction on the 2018 cuts. The Court found that, although HHS has the authority to implement payment reductions in certain cases, the Medicare statute does not provide HHS with the authority to implement the payment cuts to 340B hospitals included in the 2018 OPPS final rule. The Court ruled that the plaintiffs are entitled to relief but held off on deciding what relief to grant, ordering supplemental briefing within 30 days on what remedy to provide. In the meantime, HHS has sought a stay in the proceedings due to the government shutdown. The plaintiffs have opposed the stay.
CMS Authority to Reduce 340B Hospital Payments
The payment reduction in question reduced by nearly 30 percent reimbursement for certain 340B hospitals for separately payable Part B drugs without pass-through status: from average sales price (ASP) plus six percent, to ASP minus 22.5 percent. The payment cut applied to 340B hospitals that are disproportionate share (DSH) hospitals, rural referral centers (RRCs), and non-rural sole community hospitals (SCHs). Children’s and cancer hospitals and rural SCHs were exempted from the payment cut, and the payment rules did not apply to critical access hospitals and Maryland hospitals, as they are not paid under the OPPS. The 2018 OPPS final rule also required 340B hospitals paid under the OPPS, including those exempted from the payment reduction, to use modifiers when billing Medicare to identify 340B-acquired drugs.
The plaintiffs argued, and the Court agreed, that the Medicare statute did not grant HHS the authority to reduce payment to 340B hospitals in this manner. The agency argued that its authority under the statute to “adjust” payments allowed for the 340B payment reduction. The Court found, however, that the nearly 30 percent payment reduction went beyond a mere payment adjustment. Moreover, HHS intended for the payment reduction to more closely align 340B hospital payments with the acquisition cost of 340B drugs, but the statutory provision HHS relied on for its authority requires payment to be based on a drug’s ASP, not acquisition cost. The statute allows HHS to pay for drugs based on their acquisition cost, but only if the agency is relying on acquisition cost survey data, which is not currently available to HHS.
History of Hospitals’ Legal Challenges
On November 13, 2017, the hospital association and hospital co-plaintiffs filed a lawsuit in the U.S. District Court for the District of Columbia, asking the court to grant a preliminary injunction to stop the cuts from going into effect, asserting that HHS did not have the authority to reduce payments in this manner. The Court dismissed the challenge on procedural grounds, finding that the hospitals failed to present a ripe claim for reimbursement, as Medicare had not yet paid the hospital plaintiffs at the reduced rates. On January 9, 2018, the plaintiffs appealed to the U.S. Court of Appeals for the D.C. Circuit, arguing that the District Court erred in dismissing the case as premature. The American Hospital Association, et. al., v. Hargan, Civ. Act. No. 17-2447 (RC) (D.D.C. 2017) (notice of appeal). Oral arguments were held on May 4, 2018. The D.C. Circuit dismissed the appeal on July 17, 2018, upholding the District Court’s dismissal and finding that the plaintiffs did not present a claim for relief given that the payment cuts were not yet in effect when the initial lawsuit was filed. The appeals court noted it did not consider the merits, however, as to whether CMS has the authority to issue the payment cuts, paving the way for a new lawsuit to consider the merits after (CONTINUED ON PAGE 14)
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Court Rules, continued from page 12 the payment cuts were in place. The plaintiffs filed a new lawsuit in District Court on September 5, 2018, which the Court has now ruled on.
Hospital Implications and Next Steps
The Court will now consider what relief to provide to the plaintiffs, with supplemental briefing on the issue of what remedy to provide due within 30 days, by January 26, 2019. HHS has not indicated whether it plans to appeal the decision. The defendants filed a motion to stay proceedings in the case on January 6, 2019, in light of the government shutdown, asking the Court to pause the lawsuit until Congress restores appropriations to the Department of Justice (DOJ).
The plaintiffs filed a motion opposing the stay on January 7, 2019, noting DOJ can continue to litigate without appropriations and that HHS attorneys are not affected by the shutdown. The plaintiffs also urged the Court to rule “expeditiously” on a remedy for 2018 claims, before Medicare pays 2019 claims, to avoid disruption. In their initial complaint, the plaintiffs asked the Court to vacate the rule and require that HHS repay 340B hospitals the difference between the 2018 rates and the rates that Medicare would have paid if not for the cuts. However, the Court recognized the complexity of Medicare payments and the “havoc” that could ensue if it granted the plaintiffs’ request. HHS implemented the cuts in a budget neutral manner, offsetting the payment reduc-
Mancell Adds Another Leadership Hat, continued from page 10 what doesn’t work — and applies reflection, introspection and the management style of a coach rather than a captain, whenever possible, he believes. The “L” in “leadership” should remind us to Listen and Learn, he cautions. He delights in his passion for sports and caring for athletes, an interest he shares with his family — an understanding and supportive wife (Michelle) and sons ages 12 and 16. “My family is a major priority: I try to build everything
Is the missing
around them,” the doctor said. “There’s lots of noise in everything, at every level, no matter which of those multiple hats is on display,” he offered. “It’s easy to get caught up in the complexity of a conversation and lose sight of its purpose. My advice is to let your patients and their families be your True North. Whatever doesn’t improve the care we provide to them is just distraction. Just keep your compass handy and remember where True North lies.”
