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May / June 2015 • Volume 114 • No. 3
M E D I C A L
S O C I E T Y
www.msms.org
ICD-10 Implementation: Making the Best of Transition Jill Young, CPC, CEDC, CIMC, Charles F. Koopman, Jr., MD, and Stacie Saylor, CPC, CPB
ALSO IN THIS ISSUE:
Volume 114 • No. 3
• Five ways to be a Tax Efficient Investor • Medical Retainer Agreements are not Insurance Products MICHIGAN MEDICINE 1 Factors in Medical Professional Liability Claims • Analysis of EHR Contributing
Chief Executive Officer Julie L. Novak
Committee on Publications May / June 2015 • Volume 14 • No. 3
Cover Story
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ICD-10 Implementation: Making the Best of Transition FEATURES
16 Analysis of EHR Contributing Factors in Medical Professional Liability Claims by David B. Troxel, MD, Medical Director, The Doctors Company
Columns
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Ask Our Lawyer By Daniel J. Schulte, JD “Medical Retainer Agreements Are Not Insurance Products”
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HIT Corner By David McHale “Be Cybersecure: Protect Patient Records, Avoid Fines and Safeguard Your Reputation
24 MDCH Update Michigan Department of Community Health “Measuring the Impact of New Policies on Immunization Waiver Rates”
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President’s Perspective By Rose Ramirez, MD “Honoring the Past and Looking to the Future”
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Immediate Past President’s Perspective By James D. Grant, MD “What Starts Here Changes the World”
Departments
14
New MSMS Members
15 Obituaries 18
The Marketplace
21
Wealthcare Advisors
22 MSMS Foundation Education Course Offerings
The mission of the Michigan State Medical Society is to promote a health care environment which supports physicians in caring for and enhancing the health of Michigan citizens through science, quality, and ethics in the practice of medicine.
LYNN S. GRAY, MD, MPH, Chair, Berrien Springs MICHAEL J. EHLERT, MD, Livonia THEODORE B. JONES, MD, Detroit BASSAM NASR, MD, MBA, Port Huron STEVEN E. NEWMAN, MD, Southfield
Managing Editor Kevin McFatridge Email: KMcFatridge@msms.org
Publication Office Michigan State Medical Society PO Box 950, East Lansing, MI 48826-0950 517-337-1351 www.msms.org All communications on articles, news, exchanges and classified advertising should be sent to the above address, attn: Kevin McFatridge.
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Postmaster: Address Changes Michigan Medicine Hannah Dingwell PO Box 950, East Lansing, MI 48826-0950 Michigan Medicine, the official magazine of the Michigan State Medical Society (MSMS), is dedicated to providing useful information to Michigan physicians about actions of the Michigan State Medical Society and contemporary issues, with special emphasis on socio-economics, legislation and news about medicine in Michigan. The MSMS Committee on Publications is the editorial board of Michigan Medicine and advises the editors in the conduct and policy of the magazine, subject to the policies of the MSMS Board of Directors. Neither the editor nor the state medical society will accept responsibility for statements made or opinions expressed by any contributor in any article or feature published in the pages of the journal. The views expressed are those of the writer and not necessarily official positions of the society. Michigan Medicine reserves the right to accept or reject advertising copy. Products and services advertised in Michigan Medicine are neither endorsed nor warranteed by MSMS, with the exception of a few. Michigan Medicine (ISSN 0026-2293) is the official magazine of the Michigan State Medical Society, published under the direction of the Publications Committee. In 2015 it is published in January/February, March/April, May/June, July/August, September/October and November/December. Second class postage paid at East Lansing, Michigan and at additional mailing offices. Yearly subscription rate, $110. Single copies, $10. Printed in USA. ©2015 Michigan State Medical Society
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Medical Retainer Agreements Are Not Insurance Products BY Daniel J. Schulte, JD, MSMS Legal Counsel Question:
You have written previously that medical retainer agreements may be considered the sale of insurance, requiring physicians to comply with Michigan’s Insurance Code. Is this still the case? Answer: Not necessarily. Effective March 31, 2015 Public Act No. 522 of 2014 (the “Act”) became law. The Act added Section 129 to Michigan’s Insurance Code making clear that a “medical retainer agreement” (as defined in the Act) is not insurance and therefore not subject to Michigan’s Insurance Code. Previously in this column I have expressed a concern that a physician’s agreement to provide a package of healthcare services for a fixed fee (usually to a patient with a high deductible health plan paying the fee out of pocket) would be considered the “business of insurance” and/or the sale of “insurance.” This concern is eliminated so long as what is being sold is a “medical retainer agreement” as defined by the Act. The Act very specifically defines medical retainer agreement. The agreement must be in writing, signed by the patient and the physician and: 1. Allow for termination upon written notice by either party; 2. Describe and quantify the “routine healthcare services” (as defined in the Act) to be provided; 3. Specify the fee for the services; 4. Specify the term; 5. Prominently state that the agreement is not health insurance; 6. Prohibit the physician and the patient from billing an insurer or other third party payor for the services provided; 7. Prominently state that the patient must pay the physician for all services not specified in the agreement and not otherwise covered by the patient’s insurance, if any. 4
“Routine healthcare services” includes only the following: • Screening, assessment, diagnosis and treatment for the purposes of promotion of health or the detection and management of disease or injury; • Medical supplies and prescription drugs that are dispensed in a physician’s office or facility site; and • Laboratory work including routine blood screening or routine pathology screening performed by a laboratory that either (a) is associated with the physician that is the party to the medical retainer agreement or (b) has entered into an agreement with the physician that is a party to the medical retainer agreement to provide the laboratory work without charging a fee to the patient for the laboratory work. If all of these requirements are met, the agreement will be considered a medical retainer agreement and not be deemed to be the sale of insurance requiring you to comply with Michigan’s Insurance Code.
any such contract you have with your patient’s health insurer or any third party payor to determine the extent of continued applicability of these requirements. You should also keep in mind that, despite this change in Michigan law, it is still not possible to enter into a medical retainer agreement involving a Medicare patient if you participate in the Medicare program. Medicare participation requires you to accept assignment for all claims arising from services provided to Medicare beneficiaries and that you not charge more than the Medicare fee schedule amount. You must opt out of the Medicare program first in order to enter into a medical retainer agreement with a Medicare beneficiary.
