Practical Solutions in Health Care

Reimbursement for Remote Patient Monitoring in Virtual Care

Reimbursement for Remote Patient Monitoring

Hall Render Shareholders Chris Eades and Regan Tankersley discuss Medicare reimbursement considerations for remote patient monitoring as a part of virtual care.

Podcast Participants

Chris Eades

Attorney, Hall Render

Regan Tankersley

Attorney, Hall Render

Chris Eades: Hello, and welcome to Hall Render’s Virtual Care Podcast Series. Today’s focus will be Medicare reimbursement or remote patient monitoring services. My name is Chris Eades. I’m a shareholder here at Hall Render and a member of our firm’s virtual care team. I’m joined today by my fellow shareholder, Regan Tankersley, who focuses her practice on Medicare reimbursement, both in the context of traditional in-person services, but also virtual care services or telehealth services.

Chris Eades: Regan, thanks for joining us. Before we dive in, maybe tell us a little more about your individual practice.

Regan Tankersley: Yes, thank you. I am in my 19th year of practice as a healthcare regulatory attorney focusing on Medicare and Medicaid payment issues and regulatory compliance.

Chris Eades: Great. Well, Regan, so a hot topic in the realm of virtual care has been remote patient monitoring or remote physiologic monitoring, whichever term we want to use, for a number of reasons. It’s one of those areas where we have seen some permanent change already in the way of expanded reimbursement. It’s certainly an area that seems to mesh nicely with the concept of clinical integration and value-based care. Of course with technology and the advancements we see there, there’s simply a lot out there that we can do to potentially manage patients in a more efficient manner and in a more complete manner.

Chris Eades: So, it is a big topic and really the reason we wanted to kind of level set in terms of where we’ve been in the recent past and where we are today with reimbursement, specifically Medicare reimbursement. It’s also one of those many areas that you and I have discussed where we see competing definitions and concepts, right?

Regan Tankersley: Right.

Chris Eades: So, you and I often talk about the need for healthcare providers to understand there’s kind of the reimbursement side of the coin, all of the rules that apply to telehealth and other technology-based services that are specific to whether and how you can be compensated, and then of course there’s the professional side of the coin in terms of whether you can use these technologies to begin with to render care. If so, what do you need to do?

Chris Eades: So I mention that, right, because of course there are state to state different definitions and rules in terms of remote patient monitoring. We don’t want to lose sight of the fact that those concepts are out there and that we have to pay attention to them, but of course reimbursement is huge. It’s traditionally been the largest obstacle to providing these types of services, and so we did want to drill down more specifically on, again, where we are and where we may be headed with reimbursement in this area. So, I’m going to stop there and maybe, Regan, ask you to comment on whether or not Medicare has a definition that is specific to RPM.

Regan Tankersley: So from a Medicare reimbursement standpoint, RPM services are going to be described by those certain CPT codes that Medicare developed a payment rate for a few years back. I want to say 2018, but I know it’s within the last few years, prior to COVID, prior to the public health emergency. So from my perspective, I like to make the distinction, because we’ve seen a lot with the terminology between telemedicine, telehealth, virtual care, RPM services are paid for by Medicare under Part B.

Regan Tankersley: They are not true telehealth services as defined by the statute, by the Social Security Act that has a very narrow and discreet definition. An 1834(m) of the Social Security Act as to telehealth services, which are professional services rendered by physicians, mid-levels, eligible practitioners to provide those professional telehealth visits, consults, et cetera. RPM are not telehealth in that definition, you will not see those CPT codes listed on the Medicare list of covered telehealth services, they are just fee schedule-based services.

Regan Tankersley: I have to look into it on the hospital side, but on the physician fee schedule side, they’re paid for under the fee schedule. There are certain CPT code descriptors to describe different components of RPM, whether it’s the initial setup, whether it’s the data collection, whether it’s the interaction between the healthcare provider and the patient. So, I want to make sure people kind of understand that there may be some flexibilities during the public health emergency as to how RPM services can be provided and billed, but these services have been covered and paid by Medicare prior to the public health emergency.

Chris Eades: Got it. That’s an interesting point and an important point, right, because many of the state definitions that I alluded to would capture RPM as a defined telehealth service or a defined telemedicine service, depending upon what terminology the state uses. But as you point out, even though we think of RPM in a lot of ways as telehealth or telemedicine, technically it does not fall within the definition of telehealth for purposes of Medicare.

Regan Tankersley: Correct.

Chris Eades: So, why don’t we kind of touch base briefly about where we were with RPM just prior to the pandemic, because it was one of those areas in kind of the larger area of virtual care where we had seen some expansion. Let’s just kind of touch base in terms of where we were initially pre-pandemic.

Regan Tankersley: Right. So because of the nature of those services, they’re not an in-person visit with a Medicare beneficiary. So when Medicare developed payment rates to recognize that there’s a benefit to being able to remotely monitor patients and certain physiologic parameters, weight, blood pressure, all of those things that can be monitored remotely. Because of that non-face-to-face aspect to it, there was a requirement that the patient had to be an established patient of the billing practitioner who was going to be providing and billing for the RPM services, and there had to be consent obtained prior to initiation of those services.

Regan Tankersley: Those are all beneficiary protection measures, because they’re not there face-to-face with their practitioner, so it did require established patient and consent to be in place prior to the public health emergency. There’s been some flexibility because of COVID that Medicare is allowing during the public health emergency that the patient does not have to be an established patient prior to providing RPM services, and that the consent for the RPM services can be given at the time of that initial contact with the patient.

Regan Tankersley: So, those are the flexibilities that we’ve seen during COVID. There was also a flexibility related to one of the CPT codes that required a certain number of data to be collected and reported prior to being able to bill for that code once every 30 days. There’s been then some flexibility there during the public health emergency as it relates to patients’ beneficiaries with COVID or suspected COVID.

Chris Eades: So Regan, pre-COVID, pre-pandemic, was there flexibility to use RPM for both chronic care management and acute patient care, or was it only the former?

Regan Tankersley: I believe initially it was focused on chronic conditions, but there has been some policy clarification since COVID and part of the interim final rule flexibility recognizing that RPM services can be provided for acute care. Which is how you got that flexibility related to patients with COVID. That’s an acute condition, not a chronic condition. Then there’s been some policy clarification I believe moving forward that recognizes the utility and the value in those services, not just for chronic, but also acute.

Chris Eades: Then even pretty recently during the pandemic, this is one of the areas where we’ve actually seen some permanent change, right? We had kind of the rules pre-pandemic, we had some of the flexibilities that you mentioned in response to COVID, and then we actually saw some permanent change at the very end of 2020. What did that permanent change involve in terms of RPM flexibilities?

Regan Tankersley: Yeah. So part of the interim final rule flexibility, as we noted the consent and the established patient. So moving forward, Medicare has clarified through the traditional fee schedule notice and comment rulemaking, that moving forward the permanent changes after COVID will be that that consent that had talked about before that had to be obtained prior to these services being initiated can be obtained at the time of the services being initiated.

Regan Tankersley: That is a new permanent policy change, but CMS also clarified that post-COVID-19, post-pandemic, it is going to have to be an established patient relationship to provide those RPM services. So there’s been some clarification made, but the one really permanent change that they recognized on the consent issue. I think it’s important to realize too with remote patient monitoring, patient services, there’s lots of different devices that can collect data.

Regan Tankersley: I mean, my Fitbit collects all kinds of data, heart rate and your oxygen saturation, but for purposes of these defined terms and CPT codes for Medicare coverage purposes, it has to be a type of device providing the data that meets the FDA definition of a medical device. The data has to be sent automatically, collected and sent automatically to whoever the practitioner is providing the RPM services, it can’t be self-reported.

Regan Tankersley: So, it’s not a free for all. I mean, there’s still some coverage restrictions there related to the type of devices and the interaction that has to occur between the beneficiary and the billing provider for the codes that allow for the communication part to be built.

Chris Eades: Gotcha. How many days per month does the device need to monitor and report data?

Regan Tankersley: It’s at least 16 out of 30 under normal conditions. Again, there’s that limited exception during the public health emergency for patients with or suspected COVID that you can collect data less than 16 days and still report that CPT code that represents the data collection part of the service.

Chris Eades: Okay, so it sounds like then post-date of emergency, even with the permanent changes we’ve seen, that the two areas that will revert back, so to speak, would be, one, that RPM must involve an established patient. Then two, the exception that you just mentioned related to COVID treatment obviously would not apply at that point.

Regan Tankersley: Correct.

Chris Eades: So do we have any indication, Regan, in terms of where we’re headed next with RPM? Do we expect that we will see more permanent change or maybe additional flexibility? Is there any intel on that piece?

Regan Tankersley: I think as CMS continues to provide coverage and pay for these services, they’ll continue to monitor and collect data as to the utility. I mean, obviously I think the benefit of this type of data is that to be able to track patients for chronic and some acute conditions to hopefully provide for better health outcomes and to be able to treat patients sooner based on collecting that data that can be transmitted remotely, it’ll be interesting to see if there are permanent statutory changes made under the telehealth statute.

Regan Tankersley: For example, if going back to the original coverage for RPM services after the public health emergency, there has to be an established patient relationship. Well, can we establish that patient relationship through an initial telehealth visit? Part of that will go to are we going to have some flexibility following the public health emergency [inaudible 00:12:16] to the geographic limitation. That would really expand the ability to have that initial visit and establish a patient prior to establishing an RPM service for the program for those patients. Again, that’ll depend on whether we see a statutory change to the telehealth provisions.

Regan Tankersley: We’re already seeing sort of these RPM companies pop up, because part of the policy clarification with remote patient monitoring is that you can have auxiliary staff performing these services, but under the Medicare Incident-to regulation of services of auxiliary staff have to be directly supervised. RPM is a general supervision standard and CMS has clarified that you can contract with auxiliary personnel to provide the services.

Regan Tankersley: So, we’re already seeing RPM companies coming to physician practices with an RPM program to provide all of the technological support, all of the monitoring, and then providing the support then for the practitioner or their staff to be able to do the interactive communication parts of those services described by that codes. So you might start seeing more of [inaudible 00:13:24] industry pop-up to be able to support it to think about, one, for a data center entity.

Regan Tankersley: If we have some of these contract provision for auxiliary personnel and if we’re not limited by a supervision standard, considering what we do in different locations, different states. I mean, there’s still some of those things to consider, but I can see that happening more as kind of coming to a physician practice with here contract with us, we can provide the services for you so you can provide them to your patient population.

Chris Eades: Interesting. Yeah, we’ve obviously seen a lot of activity legislatively and we continue to see a high number of bills being introduced, most of them focused on reimbursement in the realm of virtual care. We’ve also seen some legislation that’s more specific to increased funding, and worth noting, I think, that we’ve seen some of that legislation be specific to remote patient monitoring.

Chris Eades: I know very recently there was some legislation introduced called the rural remote monitoring patient app, which intended to or is intended to establish a pilot grant program to support RPM in rural areas. So I think in addition to some of the rules themselves potentially changing, there’s certainly the possibility for some increased funding in this area as well that healthcare providers should be mindful of. You had mentioned, but just to emphasize. In terms of the actual technology, Regan, that can be used, what’s the threshold requirement there?

Regan Tankersley: So there has to be, one, depending on the CPT code we’re talking about, but for the data collection devices, there has to meet that definition of a medical device and it has to be able to capture and collect data and send it automatically. But as far as the codes that capture the interaction between the patient and the billing practitioner, that’s described. Then interactive communication, it has to be conversation in real-time. It’s synchronous, it’s a two-way communication.

Regan Tankersley: I believe a lot of that can be done … I mean, there aren’t the restrictions you see under telehealth regarding video, but you can use video enhancements. I think there’s another CPT code that can reflect some other type of services, but the data collection CPT codes have certain requirements, and then the communication-based codes with that interactive, that’ll have a set of requirements, and that’s going to be defined by those CPT code descriptors.

Chris Eades: Right.

Regan Tankersley: I would comment too as we’re talking about payment, my sense, and we know this from some of the committee hearings that have been going on in D.C., that if we do see some increased flexibility under telehealth, I mean, it could be a domino effect, like I just mentioned, that they end up changing the statute and moving the geographic restriction. Well, now you can provide more of these initial patient contacts via telehealth that open up the door to some of these other services like chronic care management and RPM. Will the fee-for-service system continue on or will there be some other methodology or mechanism to pay for some of these services?

Regan Tankersley: I feel like the Medicare fee-for-service system was meant to be reactionary. You’re paying for medically necessary treatment for diagnosis or treatment for people who are already sick, and I think part of these initiatives with virtual care is trying to capture this patient population and data to help provide for healthier outcomes before they get to the point that they’re really sick. Does the fee-for-service mechanism payment methodology really support that type of care? So, I think that still remains to be seen.

Chris Eades: Yeah, and going back to the earlier point that you made regarding the technology actually constituting a medical device. As simple as that sounds, we’ve certainly encountered concerns or issues in the employment setting or hospital setting where individual providers are seeking to use technology that kind of looks and feels like it’s a medical device, but in reality is not a medical device. So even though fundamental, I think it’s important to be mindful of that, that there are millions of applications out there and technology as well and wearable devices, et cetera, that do not rise to the level of medical device.

Regan Tankersley: That’s right.

Chris Eades: I also wanted to mention, you had pointed out one of the permanent changes involving the ability to obtain patient consent at the time of service, which provides some helpful flexibility. You and I field a lot of questions more generally about consent in the realm of virtual care, and so I think it’s also important with consent to keep two additional pieces in mind. One is, again, any state law specific requirements, right? So we’re talking about consent, again, for purposes of Medicare reimbursement, but RPM may be captured by a state telemedicine act, which itself has particular requirements for documented consent. So, need to remain mindful of those state law specific provisions.

Chris Eades: Then two, in a more healthcare provider specific context, quite often RPM is not the only service that you are providing electronically, right? You may be, as you pointed out earlier, providing RPM in conjunction with other types of virtual care services. So, approaching the consent process more strategically and proactively in a way to check all boxes, and also in a way for the healthcare provider to obtain a meaningful and helpful consent ahead of the time is probably a good idea and something that our providers should be mindful of.

Regan Tankersley: Well, and you raise a really good point between consent as required by state law, whether it’s in regard to telehealth telemedicine or just consent to treat, versus some of the specific Medicare coverage requirements for consent related to your ability to have coverage in both of those services, such as the RPM. So those are two those questions, but which one trumps, the federal or the state? We’ve got to comply with both.

Regan Tankersley: I mean, I think that’s just the important thing to remember is that if these certain services from a Medicare payment standpoint require a certain type of consent, we still have to comply with everything related to your state law. But I think too moving forward, I just read this article kind of on security and cyber-attacks attacking medical devices. Something kind of out there as far as whether or not what data devices you’re using to collect data, but how are we ensuring from a cyber standpoint the security of the data, making sure there isn’t any way to hack into patient accounts. So all of that, the more we do virtually, it’s going to just raise that compliance and risk level of how we’re making sure all this type of data and patient contact and information that’s being done virtually is going to be protected.

Chris Eades: Absolutely. Well, Regan, hey, thank you very much for your insight. To our audience, thanks for joining us. If you or your organization have any questions or topics that you would like to share with us, please contact us via our website at Certainly feel free to reach out to me at, or Regan, particularly if you have questions specific to reimbursement in this arena. Regan can be reached at

Chris Eades: As always, please remember that the views expressed in this podcast are those of the participants only and do not constitute legal advice. Thanks so much for joining us.

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Virtual Care Considerations for Fraud and Abuse

Virtual Care Considerations for Fraud and Abuse 

Hall Render Shareholders Chris Eades and Ritu Cooper discuss what health care organizations should consider in regards to Fraud and Abuse issues with virtual care.

Podcast Participants

Chris Eades

Attorney, Hall Render

Ritu Kaur Cooper

Attorney, Hall Render

Chris Eades: Hello, and welcome to Hall Render’s Practical Solutions in Healthcare Podcast. This episode is part of our ongoing series called Critical Considerations for Virtual Care and we’ll be focusing on considerations for fraud and abuse.

My name is Chris Eades. I’m a shareholder here at Hall Render and a member of our firm’s virtual care team. I am joined today by one of my fellow shareholders, Ritu Cooper. Ritu is a service line leader in our healthcare compliance group, and she has particular experience with healthcare compliance related investigations, disclosures, and related matters. So really the perfect person to have available today to speak to these issues. Ritu, before we dive in, could you maybe tell us a little more about your individual practice?

Ritu Cooper: Oh sure, Chris, thanks. And thanks so much for inviting me to join you today. I’m thrilled to be able to talk to you about this topic. So yeah, as you said, I co-lead the compliance service line. I work primarily with large hospitals and health systems, large physician practice groups. I have some clients that are kind of other, that fit in that med device type space or med device adjacent. But with all of the clients, the work I do is compliance related and related to compliance with fraud and abuse laws, like Stark and Kickback and Civil Monetary Penalties laws, anything that really talks about referral sources and physicians.