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tion for drugs with increased payments for non-drug services. The Court noted that the retroactive payments sought by the plaintiffs would presumably require similar offsets within the OPPS, calling the situation a “quagmire that may be impossible to navigate.” While the Court considers the question of the proper remedy, the 2018 payment reduction remains in place. Moreover, although HHS continued the payment reduction in 2019 as part of CMS’s 2019 OPPS final rule and extended the cuts to additional hospital outpatient locations, the Court noted it was precluded from reviewing payment under the 2019 final rule and declined to impose injunctive relief regarding 2019 payment rates. As such, 340B hospitals should continue to bill Medicare as required under the 2019 OPPS final rule, including the policies dictating use of modifiers to identify 340B-acquired drugs. Printed with permission from Baker Donelson Baker Donelson will continue to monitor the Court’s actions and will provide updates on the relief the Court ultimately grants. For further information please contact a member of Baker Donelson’s Reimbursement Team. Clients should carefully review these developments to determine if an additional service line opportunity will become available as the expanded Medicare coverage and reimbursement policies are
For Dr. Steve Charles, continued from page 3
While there, he worked at the worldfamous Bascom Palmer Eye Institute as a student, intern and resident under the wing of founder Dr. Edward W.D. Norton. “I was very fortunate to have extraordinary people as teachers,” Dr. Charles recalls. “Here I am, some dorky med student, hanging out in the lab with Dr. Norton. When I was finally leaving, I ran into him and I said ‘What can I ever do to repay you?’ He looked me in the eye, gave me a shove and said one word: ‘Teach.’ That was very cool. I’m the luckiest guy in the world.” Today, vitreoretinal surgeons the world over use many of the techniques and devices that Dr. Charles invented, and his how-to microsurgery textbook is required reading. As a result, every year he affects many thousands of patients he never sees. “I wasn’t the number one student in high school or college or medical school, but I always took the toughest classes and always did very well,” he says. “I’m not a memorizer. I’m an engineer-thinking kind of guy.” When asked what accomplishment he is most proud of, he answers without hesitation. “Being a daddy and granddaddy,” says Dr. Charles. “I have three phenomenal daughters and four terrific grandchildren. My idea of maturity is real simple: it isn’t about you. It’s about your employees, your patients, your customers and, most importantly, about your children and your grandchildren.”
implemented. Those who have questions about this article, should contact the Baker Ober Health Law Group.
About the Writers Tracy Weir
Tracy Weir provides health care regulatory counseling to clients regarding issues pertaining to Medicare reimbursement and compliance, the 340B Drug Pricing Program, telehealth, and fraud and abuse. She also assists clients with payor audits, and routinely represents clients before the Office of Medicare Hearings and Appeals in administrative litigation involving denials of Medicare reimbursement. She also counsels clients on data privacy and security matters that arise from federal and state laws, including HIPAA, HITECH and state data breach laws. She has substantial experience with HIPAA/ HITECH compliance, including analyzing transactions and business relationships, preparing and negotiating business associate agreements, developing policies and procedures, and advising clients on data breaches and notification as well as handling Office of Civil Rights investigations.
Jeffrey Davis provides clients with counsel on issues relating to the federal 340B drug pricing program, including enrollment; contracting; audits; compliance with 340B, Medicare, and Medicaid requirements; and self-disclosures, as well as other health care matters. He also provides advocacy and policy services to health care providers. Prior to joining the Firm, he served as vice president and legislative and policy counsel for 340B Health, a nonprofit organization of more than 1,300 hospitals and health systems participating in the 340B drug pricing program. During his more than seven years with 340B Health, he provided hospitals with technical assistance on 340B, Medicare, and Medicaid program compliance issues, oversaw research and policy efforts, and helped lead the government relations team in their work to educate members of Congress and their staff on the importance of the 340B program to hospitals and their patients.
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UTHSC College of Nursing Introduces 12-Month Program The University of Tennessee Health Science Center (UTHSC) College of Nursing will transition its BSN program into a 12-month program of study beginning this fall. “We are so excited to move toward our 12-month, concept-based curriculum. Faculty, staff, and leadership have been working for well over a year to bring this new innovative program to our College of Nursing,” said Wendy Likes, PhD, DNSc, APRN-BC, FAANP, dean of the UTHSC College of Nursing. “This program will graduate baccalaureateprepared nurses not only quicker into the field, but also with a better critical thinking skill set. Our UTHSC BSN students in the simulation lab at the Center for Healthcare Improvement. goal is not only to meet the needs for nursing in our community, but to do this at a high will be required to have a baccalaureate will be the final class under the old curriclevel, providing the best outcomes for degree, allowing the program to change ulum. The college is now recruiting and our patients.” from its current 17 months to 12 months. is accepting applications for its 12-month Going forward, BSN applicants The cohort that started in August 2018 BSN program through January 15.