Daniel Schulte, JD, MSMS Legal Counsel, is a member of Kerr Russell Attorneys and Counselors
Whether you are triggering a requirement to comply with Michigan’s Insurance Code is just one of the legal considerations to address when entering into a medical retainer type of arrangement with a patient. You should also keep in mind that there may be requirements you have agreed to in contracts with the patient’s health insurer (fee limitations, balance billing restrictions, claim submission, etc.) that likely will continue to apply even though the patient is paying you out of pocket for these services covered by the medical retainer agreement. You should carefully review MICHIGAN MEDICINE
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Introducing... Doctor Rose Ramirez
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octor Rose M. Ramirez is delighted to serve her colleagues as the 150th President of the Michigan State Medical Society. As the fourth woman president of
the MSMS and as a woman of Hispanic descent, Doctor Ramirez cherishes the opportunity to have a voice for her physician colleagues and the patients in our state. She remains ever thankful that she has been fortunate to have the privilege of becoming a physician. Doctor Ramirez believes the experiences of some challenging medical problems encountered in her family during her childhood influenced her dream to become a physician. As a teenager, she remembers her best friend telling her to “forget being a doctor because they do not let girls into medical school.� She started her path toward becoming a physician rather indirectly by first becoming a nurse. Doctor Ramirez continued to be stimulated by the science and art of medicine and decided to pursue her real dream. She used her certification as a licensed practical nurse to work in nursing while taking her undergraduate classes in pre-med. After she transferred to Michigan State University she studied medical technology. This preparation gave her the foundation to go on to the Michigan State University College of Human Medicine and graduate with Alpha Omega Alpha honors. After graduating from medical school, Doctor Ramirez and her husband, John vanSchagen, MD, moved their family to Florida for six years while John served in the U.S. Navy. They both completed family medicine residencies in Jacksonville, Florida. Doctor Ramirez joined a Family Medicine practice in Orange Park while John was stationed in the Philippines and Bahrain. 6
As a native of Michigan, Doctor Ramirez could hardly wait to return to her home state. Doctor Ramirez and John joined Advantage Health in Grand Rapids and she became involved with leadership in the group. She went on to serve as President of the physician group in Advantage Health for six years and chaired the Advantage Health Board. In 1996, Doctor Ramirez became a member of the Kent County Medical Society Board and went on to become its first woman president in 2000. It was during this time that Doctor Ramirez became more involved with the MSMS. She loved the Health Policy development and was energized by the time she spent with her colleagues at the annual House of Delegates. When Doctor Paul Farr encouraged her to run for Vice-Speaker of the House, she did so reluctantly. However, in retrospect, she is very thankful for his encouragement and mentoring. Doctor Ramirez feels great appreciation for the opportunity she has had to work with many other great leaders including Kevin Kelly and John McKeigan, MD. Doctor Ramirez has served on a number of local boards and is a member of the Grand Rapids Chamber of Commerce Health Care and Human Resources committee. She enjoys the advocacy work of the MSMS and looks forward to this aspect of her role as President. As an alternate delegate to the American Medical Association, Doctor Ramirez is pleased with the AMA focus on Physician Professional Satisfaction and Practice Sustainability. She feels that organized medicine is vital to a high quality health care system in the U.S. As the owner of an independent practice, Jupiter Family Medicine, Doctor Ramirez is determined to remain in private practice. She works (part-time) for Spectrum Health as the Medical Director of the Spectrum Health Physician Alliance to create stronger alignments between employed and independent physicians. She knows it is vitally important to have excellent communication and collaboration among health care providers for improved value and safety in the care of our patients. Doctor Ramirez is especially thankful for the support of her husband, John. She attributes his quiet strength as a critical element in her success. In their free time, they enjoy spending time with their family and grandchildren and friends. They are avid fans of Michigan State University football and basketball.
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Be Cybersecure: Protect Patient Records, Avoid Fines, and Safeguard Your Reputation by David McHale, Senior Vice President and Chief Legal Officer, The Doctors Company
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ybercrime costs the U.S. economy billions of dollars each year and causes organizations to devote substantial time and resources to keeping their information secure.
This is even more important for healthcare organizations, the most frequently attacked form of business.1 Cybercriminals target healthcare for two main reasons: 1. healthcare organizations fail to upgrade their cybersecurity as quickly as other businesses, and 2. criminals find personal patient information particularly valuable to exploit. Recent cyberattacks on large health insurance companies further demonstrate cybersecurity risks. On January 29, 2015, Anthem, the second largest health insurer in the United States, announced it was the victim of a sophisticated cyberattack that it believed happened over several weeks starting in December 2014.2 Reported as one of the largest attacks to date, the Anthem breach exposed the information of up to 80 million current and former members, including names, birth dates, Social Security numbers, healthcare IDs, and addresses.3 That same day, Premera Blue Cross discovered it was also a victim of a cyberattack, with an initial attack taking place in May 2014. Cybercriminals gained unauthorized access to the information of up to 11 million Premera customers dating
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back to 2002, ranging from birth dates and Social Security numbers to addresses and bank account information—the second largest breach, after Anthem, in the healthcare industry.4 The repercussions of security breaches can be daunting. A business that suffers a breach of more than 500 records of unencrypted personal health information (PHI) must report the breach to the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR). This is the federal body with the power to enforce the Health Insurance Portability and Accountability Act (HIPAA) and issue fines. To date, the OCR has levied over $25 million in fines, with the largest single fine totaling $4.8 million.5 In 2014, U.S. healthcare data breaches cost companies an average of $314 per record— the highest of any industry.6 A healthcare organization’s brand and reputation are also at stake. The OCR maintains a searchable database (informally known as a “wall of shame”) that publicly lists all entities that were fined for breaches that meet the 500-record requirement.7 To help safeguard your systems, know the most common ways a breach occurs. The theft of unencrypted electronic devices or physical records is the most common method, accounting for 29 percent of breaches across all industries in the United States.2 Also common are hacking (23 percent) and public distribution of personal records (20 percent). A breach in the latter category led to the largest OCR fine to date when two affiliated hospitals accidently made patient records public on the Internet.5 May / June 2015
If you think you may not be fully compliant with HIPAA privacy and security rules, consider taking the following steps: Identify all areas of potential vulnerability. Develop secure office processes, such as: • Sign-in sheets that ask for only minimal information. • Procedures for the handling and destruction of paper records. • Policies detailing which devices are allowed to contain PHI and under what circumstances those devices may leave the office. Encrypt all devices that contain PHI (laptops, desktops, thumb drives, and centralized storage devices). Make sure that thumb drives are encrypted and that the encryption code is not inscribed on or included with the thumb drive. Encryption is the best way to prevent a breach.
References 1
Visser S, Osinoff G, Hardin B, et al. Informa-
McCann E. Hospitals fined $4.8M for HIPAA violation.
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tion security & data breach report—March
Government Health IT. May 9, 2014. http://www.
2014 update. Navigant. March 31, 2014.
govhealthit.com/news/hospitals-fined-48m-hipaa-
http://www.navigant.com/~/media/
violation. Accessed June 24, 2014.
WWW/Site/Insights/Disputes%20Investi-
6
gations/Data%20Breach%20Annual%20 2013_Final%20Version_March%202014%20 issue%202.ashx. Accessed June 17, 2014. 2
How to Access & Sign Up for Identity Theft
Repair & Credit Monitoring Services. Anthem, Inc. February 13, 2015. https://www. anthemfacts.com. Accessed March 19, 2015. 3
Ponemon Institute LLC. Cost of data breach study:
United States. May 2014. Study sponsored by IBM. http://www.accudatasystems.com/assets/2014-costof-a-data-breach-study.pdf. Accessed March 20, 2015. Breaches affecting 500 or more individuals. U.S. Dept.
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of Health & Human Services. http://www.hhs.gov/ocr/ privacy/hipaa/administrative/breachnotificationrule/ breachtool.html. Accessed June 23, 2014.
McCann E. Hackers swipe Anthem data in
massive cyberattack. Healthcare IT News. February 5, 2015. http://www.healthcareitnews.com/news/hackers-swipe-anthemdata-huge-breach-attack. Accessed March 19, 2015. 4
Miliard M. Premera Blue Cross hack exposes
11M. Healthcare IT News. March 18, 2015. http://www.healthcareitnews.com/news/ premera-blue-cross-hack-exposes-data11m. Accessed March 19, 2015.
The author, David McHale, is Chief Legal Officer for The Doctors Company. He holds a law degree from the University of the Pacific’s McGeorge School of Law and an MBA from the University of Illinois. He is a Certified HIPAA Compliance Officer (AIHC) and a regular presenter before insurance trade organizations and the National Association of Insurance Commissioners.
Train your staff on how to protect PHI. This includes not only making sure policies and procedures are HIPAA-compliant, but also instructing staff not to openly discuss patient PHI. Audit and test your physical and electronic security policies and procedures regularly, including what steps to take in case of a breach. The OCR audits entities that have had a breach, as well as those that have not. The OCR will check if you have procedures in place in case of a breach. Taking the proper steps in the event of a breach may help you avoid a fine. Insure. Make sure that your practice has insurance to assist with certain costs in case of a breach. Contributed by The Doctors Company. For more patient safety articles and practice tips, visit www.thedoctors.com/patientsafety.
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ICD-10 Implementation: Making the Best of Transition October 1, 2015. If you’re like many physicians, this date is the source of anxiety and frustration. With ICD-10 implementation a mere five months away, the sense of urgency to prepare is real. The transition is upon us! In this issue of Michigan Medicine, we’ll address those anxieties and offer solutions to the frustration.
