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Employer On-Site Clinics as Medical Homes

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1 Employer On-Site Clinics as Medical Homes
Payors, Plans, and Managed Care Practice Group Mid-Year Luncheon November 8, 2010 PRESENTERS: Richard M. Luceri, M.D. Elise Dunitz Brennan VP of Health Care Services Partner JM Family Enterprises Inc. Doerner Saunders Daniel & Anderson LLP 120 Jim Moran Blvd S. Boston Avenue, Suite 500 Deerfield Beach, FL Tulsa, OK 74103 Telephone: (954) Telephone: (918) Fax: (954) Fax: (918)

2 Overview of the Presentation
Defining medical homes and why on-site clinics are appropriate for medical homes Describing why corporate clinics are proliferating Legal issues Ways JM Family Enterprises provides chronic care management and functions as a medical home 2

3 Definition of Medical Homes
Continuity of care Clinical information systems Delivery system design Decision support Patient/family engagement Coordination of care across providers and settings Improved access to care 3

4 Typical Characteristics of Medical Homes Are Easily Provided at Employer On-Site Clinics
Open scheduling Expanded access hours communication Patient tracking Chronic care management Personal health assessments and wellness initiatives Performance reporting and improvement 4

5 Increased Emphasis on Medical Homes
PPACA Medicaid Demonstration Programs Medicare Home Demonstration from Tax Relief and Healthcare Act of 2006 and Medicare Improvement for Patients and Provider Act of 2008 NCQA accreditation standards in existence The Joint Commission accreditation standards are forthcoming 5

6 PPACA’s Emphasis on Employer Wellness Programs Promotes On-site Clinics as Medical Homes
Grants to small employers to provide comprehensive workplace wellness programs for FY Comprehensive workplace programs include health awareness initiatives such as HRAs, efforts to maximize employee involvement, initiatives to change unhealthy behaviors, and workplace policies to encourage healthy lifestyles. CDC to study and evaluate employer wellness programs including comprehensive workplace chronic disease management and health promotion programs. 6

7 Why Corporate Clinics are Proliferating
Healthcare costs are out of control Healthcare delivery system is broken

8 Employers View of Costs Associated with Reform
Employer Estimates of Healthcare Costs Source: Mercer, Health Care Reform – Sizing up the Challenge, 2010. Budgeted Changes (2010 Sample Size=61; 2011 Sample Size=38) Source: National Business Group on Health, Large Employers’ 2011 Health Plan Design Changes, August 2010. 2010 2011

9 Even the Government Expects Higher Costs
The rate of increase in total U.S. healthcare spending will be little changed by the healthcare overhaul, according to federal economists Healthcare spending as a percentage of GDP With effects of HC reform Prior to HC reform Projected CMS Office of the Actuary Sept. 8, 2010

10 Employer Reactions to Healthcare Reform
Source: Towers Watson, Health Care Reform:, 2010.

11 U.S. Healthcare System is Broken
Care is fragmented and not coordinated Over-consumption of services Patient side: no “skin in the game” (more is better) Physician side: fee-for-service rewards volume not quality; physicians are paid for what they order not for what they know; fear of lawsuits; etc. Primary care physician shortage, projected to be even lower with ACA No time to be the “trusted” physician No coordination with other providers, specialists Earlier referral to specialists (with regional differences based on local expectations and sophistication) Lowest paid provider IT deficiencies low rate of electronic record adoption and sharing, exaggerated HIPAA interpretation, little interoperability, etc.

12 Reality: Patients Do Not Receive Recommended Care
McGlynn et al “The Quality of Health Care Delivered to Adults in the United States” NEJM June 26, 2003Health Study by the RAND Corporation (supported by the Robert Wood Johnson Foundation and the Veterans Affairs Health Administration);

13 Employers to the Rescue: Reasons for Success of Onsite Clinics
Better opportunities to control costs: Shift to less expensive but patient-oriented primary care Introduce “consumerism” in controlled setting: Focus on generic drugs, annual physical exams, etc. Value-based health plan design Good health is good for business: Physician-patient relationship is the cornerstone of care Emphasis on screening, wellness programs, chronic disease management Reduced productivity losses and absence Employee retention, work-life balance, employer of choice, etc.