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“Part of the underlying premise behind the new program was to fill the nursing shortage more quickly, but also it lays the groundwork for everyone to be at the same level with the baccalaureate degree requirement,” said Randall Johnson, PhD, RN, BSN program director for the UTHSC College of Nursing. “This is an intense program, and you have to be ready to hit the ground running. So we want to be sure we have qualified students who will be successful in the program.” The new program will take the current curriculum from the traditional nursing education model that is content focused to a concept-based program of study. The BSN program is set up so students can continue their education at UTHSC, should they want to pursue an advanced degree through the college’s DNP and PhD programs.
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GrandRounds Methodist Le Bonheur Healthcare has begun offering the Eluvia DrugEluting Vascular Stent, a stent designed to restore blood flow in the peripheral arteries above the knee, including the superficial femoral artery and proximal popliteal artery. The Eluvia Drug-Eluting Vascular Stent was recently approved by the U.S. Food and Drug Administration (FDA). Methodist officials say it is the first hospital in the greater Memphis area to offer Eluvia. The Eluvia Stent features a unique drug-polymer combination intended to facilitate sustained release of the drug (paclitaxel) that can prevent narrowing (restenosis) of the vessel, often the cause of pain and disability for patients diagnosed with peripheral artery disease (PAD). PAD affects approximately 8.5 million Americans over the age of 40 â€“ the most common symptom is muscle cramping in the hips, thighs or calves while walking, climbing stairs or exercising. The prevalence of the disease increases with age for both men and women, and if an individualâ€™s PAD is caused by a buildup of plaques in blood vessels, they may be at risk of developing critical limb ischemia, stroke or heart attack, so proper treatment can play a vital role in managing the disease.
UTHSC PHOTO BY ALLEN GILLESPIE
Methodist Offering Eluvia Drug-Eluting Vascular Stent
Randy Boyd Visits UTHSC During UT System Tour Randy Boyd, Interim University of Tennessee System President, holds up a University of Tennessee Health Science Center sweatshirt presented to him during his visit to the campus. Boyd had the opportunity to see the building improvements and construction taking place on the campus during the final leg of a week-long tour of campuses in the UT System.
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GrandRounds Significant Increase in Flulike Illness Expected in Shelby County
Qsource Awards Church Health $20,000 Partnership Grant
The Shelby County Health Department expects a significant increase in the number of influenza-like illnesses in Shelby County this month as children return to school after the holidays. Emergency department data is retrieved from the Electronic Surveillance System for the Early Notification of Community-based Epidemics (ESSENCETN). The data shows the numbers of people reporting influenza-like symptoms at Shelby County hospital emergency departments increased by almost 300 percent during the past month “The data indicate that seasonal influenza activity has begun to increase in Shelby County and is expected to peak in January or February,” said Shelby County Health Department Director, Dr. Alisa Haushalter. “We strongly encourage everyone who is sick with a fever and flu-like symptoms to stay home in order to prevent spreading illness to others. Dr. Haushalter said it is not too late for people to get the seasonal flu vaccine, if they have not yet been vaccinated.” The Health Department is offering free influenza vaccination at all public health clinics, while supplies last.
Qsource, a nonprofit healthcare quality improvement and information technology consultancy, has awarded $20,000 to Church Health through its grant-funding program, Qsource Community Partnerships, established to support programs that pursue im-
provement in health outcomes. With this funding Church Health plans to purchase a tool that will allow it to more accurately manage the health of its uninsured patient population. The tool will identify needed gaps in care, alert providers to care gaps, generate patient lists specific to the type of care needed, and allow Church Health to deploy more effective out-
UTHSC Professor Receives Grant to Study Newborn Seizures Helena Parfenova, PhD, professor of Physiology in the College of Medicine at the University of Tennessee Health Science Center (UTHSC), has been awarded a $2.1 million grant to further study the functions and mechanisms behind neonatal seizures, and to potentially uncover naturally-occurring defensive mechanisms to prevent cerebrovascular disease in newborns. The neonatal brain is vulnerable to compromises in its blood supply because of its rapid development of neurons, and seizures are the most frequent abnormal neurological event in newborns. Helena Parfenova Neonatal cerebrovascular disease caused by oxidative stress during seizures, hypoxia/asphyxia, and ischemia can lead to debilitating and lifelong neurological complications. Presently, there is no effective treatment to prevent neurovascular dysfunction triggered by neonatal seizures. “Brain oxidative stress is the main component of neurovascular damage caused by seizures, and endothelial cells are key elements of the neurovascular unit,” Parfenova said. “Strengthening antioxidant mechanisms in the neonatal brain can prevent endothelial cell damage during oxidative stress conditions.” Parfenova is specifically focusing on a novel gaseous mediator, carbon monoxide (CO), which is naturally produced in the brain. In small amounts, carbon monoxide has proven to be a vital part of antioxidant defense mechanisms that promote endothelial cell survival in newborn brains. “Our preliminary studies show that while head cooling does not stop seizures, it has proven to help reduce brain oxidative stress, prevent neonatal cerebrovascular disease, and protect blood-brain barrier integrity,” she said. “We want to uncover the phenomenon and key players by which this positive defensive reaction occurs.”