Why ICD-10 and why now? The work on ICD-10 and the effort to transition to it has been over a decade in the making. Development of the U.S. version of ICD10, ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification) and ICD-10-PCS (International Classification of Diseases, Tenth Revision, Procedure Coding System), occurred in the 1990s. Regulatory discussions about transitioning to ICD-10 also took place in the late 1990s. Regulatory and legislative efforts to move to ICD-10 took hold in the 2000’s. Due to concerns raised by the American Medical Association (AMA), the implementation of ICD-10 has been delayed three times since the issuance of the proposed regulation. In August 2008, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule for the adoption of ICD-10 and named the compliance date as October 1, 2011. When the final rule was published in January 10
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2009, the compliance date was changed to October 1, 2012 due to stakeholder concerns to. In 2012, CMS announced an additional delay and then finalized the new compliance date as October 1, 2014. The Protecting Access to Medicare Act of 2014 enacted another delay and subsequent regulation named the compliance date of October 1, 2015. The switch to ICD-10 will occur on October 1, 2015. The overall need to transition to ICD-10 at this time is due to the age of ICD-9. ICD-9 was developed in the 1970s and has been used widely in the U.S. since 1978. The age of the ICD-9 code sets means that it does not completely reflect all advances in medical technology and current medical knowledge. Another driver for replacing ICD-9 is the increased specificity of ICD-10, which is desired by some stakeholders for research and quality improvement efforts to provide better data for identifying diagnosis trends, public health needs, epidemic outbreaks and bioterrorism events. May / June 2015
Steps for preparedness AMA Director of Electronic Medical Systems, Nancy Spector offers the following steps to get your practice ready for ICD-10.
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Complete an impact assessment of where changes need to be made in the practice to support ICD10. Identify all of the places where ICD-9 is currently used and then what changes need to be made to the systems, workflows and paperwork. Identify the people who work with those processes to determine who needs to be trained.
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If practices have not yet, they need to talk to their vendors and suppliers for their practice management system (PMS), electronic health record (EHR), and forms for updates for ICD-10. Determine which changes will be done by the vendor and when the changes will be installed. Also determine the costs for upgrades.
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Assess current clinical documentation and determine if it will meet the needs of coding for ICD-10. ICD-10 codes are more specific and more detailed documentation may be necessary to fully capture the patient’s condition for it to be coded to capture the greater level of detail.
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Undergo staff training. All staff that works with diagnosis codes will need some degree of training on ICD-10. Not all staff will need the same level of training. Coders will need the most training, so that they will know how to code properly. Physicians will need a moderate amount of training to understand the changes in clinical concepts in ICD-10 and the detail of documentation that will be needed to support the coding. Other clinicians and staff will likely need minimal training to understand the differences in the ICD-10 codes and any changes for their documentation.
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Test the system and workflow process updates. Testing is the most important work to prepare the practice for the conversion and confirm that claims will process correctly after the switch to ICD-10. First, complete internal testing to see if the workflow processes and system updates are working properly and ICD-10 codes can be generated where needed. Then conduct external testing with payers and clearinghouse and billing vendor, if applicable. If claims are submitted directly to a payer, work with the payer on what types of testing they are performing and how to participate. If claims are submitted through a clearinghouse or billing vendor, work with them to identify testing processes and the testing work they are doing with your payers. Review all test results to see if there are any problems that would cause the claims to not process as expected.
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Practices need to measure and monitor their claims processing and reimbursement. If not already being done, monitoring should begin prior to the switch to ICD-10 to get a baseline understanding of how claims currently process and reimbursements for common services. Track items, if possible, by payers that have the biggest impact on the practice’s revenue, such as number of rejected claims, number of pended claims, number of requests for additional documentation to support claim, and number of days in accounts receivable. After October 1, 2015, tracking this information will help the practice identify any unexpected changes in claims processing or reimbursement and help to pinpoint which payers to focus on for resolving the issues.
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Tools of the transition
It’s all in the timing
Spector also recommends practices look at resources or training being offered by the following groups: • Billing vendors • PMS/EHR vendors • Payers • State or specialty societies • AMA – www.ama-assn.org/go/icd-10 (includes a 12-step action plan) • CMS – www.roadto10.org
MSMS Reimbursement Advocate and Health Care Delivery team member Stacie Saylor says that practices should have already started to assess their practice impact and needs, reviewed documentation to be sure the specificity is there and reviewed processes that are affected by the change.
Practices should also look at the current processes they use for coding and identify if additional resources can be added, such as computer-assisted coding tools.
• making any work flow changes necessary for a smooth transition. For example, if a physician would have normally circled an ICD-9 code on an encounter form, what is the process now? Is there a coder/biller who now must choose the code? It is not recommended that ICD-10 code be put on encounter forms due to the number of codes available. The encounter form would not be able to accommodate the increase in code and still be a one-page form. If physicians use EHR, are the ICD-10 codes showing up as a possible selection? Turn those on now so that physicians are used to seeing them and can see the specificity involved in the codes.
Additionally, and as always, members should consider Michigan State Medical Society a resource as they navigate the transition. www.msms.org/ICD10.
If they have not already done so, physicians should be… • making appropriate adjustments to medical documentation to support ICD-10 coding. • having conversations with vendors and trading partners about updates and testing now. • contacting payers for testing timelines so they can make sure their vendors will have the systems updated to test. • starting training now.
ICD-10-CM Boot Camp: The Clock is Ticking May 19-20, 2015, 9 a.m. to 4 p.m., Troy, Michigan It is imperative that physicians and their staff begin ICD-10 training. ICD-10-CM expert Jill Young CPC, CEDC, CIMC, will ensure health care professionals are prepared for the transition. This two-day program will lay the groundwork introducing participants to the ICD-10-CM coding system, anatomy and physiology.
Prepare for ICD-10: Webinar May 28, 2015, 12 p.m. to 1 p.m., Online webinar The transition to ICD-10 requires specificity in diagnostic coding but the entire record must reflect the care given and coded for the patient encounter. How is your office documentation today? What changes can you start to implement that will put you on the path to success when the October 2015 switch occurs? This one-hour course will cover what physicians need to know for ICD-10 implementation. Registration details at www.msms.org/Education.
Thursday, June 11, 2015 9 a.m. – 4 p.m. Lansing Community College West Campus
Mapping Saylor recommends General Equivalency Mapping (GEM), which was created by CMS and CDC. Physicians can download GEMs free from NCHS at www.cdc.gov/ nchs/icd/icd10cm.htm. It is important to understand that mapping is not a substitute for learning the coding system. Mapping links concepts in two code sets without consideration of patient medical record information. Coding involves the assignment of the most appropriate code based on medical record documentation and applicable coding rules/guidelines.
A physician’s perspective Charles Koopmann, Jr., MD, has been a member of the University of Michigan Faculty Group Practice ICD-10 Clinical Work Stream Committee since 2013.
“We’ve come to understand that it’s too late to try to avoid the transition,” Doctor Koopmann says.“Best thing we can do is to figure out what we can get going on now to greet it in October.”
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Doctor Koopmann recommends taking a look at the most common and high reimbursement ICD-9 codes used in a practice and seeing what they translate to in ICD-10. He suggests, once identified, that the codes go into a reference cheat sheet.
Debunking the ICD-10 myths
Another way Doctor Koopmann recommends being proactive is to determine the most common payers in the practice.
The increased number of codes in ICD-10 will make the new coding system impossible to use. The greater number of codes makes it easier for you to find the correct, most specific code. The alphabetic index and electronic coding tools are available to help select the proper code.
”Ask them how close they are to being ready to go. Ask them about any nuances they expect as of October 1st. Some will let you submit both ICD-9 and -10 to see just how ready they are,” he says. As for the myths needing to be debunked, Doctor Koopmann says the biggest one is that the transition will be delayed. He reemphasizes that ICD-10 not going to be delayed.
