The Three 'Rs' Affecting Your Practice: Reform, Regulation, Reimbursement

by Andrea B. Epstein

External forces which affect your vein practice are numerous and multifaceted. Everythingfrom the slow economic recovery, where individuals may opt to defer vein procedures due to lack of employment, to new technology which brings more effecti ve and safer treatments toyour patients, can impact your practice operations. No external forces are more sweeping, however, in their impact on health care deli very in the U.S. than the recent health care law passed on March 23, 2010 : The Patient Protection and Affordabl e Care Act (PP ACA ). That, combined with continued passage of other regulations, such as The HITECH Act last year and the neverending squeeze by insurers to control what is deemed "covered" and therefore reimbursement in vein care, requires phl ebologists to be ever vigilant to the impact of potential changes on their practices.

The new health care law will not take effect all at once: indeed, some provisions will not be implemented until as late as 2014. As a result, the full implications of this bill will be evolving – and somewhat fluid - for years to come. In this Special Section, VEIN takes the first step to help you identify some of the most pressing issues related to your practice not only related to Health Care Reform – but those other two "Rs" that play into your day-to-day practice management – regulation and reimbursement. In future issues, we will continue to keep you abreast of the developing landscape in each of these areas as the implementation strategies for the PPACA provisions and additional regulations unfold.


HEALTH CARE REFORM’S MEDICAL DEVICE TAX: The Implication for Physicians Treating Venous disease

By Andrea B. Epstein

It is estimated that the new health care law, the Patient Protection and Affordable Care Act (PPACA), will cost $938 million over the next decade in order to expand health coverage to millions of Americans who today lack access to affordable coverage through employers. Where is the money to fund this nearly $1 trillion program going to coming from? You guessed it: from spending cuts to existing federal programs (primarily Medicare), along with new taxes and penalties to businesses and individuals. While nearly half of the funds will come from cuts to Medicare (est. $1.5 billion), there is a sizable chunk (est. $107 billion) that will be derived from new fees and taxes imposed on health care companies. It is this area that may have the greatest impact on our VEIN physician audience and the patients they treat.

Up until the final reconciliation bill was passed, there was significant concern regarding a provision nicknamed the "BoTax," a 5% tax on all "elective cosmetic medical procedures" under Section 9017 of PPACA. However, Section 10907(a) of the Reconciliation Bill repealed the 5% cosmetic procedures tax and replaced it with a 10% tax on indoor tanning services. While the repeal of the cosmetic tax can certainly allow physicians who treat venous conditions that might be categorized as cosmetic to breathe a collective sigh of relief, there are other somewhat more subtle looming fees which may still impact overall costs to phlebology physicians and their patients.

Of particular note is a new excise tax on medical devices equal to 2.3% of the device. A taxable medical device is any device defined in section 201(h) of the Federal Food, Drug and Cosmetic Act and is intended for humans. Eyeglasses, hearing aids and other routinely purchased devices by consumers for medical/health use as determined by the IRS are exempt from this tax.

Lawmakers imposed this tax to help fund health care reform, arguing that product companies will benefit from the additional 32 million people who will be newly insured for health care, ultimately consuming additional goods and services. The large lobbying effort from the industry’s two Washington, D.C. based advocacy groups, the Advanced Medical Technology Association, AdvaMed, and the Medical Device Manufacturer’s Association (MDMA) did ultimately temper the final provisions: the original target amount to be collected from the bill was reduced from a staggering $?0 billion, halved to $20 billion. Further, the original implementation date was pushed back from 2010 to 2013, giving the medical device industry time to attempt to repeal the measure and adjust the tax base for smaller device companies.

For physicians who treat vein disease, the biggest concern is that costs for such items as catheters, which are used in significant volume, will be subject to the tax. The assumption is that the medical device companies will be passing this increase along to their customers – namely hospitals and physician practices. Although the tax percentage is small, when large quantities of a device are purchased for a practice, the costs can certainly add up. Does this become a new, added overhead expense for the vein physician, or is there the possibility of passing this through to the patient? And in the end, is it better to absorb the added expense or try to have the patient (and the insurer) foot the bill – impacting goodwill between the physician and patient – especially if the insurer ultimately rejects the up charge.