reach and communications. Many Church Health patients are transient, making the use of multiple communication tools (email, text message and telephone) necessary. By contacting patients when screenings, vaccinations and regular medical checkups are needed, the not-for-profit clinic will better deliver patient resources. Headquartered in Tennessee since 1973, Qsource provides programs and services to states, organizations, patients, and providers that will improve community health, healthcare quality and delivery, and achieve improved patient outcomes and costs savings.
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GrandRounds Healthcare Organizations Honor Saint Francis’ Audrey Gregory
UTHSC Professor Receives Grant to Study Newborn Seizures
Audrey Gregory, Market CEO of Saint Francis Healthcare, was honored recently by two healthcare organizations. Gregory, who has more than 25 years of healthcare leadership experience, was named to Becker’s annual list of women hospital and health system leaders to know in 2018. Becker’s Hospital Review says it “features up-to-date business and legal news and analysis relating to hospitals and health systems. Content is geared toward high-level hospital leaders, providing content, including hospital and health system news, best practices and legal guidance specifically for these decision-makers. “Each of the 12 annual issues of Becker’s Hospital Review reaches a qualified audience of approximately 18,500 healthcare leaders. “ Gregory also has been named to the 2019 class for the Nashville Health Care Council Fellows which states that it “brings together a remarkable collection of healthcare’s brightest minds each year for a unique opportunity to positively transform our nation’s healthcare system. ‘The 2019 class includes 28 senior executives from across the country representing a diverse array of sectors within healthcare that will discuss and address the challenges facing the industry. The class was pulled together from the highest number of applications in the seven-year history of the program.”
Helena Parfenova, PhD, professor of Physiology in the College of Medicine at the University of Tennessee Health Science Center (UTHSC), has been awarded a $2.1 million grant to further study the functions and mechanisms behind neonatal seizures, and to potentially uncover naturally-occurring defensive mechanisms to prevent cerebrovascular disease in newborns. The neonatal brain is vulnerable to compromises in its blood supply because of its rapid development of neurons, and seizures are the most
Church Health Earns Special NCQA Designation Church Health has earned the designation of Patient-Centered Medical Home by the National Committee for Quality Assurance (NCQA), an independent 501 nonprofit organization that works to improve healthcare quality through the administration of evidencebased standards, measures, programs and accreditation. Church Health’s NCQA designation applies to its clinical and integrated behavioral health programs. The NCQA Patient-Centered Medical Home program reflects the input of the American College of Physicians (ACP), American Academy of Family Physicians (AAFP), American Academy of Pediatrics (AAP) and American Osteopathic Association (AOA) and others, and it was developed to assess whether clinician practices are functioning as medical homes and recognize them for these efforts. The NCQA Patient-Centered Medical Home standards emphasize the use of systematic, patient-centered, coordinated care that supports access, communication and patient involvement.
frequent abnormal neurological event in newborns. Neonatal cerebrovascular disease caused by oxidative stress during seizures, hypoxia/asphyxia, and ischemia can lead to debilitating and lifelong neurological complications. Presently, there is no effective treatment to prevent neurovascular dysfunction triggered by neonatal seizures. “Brain oxidative stress is the main component of neurovascular damage caused by seizures, and endothelial cells are key elements of the neurovascular unit,” Parfenova said. “Strengthening antioxidant mechanisms in the neonatal brain can prevent endothelial cell damage during oxidative stress conditions.”
Parfenova is specifically focusing on a novel gaseous mediator, carbon monoxide (CO), which is naturally produced in the brain. In small amounts, carbon monoxide has proven to be a vital part of antioxidant defense mechanisms that promote endothelial cell survival in newborn brains. “Our preliminary studies show that while head cooling does not stop seizures, it has proven to help reduce brain oxidative stress, prevent neonatal cerebrovascular disease, and protect bloodbrain barrier integrity,” she said. “We want to uncover the phenomenon and key players by which this positive defensive reaction occurs.”
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Memphis Medical News January 2019