A coder’s perspective Jill Young is a Certified Professional Coder, Certified Emergency Department Coder and Certified Internal Medicine Coder. As an independent consultant, she conducts educational lectures and is passionate about coding. A self-proclaimed coding geek, Young is excited for the ICD-10 system.
“Where ICD-9 has three to five codes, ICD-10 has 10 to 20,” she says.“This allows for recognition of the patient illness, not just putting a square peg in a round hole like we’ve been doing.” Young believes that ICD-10 will affect patient care by creating interoperability between providers and researchers and promoting a different level of accountability to the diagnosis. “We’ve allowed ourselves to become lazy coders,” Young says. “We see ‘unspecified’ codes all the time, which doesn’t allow physicians to easily recognize or track an illness or condition. The specificity of ICD-10 will help physicians sort through the mess of EMR and speak the same language.”
With the anxiety and frustration comes misinformation. Some common myths associated with the transition are…
Unnecessarily detailed medical record documentation will be required when ICD-10 is implemented. The medical documentation should have always contained the level of specificity that ICD-10 requires. Because ICD-9 codes didn’t require the level of specificity ICD-10 does, physicians weren’t coding to that level. The result is health plans asking for medical records to find information that is missing. With ICD-10, health plans will get a more complete story of the patient’s condition from the diagnosis code and the request for medical records should decrease.
There are too many codes to memorize. Memorization is a natural progression when using the same codes over and over again. ICD-10 books are available and should be used to code to be sure that coding is done accurately.
There are many codes in ICD-10 that are unlikely to get used often, for example “walked into a lamp post.” These external cause of injury codes are reported in limited cases, such as state-based public health reporting, so many practices will never need to use these codes. Second, many of these codes that have been highlighted in articles poking fun at the new codes are actually also current codes in ICD-9.
Documentation will become more lengthy and cumbersome with ICD-10. Some documentation improvement may be needed for ICD-10 coding, but many of the concepts in ICD-9 remain in ICD-10. New ICD-10 concepts of laterality and pregnancy trimesters are data that are already documented in the medical record today and will not need to change. Improvements in documentation will extend beyond ICD-10 and will be seen in other areas, such as better capture of all patient conditions and better support for audits.
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ICD-10 Implementation: Making the Best of Transition - continued from page 13 Young recommends that coders and billers need to get reading and understanding the guidelines like they never have before. “We have so much on the job training that we often don’t get back to the resources. Coders and billers almost have to go back and learn what they should have known in the first place.” Similarly to Doctor Koopmann, Young also suggests identifying a practice’s top 25 d iagnoses in ICD-9 and working through any problems encountered there, especially as it relates to any unspecified diagnoses. “As the coder learns what information they’re missing in ICD-9, they can identify what’s coming in ICD-10,” Young says. “It’s not a flipped switch situation on October 1. We have the ability to ease into this.” She cautions practices and physicians about a couple of myths, too.
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“Some people think that the computer system will handle the transition throughout the process; those people would be wrong,” she says. “Others think that ICD-10 is only for computerized practices, not for those using paper records. This is also untrue.”
Creating logic in the system Young understands physicians, coders and billers are scared and frustrated. But she encourages everyone who will feel the impact of ICD-10 to restructure the conversation.
“It’s not about a whole new learning set; it’s about doing what we should have been doing all along. The transition is not insurmountable and the positive effects are
In a perfect world, ICD-10 will teach coders what they should know and what they should be doing. For doctors, ICD-10 will guide them into being more specific, which will help patients. It’s not just a system. It’s an important step toward promoting a health care environment that supports physicians in caring for and enhancing the health of Michigan citizens. This is the Michigan State Medical Society mission.
July Issue closes June 8!
Focus: Independent Practice To reserve your advertising space contact Carl Mischka at cmischka@msms.org or call 888-666-1491
going to be felt far and wide.”
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May / June 2015
Welcome to These New MSMS Members Olusanjo Adeoye, MD, Kent Syed Ahmed, MD, Genesee Phani Akella, MD, Genesee Bishr Al Dabagh, MD, FAAD, Genesee Nasir Ali, MD, Livingston Malaz Almsaddi, MD, Oakland Ruaa Al-Ward, MD, Genesee Abdurrahman Arif, MD, Genesee Brett Arnkoff, MD, Oakland Ahad Ayaz, MD, Genesee Terrance Barnes, MD, Kent Hadi Bazzi, DO, Wayne Julia Becker, MD, Kent Wael Berjaoui, MD, Kent Gregory Bernath, MD, Allegan* Stefano Bordoli, MD, Kent Nicki Cain-Rinckey, MD, Kent John Cantor, MD, FCCP, Kent Charles Andrew Chacko, MD, Genesee Amina Chaudhary, MD, Genesee Justin Clark, MD, Kent Diego Conci, MD, Kent Wayne Couwenhoven, MD, Kent Gustavo Cumbo-Nacheli, MD, Kent
Diane Czuk-Smith, MD, Kent Mary Davis, MD, Kent Chintan Desai, MD, Genesee Sharon Deskins, MD, Berrien Aaron Dora-Laskey, MD, Saginaw Rick Edgar, MD, Muskegon Rukevwe Ehwarieme, MD, Genesee Ahmad Elayyan, MD, Genesee Stephen Fitch, MD, Kent Mike Forness, DO, Grand Traverse Barbara Fulton, MD, Kent Madhavi Gadiraju, MD, Genesee Nedi Gari, MD, Oakland Ahmed Hamdi, MD, Genesee Abdul Moqtadir Hasnie, MD, Genesee Yolanda Helfrich, MD, Washtenaw Christopher Herald, MD, Ionia/Montcalm James Hoekwater, DO, Kent Suzanne Howard, MD, Kent Neha Jain, MD, Genesee Bharath Jakka, MD, Genesee Veena Kalra, MD, Genesee Samer Kanaan, MD, Kalamazoo Matthew Karulf, MD, Kent
Kathryn Kleaveland, MD, Kent Srilatha Koduru, MD, Genesee Ujwala Koduru, MD, Genesee Mark Koets, MD, Kent Fayez Kotob, MD, Genesee Donn LaTour, MD, Calhoun Marykay Lehman, MD, Kent Christiana Lietzke, MD, Chippewa Pamela Marcovitz, MD, Oakland Hussein Mazloum, MD, Genesee Anne McCarthy, MD Kent Marc McClelland, MD, Kent Daniel Meldrum, MD, Kent Mark Michaels, MD, Oakland Shikha Mishra, MD, Genesee Pierre Morris, MD, Oakland Kamran Mushtaq, MD, Genesee Gregory Neagos, MD, Kent Heather Osborn-Heaford, MD, Kent Adekolujo Oyebimpe, MD, Genesee Vijay Patel, MD, Wayne Tony Patsy, Jr., DO, Genesee Carol Prince, MD, Wayne Regina Ramirez, MD, Muskegon
Joseph Ramzy, MD, Genesee Stephen Richardson, DO, Oakland David Scheeres, MD, Kent Shelley Schmidt, MD, Kent Jacob Scott, MD, Kent Marlene Seltzer, MD, Oakland George Shade, MD, Wayne Seetha Shankaran, MD, Wayne Evita Singh, MD, Oakland Brett Sprtel, MD, Medical Anudeep Surendranath, MD, Genesee Shourya Tadisina, MD, Genesee Maximiliano Tamae-Kakazu, MD, Kent Larisa Traill, MD, Dickinson/Iron Laurie Vance, MD, Oakland Glenn VanOtteren, MD, Kent Shiny Mary Varghese, MD, Genesee David Wash, MD, Wayne Jennifer Watson, MD, Kent Eric Weinman, MD, Kent John Winestone, MD, Kent Myo Zaw, MD, Genesee
Patients trust you. You can trust Kerr Russell. A successful practice requires more than talented individuals and a desire to heal. Let Kerr Russell provide the legal insight needed to manage and grow your business. ENTITY FORMATION • BUSINESS MATTERS • EMPLOYMENT CONTRACTS • PURCHASE / SALE OF OWNERSHIP INTERESTS • MALPRACTICE AND ALL OTHER COMMERCIAL LITIGATION • APPEALS • MEDICAL STAFF PRIVILEGE DISPUTES HOSPITAL RELATIONS MATTERS • HEALTHCARE FRAUD DEFENSE • LICENSING AND OTHER REGULATORY MATTERS
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Analysis of EHR Contributing Factors in Medical Professional Liability Claims by David B. Troxel, MD, Medical Director, The Doctors Company
S
hortly after electronic health records (EHRs) began to be widely adopted, The Doctors Company and other medical professional liability insurers became aware of their potential liability risks. We anticipated that EHRs would become a contributing factor in medical liability claims.