As of late, probably in the last four or five years, I’ve done quite a bit of work with clients that are under CIA’s, corporate integrity agreements, and help manage all of the requirements that they need to comply with. So with that, I end up splitting my time working with compliance officers and with legal counsel. I sometimes look at myself as kind of that liaison between the two, there’s oftentimes, with a client, I might be engaged by both offices for very different projects.

Chris Eades: Perfect. So let me set the stage here a bit for our conversation today. We’ve seen a lot of headlines regarding the potential for fraud and abuse in relation to the provision of virtual care. And it’s a bit of an interesting dynamic because we saw these headlines and we saw some of these concerns well before COVID-19. The potential for fraud and abuse through virtual care was often cited, I think along with the concern for unnecessary spend as a reason maybe not to expand virtual care services, or at least facilitate expansion through just some more relaxed regulation and payment rules. And then of course, when that pandemic hit, there was just the need for virtual care, and we had to put aside some of those concerns, increase the flexibilities, and allow for the provision of care through virtual care as we’ve seen.

And so, at this point, as we ease out of the pandemic, it’s an interesting dynamic because the genie is out of the bottle, so to speak, in terms of the benefits of virtual care. It’s been used, there are lots of studies that demonstrate that it’s in demand and will continue to be in demand, that many providers want to be able to use virtual care. But we’re now starting to see and hear the same sorts of concerns that we saw pre-pandemic, and those include the concern for fraud and abuse.

And so even just a few weeks ago, the US government’s Accountability Office issued a report and highlighted, as part of that report, concern regarding fraud and abuse. One of the quotes from that report was, “Both the Medicare and Medicaid programs are on the GAOs high risk list in part due to concerns about fraud, waste, and abuse, the increased program spending, the lack of complete data, and suspensions of some program safeguards increase these risks.”

So it seems to, once again, be front and center, we’ve seen also the US Department of Justice make it very clear that the DOJ will be looking for fraud and abuse in this arena, and those individuals that do try to take advantage of some of those flexibilities, we’ve even seen headlines, again, just a few days ago, where the DOJ announced criminal charges against 14 telehealth execs who were alleged to defraud Medicare. So has been, it continues to be kind of front and center here as we talk about virtual care. So, with that in mind, Ritu, what’s your initial take on fraud and abuse in this arena, do you see this as an area that is ripe for abuse, and if so, why?

Ritu Cooper: Oh, absolutely, Chris. I mean, for all of the reasons that you’ve said. In fact, I was doing a presentation with someone from the DOJ and OIG for AHLA back in the fall, and on the day that our presentation aired, they announced one of the biggest investigations that was alleging fraud and abuse in the telemedicine space. There was also opioid as well, but I mean, there were 86 different providers, physicians, nurses, et cetera, that were even indicted, I mean, for anti-kickback type violations. And they alleged that there was, I think, $4.5 billion in claims related to telemedicine. And it was that there were unnecessary services that were provided, they were providing testing like genetic testing and various things via telemedicine, they were providing pain medication to patients they had not even seen ever in person, barely even talked to them via a platform, some of it could have been even very, very brief telephonic conversations.

So, in preparation for that, they didn’t tell me that it was going to drop the day that our presentation aired. But when we were preparing, they were talking about how, just like you said, pre-pandemic, this was an issue, and definitely a heightened area of focus because all of a sudden we needed to be able to provide telehealth services. Very, very quickly. Whereas we had clients before and, Chris, you and I have worked with a number of clients where they’re contemplating and thinking about it, and then once we kind of tell them all the things they need to think about, they kind of shied away from putting a program together. But all of a sudden last March, all of our clients said, “Oh, I know I said it was hard, but now I have to, so let’s figure it out.”

And so I think that this area in particular, because from my vantage point, even though hopefully this pandemic will end soon, I don’t think telemedicine is ever going to end. I mean, it was an area that you saw years ago that was starting to come into focus. Now that it’s here, I think that we’re only going to be looking at ways to enhance the services that are provided while still trying to figure out how to fit within this fraud and abuse landscape.

Chris Eades: So Ritu, for the benefit of the audience here who may have different levels of familiarity with these rules and regs, let’s step back, and can you maybe highlight for us the primary laws or regulations that we’re even talking about here really in the context of fraud and abuse?

Ritu Cooper: Sure. I think the first one that I think is important to understand, and then the other two fall into place, is the False Claims Act. So all of these cases, or most of these cases come forth to the government based on their belief that there was a claim that was submitted to the government that was false in some way. And that’s the False Claims Act.

The vehicle that they use to claim that something was false was that you violated the Anti-Kickback Statute or the Stark law. And the Anti-Kickback Statute says that you cannot knowingly solicit or receive a kickback for referral of Medicare business or Medicaid business, any kind of federal health care program business. And so, that law is very, very broad, it doesn’t apply just to providers, to physicians, it applies to anyone who could be a referral source. So you may see pharma and device companies, anyone else, pharmacists, anyone else could fit into that mold for anti-kickback as someone who can be a referral source.

The Stark law, however, is a little bit more narrow. It’s strict liability, there’s no knowledge or intent that is required, it’s either you meet an exception or you don’t meet an exception. And the Stark law says that if you are a physician who has a financial relationship with a DHS entity, so it designated health services entity, like a hospital, which is probably primarily what we’re talking about today, you then can not refer patients to that entity unless you meet an exception. And then each of the exceptions have seven or eight different elements, and you must meet all of those elements in order to be able to be protected from any kind of Stark liability.

Chris Eades: So Ritu, what are the potential consequences here for a health system or a hospital provider that fails to comply with these provisions that you’ve talked about?

Ritu Cooper: So under each of the laws, both the Anti-Kickback Statute and the Stark law, they have their own civil monetary penalties per claim, and they range from 15 to 20,000 or something like that. But that’s not where the big dollars are. The big dollars really come from a potential of a False Claims Act case where those claims are anywhere from 11 to $22,000 per claim. And on top of that, a potential for treble damages. And what the government says is that every claim with that physician during the time period where you did not meet an exception is what is at stake. So you’re looking at millions and millions of dollars of potential liability.

In addition to that, you also are liable for returning any money that you charged the government potentially. And then under the Anti-Kickback Statute, there is a potential for criminal penalties. So you could get up to 10 years in prison. Added to that, in 2015 through the Yates Memo that came out, the government has had a heightened focus on individual liability. And if you read what has come out of the government since 2015, which is so hard to believe that that was six years ago, they said, “Well, we’ve always cared about individuals, and we’ve always cared about those bad actors within an organization who might have been putting forth the scheme or the arrangement that doesn’t comply with the law.” But what came out in 2015 was that these individuals could no longer be indemnified by their organization and that individuals would have to pay and be held accountable on their own.

And so I think, don’t want to quote the number because I haven’t looked at it in a couple of months, or maybe even since last year, but I think there were over 50 or 60 individual liability cases since 2015. The first one came out in 2016, one year later after the memo came out. So you’re looking at even individuals facing issues where their company, their organization can not protect them as well.

Chris Eades: So significant consequences obviously, and the need to avoid those scenarios. Let’s maybe talk more generally about actions that should be taken by providers to avoid those scenarios. I mean the False Claims Act, Stark, Anti-Kickback, broader concepts, of course, than just virtual care. So let’s start more generally, Ritu. What does a healthcare organization or provider need to have in place to assist, to avoid a fraud and abuse scenario?

Ritu Cooper: So the biggest thing that the government looks at is whether an organization has a compliance program in place. So what the government feels is that if you have a compliance program in place and you’ve instructed the entire organization that compliance is important to you and educated on that, then you will be able to protect the organization.

So the OIG came out with guidance starting in 1998, and now I think there’s 13 different documents out there, but all of them center around the seven elements of an effective compliance program. So you need to have compliance administration. So someone in charge of the compliance program, maybe a committee that helps them, that represents a cross section of the organization, as well as the board that understands that they have compliance oversight over the organization.

Number two is to have policies and procedures in place specific to compliance in general, and then also specific to the various areas within the organization that might be impacted that have requirements from the government. The third is to have a hotline so that if any issues come forward, then the employees within the organization can bring them forward in the compliance department can follow through.

Number four is education and training, and is making sure that people are educated and understand the policies that they need to follow, as well as the laws externally. Number five is there is a robust auditing and monitoring program in place, and what that means is conducting a risk assessment, putting together a work plan where you’re focusing on the areas that you need to. We know that there is no organization that can look at 100 things in a year. So you really need to focus and narrow in on, “What are we doing that could be high risk?” And then paying attention to that throughout the year.

Number six is having appropriate disciplinary policies that state that, “We take compliance seriously and if you do not comply, or you do not help with internal investigations or bring things forward that we know that you’re aware of, then there will be consequences.” And those consequences are equal no matter what your level is, whether you’re the CEO of the organization or you’re working in the filing room. And last but not least is once you’ve conducted investigation and you’ve conducted it promptly, you’ve put corrective actions in place to make sure that your corrective actions are working as well.

Chris Eades: Ritu, thanks for that. I think that’s helpful information and probably a good segue into then discussing legal compliance more specifically in the virtual care arena. And I’ll just speak just for a moment here in terms of what I’ve seen. And what I’ve seen, I think was much of the obvious, which is the majority of providers out there needed to ramp up very quickly with respect to virtual care. When the pandemic hit we needed a different way to provide services, virtual care was available. And so the focus necessarily was converting to that modality in terms of the provision of services.

We’re at a point now as we ease out of the pandemic where the focus is more on, “Where do we go next? Do we want to continue to provide all of the same services through virtual care that we have been? Can we do that? And then how do we do that?” Because the regulatory landscape is quite complex and always changing. And so that seems to be most of the focus, at least in terms of what I see.

What I have not seen a lot of is what is our structure for legal compliance specific to virtual care? You had mentioned the core elements of a compliance plan, and one of those elements involves an audit function, a work plan for, “How do we ensure that we are avoiding these fraud and abuse scenarios, and we are vetting for ongoing legal compliance?” And so, I do see this as an area that has been lacking. And understandably so, again, the focus needed to be on, “Let’s get through this pandemic and provide the necessary services.” But we are at a point where I think it’s very important, as we look the next steps, to ensure legal compliance with respect to virtual care services. And I am seeing that there’s a delta there, that we need to play some catch up, and wrap our arms around this. What have you seen, Ritu? Are you seeing the same? Have you seen different?

Ritu Cooper: No, I think you’re exactly right. I mean, I think anyone who had telehealth before the pandemic, they were thinking about it, but it was very, very few. Now we’ve seen… I can’t think of a client or a provider that isn’t providing some kind of telehealth services, but I will tell you, I rarely see that coming through the compliance department or being something that’s evaluated.

Chris Eades: So let’s focus on that piece then, Ritu. So recognizing kind of the general concepts that you outlined for a viable compliance plan, what more specifically should be considered as part of a plan to avoid fraud and abuse in the virtual care arena?

Ritu Cooper: No, that’s a really good question. So I think the first thing is that compliance can not help with anything if compliance is not aware of what is going on. And that’s why number one, in that element number one where you have someone who’s in charge of the program but there’s also a committee, you want to make sure that that committee really does represent the cross-functional departments of the organization. And you need to have high level folks that are on that committee.

Compliance may not be aware of that all of a sudden we’re providing telehealth services, or we’re providing telehealth services at an exponential level before the pandemic. So those ideas or that information would come through compliance through that committee. And then let’s say that the person who is in charge of the telehealth program is not there on the committee, well, you always can add people to the committee. So that would be number one, is to make sure that we have the right people who are thinking about it.

The second thing would be, is let’s put together some kind of policy, or procedure, or something that describes the program that’s being put into place and describes all of the little areas where we might need to audit, or monitor, or check. The third thing would be the work plan and the risk assessment. So, one thing if you’re not familiar with risk assessments is what a lots of organizations do is they throw out surveys to a cross section of the organization, asking them questions about different areas to see if they are compliant.

So, for example, you might send a survey out to your real estate group asking them questions that track the real estate exception under Stark and Kickback. So do you enter into arrangements with physicians? Are they in writing? Do you have a fair market value assessment, et cetera. Telehealth is not one of those risk assessments that we normally see because it’s something that was rare pre pandemic.

So I would suggest working with the operational individuals who have put together the telehealth program to understand all the elements of the program, put a risk assessment together, and then put a risk assessment questionnaire together, and then send that out to the folks that are actually implementing the telehealth program to get their take on, “Are we meeting all of those requirements that we need to be meeting?” You might even need to have legal involved in putting that together as well because there could be other requirements that maybe even the operations folks might not be aware of.

And then once you get the answers back from that, and then you see how much telehealth you’re providing, more likely than not you’re going to identify that as a potential risk, not that we’re saying that you do anything wrong, but in an area that you might need to have more auditing and monitoring, you put that on the work plan, and then in the next year, you audit and monitor that.

And then all of the other elements kind of fall into line. So if you have a policy, you educate on the policy, you may see questions come in through the hotline, then you want to know how to answer those questions. If you conduct an investigation, you may want to put corrective actions to place if you realize that you’re not doing something accurately, and put those in place fairly quickly. So all seven of the elements can be touched on, but those three would probably be my main ones to focus on.

Chris Eades: Thanks Ritu. That’s really helpful. And it dovetails with my own observations with respect to virtual care. And I’m glad you mentioned the structure and the way that you did because one of the challenges here seems to be being in a position to vet the different angles here. And to be in a position to hear from providers maybe that want to offer new services through virtual care. As I view it, you need your kind of legal piece to this, your compliance piece. There’s certainly the business element to this in terms of what we want to do with virtual care. And then there’s the clinical piece to this. We can’t use virtual care for everything, we’ve got to be able to meet the standard of care that would be applicable to an in-person service.

And so to your point, I think your structure that needs to be in place does need to include a composition that hits on all of those elements and communication among those individuals will be key. And then I think that structure then is in place not only to vet for what’s happening today, but where do we want to go tomorrow? Where can we go tomorrow? And then going back to the elements you mentioned, really incorporating education as a component here. We’re providing the same clinical services maybe, but we’re doing it in a very different way, or at least virtually, so we’re delivering care in a different way. And there are different rules in play than would otherwise be applicable to an in-person service. And so, education of providers is really going to be important here.

As to your point on the compliance plan, I agree. We need to have a work plan that’s specific to virtual care. That work plan itself may not capture everything, but minimally, depending upon the size scope of the care you’re providing, but minimally should establish guardrails in terms of the core components, where are we providing these services? In what states? Where’s everyone located? What do the medical record requirements look like in each of those jurisdictions? What are the consent requirements? What are we comfortable prescribing or not prescribing through virtual care? The compliance work plan, we should be able to nail down some of those essential guard rails even if maybe we’re going to develop this through our structure more specifically in service lines or within departments, et cetera.

And then lastly, to your point on the audit functions, I think there too we’ve got to think about this a little bit differently. We may want to do the same type of oversight and audit that we may need to, but it may look a little different and there may be some different considerations. If we’re going to observe providers for example, or retrospectively review or audit records for billing compliance, there will be different rules in play. And we may need to go about doing this a little differently. I mean, in terms of proctoring a physician, for example, maybe a new physician for ongoing quality review, that’s going to have to happen differently because it’s a virtual encounter.

And so I think some of the same concepts, but being deliberate in terms of how are we going to get that done? And then are there any other related consequences? If we’re going to use a video recording of a patient interaction, for example, and we’re going to audit that video recording, what does that mean from a medical record standpoint? Do we need to maintain that recording go forward? Does it become part of the designated record set somehow? Do we need a particular patient consent to use the recording?

So I think there are a lot of same concepts in play in terms of what we need to do, but we need to think about those a little differently in terms of, A, there are different rules that may be applicable, and B, there may be some consequences there in terms of what we need to accomplish. So Ritu, I think great thoughts and certainly what I’m seeing, like I said, dovetails, I think, very much with what you mentioned.

Let me kick it back to you, Ritu, do you have final thoughts maybe, or any additional thoughts for those providers out there or entities in terms of what they need to be thinking or doing from a fraud and abuse standpoint with respect to virtual care?

Ritu Cooper: I think, Chris, the biggest thing is making sure that you have the right players involved as you are starting the program and then developing the program. I think that if you have compliance and legal at the table as you’re putting it together, you can probably catch some of those issues that you’ve just discussed before they might be problematic. And I think also then if those two departments are involved at the outset, they will be able to better help with the development of policies and procedures and those risk areas and auditing plans because they’ll understand the structure at the beginning as opposed to being tossed at the end.

So I think for those who may not have done that, all is not lost. But as you said now we’re talking about, “Okay, this is what we’ve done in the pandemic.” Kind of fast and dirty, but now we’re going forward and trying to set up this long-term plan, and if we could make sure that we’re thinking about the different issues that might come up from a Stark and Kickback perspective, and make sure that there’s also other issues, there’s licensure issues. I mean, there’s so many things beyond just Stark and Kickback that we need to think about, and our e-prescribing, our medical record, just like you mentioned, if we’re thinking about those at the beginning, we might even be pulling other people in place, we might need to be talking to our it vendor as well, or a medical records vendor, or whoever we’re working with also to make sure that we’re protecting the entire program.

