CAPITAL ALPHA PARTNERS

Physician Policy Issues

By Kim Monk, Rob Smith

Politics and policy mandates from Washington, D.C. may feel like they exist in a parallel dimension to the daily experience and careers of healthcare professionals, but every regulatory decision, billing code or clinical approval process began as a policy proposal inside the beltway. The range of legislative and regulatory issues impacting physicians’ practices are widely varying and constantly in flux. Congress and agencies like CMS tend to be driven by catalysts that force action. Here we will distill the major issues currently under debate and identify the most important upcoming catalysts. For instance, regulatory flexibility around telehealth, scope of practice, free COVID tests and treatment, and continuous Medicaid coverage will expire at the end of the Public Health Emergency (PHE) barring action by Congress to make some of these flexibilities permanent. We think HHS is unlikely to end the PHE before at least early 2023. Although the agency has started taking substantial steps to wind the emergency down, it’s going to be a very complicated process, and Congress has done little to ensure favorable waivers for telehealth, scope of practice expansion, and other policies will be made permanent.

Telemedicine: Good news—unlikely that Congress will greatly curtail the expansion as a result of COVID. Bad News—it is going to be some time before regulators will have sufficient confidence to make any permanent decisions. For telemedicine, we think it will likely take several years of data analysis and policy development before legislation is enacted to provide stable coverage and reimbursement. Currently, CMS’ telehealth emergency waivers will be extended for five months after the end of the PHE under legislation enacted earlier this year. We think several more temporary extensions will be necessary until Congress agrees on a permanent policy.

Reimbursement: Moving on and with a greater awareness of the value of medical workers. Congress is quickly closing its COVID wallet, and further relief from the 2% Medicare sequester or replenishment of the provider relief fund are unlikely to pass despite strong lobbying from AMA, AHA and other provider groups. Increasing medical inflation is likely to lead to favorable CMS physician rate updates for 2023. However, relief for some specialty groups from reimbursement cuts stemming from updated E/M and clinical labor policies will require action from Congress, which is far from certain at this point.

Coverage: BBB is dead but ACA is setting up to come back to life as an election battleground. Although the BBB may be dead, health coverage remains a huge priority for Dems, which is why we think they will use the reconciliation vehicle to extend the enhanced ACA tax credits, presumably paid for with drug pricing reforms. The end of the PHE will also kick off a massive effort by states to

conduct eligibility redeterminations for some 80 million Medicaid/CHIP enrollees for whom states were prohibited from dropping from the roles during the pandemic. Although CMS is giving states 12 months to conduct redeterminations, increased federal Medicaid matching funds from the Families First Coronavirus Act expires at the end of the quarter in which the PHE ends, likely prompting some states to move quickly to drop ineligible enrollees. It’s estimated that some 15 million people could lose coverage as a result of the redeterminations. Many will have access to other sources of coverages, particularly if Congress extends the enhanced ACA subsidies, but there is sure to be confusion and disruption in coverage as this is sorted out.

Drug Pricing: Likely a sub-headline item if a reconciliation package is passed. We doubt CMS will make any substantial moves on drug pricing demos or other rules that could affect physician’s ASP +6% reimbursement until at least 2023. If Democrats can pass broader drug pricing reforms in a reconciliation package later this year, it would considerably lower the pressure on the administration to address pricing via regulations. Broader drug pricing legislation might include a Part B inflation cap and limited measures giving Medicare the authority to negotiate prices for certain drugs, but whether this can get done depends on whether Dems can make a deal with Sen. Manchin (D-WV). The deadline for moving a “drug pricing plus” reconciliation package is Sept. 30th.

Surprise Billing: Bipartisan support, operational complexity. Litigation and implementation of the surprise billing law is likely to have significant implications for physician billing and network contracting in the commercial market. When Congress passed the “No Surprises Act” (NSA) at the end of 2020, it sought to create an independent resolution process (IDR) that balanced provider and plan concerns. However, in implementing the law, HHS and the other agencies said that the arbiter should pick the amount closest to the qualified payment amount (generally the median contracted rate) and may consider additional provider factors if that information clearly demonstrates that the value of the disputed item or service is materially different from the QPA. Earlier this year a Texas court struck down this controversial portion of the rule. In our view the Texas court got it right and HHS will ultimately lose the legal battle if it appeals the decision. We think the agencies will instead issue a final rule—as soon as this quarter—that requires arbiters to consider key factors, such as provider’s level of experience and training, and that is consistent with statutory intent and the Texas ruling. Finally, we’d note that that even for physicians who are in-network or who don’t balance bill, the NSA will still require all physicians to provide a good faith estimate of costs, diagnostic and billing codes as part of an advanced explanation of benefits, though the regulation for this is delayed as HHS seeks to harmonize it with the Trump-era price transparency rule. n

Capital Alpha Partners, founded in 2007, is a leading provider of strategic policy research and political forecasting. Co-founder Kim Monk and managing director Rob Smith draw upon their rich, collective experience on Capitol Hill and in the private sector to accurately pinpoint investor-relevant theses; predict challenges and opportunities; and ascertain the market significance of political developments across the healthcare sector. Services range from pre-diligence consultations and extensive research reports to post-transaction advisory. For more details or to request trial access to their weekly reports, please contact info@capalphadc.com.

MOHAMED MASAAU

Read the fine print of the purchase agreement before you buy a boat

By Dr. Jeffrey Dorfman Commodore, Rye Yacht Club

PHOTOS COURTESY OF THE AUTHOR UNLESS OTHERWISE NOTED

here is a common saying in the boat world: “The best boat is your friend’s boat.”