However, due to the three- to four-year lag time between an adverse event and a claim being filed, EHR-related claims have only recently begun to appear. In 2013, we began coding closed claims using 15 EHR contributing factor codes (eight for system factors and seven for user factors) developed by CRICO Strategies and back-coded all claims to 2007. We found that EHR-related claims frequency is increasing. Twenty-six such claims closed in the first two quarters of 2014, 28 claims closed in 2013, 22 closed in 2012, 19 closed in 2011, and two closed in 20072010. These 97 EHR-related claims that closed from January 2007 through June 2014 are the subject of this analysis. EHR-related factors contributed to 0.9 percent of all claims closed by The Doctors Company from January 2007 through June 2014. User factors contributed to 64 percent of these EHR-related claims, and system factors contributed to 42 percent.
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Analysis of EHR Claims The following tables and representative claims illustrate how EHR system and user factors contributed to the 97 closed claims. Some claims contained more than one contributing factor. EHR System Factors: Technology, Design, and Security Issues 10%
Failure of system design
9%
Electronic systems/technology failure
7%
Lack of EHR alert/alarm/decision support
6%
System failure—electronic data routing
4%
Insufficient scope/area for documentation
3%
Fragmented EHR
Claim: Lack of EHR Drug Alert A dialysis patient transferred to a skilled nursing facility. There was an active hospital transfer order for Lovenox. A physician evaluated the patient on admission but made no comment about the Lovenox order. During the first dialysis treatment, there was active bleeding at the fistula site. Heparin (anticoagulant) had not been given. Nursing did not inform the physician of the bleeding. During the second dialysis treatment, there was uncontrolled bleeding from the fistula. The patient exsanguinated and expired. Experts were critical that there was no EHR High-Risk Medication Alert.
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May / June 2015
Claim: Insufficient Area for Documentation; Drop-Down Menu A female had a bladder sling inserted for urinary incontinence. Her surgeon was assisted by a proctor surgeon who was representing the product manufacturer and training the patient’s surgeon on the procedure. The patient was informed that another physician would be assisting. In the recovery room, there was blood in the Foley catheter, so the patient was returned to surgery. The bladder had been punctured by the sling. The proctor had approved the sling’s placement. The circulating nurse did not document the proctor’s presence in the OR due to lack of an option in the EHR drop-down menu. There was no space for a free-text narrative to document that the patient was informed of the proctor’s presence.
Analysis of Location, Specialty, and Top Allegations We also analyzed the 97 EHR claims to determine where the claim events occurred, which specialties were involved, and the most common allegations. The following outline our findings.
Locations Where EHR Claim Events Occurred 43% Hospital clinic/doctor’s office 12% Ambulatory/day surgery 10% Patient’s room 9% Operating room 7% Emergency room 5% Labor and delivery 4% Radiology/imaging EHR User Factors: 2% Dentistry/oral surgery EHR-Related Issues Attributable to Users 1% each Pathology, ICU, neonatal ICU, radiation therapy, 16% Incorrect information in the EHR and special procedures 15% Hybrid health records/EHR conversion EHR Claim Events by Specialty 13% Prepopulating/copy and paste 20% Internal medicine specialties—cardiology/hospitalist/ 7% EHR training/education oncology/GI 7% EHR user error (other than data entry) 16% Primary care—family/internal medicine 3% EHR alert issues/fatigue 15% Obstetrics/gynecology 1% EHR/CPOE workarounds 14% Surgical specialties (other than cardiac surgery) 7% Nursing Claim: Incorrect Information in EHR 5% Radiology A patient was seen by her cardiologist for hypertension. In the written medical record, her blood pressure medication had been 4% each Anesthesiology and general surgery increased to 25 mg once a day. Office staff entered the order into 2% each Pediatrics, emergency medicine, psychiatry, and orthopedics the EHR as twice a day. The prescription was filled. The patient 1% Pathology missed her follow-up appointment. Seven months later, she went to the ER with numbness and weakness. Her potassium level was Top Allegations in EHR Claims low. The cardiologist corrected the prescription error and gave her 27% Diagnosis-related (failure, delay, wrong) potassium. 19% Medication-related: 7% Ordering wrong medication Claim: Copy and Paste 5% Ordering wrong dose A toddler was taken to a country where tuberculosis was preva7% Improper medication management lent. After the trip, he presented with fever, rash, and fussiness. The physician considered bug bite or flu and treated the child with fluids, antibiotics, and flu meds. His office EHR progress note indicated there was no tuberculosis exposure. The physician copied and pasted this information during subsequent office visits with no revision to note travel to a country with tuberculosis. Two weeks later, the child was diagnosed in the ER with tuberculous meningitis. He had permanent and severe cognitive defects.
David B. Troxel, MD is Medical Director of The Doctors Company. The Doctors Company is the exclusively endorsed medical liability carrier of the Michigan State Medical Society (MSMS). We share a joint mission of supporting doctors and advancing the practice of good medicine.
Recap of the Reported Risks of EHRs The 2011 Institute of Medicine report, Health IT and Patient Safety: Building Safer Systems for Better Care, concluded that the information needed to analyze and assess health IT (HIT) safety and use was not available and that our understanding of the benefits and risks of EHRs was anecdotal. The report recommended creating a government agency that would systematically and uniformly collect data to investigate harm and safety events related to HIT. The Office of the National Coordinator for Health Information Technology is now developing a plan to create a Health IT Safety Center.
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OBITUARIES The members of the Michigan State Medical Society remember with respect their colleagues who have died. Yani V. Calmidis, MD Wayne County Medical Society Died January 30, 2015
Jacob C. Ninan, MD, FACP Saginaw County Medical Society Died March 3, 2015
Joyce M. Geary, MD Saginaw County Medical Society Died March 14, 2015
Louis F. Lawrence, MD Wayne County Medical Society Died February 11, 2015
Jack G. Lukens, MD Kent County Medical Society Died March 8, 2015
Joseph J. Rowe, MD Wayne County Medical Society Died March 19, 2015
Suryarao Kurumety, MD Saginaw County Medical Society Died February 28, 2015
Clarence E. Walls, MD Kent County Medical Society Died March 12, 2015
Bernard Z. Reizner, MD Jackson County Medical Society Died March 20, 2015
IN MEMORY If you would like to recognize a colleague y making a gift or bequest in their memory to the MSMS Foundation, please contact Rebecca Blake, Director, MSMS Foundation, 120 W. Saginaw St., East Lansing, MI 48823. Call 517-336-5729 or email rblake@msms.org.
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M D C H
U P D AT E
Measuring the Impact of New Policies on Immunization Waiver Rates
Y
ou’ve likely heard about the measles outbreak that as of March 20, 2015, has sickened 178 people from 17 states. Or maybe your office has seen one of the 28,660 cases of pertussis that occurred in 2014 throughout the United States. The responses to these outbreaks, which have been all over the news and social media, have been both pro- and anti-vaccine. Some doctors’ offices are refusing to see patients who are not immunized. Some parents are speaking out louder than ever on their antivaccination views. And a growing number of parents are speaking out about their pro-vaccine views and their support for policies that protect children from vaccinepreventable diseases.