Chris Eades: Ritu, thank you for your time and insight today. To our audience, thanks for joining us today. If you or your organization have any questions or topics you would like to share with us, please certainly contact us. You can do so via our website at Certainly reach out to me at Or Ritu, particularly if you have questions regarding legal compliance or fraud or abuse issues, please reach out to Ritu at Either Ritu or one of the other attorneys in that practice group will be happy to assist. Please remember, as always the views expressed in this podcast are those of the participants only and do not constitute legal advice. Thanks so much for joining us today.

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Considerations for “Start-Ups” and New Service Lines in Virtual Care

Considerations for “Start-Ups” and New Service Lines in Virtual Care

Health care providers of all types are increasingly interested in exploring the idea of expanding or adding virtual care services. Hall Render Shareholders Chris Eades and Colleen Powers discuss what considerations should be made before adding virtual care to your business.

Podcast Participants

Chris Eades

Attorney, Hall Render

Colleen Powers

Attorney, Hall Render

Chris Eades: Hello. Welcome to Hall Render’s virtual care podcast series. Today’s focus will be on virtual care startups, whether a new virtual care enterprise or perhaps an expansion of virtual care services. My name is Chris Eades. I’m a shareholder here at Hall Render and a member of our firm’s virtual care team. I’m joined today by one of my fellow shareholders, Colleen Powers, who’s a member of our health transactions group and who has particular experience with startup entities, applicable business structures, and healthcare-related transactions.

Welcome, Colleen. Maybe before we dive in, could you tell us a little more about your individual practice?

Colleen Powers: Sure. Thanks, Chris. I’m glad to join you today. My practice is, as Chris mentioned, primarily focused on healthcare business transactions and also working with startup entities, whether that’s kind of figuring out the developmental stages of what do you want the business to ultimately achieve and then how do you determine the appropriate corporate structure and form that that should take to achieve those aims? I work with hospitals, health systems, physician, physician groups, and other entities that are kind of ancillary service providers in the healthcare space.

Chris Eades: Great. Well, Colleen, on the point of startups, we are increasingly contacted by healthcare providers and other types of business entities that are interested in providing virtual care services or perhaps expanding virtual care services. These entities often want to roll out these ventures in multiple states, if not all states, right? It’s, at this point in time, typically a more expansive business plan.

There are always a host of virtual care-specific professional practice rules and payer rules that we need to assist to navigate. But more fundamentally, there are a number of business-specific requirements and considerations that come into play. I appreciate you taking some time today maybe to highlight those considerations. Let’s start with the type of entity. When a healthcare provider or other individual wants to start down this road to providing virtual care service or services, what are the primary options available in terms of the type of entity?

Colleen Powers: Sure. There are, I would say, two that are really commonly in play here. One is an LLC, or a limited liability company. Then, the other is a corporation. The corporation can really take two different forms. You can either be treated as an S corporation or a C corporation. With respect to the S corporation, there are some more restrictions around that. There’s some limitations around the number of shareholders. There are certain parameters around who can be a shareholder. There’s restrictions on the types of classes of shares that may be had. That being that there can only be one class. There’s also some restrictions around profit allocation. However, if you look then at the other side of the corporation structure, you have your C corps. Those are ultimately going to be subject to double taxation. In those cases, the profits of the corporation are taxed at the entity level. Then also there’s taxation that occurs when dividends are distributed to shareholders.

The other form, and the one that we see put in play most often, is the limited liability company. With that, there’s a lot more flexibility from a tax standpoint. There’s also a lot more flexibility with respect to what states tend to require of a limited liability company, kind of everything from filings to what needs to be in place from a governance standpoint. For example, an LLC or a limited liability company will allow the owner, owners to say whether it’s going to be member-managed or managed by a board of directors. LLCs tend to be certainly the most favored form of corporate entity, just because of all the flexibilities that come with that corporate structure.

Chris Eades: Let’s maybe then focus on LLCs a bit more. Can you speak to what’s involved generally in creating an LLC? You just mentioned some of the documents that may come into play, but maybe highlight what’s involved to establish an LLC and some of the most relevant documents that will come into play and the basic timeline for accomplishing all of this.

Colleen Powers: Sure. With an LLC, and this holds true for corporations as well, your first step is going to be filing your articles with the applicable state that you’re going to essentially set up that operation in. For LLCs, they are referred to as articles of organization. Generally, corporations are articles of incorporation. Every state is going to have these days, fortunately, a pretty simple form that many of them will allow you to do it online. You have to plug in some basic information such as the name of the entity, address where it’s going to conduct business. You need to have a registered agent and address where any mailings can be sent to. Some states will require you to have a physical location beyond a PO box in that state where you’re conducting business. Ultimately, once you file those articles, it can really take anywhere from, we’ve seen less than 24 hours for it to be approved by the secretary of state, to really up to a few weeks. It’s very state-dependent.

Chris Eades: Maybe before we move on to the next question here, you had mentioned that with respect to certain states, and it does sound like this is state-specific, that there may be requirements to have an actual brick and mortar presence in a particular state as opposed to just a PO box. Is that correct?

Colleen Powers: Yes, some states will require that. There are not many these days that do require that, but some do. The other thing to keep in mind is that there’s a lot of services, or business entities, I should say, that serve as a registered agent or registered address in that area. You can pay a third-party to kind of stand in the shoes in that way and serve in that capacity.

Chris Eades: Gotcha. Yeah, and I thank you for that. I just want to highlight that point, I guess, for the audience. We talk a lot in the context of virtual care about the barriers to virtual care. One of the barriers is the regulatory complexity in terms of trying to offer these services in multiple different states. But one thing it certainly sounds like that startups and other entities need to be mindful of as they move into these different states, is it’s not just the virtual care-specific rules that may come into play, but also some of these just business-specific rules in terms of establishing these entities.

For example, in terms of what you mentioned, and I’m aware of the same, that there are some states out there that actually require on their books per their regs, a brick and mortar presence to establish a legal entity in that state. That certainly could be a factor when your business model is to not be there physically, but instead be there virtually.

Colleen Powers: Yeah, that’s right, Chris. Some of them kind of go beyond the needing to have the registered agent there to have an actual brick and mortar in a particular state. That’s generally to establish the entity. As you’re thinking about your virtual startup, you might think about where one or more of the owners actually has a home. That can be your registered office. But then, if you think about all the other states in which you want to conduct operations, that’s where you then need to consider the need to file with each of those additional states where you’re conducting business as an entity that is doing business in their state. That’s an additional filing that you need to be mindful of any time you’re conducting business in another state that you’re then registering that entity with those respective secretary of states as well.

Chris Eades: Colleen, what are some of the other more basic business issues that a newly-created entity should consider? Once we’ve established here what type of entity and we’ve gone through those initial steps to create the entity, what are some of the other more essential considerations that immediately come into play?

Colleen Powers: Sure. I think then you want to start thinking about the activities that you’re conducting and what additional filings need to occur with respect to the various federal and state agencies. One that’s going to be applicable across the board is you’re going to need to obtain a tax identification number, a TIN, also referred to as a employer identification number, or EIN. Those terms tend to be used interchangeably. That needs to be obtained from the IRS. That process is really pretty straight forward. That’s kind of step two once you’ve actually formed the entity.

Other considerations are if you’re going to have employees, then you’ll want to file with the State Department of Workforce Development, or whatever that equivalent is, to indicate that you do have employees on your books. Any states where you’re conducting operations you’ll also want to consider do you need to register with those local or state department of revenues as well? I think it’s kind of sitting down and mapping out any of those other agencies that might be in play and that you might have some reporting obligation to.

Another thing to think about that’s kind of just outside of the legal realm, but you’ll want to sit down with a broker and sort through what is the scope of your services and what sort of insurance coverages do you need to appropriately protect your business. At a minimum, I think about directors and officers, insurance and coverage that’s going to provide any of the owners and officers with some protection.

Then finally, I would say ensuring that you along the way are following appropriate corporate formalities to ensure that you preserve the integrity of the business. By that, I mean that there’s a clear distinction between what you were doing as an individual and what you were doing as a business. That means ensuring that you have meetings. Those are documented by minutes and you show those actions that are being taken as the corporate entity separate from yourself. That allows you to ensure that if there’s a third-party claim, that third-party claimant would come to and look at the business entity as the party to pursue some recourse against and not you as an individual personally.

Chris Eades: That’s a really important point. I’m glad that you mentioned it. We tend to talk about insurance in this realm more in the context of professional liability insurance, which is also, of course, important. But I think these other types of insurance that you mentioned, certainly business entities want to be familiar with. To your point, want to not only have the coverage, but establish their entity in a way that will end up affording them the protections that they intended to have. We will no doubt see, as we get further into virtual care, more litigation involving these providers. It’s just so very important I think as a provider to recognize that even though you may be physically located in one state, if you are offering the service in another state, maybe across the country, that you can very easily then be sued in that other state, right? It’s not just a matter of will you prevail in that litigation? It’s a matter of needing to actually be there in that state to deal with that litigation, which in and of itself is a huge concern. I think that’s a good point.

Let’s segue maybe into corporate practice of medicine. This is an issue that is increasingly coming up in the virtual care arena, particularly when an entity wants to provide services in different states. Corporate practice of medicine, or CPOM, not a new concept, obviously. CPOM exists in general, of course, to prevent corporations or other business entities from actually practicing medicine or other healthcare specialties. Or put differently, the concern here is that we want to make sure that only licensed individual providers who are trained to do so are practicing medicine, or these other specialties, and that these individuals are not being unduly influenced by corporations or other business structures.

Again, not a new concept. Most states have a CPOM rule, probably about two thirds of the states, I would say. But CPOM state to state is highly variable, much like all the rest of this stuff that we ended up talking about in the context of virtual care. Very few states actually have just a very simple, straightforward CPOM statute. Quite often it’s a collection of maybe some cases, sometimes really old case law statutes and rules that kind of collectively you have to piece together to establish what the CPOM structure is for a state.

Then even then, you have this really significant variability. Some states are highly restrictive, for example. California is probably the best example. New York has some fairly restrictive CPOM rules. Other states are restrictive, but has some pretty expansive exceptions. Many states, for example, have exceptions that allow hospitals to employ providers, things along those lines. Some states have these rules, but haven’t enforced them in years. Then you have variability in terms of application. Do these rules apply only to physicians? Or do they apply to other types of healthcare practitioners, maybe behavioral health or pick your other specialty?

Highly variable, many would say CPOM is an outdated concept just given what we’ve seen with the employment of practitioners across the board and contracting, et cetera, but it’s still something that exists and that we have to pay attention to. And as I mentioned at the outset, is increasingly a concern here, right, because it’s so easier now for us to be in different states to practice through virtual care. It means that as an entity, if that’s who we are to provide these services or that’s who we want to be, we’ve got to consider whether we’re going to violate the CPOM rules state to state.

With all of that said, Colleen, in those states where CPOM is a pretty significant issue and there’s no viable exception that would exist, what type of business structure do you see commonly employed to navigate or be in compliance, I should say, with the CPOM rules?

Colleen Powers: Sure. Yeah, that’s a good point and something that tends to come up a fair amount. What we tend to see is the deployment of what we commonly refer to as a friendly PC or a friendly physician model. With that, we’ll look to establish an entity that is ultimately owned by a licensed professional, tends to be a physician or a dentist or whatever field you’re operating in at the moment and whatever that state requires. Then, we’ll just kind of categorize them all as a licensed professional.

That licensed professional will then ultimately own a corporate entity. That corporate entity then holds any of the assets or decision points, I should say, that are required to be held by a licensed professional pursuant to that state’s regulations. It tends to involve and require that entity to then hold the medical records or ensure that it indicates that that entity is responsible for anything related to a clinical decision or patient care policies and procedures. As you mentioned, Chris, I mean, every state is completely unique and so is the subspecialty of the services that are ultimately contemplated to be provided. There needs to be a careful analysis of what the state laws say.

Then, so once you kind of craft that friendly PC and give that friendly PC the requisite control and assets that needs to be managed by a licensed professional. Then we look to put some other related documents in place, which ultimately then tend to move the financial proceeds of that entity over to another. It tends to be an MSO or management services organization-like entity. Then that MSO entity essentially is the sister to the friendly PC. That entity is then going to manage and hold everything else that is not required to be managed by the licensed provider under applicable law.

Chris Eades: Probably, Colleen, a good segue into mentioning state-specific fee-splitting provisions. Again like CPOM, some states have them, some states do not. Some states may have one, but not the other. But the point being that the state may have specific fee-splitting prohibitions that disallow a provider from apportioning some percentage of fees to a business entity and really for the same essential reason that we see the CPOM rule. We don’t want undue, or the state does not want undue influence or control over what the practitioner is ultimately doing.

I think the takeaway here on that point, from my perspective anyway, would be A, recognize that those fee-splitting rules may be out there, B, recognize that if you do create a friendly PC structure where there is this management concept in play, be sure that whatever the payment structure is from friendly PC to back the sister entity for those management services does not run afoul of those fee-splitting provisions. In other words, you may not be able to structure that relationship based upon a percentage of fees or some sort of an apportionment directly from those fees. It may need to be another payment structure that is consistent with those fee-splitting provisions.

Colleen, are there any other, you mentioned I think a lot, but in recognizing that it is state-specific, but are there other considerations for establishing a friendly PC?

Colleen Powers: Just as you dig into that sister structure that I mentioned, there tends to be some additional agreements that are in place between those two entities. For example, the licensed professional that ultimately owns the friendly PC will generally sign some form of an agreement which outlines the scope of the arrangement. That does have some restrictions tied to their ownership. It tends to include some provisions about the succession plan. If that licensed professional is no longer practicing there, then they agree and commit to transition that to another licensed healthcare professional that is someone that the MSO entity might support, for example. There’s kind of a mix of other documents that are in play to ultimately dot the I’s and cross the T’s and pull the arrangement together.

Chris Eades: Colleen, beyond the creation of new entities, you’re heavily involved in healthcare-related acquisitions and mergers. Do you see the potential for these types of transactions in the context of virtual care?

Colleen Powers: Yeah, I mean, absolutely. We’re seeing a lot of consolidation right now that’s built around the notion that scale really allows for increased efficiencies and results in healthier companies, both from a care delivery and a profitability standpoint. I think about in the virtual care environment, if you can do one of the few things, whether it’s building a comprehensive network of providers that’s attractive to a potential buyer, you have the best practices in place for that platform or you’ve developed some unique software that really causes that virtual care environment to run really well, I think each of those are very interesting pieces that a virtual care provider can bring to the table and ultimately be the basis for an even larger platform. I think if you do that, that makes you a very attractive target too. For example, we’re seeing private equity in the healthcare space increasingly. This just seems like an area that is right for that.

Chris Eades: When an entity is considering a potential transaction along these lines, what initial steps or considerations do you usually recommend?

Colleen Powers: Yeah, I would think about, as an owner of the organization or officer, what do you want for that entity one day? What do you want it to evolve into? Then, how long do the key stakeholders in the arrangement want to ultimately be in this game? Because once you move into a sale, I think one of the key questions is what role do the individuals want to play? Do you want to preserve some level of control? Do you want to be in a president or officer’s seat and involved intimately in the growth and development of the organization? Or are you looking for something where you’ve kind of built something and you want to sell it off and move on to something completely different?

I think answering that question is really the first step to figuring out who is going to be an attractive potential partner for you. Then the other thing I’d say is, it’s important to keep a close eye on the market. A lot of times being one of the first ones to the table with a very solid platform is going to yield the biggest return on your investment. I think watching market forces is another key factor. Then ultimately figuring out who’s out there as a potential buyer and starting to feel out what opportunities might be available.

Chris Eades: Well, great, Colleen. Thanks for your insight. To our audience, thanks for joining us today. If you or your organization have any questions or topics that you would like to share with us, certainly feel free to contact us via our website at Feel free to reach out to me at or certainly Colleen at Thanks again.

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Celebrating and Commemorating Juneteenth

Educating and Commemorating Juneteenth 

Hall Render’s President and Managing Partner, John Ryan, speaks with shareholder and DEI committee chairperson, Charise Frazier, about Juneteenth and how Hall Render as an organization is educating employees and commemorating this important holiday.

Podcast Participants

John Ryan

President & Managing Partner, Hall Render

Charise Frazier

Shareholder & DEI Committee Chair, Hall Render

John Ryan: Hello, and welcome to Hall Render’s Practical Solutions in Health Care podcast. I’m John Ryan, president and managing partner at Hall Render, largest health care focused law firm in the country. Today, I’ll be talking with Hall Render shareholder, our DEI committee chairperson, Charise Frazier, about Juneteenth and what we’re doing internally as an organization to educate and commemorate this holiday. So, Charise, hello. Welcome to the podcast.

