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There is no need to suffer: Why hospitals should engage physicians in a dedicated chronic pain program

Posted by Joshua Miller on Feb 5, 2020 2:18:20 PM
Joshua Miller

Chances are, you know someone in your life who suffers from chronic pain. Workplace injuries, aging, car accidents, disease, and many other common events can trigger a lifetime of pain for those afflicted. However, the sheer scale of the problem is staggering. According to the Institute of Medicine[1], over 116 million Americans suffer from chronic pain, costing sufferers and taxpayers over $600 billion per year. Yet, chronic pain is often treated incorrectly and many hospitals simply do not provide pain programs or specialists to assist patients.

One factor contributing to the problem stems from concerns over the opioid epidemic. The epidemic is making it more difficult for patients with chronic pain to find multidisciplinary pain treatment.  Primary care physicians are fearful of prescribing medications for pain treatment.  The untreated patients are flooding your EDs and hospital beds. However, help is available from a growing cadre of physician partners specializing in pain management.


Over the past 30 years chronic interventional pain management has developed into a distinct specialty with post residency ACGME fellowship education and specialty board certification.  Physicians feed into Chronic Pain Fellowships from a variety of residency programs including anesthesiology, neurology, physical medicine and rehabilitation, internal medicine, and others.  Current certification is through the American Board of Anesthesiology.  All physicians that complete an ACGME fellowship are eligible to sit for the Board exam no matter their residency specialty.

Given the opportunity presented by the growing physician base, hospitals lacking pain programs should absolutely consider developing a chronic pain program at their facilities. Clearly, it is important to ensure that your physician partners are ACGME fellowship trained and Board Certified. Opening a pain program also makes financial sense. A mature pain practice can generate over $2 million in annual direct facility fees; not including down-stream revenue such as physical therapy, lab studies, radiology, or internal referrals. Additionally, chronic pain clinics are efficient and low-cost providers when compared to surgery and hospitalizations.  This is particularly important as we move to population health and value-based reimbursement.

That said, be aware that the location of your hospital owned pain clinic matters!

Over the past four years CMS has reduced Medicare reimbursement rates for off-campus hospital outpatient department (HOPD) facility fees.  Significant payment reductions for millions of Medicare transactions commenced as of January 1, 2019, with deeper cuts rolling out in 2020.  However, thanks to a recent Federal court ruling[2], on-campus outpatient departments are not affected by the HOPD payment reductions. For off-campus HOPD’s, the policy’s two-part phase-in cut Medicare payments for clinic visits to outpatient departments by 30% in 2019. By 2020, the rate will be cut another 30%. Therefore, site of service is critical.  Future plans for outpatient services should recognize that more services will need to be performed on-campus in order to receive fair reimbursement from the Medicare program.

Contracting:  Anesthesiology is NOT Pain Management.

As you build out a new HOPD or ASC pain management practice, ensure that you have separate and distinct contracting with your Chronic Pain Services provider.  An example of the problems presented by overlap between an exclusive hospital anesthesiology contract and chronic pain management is shown by the experience of a lawsuit involving Carlisle Anesthesiology and Blue Mountain Health, a critical case from 2009 that you need to understand[3].  The U.S. 3rd Circuit Court of Appeals found that the hospital failed to meet the personal services exception under the federal physician self-referral regulations, known as Stark, when it contracted with an anesthesiology group. The exception generally allows physicians to contract with a hospital entity to provide particular services -- as long as the agreement meets certain criteria and does not violate federal laws prohibiting illegal referrals between entities that share a financial stake.  Carlisle Hospital and Health Services in Pennsylvania contracted exclusively with Blue Mountain Anesthesia Associates PC in 1992 to provide anesthesiology services at the facility in exchange for free office space, equipment, supplies and staff. In 1998 the hospital, now Carlisle Regional Medical Center, built an ambulatory surgery center and pain clinic. The anesthesiologist began providing pain management services there, also while receiving space, equipment and other support at no charge. Carlisle argued the arrangement was an extension of the original 1992 contract, which referenced pain management even though the services were not widely provided at the time.  But the 3rd Circuit disagreed, holding that the new deal opened up possibilities for illegal referrals and failed to meet a host of safe harbor requirements. In addition, "the only written contract in existence ... was negotiated in 1992 in a context wholly different from the one that existed six years later after the opening of the pain clinic." 

In summary, there is enormous public need for the provision of highly qualified chronic pain management programs. Hospitals have a unique opportunity to both meet that demand and unlock a new revenue source in the process. There are pitfalls to be aware of, but with careful planning and execution, the opportunity is too large to let pass.

I have years of experience in this field. If you would like to discuss your options, please do not hesitate to contact me at jmiller@surgicaldirections.com.

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[1] From MedPage Today, June 30, 2011, found here: https://www.medpagetoday.com/painmanagement/painmanagement/27372

[2] From The Advisory Board online, October 23, 2019, found here: https://www.advisory.com/daily-briefing/2019/10/23/site-neutral?WT.ac=Inline_IPP_Blog_x_x_x_RR_2020Jan07_Eloqua-RMKTG+Blog

[3] From Court Listener, found here: https://www.courtlistener.com/opinion/1277889/us-ex-rel-kosenske-v-carlisle-hma-inc/

Tags: Value-based incentive payment, Value-based care, Performance Improvement, Surgical Volume, ASC, physicians, Healthcare, Healthcare technology, HOPD, Pain Management, Chronic pain, Chronic Pain Program, Hospitals

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