State school vaccination requirements have proven to be effective in maintaining high vaccination coverage and minimizing the risk from vaccine preventable diseases. Immunization requirements for schools and child cares vary by state. Over time, Michigan laws have been implemented to ensure that children are adequately immunized against vaccine preventable diseases:
Michigan moved from sixth grade reporting in 2013 to seventh grade in 2014 to better align with the nationally recommended immunization schedule. Provisional 2014 school year data show a notable decrease in the immunization waiver rates; 7.8% of 6th grade students had an immunization waiver in 2013 compared to 4.7% of the 7th grade students in 2014 (Table 1).
• 1978: Michigan law requires that each student, upon entry into kindergarten or into a new school district involving grades 1-12, possess a certificate of immunization at the time of registration or not later than the first day of school.
While we are seeing progress, there is still a long way to go. MDCH data show that the overall waiver rates vary across Michigan’s counties with the lowest rate at 1.1% and the highest at 17.9%. In the March/April issue of Michigan Medicine, we reported on the new State Administrative Rules that were passed and became effective on January 1, 2015, requiring: 1) education on the risk of vaccine-preventable diseases and the benefits of vaccination at the time a non-medical waiver is signed and the waiver is certified by the local health department (LHD) and 2) the use of a standardized state waiver form when a waiver is signed. We hope that the coordinated effort of providers and LHDs will help decrease our waiver rates even further. There are new materials on the MDCH website that provide talking points for common concerns parents have on immunizations. The materials are available at www. michigan.gov/immunize under the Local Health Department section.
• 2000: Public Act 89 mandates an immunization assessment be completed for each sixth grade student. • 2010: Additional vaccine requirements are added. • 2012: Michigan legislature passes new requirement to move the 6th grade assessment to 7th grade. • 2014: Updated Administrative Rules put an educational requirement in place for parents choosing to opt their children out of receiving required vaccines for school (passed in 2014 and went into effect January 1, 2015). Michigan is one of 19 states that allows a parent/guardian to obtain a philosophical waiver for school-required immunizations. Prior to January 2015, an immunization waiver could simply be obtained at a school without education by a health care professional on vaccinations. In recent years, an increasing number of parents have requested philosophical waivers for their children. In fact, Michigan had the fourth highest waiver rate in the U.S. during the 2013-14 school year for kindergarten (5.9%), over three times the national median.
Table 1: Immunization Wavier Rates in Michigan Schools, 2013-2014
Kindergartenn
6th/7th grade
New Entrants
Total
2013
5.8
7.8
5.6
6.3
2014*
5.3
4.7
4.4
4.7
*Provisional data as of March 25, 2015; the data may change slightly when delinquent school reports are finalized.
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Vaccinate adolescents during summer – before the back-to-school rush Every time an adolescent patient arrives at the office – whether for a preventive or sick visit – it’s an opportunity to immunize that patient with needed vaccines. Back-toschool check-ups and sports physicals are an ideal time to make sure adolescent patients are fully vaccinated. Providers are urged by major medical groups, such as the American Academy of Pediatrics (AAP), American Academy of Family Physicians (AAFP), Society for Adolescent Health and Medicine (SAHM), American College of Obstetricians and Gynecologists (ACOG), and the Centers for May / June 2015
Disease Control and Prevention (CDC) to vaccinate according to the recommended immunization schedule put forth by the Advisory Committee on Immunization Practices (ACIP). Adolescents need to be assessed for all recommended vaccines including Tdap, MCV4, Varicella, HPV, Hep B, Hep A and Flu.
New HPV9 vaccine licensed In February 2015, the ACIP met to discuss recommendations for the use of 9-valent HPV vaccine that provides protection against five additional HPV types – 31, 33, 45, 52 and 58. In the U.S., nearly 75% of invasive HPV-associated cancers are attributable to the serotypes found in HPV9 vaccine. ACIP recommends routine vaccination with HPV9, HPV4 or HPV2 for females aged 11 or 12 years and with HPV9 or HPV4 for males aged 11 or 12 years. Vaccination also is recommended for females aged 13 through 26 years and for males aged 13 through 21 years who were not vaccinated previously. Additional recommendations for males aged 22-26 years who are at high risk for disease or desire immunity are also available. The Updated HPV Vaccination
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Recommendations of the Advisory Committee on Immunization Practices were published by CDC on March 27, 2015, and can be found at www.cdc.gov/vaccines (click on “recommendations” and “ACIP recommendations”)1.
and ask about vaccination status when they come in for sick visits and sports physicals. Patient reminder and recall systems such as automated postcards, phone calls and text messages are effective tools for increasing office visits.
If vaccination providers do not know or have available the HPV vaccine product previously administered, any HPV vaccine may be used to continue or complete the series for females; for males, either HPV4 or HPV9 may be administered. There is no current recommendation for revaccinating persons who previously received HPV2 or HPV4; this will be a topic of discussion during the June ACIP meeting.
Take the time to educate parents about the diseases that can be prevented through adolescent vaccines. Parents may know very little about pertussis, meningococcal disease, or HPV. Implement standing orders policies so that patients can receive vaccines without a physician examination or individual physician order.
Routine recommendations have been in place for HPV vaccine for females since 2006 and males since 2011, yet HPV immunization rates remain low. A strong health care provider recommendation is critical for increasing uptake of HPV vaccine. Parents trust your opinion more than anyone else’s when it comes to immunizations. Studies consistently show that provider recommendation is the strongest predictor of vaccination. Use every opportunity to vaccinate your adolescent patients
MICHIGAN MEDICINE
Now that school is out, and families are enjoying summer vacations, camps, and other fun activities, remind your busy patients to beat the back-to-school rush at the end of summer. Encourage your patients to make an appointment for their adolescent child’s vaccinations today. For more information visit michigan.gov/ teenvaccines or cdc.gov/vaccines/teens Petrosky E, Bocchini JA, Hariri S, Chesson H, Curtis CR, Saraiya M, et al. Use of 9-Valent Human Papillomavirus (HPV) Vaccine: Updated HPV Vaccination Recommendations of the Advisory Committee on Immunization Practices MMWR. 2015;64(11);300-304. 1
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T H E
M A R K E T P L A C E
Would You Like To Place A Classified Ad? The rate for classified advertising in Michigan Medicine, including both print and online versions, is $1.60 per word, with a minimum of $65.00. All ads must be prepaid. Text for classified advertisements and advertising fee should be received no later than the first of the month proceeding the month of publication. All submitted ads must be typed. No handwritten or dictated ads will be accepted.
PHYSICIANS
Outpatient Exams - No Treatment
When asked to describe what we do, our staff says, “Working together, we help create the best possible future for our patients” and “We provide individualized care with a high level of detail and time” and “We make it a fun experience for ourselves and the kids so this is a place that kids want to come back to” and “We work collaboratively; we demonstrate respect for each other, and we work as a team.”
Tri-State Occupational Medicine, Inc. (TSOM) is looking for physicians to perform disability evaluations in their MI offices. We have part-time opportunities. No treatment is recommended or performed. No call, no weekends and no emergencies. There is minimal risk and stress involved with this position. Training and all administrative needs are provided. Pay is guaranteed regardless of the turnout and paid promptly regardless of time of collection. Preferred specialties: Internal Medicine, Family Medicine, General Medicine, Emergency Medicine or Occupational Medicine. Must have a current MI medical license. TSOM has an excellent reputation for providing Consultative Evaluations for numerous state disability offices.
Our providers trained at Rainbow Babies and Children and the University of Michigan. The practice employs RNs for nursing support. We have used EMR for 10 years currently athenahealth, and the practice is PCMH designated.
Contact: Susan Gladys / susang@tsom.com phone 866-929-8766 / fax 866-712-5202
To place an ad call 888-666-1491 or email Carl at cmishka@msms.org.
Pediatrician – Unique Opportunity in Ann Arbor Area Established Private Pediatric Practice is recruiting a full time general pediatrician to join our three provider practice near Ann Arbor. We are guided by this Mission Statement: To provide the highest level of care in a warm welcoming environment, creating a community among our patients.