Charise Frazier: Good afternoon, John. It’s great to be here.

John Ryan: So, maybe to kick things off, you could tell us a little bit about your role as it relates to the diversity, equity, and inclusion initiatives here at Hall Render and the work of our DEI committee. Maybe discuss your role a bit, how long you’ve served in this capacity and the core areas where you and the committee have been focused.

Charise Frazier: Yeah, absolutely. So, as you mentioned, I’m the chair of the DEI committee, which is Diversity Equity Inclusion here. I’ve served in that capacity for over four years now and have served on the committee for about seven years now. And really, most recently … Late last year we spent some time developing a diversity equity and strategic plan for the firm. So based on that, we have three main goals that the committee would like to steer the organization in, and that’s focusing on creating a diverse workforce, and that’s going to be both through recruitment and retention. We also want to create and cultivate an inclusive and engaged environment where everyone can come and feel as if they belong and bring their best self and do their best work. And then finally we want to hold ourselves accountable for the work that we are doing and making sure that the goals that we are setting for ourselves and the metrics that we are looking at are consistent with achieving those goals.

Charise Frazier: So with that, we’re also now in the process of trying to develop a work plan, which will serve as a roadmap to helping us accomplish those three main goals. So the committee has been spending some time with that along with leadership within the organization, just trying to figure out what’s going to be the best roadmap for Hall Render.

John Ryan: Well, thank you. It’s been, having sat in the chair that I have and watched the work of the committee and you in leading that committee, I certainly, for one, have enjoyed the exercises that we’ve gone through over these last several months and the work product that’s starting to take shape and guide the firm.

John Ryan: Let’s turn a little bit more specific. I’d like to talk a little bit about the upcoming Juneteenth. I’ll admit, this is a day of significance that I was not very knowledgeable on until the last 12 months or so. I’m wondering if you might share with me and our listeners a bit about the history of Juneteenth and what the holiday commemorates. Maybe also why you believe it’s becoming a more celebrated event in the last year or so, or at least has gotten more recognition than it had in years past.

Charise Frazier: Yep. So, here’s what I will say. I think, you know, you pointed it out, it has been one of those little-known holidays, I would say, for years. I think among the African-American community, Juneteenth has been celebrated, certainly, since I was a child. It is a holiday that we celebrate and look to for … Very similar to Independence Day, right? So, for the 4th of July, Juneteenth is very much like that in the African-American community.

Charise Frazier: And just to give a little bit of history behind it, it really serves as the actual day of freedom of the ending of slavery for all African-Americans. And I think what’s interesting about the story of June 19th and I guess, first, why it’s called June 19th. So, that just represents the month of June and then the 19th today. 

Charise Frazier:  In 1865, in Texas, after the emancipation proclamation, and this is more than two and a half years later, there are a group of slaves, over 200,000 slaves, in Texas, had not been freed and they had not gotten the word that slavery had ended.

Charise Frazier: I think this marks the day where really all Americans became free, right? While we look at the emancipation proclamation as that date, because there were so many that were still in slavery, we look at Juneteenth to be the actual day and the day that celebrated as a day of independence and a day of freedom where our country was moving away from enslavement.

Charise Frazier: I think it remains very remarkable and relevant today. It serves as a celebration of the progress we’ve obtained throughout the generations. But it also serves as a reminder of the work that is yet still to come. As we do those celebrations, it’s always about kind of highlight where we’ve been and where we’re going in this fight for equality and justice in America and making certain that everyone have the freedoms that we all believe we should have in the States.

John Ryan: Great. Well, thanks for that answer. That was a good history lesson and also an opportunity for me to better understand, and I suspect our listeners as well, not just about the history, but also about the significance of that date and why we would be celebrating June 19th.

John Ryan: Talk a little bit about the focus more recently, the added notoriety that this holiday has gotten, particularly in my instance, in the last year or so, I suspect for many as well. Just interested in your thinking. I suspect a lot of it has to do with the events of the last 12 months and the result in added significance in a holiday that just didn’t get that notoriety that it had in the past. Anything that you can add relative to kind of the increased notoriety with respect to June 19th?

Charise Frazier: You know what, I think it’s just awareness and education, right? Like, as you mentioned, learning the American history and understanding American history has given individuals a new appreciation of the importance of recognizing the significance of this holiday. But so many didn’t even know why it was a holiday or why people were celebrating. I think most people believe that slavery ended with the emancipation proclamation. And once folks became aware and realize that celebrations were happening, I saw lots of people wanting to join in or better understand it. I think, really, the notoriety is also recognizing the work that we have to still do in this country.

Charise Frazier: I think, as you pointed out, you know, over the last 12 months, the amount of injustices that still plagues the African-American community was just something that I don’t think that a lot of people recognize was still happening in this day and age. A lot of people saw that as being history and not modern-day.

Charise Frazier: So I think as people began to be enlightened about not what happened 400 years ago, but what’s actually still happening today in many different forms. I think folks started to want to have a better understanding of it. And then, like I said, I think here and now it promotes kind of the continued fight for freedoms and equality and rights. And I think lots of people thought we were living in a world that was equal but have learned over the time that there’s a lot of inequalities that still exist. And now we are seeing kind of some movement and momentum to kind of make that change and push towards the quality. I think this holiday is one that gives people an opportunity to do just that, celebrate it, join the in in the challenges, and kind of move this thing forward.

John Ryan: Focusing on the last point you made about joining in, I’d be interested in your thoughts on what can those individuals, our listeners, others, myself, who are interested do to commemorate the holiday?

Charise Frazier: Certainly I think the first thing is just learning more about the holiday. I think, again, as I mentioned early on, Juneteenth is something that I’ve celebrated as a child. However, I too have taken the time to learn more about the history of this holiday and the fact that the first Juneteenth happened in 1866, so the year after the order was entered and taking the time to actually read the order in Texas from Granger that says, “Okay, this is what’s happening,” and kind of everything that had gone around that.

Charise Frazier: I think one of the best things you can do is educate yourself, right? Look at the information, learn as much as you can, recognize the importance and the significance, and then just take some time to reflect on how that may be impacting you, your life, friends or families or any of those things just so, because I think part of it is just understanding. I think allyship comes with making an effort to understand, and once you get that understanding, then I think you’re able to contribute in a meaningful way to the cause.

John Ryan: Great. I’ve got a final question for you. I promise it’s an easy one.

John Ryan: But I’d be really interested in your thoughts on, really, how do all these efforts and these activities that you’ve mentioned, and I love your comments on education and awareness and the value of that as well, but if you kind of wrap all that together, how do all these efforts and activities tie into a larger DEI strategy for our firm and really for our communities.

Charise Frazier: I think one of the things that is important in DEI is developing cultural competencies, right? And cultural competencies, again, goes back to education piece, and that is learning the norms and the backgrounds and the understandings of cultures that are different from. So we here at the firm, on a monthly basis, we highlight various different holidays from different cultures or different lifestyles that individuals may have. And the point of that is to educate our sales around what are some of the norms that are not normal to me but are everyday norms for someone else. And then how can I better understand that so that when I am interacting with someone who’s different or have a different background from me, we can have a positive interaction.

Charise Frazier: I think highlighting something like Juneteenth is an opportunity to introduce a lot of people to a cultural activity that they have not been aware of or, frankly, never been involved in. And so helping to develop this cultural competency also allows individuals to become more comfortable because we’re all human. So as I better understand who you are, your likes and dislikes, the reason you do things or don’t do things, that helps me develop a better relationship with you.

Charise Frazier: I think, both within Hall Render and for anyone who’s developing their DEI plans or processes that you want to help develop cultural competency by constantly introducing your workforce to information and celebrations and cultures that they may not have been introduced to, this will then allow them to be able to interact with folks.

Charise Frazier: I think one of our models is, from a DEI’s perspective, is take the opportunity to learn something new and do something different. And when you’re constantly taking that opportunity to do that, you are oftentimes pushing yourself out of your comfort zone, but as with anything, once you’ve did it once, the second time is so much easier and then it becomes second nature. And that’s what we’re trying to get these things to do, that we celebrate everyone. And those celebrations are very comfortable to all because it’s just second nature kind of deal.

John Ryan: Charise, we’re in good hands with your leadership and that of the DEI committee. I really thank you for what you shared today and the very informative discussion.

John Ryan: Thanks to everybody for listening in today. If you or your organization have thoughts or DEI programs that you’d like to share with us or ideas, please contact us on our website at, or reach out to me or Charise, we’d be happy to chat as well.

John Ryan: Thanks again, and everyone have a great day. Thanks, Charise.

Charise Frazier: Thanks, John.

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Implementing Virtual Care as part of a Value Based Enterprise

Implementing Virtual Care as part of a Value Based Enterprise

Virtual care offers many benefits, such as better and increased care coordination, better means of patient follow-up, remote patient monitoring and other general efficiencies, that align with value-based purpose. Hall Render Shareholders Chris Eades and Alyssa James discuss the intersection between value based enterprises and virtual care.

Podcast Participants

Chris Eades

Attorney, Hall Render

Alyssa James

Attorney, Hall Render

Chris Eades: Hello, and welcome to Hall Render’s Virtual Care podcast series. Today’s focus will be value-based enterprise more specifically, how and where value-based enterprise or VBE intersects with the concept of virtual care. My name is Chris Eades. I’m a shareholder here at Hall Render and a member of our firm’s virtual care team. I’m joined today by my fellow shareholder, Alyssa James, who has particular knowledge and experience with value-based enterprise. So Alyssa, before we dive in, why don’t you tell us a little more about you and your practice?

Alyssa James: Thanks, Chris. As Chris mentioned, my name is Alyssa James. I’m a shareholder in Hall Render’s Indianapolis office. My practice focuses primarily on fraud and abuse and regulatory compliance type matters. I work primarily with hospitals and health systems, as well as other types of healthcare organizations on various provider contracting matters, transactions amongst various healthcare organizations, and more complex Stark Law, Anti-Kickback Statute and civil monetary penalty, beneficiary inducement related analysis. In the current value-based landscape, I also work with clients to help them navigate these regulatory frameworks when implementing value-based, risk sharing, and other related arrangements.

Chris Eades: Great. Thanks, Alyssa. So when I look at and think about value-based enterprise at a very high level, 10,000 foot view, to me, there seems to be some clear overlap with the potential advantages of virtual care. We’ve certainly seen those advantages unfold over the pandemic. I think it started with the most obvious, which is the fact that virtual care allows distance in between provider and patient, which has had some obvious advantages during the state of emergency, but we’re also starting to realize, I think some of the other advantages of virtual care such as a better and increased care coordination, better means of patient follow-up, even following up with a patient in the patient’s home, remote patient monitoring, general efficiencies to be gained, and really all of these benefits strike me as very much in line with the operative definition for value-based purpose.

And so I do think it makes sense to really talk about VBE in the context of virtual care. And with that in mind, maybe we could start with you providing just a, kind of a general understanding or giving us a general understanding of what we even mean when we’re talking about value-based enterprise.

Alyssa James: Of course. So when we’re looking at a potential value-based opportunity, I like to frame the various definitions in terms of a who, what, when, where, why, how. Under this type of analysis, the VBE or value-based enterprise itself is the who. VBEs must consist of at least two participants. Those participants can be either an individual or an entity that engages in at least one value-based purpose and collaborate with each other to achieve those value-based purposes. When we’re talking about value-based purposes, those can be one of four things: coordinating and managing care for a target patient population, improving the quality of care for a target patient population, appropriately reducing costs and payer expenditures without reducing the quality of care to the target patient population, and/or transitioning from a volume-based care delivery system and payment mechanism to value-based.

You all may also be wondering what a target patient population is, and I know I jumped sort of from value-based enterprise to value-based participant. When we begin to scratch the surface of the relevant value-based frameworks, the definitions get a bit cyclical because each definition refers to other terms that are defined by the regulation. So bear with me here a little bit as we kind of get into this. But as I was saying, the value-based enterprise has to be engaged in trying to achieve at least one of those value-based purposes that I just mentioned. So in essence the VBE is a consortium of individuals (such as physicians or others) and/or entities (for example, hospitals, physician practices, or other healthcare organizations).

A VBE does not have to be a separate legal entity, but it does need to have an accountable body that’s in control of the VBE. So you don’t have to go out and form a new legal entity or a true joint venture, so to speak. But you do have to kind of come together through a contractual arrangement and allocate who is going to be responsible kind of for governing matters of that value-based enterprise as it works to achieve its goals.

Chris Eades: So, Alyssa, if we distill that down a bit, how would you summarize the general steps required to establish a VBE?

Alyssa James: So at a high level, when we’re looking at this in order to form a VBE, you need to identify the following and who the players are going to be…who your value-based participants are in that VBE. You need to identify the target patient population for which the VBE wants to focus its efforts. So a target patient population can be very broad. It could be all the patients in your health system or all the patients that are discharged from a particular hospital, or it can be very narrowly tailored to a certain diagnosis, a certain zip code, that sort of thing. And when we’re looking at that in that “who, what, when, where” framework the target patient population is the where. So, where are we focusing our efforts?

The “why” would be those value-based purposes that the VBE is going to strive to achieve. The “how” is what activities will the VBE engage in in order to try to move that ball forward, to have that impact on the care coordination or other value-based activities for that patient population. Once you identify all those things, the “who, what, when, where, why” then the parties need to enter into one or more value-based arrangements that spell out those goals of the VBE, any compensation that’s going to flow between the parties and other details of the arrangement to show how it’s structured and how it’s going to be implemented.

Chris Eades: So VBE is obviously a relatively new concept. At this point have you seen health systems, hospitals, or other healthcare providers actively pursuing VBEs or otherwise engaging this process?

Alyssa James: Yes. We’ve been fielding numerous inquiries from clients who are looking to what I’ll call exploring the art of the possible with respect to the VBE framework. I think folks are very excited about it. They’re wanting to kind of see what this framework allows them to do as far as a care coordination collaboration standpoint and how they can really focus in on some of these target patient populations that are applicable to their organization and improve care coordination and patient outcomes. In addition to the creation of VBEs more specifically, I think that these applicable Stark Law exceptions and AKS Safe Harbors that have been implemented under this construct are leading providers and other health care organizations to just generally evaluate other types of risk sharing arrangements or patient incentives that may or may not require the formal formation of a VBE, but fit within that same spirit and framework as care continues to shift from a more volume-based to a value-based model.

Chris Eades: So if we take really that piece of the conversation in terms of what you’ve seen and we talk maybe a little more about where this intersects with virtual care, I know that I’ve seen as part of my practice, the concept of VBE come into play potentially in relation to, or at least a precursor to the provision of telemedicine equipment and platforms by maybe a distant site telemedicine provider to an originating site, location that’s going to be receiving those services. Can you maybe speak to kind of how you might see that come into play in the context of a VBE or maybe some of the potential benefits there?

Alyssa James: Sure. So in addition to the compensation arrangements that may be directly associated of with that VBE’s value-based arrangements, there are certain AKS safe harbors outside of that VBE framework that do lend themselves, I think, to various virtual health activities. For example, there’s a new AKS Safe Harbor for care coordination arrangements that improve quality, health outcomes, and efficiencies. This safe harbor allows for the provision of in kind remuneration. So not monetary compensation, but in kind remuneration amongst VBE participants. So you do still have to form a VBE in order to utilize this AKS Safe Harbor, but under this safe harbor, the recipient of this in kind remuneration can receive something from another VBE participant in the VBE.

The recipient is required to pay at least 15% of the offerors costs for that remuneration, but even so, I think this safe harbor may provide significant flexibility for the provision of virtual health or telemedicine equipment or software, or even staff, maybe for that originating site. If they need a technician or a nurse or something to that effect to help the virtual health platform operate, I think those are all options here under this safe harbor for this VBE to lend some of those things to other participants.

Chris Eades: Alyssa, do you see other potential intersections between VBE and virtual care?

Alyssa James: I do. So I think the intersection here is ripe for opportunity. I think as we’re beginning to scratch the VBE surface, we’re also sort of beginning to just unravel what opportunities are available. But in addition to opportunities amongst VBE participants, which Chris, I know you and I have touched on a little bit already, I think there are other increased opportunities for providing items and services to increase patient engagement. This of course is a very important component of care coordination. We can coordinate as much as we want, but if the patients aren’t buying in or aren’t able to access care, it doesn’t get us very far. And so, for example, there’s another new AKS Safe Harbor for arrangements for patient engagement specifically, this safe harbor is also only available to VBE participants, but it allows the VBE participants to provide in kind items, goods, and services to patients that are valued up to $500 per patient per year, for various patient engagement activities.