VEIN contacted Cook Medical (Bloomington, IN), a supplier of catheters to vein practices nationwide to determine if they have made any policy decisions regarding the excise tax, and how they planned to address the added cost associated with it. Are they considering passing the tax fee along to the physicians and is there any way for the practicing physician to avoid higher overhead fees? Cook Medical would only speak in generalities, as the excise tax does not take effect for several years -- until the tax year 2013. With the implementation of the tax years away, it would indeed be premature for companies like Cook to have a formal customer strategy and response ready to execute. At this juncture, their comments about their future plans are broad:

In a policy statement dated March 22, 2010 by Medtronic, one of the country’s largest cardiovascular-focused medical device manufacturers, the company noted that the impact of the excise tax on their business is estimated to be between $150-$200 million annually beginning in 2013 when the tax takes effect. Like other device manufacturers nationwide, they comment that they "accept their share of fiscal responsibility for coverage expansion" and at the same time are appreciative of the lobby efforts that "significantly tempered the size, distribution and timing of the tax implementation." Like Cook, the comments by Medtronic reflect a corporate position to embrace the potential benefits of expanded coverage that will result from health care reform, but at the same point, acknowledge that it is too premature to define any specific customer strategies in terms of product pricing or marketing.

Clearly, time will tell how this device tax unfolds. Medical device companies are assuredly still lobbying to address a number of key elements in the tax, particularly the impact on smaller manufacturers, for whom this tax may result in a bigger hit to their R & D efforts. With opportunity still remaining to repeal the tax altogether, it’s unlikely that device companies will develop and publicize formal pricing strategies for physicians, hospitals and patients for at least another six to twelve months. VEIN will keep you apprised of any additional changes to the tax provision as they unfold and what impact it will have on your practice going forward.



by Michael J. Sacopulos, JD

The ever increasing number of state and federal law that can pertain to the use of photographs of patients ha triggered a lot of questions from the medical community Below are some frequently asked questions and answer from Michael Sacopulos, General Counsel for Medical Justice. Note these are general answers and are not state specific. You should consult local licensed counsel taddress laws, regulations and prohibitions specific to the state in which you practice.

Question #1:
When do I need to use the label "MODEL" on a photograph?

The term "model" should be used when the photographis displaying the results of a procedure or procedures no performed by the physician or practice (displaying thephotograph). Here the term "model" is being used in a general representative fashion and is not being usedto display a specific practice or physician’s professiona services/results.

Question #2:
I hear the use of testimonials has regulations. Please explain.

There are several sources of regulations over the use of patient testimonials. Some state licensing boards greatly restrict or prohibit testimonials. Each state has different standards; some flexible, some very restrictive.

The Federal Trade Commission also has rules that appto the posting of testimonials. In general, a physician should:
1. Make sure the patient has consented to the use of the testimonial.
2. That the testimonial is accurate (what the patient really said and not paraphrased).
3. That both #1 and #2 are documented.

Question #3
What does HIPAA have to say in its marketingregulations about the use of "before and after" photographs and testimonials?

HIPAA in general protects patient privacy. Althougthe act does many things, it would prohibit the use obefore/after photographs without a patient’s permissionHowever there is nothing in the act that would preventhe use of accurate before and after photographs with apatient’s prior approval. As always, this approval should be documented. Finally, it should be made clear that a patiencan withdraw his or her approval to use the photographsat a later date and that the physician must comply withthis subsequent withdrawal of approval.

Question #4:
What is this I am hearing about The Federal Trade Commission in regards to "results not typical" and endorsements?