To learn more, contact Scott Moore, MD at drmoore@my’kidsdoc.org.
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248-558-2700
May / June 2015
Spring 2015 Education Course Offerings MSMS On-Demand Webinars: Education When You Want It! • Physician Executive Development Program featuring The Doctors Company CEO, Richard E. Anderson, MD • CDL-Medical Examiner Course • Summary of the Affordable Care Act • HIPAA Security Rule • End of Life Concerns and Considerations • Understanding and Preventing Identity Theft in Your Practice • Stepping Up to Stage 2 Please visit www.msms.org/eo for complete listing.
Educational Conferences
Spring Scientific Meeting
Office Staff Training: Pitfalls on E/M Documentation 2015
Date: Wed., May 13 and Thurs., May 14
CCM, CPO, TCM: Do You Know Your Alphabet of Outpatient Care Codes? How to Perform an Internal Audit: How to Keep It Simple But Useful Date: Friday, April 17
Location: The Henry in Dearborn Contact: Marianne Ben-Hamza 517-336-7581or mbenhamza@msms.org Note: Continental breakfast and lunch will be provided
Location: Marriott, Troy
Intended for: Physicians and all other health care professionals
Contact: Stacie Saylor, 517-336-5722 or ssaylor@msms.org
For more information or to register on-line please visit www.msms.org/eo
Intended for: Coders, billers, office managers, billing managers, and physicians.
Questions? Phone MSMS Registrar at 517-336-7581
FREE! “Lunch and Learn” Policy Webinars
For more information or to register on-line please visit www.msms.org/eo
Preparing for the Medicare Physician Value-based Payment Modifier
Questions? Phone MSMS Registrar at 517-336-7581
Annual Joseph S. Moore, MD, Conference on Maternal and Perinatal Health
Stacey Hettiger, Director, Medical and Regulatory Policy, MSMS
Train the Trainer: Advanced ICD-10 Course
Wednesday, April 22, 2015
Dates: Thursday, April 23
12:15 pm - 1:00 pm
Location: Sheraton, Novi
What’s New in Labor and Employment Law
Contact: Stacie Saylor, 517-336-5722 or ssaylor@msms.org
Aliyya Clement Rizley, JD, Labor and Employment Law, Miller Johnson
Intended for: Coders, billers, office managers, billing managers, and physicians.
Wednesday, May 20, 2015
For more information or to register on-line please visit www.msms.org/eo
12:15 pm - 1:00 pm Health Care Providers’ Role in Screening and Counseling for Interpersonal and Domestic Violence: Dilemmas and Opportunities Tom Cottrell, LMSW Wednesday, June 10, 2015 12:15 pm - 1:00 pm Contact: Trisha Keast (517) 336-5734 or tkeast@msms.org For more information or to register please visit www.msms.org/eo Questions? Phone MSMS Registrar at 517-336-7581
Questions? Phone MSMS Registrar at 517-336-7581
ER/LA Opioid REMS: Achieving Safe Use While Improving Patient Care
Date: Thursday, May 14 Location: The Henry in Dearborn Contact: Marianne Ben-Hamza 517-336-7581 or mbenhamza@msms.org Note: Continental breakfast and lunch will be provided Intended for: Physicians, nurses, residents, students, and all other health care professionals working with women and their infants. For more information or to register on-line please visit www.msms.org/eo Questions? Phone MSMS Registrar at 517-336-7581
ICD-10-CM Boot Camp: The Clock is Ticking
Dates: Saturday, May 2 - Amway Grand Rapids; Thursday, May 14 - The Henry Dearborn;
Dates: Tuesday, May, 19 - Wednesday, May 20
Wednesday, October 21 - Somerset Inn Troy
Contact: Stacie Saylor, 517-336-5722 or ssaylor@msms.org
Contact: Caryl Markzon (517) 336-7575 or cmarkzon@msms.org Note: Continental breakfast and lunch will be provided Intended for: Physicians, executives, office administrators and all other health care professionals
Location: Marriott, Troy
Intended for: Coders, billers, office managers, billing managers, and physicians. For more information or to register on-line please visit www.msms.org/eo Questions? Phone MSMS Registrar at 517-336-7581
For more information or to register on-line please visit www.msms.org/eo Questions? Phone MSMS Registrar at 517-336-7581 25 Volume 114 • No. 3
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May / June 2015
Five Ways to be a Tax Efficient Investor BY NICOLE GOPOIAN, JD, CFP®
L
et’s face it; no one wants to pay more taxes than they have to. Here are
five strategies that may be integrated into your financial plan to help you become a more tax efficient investor. Tax Loss Harvesting It is easy to be disappointed when the stock market goes down, but dips in the market can create a tax opportunity to realize losses. It’s human nature to shy away from recognizing losses – it goes against everything we’re taught from an early age. However, when executed appropriately, this strategy allows the investor to maintain exposure to a desired allocation while recognizing losses that can offset future gains. This is accomplished by selling a position at a loss and then investing in a similar asset for a 30 day period. The IRS will not allow investors to buy an asset and sell it for the purpose of paying less tax. Therefore, the IRS will disallow the loss if the investor purchases the same or a substantially identical asset within a 30 day period. Given the numerous choices investors have in the market today, it’s not difficult to find a substitute position. After the 30 day period, the investor may repurchase the original asset.
Investment Vehicle Selection Investors today have a lot of options. Stocks, bonds, mutual funds, and Exchange Traded Funds (ETFs) are a few popular options. Certain investments are more tax efficient than others because of how they are structured. For example, an ETF is generally more tax efficient because it has low turnover. It is important to pay close attention to turnover because it can create Volume 114 • No. 3
capital gains for the investor. The best way to illustrate turnover is via an example comparing mutual funds and ETFs. Mutual funds and ETFs each own a basket of securities. The difference comes in when the baskets are rebalanced or changes are made to holdings. When a mutual fund buys or sells a security, this creates a taxable event for the investor. Even if the mutual fund has an unrealized loss, the investor could still be assessed a capital gain due to this rebalancing. In the case of an EFT, there is no taxable event because ETFs do not buy or sell securities within the basket. Instead, they have a structure that allows the holdings within the ETF to be exchanged without a taxable event.
Charitable Giving In order to align a tax-efficient investment strategy with charitable intentions, consider gifting highly appreciated assets instead of cash. Highly appreciated assets are those that have been held for longer than one year and have significant appreciation. The win-win of this strategy is that the donor is able to deduct the full market value of the appreciated securities up to IRS limits and not pay capital gains taxes. The charity is not assessed any capital gains tax if they sell the assets due to their tax-exempt status.
Tax Optimized Withdrawal Strategy Which accounts do you take distributions from and in what order when you’re retired? Traditional thinking dictates exhausting the following accounts in this order: first taxable accounts, then tax deferred accounts, and finally tax free accounts. Taxable accounts can include living trusts, individual and joint brokerage accounts. Holdings in these accounts can benefit from a capital gains rate. Traditional thinking indicates that theses accounts should be depleted first because of the lower tax rate on capital gains while continuing to defer withdrawals from pre-tax accounts. While this might be optimal in some cases, in MICHIGAN MEDICINE
many circumstances it is not. The reason is that withdrawals from tax deferred accounts are taxed at ordinary income tax rates. The additional deferral might create a situation where ordinary income tax is higher in later years of life. Many factors come into play, including you income levels, account balances, financial goals and spending needs. Your asset withdrawal strategy should be reviewed regularly to look for ways to mitigate taxes.
Municipal Holdings A municipal (muni) bond is a debt obligation issued by a state or local government for the purpose of financing its expenditures. When an investor purchases a muni bond, they make a loan to the government so that the government can fund a project, like building a bridge, school or stadium. The terms of loan determine the interest that the government is required to pay the investor for the use of their money. When the muni comes due, the investor gets their principal back. Generally speaking, the interest paid is tax-exempt. This can be attractive to a high income investor. It is prudent for all investors to take the time to review the holdings in their investment portfolios to see if there are opportunities to be more tax efficient. Work with a competent financial professional to understand how best to integrate tax efficient investing into your overall financial plan.