So typically when we’re talking about items or services that you can provide to patients, specifically Medicare or Medicaid beneficiaries, the Civil Monetary Penalties Law is much more limiting than that from a dollar value standpoint. But this AKS Safe Harbor allows VBE participants to provide items or services up to $500 per patient, which is huge, I think. And I think that these items and services, although they’re required to have a direct connection to the coordination and management of care of that target patient population that we talked about a little bit earlier, I think it can be a great way to provide maybe necessary technology to patients in order to facilitate their ability to access these virtual care platforms, whether that’s a tablet or increase Wi-Fi in their home, or something to that effect too. I think there’s a lot of opportunities here to make sure that not just that the providers have what they need for this virtual healthcare platform, but that the patients that we’re trying to reach do too.

These safe harbors give a lot of flexibility to VBEs beyond just what’s within the four corners of their value-based arrangements amongst each other.

Chris Eades: That’s a great thought and that will no doubt increasingly come into play. So I appreciate that information. So really at this point, Alyssa, if a health system or a hospital or other type of healthcare provider is interested in pursuing a value-based enterprise, what initial steps would you recommend?

Alyssa James: So I think the first steps are really to think critically about who you want to include, both as fellow participants in your value-based enterprise, as well as what patient populations do you really want to target? Do you want to have some sort of broadly defined target patient population? Do you want to at the outset at least, just focus on a couple of more specific subgroups of patients, whether that’s by disease state or comorbidity or something to that effect? The other thing to keep in mind is an organization or individual can enter into multiple VBEs and value-based arrangements. And so maybe it makes sense to partner with a few folks on one patient population, but then for a different patient population, maybe it makes sense to strategically partner with others. So something to keep in mind there, just kind of really brainstorming who you want to be involved and what patient population you want to target.

And from there, I think developing a plan for the actual arrangement construct and corresponding incentives that will follow, more of your contract terms and things like that. Depending upon the nature of the arrangement, there are different Stark Law exceptions and or AKS Safe Harbors that will be applicable, and each have their own specific set of, as you may imagine, criteria that must be met in order to meet the exception or safe harbor. So once you kind of get that general idea of what the goals are and what you’re trying to achieve, really then putting pen to paper and cross checking that with the applicable exceptions or safe harbors, to make sure that this arrangement is going to be in compliance with this new framework.

Generally speaking, the more significant the downside financial risk that each participant has, the fewer restrictions or burdens there are on the VBE and its participants. Value-based arrangements that don’t have a lot of downside financial risk are going to have a lot more obligations put on the participants, such as monitoring, documenting what is required to be in writing, and annual re-evaluations of whether you’re meeting those metrics. And that sort of goes without saying, right? That the less the downside risks, the more the government is going to make you have to do to prove that you’re not abusing any sort of relationship there. So, just something to keep in mind to make sure that you’re hitting all of those elements that are required for compliance purposes.

Chris Eades: Thank you, Alyssa. That’s helpful information. To our audience, I think we’ll conclude there for today. Thanks for joining us. If you or your organization have questions or topics you would like to share with us, please contact us on our website at or certainly feel free to reach out to me at or Alyssa at As always, please remember that the views expressed in this podcast are those of the participants only and do not constitute legal advice. Thanks so much.

Alyssa James: Thank you everyone.

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The Importance of DEI Programs at Service Driven Organizations

The Importance of DEI Programs at Service Driven Organizations

In this interview, Ritu Kaur Cooper sits down with John Mariano, SVP and General Counsel at Precision Medicine Group to talk about the great work that Precision is doing in the area of Diversity, Equity and Inclusion at their organization.

Podcast Participants

Ritu Kaur Cooper

Shareholder, Hall Render

John Mariano

Senior Vice President and General Counsel, Precision Medicine Group

Ritu Kaur Cooper: Welcome everyone. Today. I am talking to John Mariano, Senior Vice President and General Counsel at Precision Medicine Group. And we are talking about the great work that they’re doing in the diversity, inclusion and equity space. John, so before you start talking about all the great work you’re doing in DEI, I’d love for you to introduce yourself and Precision to our audience.

John Mariano: Thank you. And it’s really my pleasure to be here. It’s always a pleasure to see you, of course, but it’s my pleasure to be here and to speak about some of the initiatives that obviously have gained a tremendous amount of momentum in a little less than a year, particularly in Precision. Precision is a global life sciences service business that concentrates in accelerating the delivery of life-changing treatments and profoundly improving health outcomes. Precision has been around for 10 years now, we’re in our 11th year. We have approximately 2,500 employees worldwide, about 500 of those are in Europe, Canada, and Australia and the remaining 2,000 are in the United States. I’ve been general counsel of Precision since it started, in fact, I’ve been general counsel with the founders going back to 2003, and that was three companies ago we’re on our third business now and this is a very exciting one. And not just because we’re able to make, I think, a big impact on this diversity, inclusion initiative that we’ll discuss today.

Ritu Kaur Cooper: That’s great, John. So, and I’ll tell you I’m not just saying this, I thoroughly enjoy working with you and your team. You can tell that people love working at Precision and they do really love the atmosphere and the culture. I think that’s attributed to the tone that you all are setting at the top. So with that, John, why don’t you tell us about your DEI initiatives that you have at Precision?

John Mariano: Sure. Look as a service-driven organization, our greatest asset is our people. No doubt, that’s the bottom line. We felt after the events of last summer, that we wanted to really now develop a clear vision that respects and celebrates diversity within our organization and the communities we serve. Our vision is to recognize that diversity, promote equity, and elevate a culture of belonging. And we started with a variety of committees, employee-driven and executive-driven committees to try to develop a roadmap to build out these initiatives and we’ve landed on a three-year plan. The plan is largely modeled on the global diversity and inclusion maturity model. And that is kind of composed of four elements, purpose, strategy, initiatives and the fourth element is something that we have, which is our human relations guiding principles. And I’m going to start with the fourth one because that’s important for any organization, including a law firm like Hall Render or any organization.

John Mariano: When you have those guiding principles, I think all roads can lead back to them when you’re talking about your people, your assets, your initiatives like this. And our guiding principles are client service, purpose, accountability, mutual respect, and collaboration. So we want to take those guiding principles, apply them through our purpose in business, and then lay them out in the strategy that goes across three areas, talent, culture, and community. And then we have a number of initiatives under each of those three areas. For example, in talent, we have recruitment programs, talent development, talent, promotion, employer brand, talent metrics. In culture, we have D&I awareness and D&I training, employee committees, listen and learn circles, which I want to talk about a little later, that’s important, I think, and communications and messaging. And then finally in the community, we’re trying to develop philanthropic support in our communities, a sense of volunteerism amongst our employees, a commitment to that, and supplier diversity. For example, we just launched within the last two weeks, I think it was announced last week actually, that we now have a company-wide volunteer time off program, a VTO program, which, obviously aims to encourage and promote employee volunteerism within our communities.

John Mariano: So that we think, this three-year plan will be able to help us develop and sustain an immersive culture of diversity and inclusion and ensure that diversity and inclusion are demonstrated through tangible actions and align our corporate social responsibility to identify opportunities and partnerships that materially impact the industries and populations that we serve.

John Mariano: Finally, one quick note, which you know, is as a privately held company and as largely a service provider to pharmaceutical biotechnology companies, our client base is looking at us to ensure that we are following these D&I initiatives. That we have best practices, that we are really pushing out these kinds of initiatives across the organization. And we are almost always asked about what those initiatives are and what we’re doing by the clients when they do preparations for an RFP or incline audits as well.

Ritu Kaur Cooper: So goodness, John you’ve shared a lot. I mean, it’s incredible. I mean, you can tell that a lot of work has been put into that.

Ritu Kaur Cooper: So of these initiatives that you have, whether they’re recent or you’ve had them for a while, which ones of them do you feel are having the greatest impact on your organization?

John Mariano: I would say that there’s probably three or four. The employee-led committees that we formed early on were extremely powerful and had a great impact in developing the course of action we wanted to take. And it came right from our employees, we had volunteers, we had a number of committees set up, they all worked together collaboratively and created a roadmap that was ultimately developed into our three-year plan.

John Mariano: One other thing is we’ve established partnerships with several nonprofit organizations that we feel you will help us provide internships, sponsorship donations within the communities we serve, where our offices are located to create a bigger impact in that regard. And the third one actually is probably the volunteer time off, like I said, that was announced last week and it really had a great reception amongst the employees and I think it really shows, we’ll talk about this from the leadership standpoint, but that leadership is behind this initiative. That they’re supporting the workforce’s ability to take time away from work and contribute back to the communities and the volunteer causes that you may feel are important to you and that align with the D&I initiative. So those probably are the biggest ones so for.

John Mariano: The final one that I kind of want to mention, at least here, it wasn’t necessarily an initiative, but last summer when so many of our communities were turmoil, and many of us were personally at turmoil about what we were seeing and what had happened with George Floyd, kind of obviously there’s just so many other incidents that we could mention that proceeded that. We had a series of Zoom calls, you know our business lines and the Zoom calls were largely within the business lines. But as general counsel, I was able to kind of sit in on some of those in addition to the corporate call. And those calls were so powerful Ritu, I can’t even begin to describe the impact that they had on me. And I think the impact they had on propelling or turbocharging the momentum for these initiatives to be adopted and enacted. The emotion, the raw emotions from some of our employees who have experienced discrimination, injustice, inequality was eye-opening. I was on one call where a senior executive was literally in tears on the call hearing stories from some of our younger employees who face this every day, who confront this inequity in terms of it being singled out. One person said, “Walking while black.” You just can’t fully understand it, probably ever. But, when you hear it and see it and listen to it on a Zoom like that, obviously, the best we could do was a Zoom because of the pandemic. But, it had a tremendous amount of power. And the additional thing in that was a lot of the young mothers that worked for us or mothers with young kids, I should say, perhaps. They talked about the struggle of teaching their kids right and wrong.

John Mariano: Teaching their kids equality. Teaching their kids freedom. Teaching their kids about a non-racist society or a non-racist basis. And, literally, just getting smacked in the head over and over again when they see these events happen. And when they have to explain things like this to their kids. And the frustration that they had. That was really a very, very powerful initiative. It had a tremendous impact. If that’s something that an organization can do, I would strongly encourage that they do it. Because that’s the listening and learning that needs to happen to really see the impact that some of these initiatives can have in the real world.

Ritu Kaur Cooper: John, I couldn’t agree with you more. And actually, I’m getting probably a little emotional hearing you say that. But we did a similar thing, John. We did some town hall meetings. I was one of the facilitators. I did not expect to become emotional when I talked about myself and my family. Just thinking about it right now… I don’t know if you know John, but my husband is black. I’m married to a black man. I’m raising two black boys as well as Indian boys. They’re black and Indian. And I will be honest. I’ve always been a worrywart and never really felt totally comfortable until Tony has come home or he calls me when he gets to his location. But in the last few years, if I go four or five hours and not hear from him, I wonder. I do. I’m sorry. I didn’t mean to…

John Mariano: No apologies necessary. You are reminding me exactly of the force of impact that those discussions had. To hear that really brings home the challenges that we have ahead of us. I can only say that from my standpoint, one of the things that I felt that came out of it best was, you know our chairman, Ethan Leader and our CEO, Mark Klein, they are our co-founders. Our ability to hear this, but then encourage these mothers, to tell them you have to stay strong, you have to continue to teach these pillars of equality, justice, diversity, inclusion, those kinds of things to your kids. Because that’s what we’re counting on.

John Mariano: It all happens at the ground level. It all happens. It takes a village. I think that helped some of these moms on the calls, to hear that coming from Ethan and Mark and Chad and me and some others, obviously that you know. I can say that it probably would be good if we moved on because your emotion is also getting me emotional, too. That’s exactly the way I felt. It was really, really powerful stuff.

Ritu Kaur Cooper: Then I’ll switch to a funny story. I don’t know if Tony and I are doing right or wrong. When all of these issues have been occurring in the last couple of years, we asked our older son, who is now seven. I think at the time he might’ve been five or six. We asked him, “Shaan, you know that you’re black and Indian, right? That makes you Blindian.” And he looked at me and he goes, “What mommy?” He said, “No, I’m not. I’m peach with cream on the inside.” And he’s looking at his hand as he’s saying that. And Tony and I look at each other like, oh my God, are we doing something wrong? I said, “No, you’re black and Indian because your daddy is black and your mommy is Indian.”

Ritu Kaur Cooper: And he said, “Mommy, daddy’s not black. His skin is brown.” And then I repeated, “No, your father is black.” He’s like, “Do you mean because he’s wearing a black shirt?” Honestly, John, Tony, and I looked at each other and we’re like, oh no, either we’re doing something right or we’re not doing something right. You’re seeing the world through a five, six-year old’s eyes. For him, we’re very, very fortunate to have a very mixed group of friends and family. In our culture, we call anyone who is your parents’ friends, auntie, and uncle. They call someone who is white auntie. They call someone who’s white uncle. They call somebody who’s black auntie. Asian, Indian. For them, once we tell them that they’re part of our extended family, that’s their response. I’m hoping that you’re right, that if we’re teaching that to these children and that when they see everyone, they notice that they’re different. I don’t want them not to notice the differences. But, that they all look at them and they all look at everyone as equal.

John Mariano: I think the younger generation, I’m a little more senior than you. I have a 26-year-old, a 24-year-old, and a 22-year-old. And the extent to which their interactions are colorblind, amaze me. This is my own personal viewpoint. But, there has been a seismic shift in that from a generational standpoint. I’m hoping that that is also a foundation for our ability to move on past some of these things that have really been a drag on the country, our culture, and so many other things. I’m optimistic in that regard. I really am. When you hear stories like that from you, when you hear stories from the moms with young kids and how they teach these kids and how they’re committed to teaching them about equality, justice, right and wrong. And then you see it when they get a little older like mine and how it translates into the real world and their lives. It’s pretty powerful stuff. Yeah. It’s pretty good.

Ritu Kaur Cooper: Well, that’s great. But John also, that’s a tribute to you and your wife. Raising them. It’s not just to their world, but it’s also to what you see at home because kids repeat what they hear at home also.

John Mariano: And that’s really one of the big takeaways. Not just the listening and learning and the eye-opening aspect of hearing these stories directly from some of our people. But, that created an opportunity for us to encourage those same people to continue those kinds of lessons and molding and building of your kids. And it is. It’s vitally important.

Ritu Kaur Cooper: That’s amazing. With the initiative that you have, John, how are you capturing any of your DEI metrics or ensuring that they’re working or evaluating them?

John Mariano: Probably no different than you guys would. In an analytical world, as we get more and more into metrics, controlling everything we do. Again, we have three elements here. The first is engagement. We wanted to engage our employees in these kinds of things. We created interactive presentations on our intranet, as well as we have something called Precision Pulse, which is a newsletter that goes out every week. For example, one of the early things we did was we launched a company-wide voluntary training.

John Mariano: We went out and licensed a video called the History of Race in America by Jeffrey Robinson. And we built that into an initial, internal DNI curriculum. If you can get your hands on it, it was relatively inexpensive, the license arrangement. In fact, they were thrilled that it was being used for this purpose. that’s a great and powerful presentation that we launched early on. And that attracted people in to make them understand what we needed to do here. The second element would be the metrics, the numbers. We hired a consultant, like most businesses would, in an area that we want to learn about and understand and get ideas in terms of how to address, no different than a law firm getting a Management Consultant or a consultant on how to run the business or a consultant on how to train your associates, or whatever the topic may be, how to train your partners maybe even. That consultant helped us map out the kind of industry-wide benchmarks that we needed to look at. Now, coming back to three’s here, but three aspects there were total US workforce percentages, our industry, biotech, and then our company and how our numbers matched up to see where we need to improve and where we need to target further inclusion and diversity.

John Mariano: We were fairly pleased, at least at first glance. We exceed the biotech industries metrics for percentage of employees that are black and Hispanic, so we were happy to see that. Without the framework of the initiative that we have going on now, we had at least created a workforce that we felt was balanced and moving towards more diversity and inclusion. We were surprised we were very low on Asian employees. We were well below the biotech industry percentages, but we were well above the overall US workforce. So we’ve got some work to do there, but that was great to kind of look at a roadmap basically, kind of a map of everything that we can figure out where we needed to put some attention to.

John Mariano: And finally, again something else that is just recent, we have hired a Head of Diversity Inclusion in Corporate Social Responsibility. Her name is Temi Adonja. We were able to steal her from Price Waterhouse, which we were very happy about. She just started about a month ago and she’s obviously on a listening and learning tour now to kind of absorb a little bit more about what we want to do, understand our plan better and we are all really really excited about that that’s for sure.

Ritu Kaur Cooper: That’s incredible. John, quick question because you mentioned US-based and you guys are global, do you have initiatives outside of the US and if so, are they different? What do they look like?

John Mariano: We have included Canada and Europe in these initiates and they’re not very different at all. The interesting thing from the European standpoint is the challenge there was translating the initiative out of a stereotypical understanding of America and racism, frankly, and into cultures that actually very very open to diversity. Many of our European, notwithstanding the rivalries within European countries or nationalities, many of them were all like, “Well, that’s what we do here. We don’t look at people as black or Indian or Asian or white. It’s the person.” And so, they were very receptive to all these initiatives, and I think uniquely interested to see how they could participate alongside an American company to help improve diversity and inclusion. So that’s been a big plus. We have HR Directors in Europe who help work with that and Temi will help be a global enterprise-wide leader of the diversity and inclusion initiative, too.