Earlier this year, The Federal Trade Commission set forth new guidelines for the use of testimonials and advertising that apply to many areas including healthcare. In the past, The Federal Trade Commission (FTC) has taken action against certain weight loss products when these products were advertised by an individual claiming extreme weight loss. The FTC’s position was that it is a deceptive trade practice to show an individual has lost 100 lbs. when this result is not at all representative of a typical patient’s outcome. In this situation, the term "results not typical," would need to be used. Under the new regulations, we should expect that the FTC will take a similar approach. Under the new FTC rules, you must also disclose the fact if an individual has received compensation (of any amount) or discounted services in exchange for providing a testimonial or endorsement.

Question #5:
What concerns should I have if I want to implement an e-mail campaign to my database?

You will not be surprised to learn that there are specific Federal laws related to the use of e-mail campaigns for commercial purposes. Specifically, the CAN-Spam Act sets forth the Federal requirements for those wishing to promote goods and services by e-mail. Before you start to send those e-mails, check out the Federal Trade Commission’s website on this act:

Question #6:
What should I know before I start a Facebook account?

From the legal perspective, information that you place on Facebook is treated exactly the same as information that you would place on your practice’s website. However, some have found Facebook to have a more intimate feel. People tend to make statements and do things on Facebook that they might not otherwise do on a typical web page. We have all read the accounts of individuals losing a job because of some posting on Facebook. I recommend that you keep two separate Facebook accounts. You may have one for your practice and one for personal use. I believe it to be a mistake to mix your personal and professional activities in one Facebook account.

Question #7:
Can I give a referral patient a gift card to use towards services?

Yes. Few problems arise from giving a gift card or a discount to a patient that has been referred to your practice. It is more difficult to compensate patients for the promotion of your practice. As we discussed above, should you wish to compensate a patient for the use of his or her before and after photographs on your website, this fact must be disclosed.

Question #8:
If all these are legal requirements, why don’t more doctors get prosecuted?

This sounds like a practical question from a risk taker. The answer to this question rests in the limited resources for enforcement. Most people driving above the speed limit don’t receive a ticket, but it is clearly a possibility every time someone exceeds the speed limit. One more word of caution: The penalties for violating some of the rules and regulations described above can be quite harsh. Your smartest move is to try to comply with all rules and regulations regarding online advertising.

Michael J. Sacopulos, JD is the General Counsel for Medical Justice, a membership-based organization that offers patented services to protect physicians from frivolous lawsuits, demands for refunds and internet defamation. For more information, go to www.


SPECIALTY EMR SYSTEMS FOR PHLEBOLOGY PRACTICES: What Are My options and What Should I look for?

by Kevin Park

Phlebology is a burgeoning business, and with an estimated 20 million Americans suffering from venous insufficiency, a focus on this specialty has made for some very busy vein practices. I see many of these Phlebology practices across the country, and when it comes to charting, patient workflow and billing, efficiency is all over the map, with some offices leaving me wondering how the work ever gets completed.

As most of you know, the government has mandated and provided incentives for all medical professionals in the
U.S. to use electronic medical records (EMRs). However, despite its mandate the government has yet to evaluate
the EMR requirements for the specialist. For instance, a family practitioner has no need to track conservative therapy, send preauthorization letters or measure patients for compression hosiery—all issues specific to the practice of Phlebology and somewhat lacking, with respect to flexibility, in general EMR systems. Given this, the question of how effective a general EMR system will perform in a Phlebology practice leads to an obvious conclusion: not very well!

This leads us to the next questions, which include; where will I find the right EMR for my Phlebology practice, and what are my options?

Should I acquire a web-based platform, or set up servers in my office? If I set up servers, can I manage the IT component myself, or will I need to hire an IT specialist? When you start to factor in the ancillary costs of some EMR systems, the numbers are staggering.

I speak with many providers across the country in this specialty, and generally speaking, they have the same three
simple goals: I want to cut my documentation workload; I want to b properly reimbursed for my work; and I do not want to overburden my staff. While these seem like reasonable requests, it is my experience that for a software company to truly deliver on these expectations, their time and resources should be devoted to the workings of this specialty.