14 Legal Issues Corporate practice of medicine issues Licensing issues
Privacy issues ERISA applicability Relationship to HSAs HRAs & GINA Liability Issues 14

15 Corporate Practice of Medicine Issues
Medical home is a physician-driven model in which the physician leads a team that takes collective responsibility for a patient. Problem with employment of physicians in some states so there is a need to link with a captive PC. On-site clinics frequently rely on physician extenders (APNs and PAs) to decrease costs. On-site clinics need to balance reliance on physician extenders with medical home concept that physicians are pivotal. 15

16 Licensing Issues Involving Physician Extenders
PAs are frequently licensed by medical licensing statutes, so corporate practice of medicine prohibition may apply. APNs are typically the only type of nurses that can diagnose and treat. APNs may not have prescriptive authority. Typically neither a doctor nor a physician extender can rely on the patient assessment by an RN and make a medical diagnosis if he or she does not see the patient directly. Further, a RN can not take orders from a doctor unless: The doctor has seen the patient; and Has prepared a medical protocol. 16

17 Licensing Issues Involving Drug Distribution
Chronic disease management includes medication management and employers are desiring to purchase and dispense drugs directly to employees to lower costs. Distribution of medication through employer facilities may necessitate wholesale or distribution pharmacy licensing issues depending on state law. In some states, properly registered physicians can dispense non-schedule medicine but on-site clinics frequently warehouse drugs. 17

18 Privacy Issues Covered entity status of employer health plan, but not employer, so free exchange of PHI between on-site clinic and health plan must be shielded from employer. Ease of access to patients: s and quick and frequent meetings when healthcare providers reside at patient’s place of location necessitates enhanced HIPAA and HITECH responsibilities. 18

19 Privacy Issues State privacy laws, Americans with Disabilities Act, and Family and Medical Leave Act may apply to PHI. Employer health plan and on-site clinics are both covered entities, and this differs from typical arrangements when TPA is business associate of employer health plan so aggregate collection of PHI for plan administration purposes needs to be carefully monitored. 19

20 Privacy Issues Confidentiality obligations of the on-site provider differ for the treatment of job related injuries versus other health care needs. Most state workers compensation laws allow employer access to treating physician report. May need to consider enhanced or coordinated privacy policies for “trust.” 20

21 ERISA Applicability Maintenance on the premises of an employer facility of treatment for minor injuries or illness or rendering first aid in the case of accidents occurring during working hours is not an employee welfare benefit plan pursuant to DOL section (c). A wellness program is any program designed to promote health or prevent disease. DOL section (f). When an on-site clinic provides chronic care coordination it becomes a wellness program subject to ERISA plan and notification requirements, HIPAA nondiscrimination rules, and COBRA. 21

22 Applicability to HSAs IRS Notice (Q&A 10) allows an employer or dependent to have an HSA and use an employee on-site clinic that is either free or charges below fair market value, if the employee or dependent does not receive significant benefits in the nature of medical care. A hospital that permits its employees to receive all medical care at its facilities for no charge is providing significant care and the employees are not eligible for HSAs. 22

23 Notice 2008-59 Guidance on Significant Benefits
Physicals and immunizations are not considered significant benefits. Injecting antigens provided by employees is not considered significant benefits. Providing aspirin and other non-prescription pain relievers is not considered significant benefits. Query: Does the nature of a medical home necessitate a provision of more than significant benefits? 23

24 PPACA Increases Confusion
Query: Are preventive screenings broad enough to include annual physicals, basic tests, and services typically provided in an outpatient physician’s office to manage chronic conditions, which is implicit in the medical home concept. PPACA provides some indication that management of chronic problems (such as regular blood pressure checks) fall within the concept of preventive screenings but need further guidance. 24

25 PPACA Increases Confusion
Tests as to whether the services provided by on-site clinic are in the nature of preventive and primary or treatment for injuries and illnesses contracted at the employer’s worksite versus management of specialist healthcare needs. Once on-site clinics enter into employer direct service agreements with hospitals or specialists movement to significant benefits. For now most employees with an HSA are charged a nominal fee for on-site clinic services, but this does not resolve the exemption from ERISA issue. 25

26 Future Issue On-Site medical clinics will be treated as a group health plan coverage for purposes of the excise tax that goes into effect in 2018 on “Cadillac Plans” if they offer more than a de minimus amount of medical care to employees in executive physical programs. This is in the technical explanation of the revenue provisions of the Reconciliation Act of 2010 as amended, in combination with the Patient Protection and Affordable Care Act (JCX-18-10), 64 (March 21, 2010). This explanation does not define de minimus medical care. 26

27 HRAs and GINA Title I prohibits health plans from discriminating against covered individuals based on genetic information. Title II prohibits employers from discriminating against employees based on genetic information. Genetic Information includes family medical history and information on individuals’ and family members’ genetic tests and genetic services. Federal regulations at 74 Fed Reg (October 7, 2009). 27

28 HRAs and GINA Fundamental to the concept of Medical Home is collecting sufficient information through health risk assessments and/or biometric testing, which enable the provider to manage chronic illness or provide preventive care. The Medical Home concept incorporates wellness initiatives which are governed by the HIPAA nondiscrimination rules that prohibit discrimination in the provision of wellness programs based on participant’s illness or medical condition (29 CFR § 2590). 28