Ritu Kaur Cooper: That’s great. I definitely would love to connect with her in six or nine months to see what she’s learned. I think that would be a really great perspective. It’s like you said right now her job is to just listen and to learn and then assess. Well, congratulations on that. That’s a big deal. That’s a really big deal. We’re trying to walk the walk. Exactly.

John Mariano: We can talk all about it all you want, but until you start dedicating resources and time and talent to this initiative, that’s all it is, just talk of the talk. We’re really excited about Temi coming on board. I think it’s a huge addition. Again, supported at the highest levels of the company. This has been a priority for Mark and Ethan from day one. My hats off to them because it starts at the top. You’ve got to set that tone at the top. Like any service organization like or anywhere, you need it to come from the top.

John Mariano: You know Mark Klein a little bit. He tends to look at of our leadership and our dynamic duo, Mark tends to look at the bottom line a little more so it’s a big accomplishment to get him to dedicate the resources, anything beyond the basics here. I think that speaks volumes as to how important it is, and even he recognizes that, too.

Ritu Kaur Cooper: Absolutely. I think you’re touching right now on my next thought, which is leadership. Obviously, you’ve put the resources in, you’ve hired someone to be the global head of diversity for your organization. You’ve put all these other new initiatives or reinvigorated old initiatives throughout the organization. Tell me from your perspective, why is it so important for that tone at the top, to have leadership understand the diversity and inclusion initiatives?

John Mariano: It should not be as glib as walking the walk or as glib as it starts at the top, but let’s face it, it does. Leadership is critical in effecting real change. When leadership cultivates a culture of respect, education, and dialogue we know that our teams will do the rest. When you tie that into our guiding principles and having a common theme that leadership can embrace and then push down within the context of a DNI initiative like this it has tremendous importance and impact on our people. We have phenomenal people. You’re kind enough to say how much you like working with us and our teams. We really have phenomenal people. When they were offered the opportunity to identify challenges and encouraged to design the solutions we got progress. We put those employee committees together and that was really a big big step in the right direction early, an important step in the right direction.

John Mariano: Now, leaderships role is really, we’ve got to insure that we’re offering support, constantly supporting these initiatives. Whatever the forms are, developing the right forms so that we advance diversity and inclusion and advance it within our culture of the guiding principles I mentioned earlier. That’s really important. Like I said, it’s been embraced by our chairman and our CEO and I don’t know if I mentioned this to you before, but my little sacrifice as a somewhat of a leader was that my assistant Donnea McClinton who has been with me for quite awhile and is really invaluable to me, asked that she be given a new opportunity to expand her professional career and to be a leader and work hand in hand with Temi, our new Diversity and Inclusion Officer, to help push out and roll out these initiates across precision.

John Mariano: I had to give up Donnea to something much more important than my daily whims and eccentricities and whatever else you would call them, but that I think shows how there are all kinds of little opportunities to help someone really grow professionally within this kind of diversity and inclusion model. Donnea is black, she’s African American and she has embraced this new role and it’s just really really satisfying for me to see her want to do that and then to start on a path of success for that. You talk about getting emotional before, that gets me a little emotional now. I’m really proud of her. So that’s kind of the support. That’s kind of a real-world example. You got to get out of your comfort zone. I got to make my Zoom calls now and I got to do some calendaring on my own and things like that, but it’s all for the better. It’s for the better for someone like Donnea and it’s for the better for the organization.

Ritu Kaur Cooper: That is a huge sacrifice, John. Since I’ve known you, Donnea has always been there and is incredible. I think she knows what you’re doing before you know what you’re doing. But just like you said, that is amazing to recognize. I actually think it’s amazing that she felt comfortable to ask, which also then goes to your organization being a place that is supportive open because she could have been in an organization where she would have felt reluctant to even ask, to want to pursue and expand her professional prowess. So I think that’s … Kudos on both sides, but oh my goodness. I am so sorry.

John Mariano: Yeah. So far, so good. She’s been keeping an eye on me. I’m just really, really proud of her that she want to expand, obviously her professional career, but at the same time she wanted to play a leadership role in this initiative. She saw it as something important to Precision, and in her role as my executive assistant, or I’m not quite sure what her official title was, but my right hand basically, she’s a gatekeeper. She sees so many people interact with the legal department across the entire organization, across the entire world. And I think that she was able to take this broad-based knowledge of the organization and say, “Hey, this is something I can help with. I know these people, I know the players, I know people all across the organization. I know how they operate.” And it’s really just a great opportunity for her. It was a no-brainer. It was a no-brainer.

Ritu Kaur Cooper: That’s great. Well look, John, I could probably talk to you for hours. I do. I absolutely love talking to you. So I know I could.

John Mariano: The feeling is mutual.

Ritu Kaur Cooper: But our audience may not want to talk to us or hear us talk all day. So could you give our audience just maybe some best practices or lessons learned or something, just as a parting thought for them to think about as people go about their initiatives that they’re doing for their own organizations?

John Mariano: I’m afraid this is going to be a little repetitive, but I still love this whole idea of empowering your employees to create a structure to how this should move ahead, how an initiative like this should move ahead. That’s number one. And number two really, I think were these town halls, these Zooms. I learned so much. The lessons I learned in that were so powerful personally, professionally. I know we had internal meetings amongst the executive management group afterwards, after sitting through all of these. We had a number of meetings. And we were all blown away at the power of these stories, of these personal challenges that people have. You just get so comfortable in that work mode.

John Mariano: You are a longtime friend of a young lawyer who has worked with me for almost 20 years now. And I know her in this work context, but I don’t know those challenges she’s dealing with, with her kids at home and what they confronted and what they see and how it impacts her personal life. And to have this 360-degree view and to really understand the challenges that mothers with young children are dealing with and the challenges that some of our younger members of the workforce are dealing with. Again, eye-popping. That had an incredible impact on all of us in the leadership group, as well as you just learned a lot of lessons about how challenging it is to raise kids, as you noted, the challenges that you yourself personally deal with. To hear that just creates a whole new perspective, I think.

John Mariano: One other thing was really interesting, which I guess maybe a simplistic way of looking at where we are in the arc of time in this challenge that our country’s had. So many of our minority younger employees, when they would tell stories about being picked out, being pulled over by police over and over again, by being afraid to walk home because if they’re walking through a white neighborhood or something, I mean, just all kinds of stories that they told us. It came back to something that I think is really driving a lot of this today in our culture and in our country. And it’s very simple, enough is enough. Enough is enough. And to hear this from some of these younger kids, that had a big impact on me too. They’ve seen it with the parents. They’ve probably seen it with their grandparents, and now they’re living it. And their viewpoint is enough is enough.

John Mariano: And I think that really, we took away from that saying, it’s now or never. We can’t just let this float along or just let this slide. We need to take concrete action to put in place a real diversity and inclusion program for Precision that really works. And I think that was a big, big lesson that we learned to help propel us to that point. So we rolled into these town halls, whatever you want to call them, in June and July, and they were a really great way to let people talk, let people hear, listen, understand and learn. And it was really, really helpful.

Ritu Kaur Cooper: And because you love threes, if you want to say a third, I’m okay with it.

John Mariano: No, I think I’ll stick with two on that one.

Ritu Kaur Cooper: All right. No problem at all. Well John, thank you so much for sitting with me today, and if it is okay, I would love to be able to check in on you guys in six to nine months, and to see the work that Temi and Donnea are doing, and to see maybe where your program is.

John Mariano: That would be great. I’d love to do that.

Ritu Kaur Cooper: Awesome.

John Mariano: It’s always good to see you and get to do something fun like this. I almost feel like this is a kind of a Francesca Mariano podcast. That’s an inside joke for our audience, but Ritu can tell you if you want to ask about it.

Ritu Kaur Cooper: Well, hopefully, she approves.

John Mariano: Yeah, it’s not as much fun as she’s having right now talking about the Oscars last night, I’m sure, but this is still a really important topic. I am so pleased you asked me to share this with Hall Render and your colleagues. It’s been a great relationship that we’ve built over the last five years or so as a client of the firm’s. You guys have done great work, and I’m looking forward to a little up on this too. It’ll be interesting.

Ritu Kaur Cooper: Well, great. Thank you. Thank you, thank you. And I hope you have a great day. And to our audience, thank you so much for tuning in.

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A Look at the Evolution of Health Care Delivery

A Look at the Evolution of Health Care Delivery

Join Hall Render attorney Brian Betner, along with Jacob Bregman of Everside Health, Meg Duffy of DispatchHealth and Chad Knight of Encompass Health – Home Health & Hospice, for a discussion exploring how health care delivery is evolving with an emphasis on patient access, meeting patients where care is needed and the importance of integrated post-acute care. From the perspective of industry innovators, the panel will discuss the opportunities and challenges in navigating health care status quo and their thoughts what tomorrow holds.

Podcast Participants

Brian Betner

Attorney, Hall Render

Jacob Bregman

Everside Health

Meg Duffy


Chad Knight

Encompass Health

Brian Betner: Good afternoon everybody. Thank you so much for investing your time with us on what hopefully is a beautiful afternoon to you somewhere. My name is Brian Betner again, I’m an attorney with Hall Render.

Today we have an impressive panel on the whole notion and concept of the evolution of healthcare delivery. We’ll be talking about trends and opportunities and challenges in navigating the healthcare status quo, from the perspective of a few organizations making a splash in their respective areas, and hopefully touch some expectations and predictions for the future.

But before we dive into the panel introductions, I want to provide an overview for our panel of who we have participating today, and there’s a number of us across the country, whether as a participant, you’re a hospital or health system representative or multi-specialty group practice or home health or hospice, we have a broad array of individuals on the phone or on Zoom with us now and I’m sure you also have interesting insight experiences that may guide questions during the next hour or just short of that. So please use the Q&A feature to pose those as we proceed here over the next, like I said about an hour.

Our goal today is that whatever your role is in the industry, you’ll come away with something, a new idea, a fresh perspective, a new strategy that you can apply to your organization or your role as you navigate this evolving healthcare landscape. So to give you an idea of what to expect, we’re going to take a few minutes for each of the panels to briefly introduce themselves, tell a little bit about their background and the industry and their respective organizations.

I will then kick off our conversation with a very brief overview of what we mean by the evolution of healthcare, and then ask some questions that draw out some of the high-level themes that we hope to be talking about here over the next hour and gets you thinking.

And then toward the tail end of our hour today, we’ll open up the Q&A to give you an opportunity to ask specific questions that you’ve been thinking about or to help you navigate some of the issues that have been challenging for you. So with that, again, we’re grateful for your time today, unless you have any initial questions, let’s get started with a few introductions. And so now I’m going to turn to Meg Duffy with DispatchHealth. Meg, thank you for being with us today.

Meg Duffy:    Thank you, Brian. I’m happy to be here. I’m going to just as part of my intro cover three things. Who am I? What do I do? And what is DispatchHealth? So my name is Meg Duffy, I’m the VP of Strategy at DispatchHealth. I joined Dispatch in August of 2020 in the midst of the pandemic. And prior to joining DispatchHealth, I spent about a decade on the health system side working for various health systems in the industry, always in a strategy role.

And that brings me to my second thing. What is strategy? What do I do? Because often I get that question, what is strategy? And I would describe it as, the way that a mentor that was very important to me did years ago, strategy is watching what’s happening on the fringes of the world that we live in and how it’s going to impact how we deliver care in the future. So it’s exactly I’m aligned with, I believe the topic here, the evolution of health care delivery.

And then what does Dispatch do? DispatchHealth really as a tech-enabled provider, a company that partners with health systems and payer groups across the country, to deliver medical care in the home to hopefully avoid unnecessary urgent care emergency room visits and hospital admissions. So in a nutshell, that’s me, what I do in strategy and DispatchHealth.

Brian Betner:  Thank you so much, Meg, I really appreciate it. Chad, thanks for being with us today, tell us about yourself.

Chad Knight: Thanks Brian. And legal is not as interesting of an introduction as Meg’s in Strategy, but I’ll try and share a little bit about the company too. My name’s Chad and I’m general counsel, Encompass health, Home Health and Hospice. Our Home Health side is the nation’s fourth-largest provider of skilled Home Health services by revenue.

Our hospice side is the eighth largest provider, we operate in 31 States with the concentration in the Southern half of the US. And then just Home Health patients are frequently referred to us following a stay in acute care or inpatient, rehab hospital or other facility. And we also have many patients referred from primary care settings and specialty physicians without a hospital stay.

Our patients are typically older adults with three or more chronic conditions, significant functional limitations, and may require a number of medications. We also provide Hospice services to terminally ill patients. And look forward to sharing more through this panel. Thanks.

Brian Betner:  Oh, that’s great, that’s great. Thanks so much, Chad. Jacob, so it looks like we’re interrupting your mountain retreat, so sorry for that, we really appreciate you giving us time here this Thursday afternoon.

Jacob Bregman: Well, thanks Brian. Good afternoon everyone, and thank you for having me. My name is Jacob Bregman and my role is the market president for the West side of the United States for Everside Health. So in that role, I’m responsible for operations and client relationships operating about 50 health centers. And before working at Everside health, which I joined in 2019.

Similar to Meg, I have some background working in health systems, so I worked at university of Colorado hospital here in Denver, prior to that I worked at DaVita dialysis company. And started off in healthcare at the advisory board company in Washington, DC.

If you’re wondering what is Everside Health? So Everside Health is the country’s second-largest provider of direct primary care. And Everside Health has a new name and a new brand for us just within the past few weeks. Those on the call may know us as Paladina Health, Activate Healthcare or Healthstat. Those are the three legacy companies that merged together to become Everside Health.

And what we do in a nutshell is we partner with employers, we partner with unions and we develop onsite, near-site and virtual primary care services. So the typical challenge that we address with our clients is groups, particularly employers are seeing healthcare costs go up and up and up, but they’re not seeing necessarily the quality of the health that their employees and their dependents are receiving going up.

So our model involves really giving primary care providers a lot more time to spend with their patients, longer appointment time, smaller panel sizes. We hire providers who work at the top of their scope to fulfill potentially up to 90% of a patient’s healthcare needs inside primary care. And then we try to make the incentives aligned to ensure that we’re providing high quality and at the same time, low-cost primary care. So that’s Everside in a nutshell, and again, thanks for having me.

Brian Betner:  That was great, Jacob, thanks so much. So you touched on a number of issues, hopefully, we’ll explore here today. So let me… As I commented on a few minutes ago, before we dive into the panelist perspectives and experiences, I want to give a very brief backdrop. So we talk about the evolution of healthcare. We’ve had a bit of a level set with everybody in terms of what we mean.

So when discussing the notion of an evolving healthcare landscape, in terms of how and where care is being delivered, it’s important to have a background that speaks to what’s driving the evolution. And so here’s how I’ll tee that up for us, just so we’re coming from the same point.

We’ve had a perfect storm of sorts for the last 20 years or so, and if you want to go back to 1999 and 2001, the whole notion driving quality, that really brought at least when you’re a healthcare provider and you’re involved in policy and quality and how we deliver. The Institute of medicine [inaudible] crossing the quality chasm release Seminole papers, that started a dialogue certainly within the federal healthcare system, in terms of the return on investment that American healthcare gets in a prevalence of patient safety events, et cetera.

And then when you compound that with social security trust fund insolvency issues, CMS’s hospital quality initiatives, the joint commissions national patient safety goals, dramatic advancements in HIT. I mean, if you go to any healthcare provider from a line item standpoint, that health information, whether it be the chief technology officer or whatever the title is, they have an insatiable budget, because there’s all sorts of toys out there, that dramatic advancement in HIT are really driving things.

The advent of the triple aim, certainly increased fraud abuse compliance enforcement with additional funding, which creates scrutiny and opportunities to avoid certainly the whole notion of corporate negligence and negligent credentialing takes a very significant role. A host of market trends, patients have a greater expectation today in their experiences and their quality and their outcomes. And certainly quick-moving commercial payers.

That entire perfect storm that’s been happening the past 15 plus years feeds into what’s happening today, there’s a longstanding Axiom that continues I believe to be true, which is that reimbursement policy drives delivery system change. And we have seen that through the affordable care act, now just a hair over 11 years, two days ago, it was 11 years old, I guess.

But CMS has made its goal very clear and shifting that the largest payer in the country in terms of lives touched in relationships with healthcare providers, its goal of shifting Medicare and Medicaid away from fee for service, to being more oriented toward value-based and pay for performance, quality control, cost control, driving integration among providers, et cetera.

But this is really challenging when you consider that so much of the foundation of our healthcare infrastructure is built on or has been built on not inappropriately, but is built on acute care, and inpatient focused mindset, patients coming to providers, certainly a hospital anchored design, a hospital-sponsored and funded design, if you will. And these and other factors have contributed to a very meaningful shift in where and how care is provided.