There are four companies who are dedicated to this specialty: VeinSpec EMR, Vein Technology Solutions, Sonosoft and Streamline. All are good companies who strive to deliver the best available technology and specialization for their clients. From a platform standpoint, VeinSpec EMR and Streamline are web based, while Sonosoft and Vein Technology Solutions take an in-house server approach.

I suggest researching these companies to determine the best fit for your practice, and suggest the following questions/guidelines:

1. Ask your representative if the system is complete. By this I mean are there any modules required to purchase to fully integrate scheduling, patient management, billing, documentation and patient notification/portal. A company with these basic modules included (or added on for a nominally appropriate fee), with the ability to customizethem for your practice, can make your EMR integration much less painful.

2. Ask how the developer performs training. I strongly recommend in-house training for the following reasons:

a. The training staff can see and understand your workflow in real time. Doing this will ensure the system is adapted for you, and you are not having to adapt to the system.

b. Speed of conversion: In my experience, companies who train on site can speed up full conversion from 90 days to less than 30 days. That’s a lot of payroll time spent back at work and not in training.

c. Customization issues are typically remedied much faster on site versus trying to customize remotely. I suggest an additional resource that offers sound and practical advice on the implementation of EMR systems,
entitled Electronic Medical Records, A Practical Resource for the Private Physician, by John D. Deutsch and Christopher J. Fer-guson. It is available in e-book form at Of course, heeding these suggestions does not guarantee a perfectly seamless EMR integration, but they will lessen the risk that implementation of an EMR in your practice does not end up in a case study against EMRs!

Kevin Park is the Chief Technology Officer for VeinSpec EMR.



by Andrea B. Epstein

An alarming trend is on the rise in sclerotherapy insurance reimbursement – one that can have negative consequences for vein physicians and their patients who need this procedure to alleviate their varicose vein problems. Between January and April 2010, insurance experts noted an increase in policy revisions in which ultrasound guided sclerotherapy, previously covered for deeper vein systems, was denied coverage, with policies stating this is now a non-covered service that does not meet medical necessity criteria. Most disconcerting is a revision to the Blue Cross/Blue Shield Plan of Florida, the first large payor to write these revisions into their policies in February of this year.

Why is this occurring? Clearly, according to AJ Riviezzo, President of American Physician Financial Solutions (APFS), the changes underway imply that sclerotherapy is used primarily for veins which are on the surface, thus negating the need for the additional cost of ultrasound. Riviezzo states, "With these policy changes, there is no latitude for the physician who is performing sclerotherapy for deeper vein systems where the veins are not visible to the eye."APFS has seen denials in the past in this arena, but with small insurance companies, they have had success with getting them overturned. With larger insurers getting involved, including both the Blues of Florida and Aetna, concern is mounting that more insurance companies will follow suit. In particular, Riviezzo notes, other Blues plans in the Southeast, including those in Tennessee, North Carolina, South Carolina, and Alabama, all defer to Florida Blues’ policies already in many cases, due to the overlap of insured employees who reside in these states.

Right now, physicians faced with denials for ultrasound guided sclerotherapy have limited options. In cases where it is a non-covered service, they can opt to "eat" the cost of the ultrasound, which typically is billed out/reimbursed in the range of $180-$200 per procedure. If it is a non-covered service, patients can be balanced billed for the fee only if they are informed of this situation by the physician before the procedure and agree in advance to self-pay the ultrasound fee.

A third alternative is likely to drive up the cost of vein care – ironi-cally, the opposite effect of what these insurers
are trying to achieve. For more complex, deep veins where sclerotherapy and other, more expen-sive but reimbursable treatment options are available, physicians may opt for the latter to assure their ser-vices are covered. In these cases, patients may end up being "overtreated" with radiofrequency or laser ablation.

If insurance policy changes which define ultrasound guided sclerotherapy as a non-covered service become increasingly prevalent, the ethical and financial dilemmas faced by physicians performing these procedures for their patients will also increase. In the end, the effect may backfire on insurance companies for the treatment of certain venous diseases, and with that, the only winners will be the device manufacturers which offer advanced, more expensive technology that ironically is covered by these insurers.