29 HRAs and GINA Wellness programs that provide rewards for completing HRAs that request genetic information, including family medical history, violate the prohibition against requesting genetic information for underwriting purposes. This is the result even if the rewards are not based on the outcome of the assessment, which otherwise would not violate the 2006 final HIPAA nondiscrimination rules regarding wellness programs. Some employers give rewards for completing HRAs that do not solicit genetic information. Some employers make completion of HRAs completely voluntary. Query: When a turn-key on-site clinic or independent contractor seeks completion of HRA, is this an action of the employer? 29

30 Professional Liability
The professional must render care with the same degree of care as a reasonable member of that profession in similar circumstances would render in the community. Query: What is the community standard for on-site clinics? Is it a different standard? Does the standard differ for independent contractor, employee, turn-key operation, or captive PC? Possible apparent authority or ostensible agency issues as raised against non-staff model HMOs. 30

31 JM Family Experience with “Medical Home”

32 About JM Family Enterprises, Inc.
Diversified private automotive company Founded in 1968 by automotive legend Jim Moran Led by President and CEO Colin Brown Approximately 4,000 associates Headquarters in Deerfield Beach, FL Major business operations throughout U.S. and Canada

33 Notable JM Family Rankings
About JM Family Enterprises, Inc. Notable JM Family Rankings No. 28 on “100 Best Companies to Work For” list; ranked for 12 consecutive years No. 30 on list of America’s Largest Private Companies No. 3 on list of “100 Best Places to Work in IT” No. 2 on list of Florida’s Largest Private Companies

34 On-site Health & Wellness Centers
4,000 Associates 10,000 Covered Lives Health & Wellness Centers

35 Our Leaders “Get It” CEO Total Rewards Healthcare Services CAO/HR

36 Overall Medical Home Strategy: Engagement, Wellness, Prevention
Associate Engagement Stay Healthy Accept responsibility for one’s own health Better understand how to consume healthcare Prevention Promote healthy lifestyle Promote targeted screening Health Risk Assessment Core Programs Weight Management Physical Activity Smoking Cessation Risk Reduction Coordinate Care “Medical Home” Education Coaching Manage chronic disease

37 On-site Health & Wellness Centers
Staff: Primary care/IM physicians, gynecologists (full and part-time) Full-time registered nurses Physical therapist on-site or locally accessible in major facilities Contracted registered dietitians and fitness instructors Patients served: Benefit plan members including associates, spouses, children >15 Wellness/prevention programs are open to all Schedule options: By appointment “Fast Track” minor care (viewed as a “stay healthy” opportunity) Virtual waiting rooms

38 Wellness & Prevention Programs
Smoking cessation Weight management Cancer screening Breast Prostate Colorectal others Vaccinations Psychological counseling Nutritional consultations Onsite fitness programs tailored to location: Gyms, swimming pool Exercise classes, Pilates, Boot Camp, etc.

39 Coordinated Care (DM) Programs
Core programs: Diabetes Hypertension Hyperlipidemia Always available: Weight management Smoking cessation Behavioral health Planned: Musculo-skeletal health

40 We “Drive” Associates and Families to Our Health & Wellness Centers
No-cost access to H&W Centers (except HAS plan) No deductibles All services performed on company time “Free” ancillary lab and imaging services Local vendor contracting High-touch/quality services “Free” screening specialty visits Well-woman exams by GYN Dermatology checks “Free” starter medications, course of antibiotics

41 We Test Our Programs Through Pilot Studies
“Modified” HRA with biometric data: 72% participation rate in pilot of > 1,000 associates without incentives Generated multiple annual and wellness visits, nurse coaching, teachable moments LifeSteps weight management program: 3-components: behavior modification, proper nutrition, and activity Remote locations tested first Mentoring from previous participants is maintaining engagement Success prompted “waiting list” for future enrollees and need for additional personnel We pay for programs; participants maintain memberships through continued engagement and commitment

42 We Promote Partnerships With Local Hospitals and Provider Groups
Partnerships with area hospitals: Employers are good corporate community partners for hospitals Hospital revenue streams and margins are challenged Grants are possible and should be pursued: We earned a fitness and smoking cessation grant in one location $1.5 M grant proposal is being submitted with another hospital system for wellness partnerships Opportunities for integrated delivery systems (ACO) and other opportunities through PPACA Local specialty networks Reinforce coordinated care concept Assure quality Coordinated by our physicians

43 What’s Next? Preliminary results Future direction
We’ve begun bending the cost curve Associate engagement has increased Future direction Continued focus on overall health and wellness of our associates Expand onsite or near-site services Telehealth in certain locations Modulate benefit design in conjunction with healthcare services

44 Employer On-Site Clinics As Medical Homes © 2010 is published by the American Health Lawyers Association. All rights reserved. No part of this publication may be reproduced in any form except by prior written permission from the publisher. Printed in the United States of America. Any views or advice offered in this publication are those of its authors and should not be construed as the position of the American Health Lawyers Association. “This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought”—from a declaration of the American Bar Association 44

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