Generally, I would say an emphasis on primary care, pre acute and post-acute, care of individuals and certainly end of life issues among other matters that are starting to become prevalent because of the costs involved in care, there’s a data point, an overwhelming percentage of Medicare’s budget is attributed to the last 180 days of life.

And we’re starting to look at that as a society and a country, and as a result of all these pressures, healthcare industry has been making efforts to improve its efficiency, access, quality, affordability of services, and lots of changes have occurred, and especially the past few years as a result of these efforts, for example, I mean, we see a tremendous, measurable, I should say, decrease in hospital admissions as more people are served throughout the outpatient care continuum, we’ll call it.

And so, there is a confluence of events and activities, and we’ve got a lot of innovators around the country, it’s really amazing. Anything is impossible in healthcare, but for some hurdles and challenges, of course, that hopefully we’ll explore today. So with this as a backdrop, we’re going to turn to our panel, and Meg I’m not picking on you, we started introductions with you.

But I want to start with you here. And here’s what I want to set aside, so that everybody understands this. The whole notion of COVID elephant in the room, this is not so much a COVID panel discussion, but we can’t avoid it. It is probably the prevailing or the dominant experience for many of us, certainly over the past 12 plus months. But the past several years have involved some common denominators for all providers in terms of them shifting the patient experience and emphasizing quality, addressing population of health issues and certainly efficiency and cost control.

So with those dominant factors, Meg I want to start with you, because in some respects, DispatchHealth it’s existence, it has to do with many of these things. So, can you describe for us Dispatch’s mindset and how it shows it has started to address these trends?

Meg Duffy: Yeah, absolutely. So, I wish I could speak firsthand to being one of the founders of Dispatch, but our co-founders started Dispatch in 2013 really after decades of working as clinicians, our CEO Dr. Mark Prather is emergency medicine Physician and the stories he tells about seeing people come into the emergency department and thinking there’s got to be a better way, I don’t know that they’re going to get their meds, I don’t know that they’ll follow up with their cardiologist.

You know what? I don’t have any context of their lives, they come in, we treat them and they’re out and he started to think there’s just got to be a better way. So he started in Denver where we’re headquartered, piloting really with EMS agencies to re-imagine the 911 response. And using a proprietary risk stratification model and some logistics engine we have within our platform. We’ve been able to prove that you can safely risk-stratify patients, determine who’s appropriate to be seen in the home and effectively take those clinical capabilities to the home.

 We have a set of providers, an emergency-trained physician assistant, or a nurse practitioner along with a medical technician that goes in the home with the clinical capabilities to be able to treat people where they are and meet them where they are and avoid unnecessary trips into the emergency department. So saving the unnecessary costs, not just in the emergency department, but also for the EMS agencies and transporting those patients.

So we quickly realized, okay, not only are we able to accomplish this at a lower cost, but over the years now, as we’ve scaled the model across the country, here to date, our NPS score is still 96, which is just phenomenal, you don’t see that very often in healthcare delivery, that high of a patient experience for our net promoter score has consistently maintained that high.

Our outcomes we believe to be superior, particularly as we branch into areas like hospital at home where our readmission rates are less than 4%, our unexpected mortality is zero. And so we’re able to say, gosh, we’ve taken care back to the home, we’ve had to do some testing,  started small, but as we scale, we continue to see lower costs, better experience and better outcomes. And our providers love it. They have more autonomy, they are able to experience a better relationship with the patients, they see their pets and their family members, and they get that context of the social determinants of health that you may not get in other care settings.

So that’s sort of, you’re exactly right, we were born out of this mentality of, there’s got to be a better way to achieve the triple or quadruple aim. And I’d say, five-plus years later operating under the Dispatch health model, we’ve been able to prove that it’s possible.

Brian Betner:  So there’s a lot to unpack there. I like that. Jacob, let’s go to you. I want to understand the direct primary care model that Everside is largely built on today in terms of its priorities and emphasis. How does… Dispatch has found a sweet spot in terms of where it’s seen a void. What is Everside’s view in terms of how direct primary care plays into that?

Jacob Bregman: Yeah, absolutely. I love what Meg said and it resonates with our philosophy of, there’s got to be a better way. And I think the niche that we fit into is people who sponsor health plans. So typically employers, Taft-Hartley union groups, some benefits trust funds. As I mentioned before, healthcare is not necessarily going up, even as costs go through the roof.

And so our approach is basically to proactively and comprehensively manage primary care. And we do that through a mix of brick-and-mortar primary care clinics, and as I’m sure we could all speak to the growth of virtual care over the past year.

So a couple of things that I think are highlights of the model, we leveraged technology a lot to risk-stratify patients. I’ll give you an example, I know Brian, you don’t want to go to COVID quite yet, but it’s pertinent in this case. A year ago when nobody really knew what was happening with the Corona Virus, we were able to leverage our analytics and stratify our patients, basically depending on their risk factors, if they were to contract the virus, the higher risk folks got a personal call from their primary care physician, the next step down, they might’ve received a call from an advanced practice provider or from medical assistant or a web message, basically letting them know, Hey, we’re here for you and getting those patients, getting their medications refill, getting them care as they need it. Sometimes just reassuring people.

So not dissimilar from DispatchHealth, a big part of our model is keeping patients away from higher-cost locations for care, such as urgent care or the emergency department, and when possible managing healthcare within primary care. There are things we can do related to dermatology is a great example, women’s health is another example, wherewith the well-trained family medicine physician, our advanced practice provider, we can take care of those needs for the patient within our model at no cost to the patient. And that voids a specialty visit that enhances coordination. And because we’re not worried about following up on referrals and records and things like that and convenience and time savings for the member.

Brian Betner:  Does the current reimbursement scheme, the major payers, governmental and commercial, do they facilitate that? I mean, I often use an expression when I talk to physicians today that a lot in advanced practice professionals a lot is required of them today, and there’s no CPT code for it, right? They’re being asked to do things in a management way that may not fully align with the reimbursement system. Is the model you just described? Does it fit well or a lot of these things don’t value adds.

Jacob Bregman: Yeah, it’s a good question. So the broad model that we fit under is direct primary care, and the direct word basically references that we view our relationship as between the provider and the patient, whereas in traditional fee for service medicine there’s the insurance carrier if it’s in there. So for the most part, we don’t bill at all. There are certain instances where the IRS requires us to bill under high deductible health plans and things like that, but for the most part, members might… You might compare your access to Everside Health is like a gym membership. We collect a flat fee or a monthly fee, and then members come in and use our care as much, or as little as they need it doesn’t matter, there’s no impact on reimbursement if it’s virtual, if it’s in person, if it’s by a text message.

So that’s one of the really nice things, and I think the providers who work in our model really enjoy that, they’re not spending time billing and coding and up charging, they’re just focused on providing the right care to the patient.

Brian Betner:  So, Chad, Jacob just described a pretty flat relationship to payers, a little more streamlined, but that’s not your experience, right?

Chad Knight:  Right. And I mean, Home Health for a long time is very much fee for service, we’re seeing, I think within the past seven years, and it’s just growing and growing is new payment models. And so things that shift more to the value-based care like we talked about earlier, right now Encompass we’re collaborating with about 140 within different payment models, so these are NXGEN, ACOs, MSSP and direct contracting is one of the newer ones coming from CMS.

So, as that landscape changes our ability to fit in and provide more value-based cares is growing too, so I think that’s just going to keep increasing as we go into the future.

Brian Betner:  Is that having to maintain competency over 140 or so different payment models, how does that… Explain to me how that works? That seems a bit minomic.

Chad Knight:  Yeah, there’s probably only a dozen or so different payment models, but I think MSSP has been around and NXGEN have been around longer, so those are pretty standard now, but as we’re working on direct contracting models, that’s new and everyone’s getting their templates together and things, so that takes more time, I think that’ll get easier as time goes on.

But even just working with the 140 different, whether it’s physician groups or hospitals or ACOs, each of them depending on the region has different things that’s important to them and drafting the contract in a way that aligns best in the patient’s interest really is I think the fun part about the new models. So that’s what we’re working through and that takes time with each relationship.

Brian Betner:  Meg, Encompass can align through recognize participating provider arrangements with commercial payers and Medicaid, Medicare, et cetera. How does that work for Dispatch?

Chad Knight:  Yeah, I mean, we are contracted with 300 plus managed care contracts across the country, we have 150 plus covered lives that have access to DispatchHealth through those contracts, and then of course we see Medicare and Medicaid, and we’re looking at how to participate with direct contracting as well. Most of our interest comes from health system partners or provider groups that are taking risk that we’re able to demonstrate the value on their different populations, not to say we’re taking the risk directly ourselves, but we’re able to enter into an arrangement with those health systems or provider groups that are at risk and partner with them to make sure that we’re, again, risk stratifying, identifying the most appropriate patients that we can be helping offset unnecessary costs.

And then one of our main things always is to tuck the patient back into whomever is their primary care or whoever is their network to make sure that right now we don’t have necessarily that longitudinal relationship with the patient, but we want to make sure that they’re taken care of and tucked right back in. So regardless of the payer, that’s always top of mind as well, but I would say that the most attention from interest from the industry is coming from those that are already taking risks today.

So, what each of you has described assumes that the whole notion of helping a patient, engaging the patient assumes that their patients understand your models, they understand how to take advantage of it, they’re engaged enough to be, I mean, there’s a competency there, proficiency or knowledge, how does it even work? I mean, how does Dispatch or Everside or Encompass meet the patient so that they’re making an informed decision? Help me understand how that works, Jacob?

Jacob Bregman: Yeah, I think that’s a big part of what we work on every day, I think there’s a little bit of feedback we get sometimes when people first hear about Everside Health thinking, one of two things, one is this too good to be true? What am I missing? The second being, huh, I am not sure how I feel about my employer, my job being connected to my personal health care.

So how do we get through those things? I think it’s really a combination of education, of transparent communication. I mean, on the employer and the privacy side, we can talk to patients about HIPAA and privacy practices around the provider, patient relationship. Quite honestly, a lot of the learning just comes by word of mouth, I’m fond of sharing my own personal story. When I first got access, when I worked at DaVita, I had access to Everside Health as a patient, and I was one of those folks who said, I have a primary care provider I’m happy with, I don’t want my work in my personal medical life.

And then what happened is I got sick and my primary care provider, I called them and they said, yeah, we can get you in the next week. And my thought was, well, I’m sick now. And then I remembered through my workplace, I had access to Everside Health, I gave them a call, they said, can you come in in an hour? And I said, yeah. And they took that opportunity not just to treat what I was facing that day, but they said, Hey, if you’d like to come back in and establish care with us, we’d be happy to take care of you. So, that’s a lot of what we do patient by patient, just explaining what we do and how we’re in their corner. And patients once they come in once or twice, they typically keep coming.

Brian Betner:  All right, that’s rational, that makes total sense. Meg how does it work from Dispatch’s perspective?

Meg Duffy: Not too dissimilar, where once they’ve experienced us they’re ready to come back, but I will say it’s similar, it’s too good to be true, wait a minute, you’ll come to me within two hours or whatever it may be. So I would say, a couple of things that we do on our onboarding process, we try to make sure that we have appropriate reading levels and things like that of the language that we’re using to describe our services and do the risk stratification. So that way it’s translating well to the mass majority of callers, we have web-based, mobile-based ways that they can request care, so hopefully we’re also hitting people whatever is the methodology to request care that’s best for them.

And then I think we have… I don’t know most of our patients are new patients, we have a lot of return repeat patients, and we also have a lot of caregivers that are calling in on behalf of, so it’s me for my mother, or it’s, I’m a caretaker for somebody. And so often they’re the ones that are recognizing, gosh, I don’t have the time or the foresight or whatever to be able to plan accordingly a half a day or a full day or whatever it may take to get somebody into an urgent care appointment, especially if they’re homebound or have transportation issues. And so, a lot of times it’s the caregivers and we also have referrals directly from our providers and payers that we partner with.

So a lot of times they’re helping with managing up the Dispatch option as a choice for their members, and then sometimes even making the direct referral to us, should it be something where they can’t handle the need appropriately, or it’d be better suited for DispatchHealth to come in and treat that patient where they are.

So a lot of different ways that hopefully we’re trying to get the message out, but once similar, I experienced DispatchHealth firsthand and I mean, and definitely, that was long before I worked for DispatchHealth, like you were saying, Jacob, and I’m a believer from that firsthand experience. So it just takes one time.

Brian Betner:  So there’s an unavoidable theme in everything each of you has said. And when I think about access, when I think about how you generate your business and a referral mindset, a lot of it has to do with convenience and experience, staffing is everything for that, right? You want to get a dermatology appointment, you’re looking at March of 2024. Providers and availability of individuals.

So I don’t understand, help me understand how you accomplish access, convenience, that experience you just described, particularly given your scale and size. Chad, the scale and size of Encompass, help me understand from a staffing standpoint, how are you able to staff it? How does it work? How do you have the providers who are available at the right level, particularly, it sounds like we might be, the whole top of the license notion that I think Meg had mentioned, how does that work?

Chad Knight:  It’s been tough especially over the past year. The biggest thing that Encompass does I think is, we’re big on best place to work, and you’ll see that just throughout the country where we have offices. So I think it’s either corporate culture or that extra feel kind of the family feel that our offices have, that makes us different from other providers, and working another provider but staffing is difficult for all health care providers across the country.

Brian Betner: Are we talking largely APNs, PAs? What’s the license mix that dominates your rosters?

Chad Knight: Yeah. Nurses and physical therapists in Home Health.

Brian Betner: Okay. Jacob, how about you?

Jacob Bregman: Yeah, for us it’s a mixture of family medicine physicians, and then family medicine and trained nurse practitioners and physician assistants. And so we’ll work with each client when we’re establishing a new health center to discuss the right staffing mix for that particular location and patient population.

We find it works really well to pair the two together, so to have a health center staff by a physician complemented by an advanced practice provider gives the patient some choice, it allows some focus as we’ve been saying for each provider to work at the top of his or her license.

And I’ll echo what Chad said, especially as we talk about these innovative models, one of the challenges we face is recruiting providers who get it and they want to practice this way. And I think in our world for a family medicine physician who’s coming from the fee for service world, where they’re seeing 20 or 30 patients a day generally generating a lot of referrals and a lot of billing codes, it’s different.

A lot of our providers tell us this is the way I want to practice medicine, but on the front end, back to this too good to be true, we sometimes struggle with that. And the other part of our model is we want our patients to be able to access us, so we ask our providers to be on call 24/7, because we’d rather get a call on a weekend or in the evening than have one of our members go to the emergency department for something that we could have helped avoid.

Brian Betner:  So that’s interesting because there are jokes [inaudible] that physicians will choose, certain specialties at a residency, because they don’t involve call, right? And now you’re telling me that your FPs and your primary care advanced practice nurses and PAs they take 24/7 call.

Jacob Bregman: They do, yeah. Meg, how is staffing for Dispatch? You’re largely because of the … it’s much more autonomous, right?

Meg Duffy: So, actually, so I’m going to try to kill two birds with one stone here. So there was a question in the chat from Lisa Brandt, and I asked a little bit about our focus. We go to the home, do we use telemedicine? And so I guess to tie that into how we staff, we’re constantly focused on how we can continue to right-size care, we’ve limited resources, there’s not necessarily parody with regard to reimbursement across all different payers, and so what we’re trying to I think do is look at our risk stratification model and make sure that we’re optimizing it all the time.

And so we started off with the business model of sending out an emergency trained nurse practitioner and physician assistant paired with a medical technician into the home. And what we’ve found is typically our patients are chronically ill, elderly, and that’s appropriate, but there’s some times that it’s a snotty nose or a sore throat or whatever, and we want to right-size care, we don’t necessarily need to send out that full team.

So instead we’ve developed a model that we call tele presentation which is basically an enhanced or assisted virtual visit where we send out the medic, they’ve got the kit, the equipment, they’ve got a moderately complex CLIA certified lab that they can run point of care testing, but they’ve got the virtual APP on the other end. So that way we’re continuously right-sizing care. And so depending on the service that we’re providing, the staffing complement might be a little bit different. So it could be anywhere from a med tech tele presenting, full tele medicine. We could go all the way then with the hospital level of care in the home where you’ve got RN coming in and doing visits.

So, anywhere from that episodic intervention to now we do post-acute visits in the home. So after they’ve been discharged from a hospital at one of our partner systems, we’ll send in a nurse or a tech to do some follow-up, and make sure that within three days there are some services wrapped around them, we’re avoiding a readmission, all the way through a seven day episode, a 14 day episode, a 30 day episode, really just based on what the patient needs. So the staffing complement is all based on that sort of right-sizing care and right-sizing the resources needed to treat them appropriately.