Nicole Gopoian, JD, CFP® is an advisor at Wealthcare Advisors, LLC – an MSMS joint venture.
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P R E S I D E N T ’ S
P E R S P E C T I V E
Honoring the Past and Looking to the Future by Rose ramirez, MD
I’ve been asked rather frequently lately why it is I’m drawn to serving the Michigan State Medical Society. It’s a relevant question as I look to take the reins as president of the society, but it also causes me pause, as service is something I’ve always been called to.
I
have always been so thankful to be a physician. I love my practice and I love being a family doctor, so I see service as a way to give back. Being an advocate and serving as a voice in Michigan health care is one of the ways I can marry doing what I love with a passion for service. It also charges me up. Policy and the quest to make things better for the people we’re charged to take care of excite me. Interacting with peers and colleagues, engaging in transformative debate, that’s where it’s at. A large part of my calling to help affect change comes back to seeing patients challenged in having access to quality health care they need. That is injustice and it is our duty to break down these barriers. As physicians we have a responsibility to help in the effort to make the process easier and more affordable. To me, being a physician has always been about getting people the care they needed and that that care is affordable. As physicians, we know that being sick can devastate someone’s life on so many levels. Our patients can’t plan to be sick, but find themselves without jobs or insurance because of sickness every day. Despite its imperfection, the ACA is the closest thing we have to getting people what they need. I think a next step would be to identify what essential set of health
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care benefits looks like. I’d see that as access to vaccinations, primary and emergency care, and careful access to medication. I’m aware of the controversy, but I would be in favor of some regulation of pharmaceutical drug pricing. We absolutely need the research and development of pharmaceuticals, but a better balance ought to be reached to ensure the burden of access to affordable, life-saving drugs does not fall on our patients. But, these are major changes that we must take on incrementally. As your incoming president, I will be pleased if as a group we can make some of those small changes together. Sometimes the incremental changes are the best we can hope for when the issues are so complicated. I’ve also been asked why it is I wanted to become president of our society. To be truthful, I never aspired to it! I started at the Kent County board level and became more involved with MSMS and the momentum carried me through to today. I thoroughly enjoyed my time as both vice speaker and speaker of the House of Delegates, where I got to orchestrate the debate and make a real impact on health policy. I found that being a voice stirred me professionally and personally and I’ve been hooked since. Add to that the incredible support of my peers, and you get my running for your president. I’m ready to serve. In my tenure as president, I plan to highlight our 150th House of Delegates year. This is an incredible accomplishment. We will spend some time honoring the past and looking into the future. We’ll MICHIGAN MEDICINE
be re-inspired by the great people that we walk behind, but I want to be careful not to dwell there. If you talk to most any physician, they’ll agree that the last 10 to 20 years have seen the most rapid rate of change in health care. That pace is not going to ease up. As we continue to adjust to this new information society we live in, we find ourselves treating patients who have just as much information on something as we do, thanks to the Internet. We’ve got to learn how to embrace this change and sit down and talk about health care together. As we move into this next phase of leadership, I urge you to lend your voice. One voice alone is not strong enough, but the voices of 15,000 members must be heard. I encourage you to find a committee to participate on to lend your talents and expertise. It is also critical that you continue to help recruit new members. Without our members, we cannot advocate. It is an honor to serve as your president. In the fifth grade, I thought it would be so cool to be a doctor. I couldn’t imagine then how thankful I’d be to become that doctor and have a job I love. It’s with gratitude to you, my colleagues and peers, that I look forward to what we can accomplish together.
Doctor Ramirez, a Kent County family physician, is president of the Michigan State Medical Society
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What Starts Here Changes the World by James D. Grant, MD What starts here changes the world. I started to think of what starts in here at MSMS and how it has changed and will continue to change the world of medicine in Michigan and beyond. It seems the world of medicine is ever changing, even without our prompting. Change has been an inevitable part of medicine for centuries, but it’s in our decision not to run from this change and rather, embrace it, that we have been so successful. We challenge the status quo. We imagine things not the way they used to be, but what they can be. We disrupt the flow to build a better world for our families, our patients and our patients’ families. We find that in disruption, we’re making a better world. A great example of “disruptive innovation” dates back to the 1960s. This is when Sony began selling affordable transistors that eventually replaced RCA’s vacuum tube. This made televisions affordable for the average American and more accessible when they became available in a new kind of store…Kmart. This one little disruptive change revolutionized how we were entertained, how we received information and what would become the center of the evening of the classic American family. American medicine is in the center of what we could label disruptive innovation. But I see disruptive innovation as our opportunity to take the lead and design a high quality, low-cost system that ensures health care for every American. But the disruptors cannot be bureaucrats in Washington, nor can they be think tankers sitting in their ivory towers telling us how to practice. They cannot be insurance companies or trial lawyers. The disrupters must be us. Physicians must lead this disruptive innovation to move us forward to build, develop and continually advance a system that serves each and every American. Richard Branson, founder of the Virgin Group and one of the most successful business leaders in history puts it well, “One has to passionately believe it is possible to change the industry, to turn it on its head, to make sure that it will never be the same again.” Branson goes on to further state, that the potential for reinvention is all around us, and it’s 30
A few weeks ago, I was in Austin visiting the University of Texas. My first time ever walking around the campus, I very quickly learned their motto “What starts here changes the world...” an exciting time to be thinking about how to structure or restructure your business, your community, or your life in ways that create new value. This year marks my 28th anniversary of graduating medical school. When I think of the terms that have become part of common everyday vocabulary in my short career, I think of terms like value and patient experience. Culture of safety. Quality. Process improvement. Care coordination. Readmission. Last year, at the House of Delegates annual meeting, we had a conversation and it was about leadership and to take Michigan physicians to a new level. We have had some ups and some downs, but I am hopeful that you see these peaks and valleys as I did. We are leaving a stronger medical society today than a year ago. My hopes are that next year is even stronger than this and on it goes. We have come together because we have a unity of purpose. Will there be roadblocks put upon us? Of course, but nothing that a strong, united house of medicine cannot conquer. As medicine gets more complex and bureaucratic, we will need to look for the glue that binds us — that will be your fellow MSMS members. Will there be conflicts along the way? Of course. There will be issues that divide us but we must remain committed to a strong future for the next generation. In an interview with Ernst and Young, Mario Preve, the chair of Riso Gallo, an Italian rice producer since 1845 said it best, “I always MICHIGAN MEDICINE
say that the family business is like the relay race: someone passes you the baton and then you pass it on to someone else. We say that we didn’t get the company from my parents; we are borrowing it from our children. And this is important. We are thinking of how it affects our offspring. We don’t think in quarters, we think in generations.” Tomorrow’s world is sure to bring change. There is no doubt about it and we need to encourage change because without it we will become stagnant and die. Our focus will not be on what was, but what will be. This is the 150th anniversary of our great organization. While we should celebrate our past, it’s more important to remain united, remember our sense of purpose and create our future not only for the next generation, but also for generations to follow. It has been truly one of the greatest honors to be your leader and spokesperson for the past year. We are leaving a stronger organization than we found, not because any one of us but because of all of us. You are the future to make great things happen. We are just borrowing this time from the next generation, so we can and must leave it a better place for them. I leave you with a quote from the late Robert Kennedy, “There are those who look at things the way they are, and ask why…I dream of things that never where and ask why not?” What starts here will change the world. You are going to lead this change. You are not going to sit back and simply take what is passed down. You are not going to just resist. You are going to lead and create. Thank you for a great year. Thank you for your leadership and thank you for being involved so we can build a future for the next generation that we are all proud of.
Dr. Grant, a Royal Oak anesthesiologist, is president of the Michigan State Medical Society. May / June 2015
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