Primary Care Physicians Lose In 2015

Many Americans trumpeted the millions of uninsured who obtained health coverage in 2014 via Medicaid or Obamacare exchange coverage. However, the Affordable Care Act made assumptions that all states would expand Medicaid coverage and this simply has not happened. In fact, 23 states have opted not to expand Medicaid leaving healthcare providers to face even more high uncompensated care costs.

Rubbing salt in the wound, Congress failed to extend Medicaid rate increase for primary care services before they adjourned at the end of 2014. The Affordable Care Act sought to increase Medicaid payments on par with Medicare. The thought process was that this would incentivize more physicians to see this newly expanded pool of Medicaid patients.

An analysis performed by the Urban Institute shows an average 2015 Medicaid reduction of 42.8%, with physicians in California, Florida, and New York being cut more than 50%. The Kaiser Family Foundation claims that 15 states are trying to find ways to cover some of the costs (in an attempt to keep Medicaid on par with Medicare). However, with many states already in a tight budget stance, it remains to be seen if and to what extent this will come to fruition.

So, now that the temporary two year hike in Medicaid rates has come to an end in at least half of the country, we may see a reverting of physicians opting to not accept Medicaid patients. With more patients now on Medicaid as a result of Obamacare, that would mean a larger number of patients having trouble getting access to healthcare than before the law was passed.


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Hackers Target Healthcare in 2015

While data breaches certainly are not a new phenomenon, there is a persistent and growing threat of healthcare breaches. And while 2014 was a great year for cybercriminals targeting U.S. consumers, 2015 may be even better for hackers.

Experian produced its second annual Data Breach Industry Forecast this month showing that the potential cost of breaches for the healthcare industry could be as much as $5.6 billion annually. The report claims that the risk of experiencing a data breach is higher than ever citing the “consistently high value of healthcare data on the black market.”

Hackers already are big fans of payment breaches and cloud data, and many healthcare providers are already utilizing both of these potential vulnerabilities. The Identity Theft Resource Center stated that 42% of breaches reported this year have occurred in the healthcare sector! As the healthcare industry expands (via electronic health records) the number of access points to Protected Health Information and furthers the adoption of wearable wellness technology, patients will become attractive targets to criminals. More pressure than ever is going to be placed on healthcare executives to ensure data is secure as patients demand for remedies increases.

Healthcare reform has mandated that medical providers “become more electronic” at such a fast rate that the security of patient data is truly compromised. And criminals know it! “Many doctors’ offices, clinics and hospitals may not have enough resources to safeguard their patients’ PHI,” confirmed the Experian report. Michael Bruemmer with Experian correctly stated that “accessibility has trumped security.”

The Experian report can be found here.


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Are ACOs Sustainable?

The Centers for Medicare & Medicaid Services (CMS) recently proposed changes to the Medicare Shared Savings Program (MSSP) in a desperate attempt to save Accountable Care Organizations (ACOs). Unfortunately, the proposals once again fall short and fail to address what the ACOs have been asking for.

As I addressed in my last post, the cost of operations and collecting quality metrics is causing many ACOs to fail. In fact, some 80% of ACOs in the MSSP are losing money! Leading health economist Paul Keckley, Ph.D. commented on the recent CMS proposals. “So what CMS did not do is address the concerns of many of the ACOs to comply with the rules and report the quality measures. It’s going to cost ACOs more than they save.” He continued by predicting that if the proposals are implemented as is, we will see even more ACOs drop out of the Medicare program.

As I have stated in previous posts, a major issue with the Affordable Care Act is misaligned incentives. Dr. Robert Pearl, chairman of the Council of Accountable Physician Practices confirms this notion. “While ACOs might receive payment on a prepaid basis, the physicians and hospitals inside the ACO are often still reimbursed based on volume. As a result, providers often don’t have an incentive to work together to find more effective ways to deliver clinical care. And when patients seek care outside of the ACO, physicians are at financial risk for care that may be unnecessary or inappropriate.”

So, are ACOs sustainable? It most certainly does not seem so at this point in time. As Dr. Pearl stated, “Even among the most efficient practices, the cost of delivering care must be adequately funded. When payments are too low for physicians to deliver quality care and keep their practices viable, there is no good solution.” And once again, healthcare reform fails to consider physicians as stakeholders. “Physicians often feel relatively powerless and struggle to commit fully to the goals of performance improvement and cost containment,” says Dr. Pearl.


Contact ABISA, a consultancy specializing in solo and small group practice management. Visit us at