While there is some truth in the statement, the allure of having your own vessel to navigate lakes and oceans is compelling. Physicians, dentists and entrepreneurs all work extremely hard, and if you find yourself in the fortunate position to afford a boat, then by all means don’t let the naysayers ruin your fun. That said, in this article I want to provide a few practical tips related to the actual purchasing process to ensure your transaction is what you intended.

All Fine Print can be modified on the written Purchase Agreement (PA) if the Seller really wants to sell a boat. Note that a Seller can be a local boat dealer or the manufacturer who sells directly to the Buyer.

Potential boat buyers should carefully read the Fine Print on the back of a boat PA and also seek professional opinions from both an attorney and insurance advisor before signing it. It is hoped that if enough people refused to sign standard boat Purchase Agreements as many are currently written then boat manufacturers and local dealers would make changes.

The National Marine Manufacturers Association (NMMA.org) states that U.S. expenditures on boats, engines, accessories and related costs totaled $35.4 billion in 2014. It also states “Boating is primarily a middleclass lifestyle as 71.5% of American boat owners have a household income less than $100,000.” What government agency is protecting Americans who may not read or understand the Fine Print on the back of the boat PAs they sign?

Some things to look for in the FINE PRINT of a boat PA

Price: Can the sales price be changed AFTER you sign the PA if: 1) the manufacturer “unexpectedly” increases the price to the dealer, or 2) the boat is not in their current inventory? A Seller should provide the exact price of a boat before you sign a PA.

Sales Tax: If you live in and enjoy boating in one state—but purchase a boat in another state that has a lower sales tax—you will still owe the difference of the higher state tax even though you might not be charged it on the boat PA. This can make the total purchase price appear artificially low. It is better to pay the correct sales tax at the time of the purchase so you don’t receive an unexpected sales tax bill later from the state in which you live and/or enjoy boating.

Delivery Date: Can the delivery date be extended without any limitation due to what the Seller calls a “Force Majeure,” or any other reason “beyond their control?” If so, you could end up waiting for a boat indefinitely without any option of canceling the agreement. It’s reasonable to set a maximum time limit beyond the expected delivery date where the Buyer can cancel the purchase without penalty. Note that a “Force Majeure” has a specific legal meaning and is really not just ANY delay beyond the Seller’s control.

Inspection: Is there a paragraph that says you have examined the boat, and find it acceptable—which would be illogical if the boat hasn’t yet been built or delivered? Seek out a reputable local boat surveyor to inspect the boat and a separate factory-certified mechanic to survey the engine(s).

Warranty: Does the Fine Print refer to Manufacturer and Component warranties that were not provided to the Buyer in advance of signing the PA? If the Seller states they are NOT saying the boat is fit for any particular purpose, you might want to ask why. If the Seller says that in no event shall they be liable in the event of any damage arising from the purchase and use of the boat—then in the event of a serious manufacturing defect that could cause injury or death, you might be giving up your right to sue.

Indemnification: If the Seller seeks “Indemnification” from any loss, liability or legal action, then the Buyer may ask why this is necessary. The Buyer may be giving up the right to sue in the event of misrepresentation—or fraud.

Insurance: Does the Seller pass all insurance coverage requirements onto the Buyer even in some situations where the Buyer may not actually be insured—even if they have insurance? Examples: 1) during delivery of the boat by truck, 2) use of the boat in a boat show or 3) dealer display of the boat at their marina during the winter. Ask your insurance advisor.

Reappraisal of Trade-In Price: Can the Seller change the price of the trade-in AFTER the PA is signed? Instead, can you bring in your trade-in for a survey BEFORE you sign and thereby make the trade-in price unchangeable? This protects both Seller and Buyer.

Transfer of Title of the Trade-in: Some sellers expect to own your trade-in immediately after signing the PA—even though you may not receive your new boat until sometime later. You could be without any boat for quite a long time. Also be aware, that sometimes the Fine Print can require the Buyer to pay an

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unspecified amount for the registration of their Trade-in in another state.

Entire Agreement: Is the Seller verbally telling you something different than what is written in the Fine Print? Despite his/her assurances, get it in writing. The “Entire Agreement” paragraph will typically say that any verbal agreement means nothing unless it is written as part of the PA.

Batten Down the Hatches

It is highly recommended that potential boat Buyers do NOT begin picking out boat engines, colors, cabinets, flooring and fabrics with family members until after ALL aspects of the PA are resolved. Otherwise, you might find yourself being subjected to unpleasant sales pressure and give in to key legal points of the PA in front of your family—who just completely helped you design a boat.

Speak to an attorney and/or insurance advisor BEFORE signing a PA for any new or used boat. It is better to take the proper time and give advisors time to carefully review a PA before signing. However, if you are at a boat show and believe you have found the deal of the century, then at least use your cell phone to take a picture of the entire PA—including the Fine Print— and email it to your advisors for their professional opinions BEFORE signing.

LITTLE JOHN

While this highlights some important aspects of the fine print of a boat PA, it’s not exhaustive. Legal questions are raised in this article, but no legal advice is provided. n

Jeff Dorfman, DMD, is the retired founder and director of a high-end 16-dentist and specialist group practice in midtown Manhattan. He is a technology innovator, professor and author. Owner of several IP holding companies, including 1dentist LLC and Rye Yacht Inc., he has been a yacht owner, advisor and enthusiast for decades.