Brian Betner:  I was going to hold this question for diving into COVID, Jacob, I promise we’re going to get there. Diving into COVID, but this relates to all this, Meg, because you just mentioned the role that mobile technology and telemedicine plays. Is telemedicine playing, COVID aside or COVID, let’s go ahead and go there. What role is telemedicine playing in your current delivery model? Is it dominant? Is it different post COVID or not? Jacob.

Jacob Bregman: Yeah. I think it has shifted, but I think it’s here to stay. And at the beginning of the pandemic, probably in April of last year, somewhere around 80% of the appointments Everside completed were virtual. And I think that’s stabilized, I’ll use the word stabilize, who knows, but around 30 to 40% now of care is still being completed virtually. I think there’s been a lot of learning and a lot of comfort development on both sides, both patients and providers. Patients realizing that this is something that is convenient and safe and trustworthy, and I like it. And on providers really saying that, hey, there’s a lot of medicine I can practice with a video feed or even a telephone call to the members.

And then we wrap that around the physical clinics, the health centers that we have. So probably the classic example is abdominal pain, there’s certain elements of abdominal pain that the providers can evaluate virtually, but probably the patient does need a belly exam for comprehensive care. So the same provider who speaks to the patient on the video visit can then say, great, if you want to drive over, we have an appointment this afternoon, and we can complete the care that way.

Brian Betner:  Chad, is technology or telemedicine or telehealth generally, is that playing a role in Encompass’s model or has COVID changed that?

Chad Knight:  It has, there were waivers this year to allow telemedicine visits, and we found that we use them I think more so when COVID was really bad and for our patients, it seems like a lot of them still prefer in-person visits. So I think telemedicine is here to stay, but I don’t think it’s going to replace having a nurse there in person.

Meg Duffy: I can tell a little story around that if it’s relevant, if you don’t mind.

Brian Betner: Oh, please.

Meg Duffy: Because you’re right, Chad, we’ve had the same response, particularly from certain consumer segments that are just, they love seeing their provider, they want to see their doc, who they’d been going to for years or whatever. But one of our partners in the Pacific Northwest, earlier in COVID said, Hey, we’re struggling to get our patient panel in to see their primary care for health maintenance visits, how can you help us with that? You have assets in the market, you’ve got teams that are already going into homes, is there something we can pilot there?

So over the past year we’ve been piloting what we call a clinic without walls, and it’s essentially one of our medical technicians going out into the home, and then tele-presenting back to our partners primary care provider. And for being able to, again, provide point of care lab testing, and some of that hands-on stuff that otherwise you can’t do with just a virtual visit. And we’ve now since been able to survey our patients that we’ve treated through that mechanism, through clinic without walls.

And all of them say that it saved them two or three hours than a typical visit would, all of them say that they loved it and that they would do it again, but all of them also said that their preference would be a hybrid model, that they would see their providers in person sometimes, and then on the off times, or here and there they’d be able to interact with them with the clinic without walls model.

So I agree, I think it’s here to stay, but there’s going to be this blend I think in the future, and we have to think about the difference in different consumer segments and their preferences and being able to accommodate those.

Brian Betner:  Does provider or physician… the acceptance of that model, a technician going in and facilitating that, providers accepting of it. I mean, you’ve got physicians like IO and that works for me, I like it. Some of them, okay, yeah.

Meg Duffy: Some of them. So some of them been kind of like, how’s this going to work, a little… some of the provider that we’ve had, a couple of providers that we’ve had piloting that have been wonderful and they are totally bought in once they see the technology, they actually say the heart sounds, the lung sounds, the ear sounds are better through technology than they are through a stethoscope or for what they’d be hearing in the office and they have the ability to record those things, go back and document it in the chart that way. So I think they’ve really seen the value.

And then just to, also while I have the floor answer a question I saw come through at least on the panel side, around we leveraged remote patient monitoring, we leveraged personal emergency response devices. And our view is that eventually we’re going to have to be able to partner with any of those solutions, any company, because we’ve got, again, a diversity of partners from health systems and payers that may have preferences for RPM or for pers devices. And we want to make sure that we’re leveraging those so we can keep people safely in the home, but that we can not create unnecessary limitations with which devices we can be compatible with.

Jacob Bregman: And if I can add one idea onto that, talking about the acceptance of virtual health across different areas of healthcare mental health, I think it’s been remarkable and a really great thing for society to see the very quick acceptance of virtual mental health care. I think despite all of the work that we’ve done over the years, there still is a little bit of a stigma for patients going into a psychologist, psychiatrist office versus finding a comfortable, confidential space to do a virtual visit. It has done great things I think we’ve seen within our population.

Brian Betner:  Jacob, that’s interesting, because I often think about building a… in emergency situations, this doesn’t really happen as much, but building a rapport, so there’s a trusted relationship, there’s a sense it’s hard to do that in initial virtual encounters, that hasn’t appeared to be a hurdle from every side’s experience.

Jacob Bregman: It really hasn’t, I think what you just described is what all of us anticipated at the start of this. And I think we’ve seen those walls break down very quickly, and again, on both sides, both from the provider feeling as though she or he is… it’s more challenging to create that rapport without seeing the person in person. And on the other side the patient feeling comfortable to have this type of relationship across the screen.

Brian Betner:  There’s a notion, I mean, if you go to most health systems websites today, you’re going to see the words clinically integrated, we’re a clinically integrated delivery system. It’s a strategy officer’s [inaudible] love it Meg. It’s a concept, now it has legal parameters on it, if you think from antitrust issues, but at the end of the day, I mean, it’s a delivery model and it assumes that providers are collaborating with other providers and you’re sharing information. How does that work within, Chad, from Encompass’s perspective, historically there’s probably a lot of handoff situations, right?

Your post-acute managing patients in a home health setting after discharge, post-surgery that sort of thing. What is clinical integration played a role in each of your models in terms of affiliating with other providers?

Chad Knight:  Yeah, I think more and more it’s coming up and providers are asking for it, so we have contracts where we share data, share metrics, track quality at its core I think it’s the same thing we’re all doing improving results for the patients, and that’s all of our goals. So the more that we can incorporate metrics that are aligned between us for the patient and actually track those, hold each other accountable, meet and discuss, the more we’re seeing benefits.

Brian Betner:  And, are those metrics. I mean, some of this is co-management, right? You and another provider type. I mean, is metrics, is that information that’s, is it solely within Encompass providers jurisdiction or some of it because it’s the care’s being managed with a primary care provider you’re not affiliated with, I mean, are they all internal metrics to encompass providers or are they metrics that kind of measure more of that continuum or other aspects of care that you’re not exclusively responsible for?

Chad Knight:  It’s both and it depends on the metrics, right? So, some data we’ll have to share, some the provider can add data to our EMR or vice versa. But I think in most cases it’s, we need to share reports and meet and talk and [crosstalk]-

Brian Betner:  Direct primary care. What’s that?

Chad Knight:  It’s not as easy as it sounds on its face, so.

Brian Betner:  Right. Jacob, direct primary care. How does that work with specialists? How does that work with relying upon the various specialties and subspecialties that your FPs and APNs, et cetera, lean on?

Jacob Bregman: Yeah. So I think in primary care we view our role as the quarterback or the coordinator of the patient’s care. And so when we think about specialists and referral needs, we kind of think about it in three tiers. So the first tier would be, with the right time and tools and training of our own providers, can we get this done inside Everside?

Now the next would be perhaps the, maybe it’s a diabetic and the patient’s situation is on the bubble at the edge of the telemedicine providers training. We leverage an e-consult service to do basically a curbside consultation in that case with an endocrinologist to get an opinion. And then that might result in a referral to that endocrinologist.

 One of the nice things about our models, because we’re working with clients, we work with a defined number of health plans, so each of our clients typically only has one, maybe a handful of health plan options. So we get to know those pretty well, who’s in-network? Who’s going to give us great quality, great service and keep those costs low? So that’s our view of the world of specialty, we as much as possible try to keep it in house, and when we do need to be on our specialist partners, we try to use the best plan information and analytics to make sure that we’re sending patients to the best specialist.

Brian Betner:  How does your EMR work? Providing access and populating it with those providers? Do you have relationships… you have relationships where they’ve got direct access, how does that work?

Jacob Bregman: Yeah, it’s a difficult question to… because there’s not just one answer there. Certain health information exchanges in different States make it very easy for us to retrieve information. Some people might be familiar with Epic, Epic has a care everywhere functionality that is very easy to use, so the primary care provider can get records more easily. But I’ll be very honest with you, there are still instances where we’re getting faxes and other records in older ways and we’ll incorporate those so we can make sure we have everything we need.

Brian Betner:  The occasional pigeon or so. Yeah. Meg, how does DispatchHealth integrate? You probably have given the remote monitoring technology, I’m sure you’ve got direct access. You’re an extension in some cases for your hospital relationships, right? You do have direct access to the EMR?

Meg Duffy: Depends on the relationship and we’re working on further integration with Epic specifically, but I would say, what we do is digest their network, and our platform is able to refresh that and make sure that if we need to send a referral we’re sending it within network for that patient. So that’s first and foremost.

One other things though that we find with our model as it grows and evolves as we become our own referral source, so when we’re in a patient’s home for an urgent care or emergency care level visit, six to 8% of the time, somebody needs to be admitted for further observation or for a short stay, and we’re able to evaluate their home environment right then and there and say, okay, would they be eligible to be admitted in the home.

 And so when you’re doing that with our model, we have 98% acceptance rates where patients are like, sure, great, okay, yeah, you can do that right here, I can safely be admitted at home, I’ll do it. When they’re in the hospital, and this also gets to another question on the Q&A, when they’re in the hospital and they already show up either by ambulance or self or whatever, and they’re in the emergency department and a physician says, Hey, we’re going to need to admit you, but we can admit you at home, we’re partnered with Dispatch or Medically Home or others that do hospitalization in the home. The admittance rate is I think less than 2% or something, because it’s very hard for patients, once they’re already there physically to understand, wait, I got to go home now and you can actually do that at home, but I’m here. So you don’t want to take care of me or, can you just do this now?

And so our acceptance rate when we’re referring to ourselves for that next level of care, are a little bit different than a specialty consult, but for that next level of care is really high. And so we continue to see benefit with having a full continuum of options to offer patients.

And then the question also starts to ask about the decline in volume, these are patients that I don’t think health systems will be incentivized for the long haul to keep them in their four walls anyway. And it’s actually going to be a win-win a benefit to the health system and the patient to be able to treat them at an appropriate cost setting.

So, I do think there may be a decline in admissions, but hopefully a pickup in value over the course of time, and then I do think that the reliance on elective procedures in the inpatient setting is short-sighted, with the vast majority of those things moving to the outpatient space safely, hospitals are going to have to figure out another way I think to partner with folks like us who are willing to help them create opportunities to right-size care and safely care for patients where they are when appropriate.

Brian Betner:  So, the whole notion of decline in volume is a good segue to address some COVID issues here. Chad, want to go around the horn here, but I think I want to hear from each of you on two items, what was the biggest impact COVID had on your delivery model? And number two, what do you expect… is COVID changing your operations beyond, let’s assume everybody’s vaccinated in 42 days and we kill this thing and the malls are full and everything’s happening, let’s assume all that. How COVID may change if at all, or is it not changing operations post PHE? Chad, how did COVID impact volume? How did you react and is anything going to last?

Chad Knight:  Yeah. So COVID had a lot of challenges for us I think like everyone else, our patient volumes decreased a lot in Home Health, we had decreases in visits per episode, and also on the supply chain side, we had disruptions, we had trouble getting masks and other PPE, so either delays in that or price increases. And that continued for months, so I think once that’s resolved and everyone has equipment they need on time and it’s not worried about getting it, that’s big difference. And I think you’re right, COVID could go away and I don’t know that anything changes from power handling it now, I think we’ve made the adjustments that we need in our operations to handle it if it comes up again and made improvements in where we’re at. So I don’t know that we’ll have… we’re not going to flip the switch or anything and change everything [inaudible] it’s gone. So.

Brian Betner:  So, that makes sense, Jacob.

Jacob Bregman: Yeah, for us I know we’ve talked a bunch about this shift to virtual, and I think that’s here to stay, I think finding a good balance between in-person virtual visits is probably what will be the future for us. I mean, to be honest, 10 months ago I was wondering, will we continue to build primary care health centers as we continue to shift to virtual? And the answer has been a resounding yes. And when we work with employers and union groups and other trust fund groups, they’re still interested in having an onsite and near site place where their folks can go to receive care.

If I can highlight maybe one other thing that was a silver lining or something good about the pandemic is I think it got everyone thinking about health care. And when we think back to the beginning when no one really knew what to do or how to get tested or things like that, the public health guidance was, go talk to your PCP.

And I think there were a lot of folks out there who said, I don’t have a PCP and that was their motivation to say, Hey, I probably need someone in my corner, and so they got themselves into the healthcare system which I think is great for everyone.

Brian Betner:  Yeah. Great talk. Meg.

Meg Duffy: Well, so COVID kind of threw us for a loop, similar things like everybody, we had to acquire PPE and make sure we had all the right safety protocols. But we were a leading indicator of COVID volumes, we would be getting called for asymptomatic testing, we’d have people with symptoms coming into their home to do testing so they didn’t have to go out in public and either risk getting the virus or risk spreading the virus.

And so it just accelerated, we had the busiest year, of course we’ve been growing year over year, but I mean, just way more than we would’ve anticipated, with just your seasonal communicable disease, and so COVID accelerated our business model, absolutely. But it also I think highlighted some areas of opportunity for us to, like we have been doing now is evolving across the continuum.

So early days we could get out there and we could send a team, and we were doing asymptomatic or symptomatic COVID testing, and we quickly realized, gosh sometimes for example it’s a whole family that needs the testing. How does that impact our logistics engine and our predicting on-scene time and some of those things. And so it’s made us think I think a little bit differently about how we’re onboarding patients, the questions we’re asking, how we’re working them through the process as well as rightsizing care once again, so I’ve said that a few times, but if we’re just doing a point of care tests, we can send out a medic, we maybe don’t need to send out a whole team.

And so just thinking again about what are the resources that are truly needed, because in the past year we were very full in all of our markets mostly with COVID. And so that is a little bit of a concern too, for us, just from seeing volumes drop for other communicable diseases, what will seasonality look like in the future? It’s kind of a wild card, I think, but should be fun to solve whatever that challenge may present.

Brian Betner:  Said by a true strategy officer, that’ll be fun. Yeah, I love it. So, hey, so let’s close with this. I want to ask each of you, your wishlist, your one item from your delivery model, meeting the patient, outpatient, home care. What is the hurdle that you want to overcome? What’s the wishlist? Is it a reimbursement one? Is it a regulatory issue? And your perspectives are going to drive this. I mean Chad’s a lawyer, so he’s going to want, we want free-market principles. What is the one wishlist that would absolutely optimize your strategic goal, your care model, et cetera. Chad, I’ll start with you.

Chad Knight:  Yeah. I think, so right now there’s I think a lack of tele-health reimbursement throughout healthcare. And so the reimbursement model needs to catch up to the technology. So that would be my first ask.

Brian Betner:  Right. Yeah. And there’s a long list of people behind you with that one. Jacob.

Jacob Bregman:  Yeah, for me it’s a bit of a buzzword, but value-based care. And that term has been around for a while and I still don’t feel like we’re where we should be, I think the world still revolves around fee for service and the incentives are aligned to provide more healthcare as opposed to the right healthcare.

Brian Betner:  Yeah, I get it. Meg.

Meg Duffy: I second both of those notions. So I agree, but I will add just for a different flavor, that for us, the variability in scope of practice, limitations by state, really, I think inhibits our ability to innovate and think creatively about how we use the right resources for the right care at the right place. So, that would be probably my number one if not for reimbursement.

Brian Betner:  Yeah, that’s absolutely huge, the inconsistency, we have 50 States you have to navigate with those issues. Absolutely. So we are right at the 60 minute Mark. And so here’s what we’ll do. I’m going to turn it over to Julie here in about 12 seconds to make a closing statement from an admin perspective. But we’ll take a look, make sure we answered any questions. Do not hesitate to reach out to us and follow up if you have any inquiries on anything you heard here today, I am absolutely grateful, you took an afternoon here in late March to speak with us and especially want to thank each of the panelists for their expertise and experience.

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EKRA Enforcement Developments and Moving Forward

EKRA Enforcement Developments and Moving Forward

Recovery Homes, Clinical Treatment Facilities, and Laboratories must continue to be mindful of the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”), an all-payor statute enacted in 2018 prohibiting kickbacks related to remuneration for referrals to these entities. EKRA’s passage generated uncertainty surrounding its applicability and enforcement, particularly regarding the statute’s breadth and its interplay with permissible arrangements under existing federal health care laws. However, the Department of Justice announced its first conviction under EKRA at the beginning of 2020, signaling the government’s commitment towards enforcing the statute and emphasizing the importance of structuring compliant arrangements.

Podcast Participants

Alyssa James

Attorney, Hall Render

Gregg Wallander

Attorney, Hall Render

Alyssa James: Hello. Welcome to Hall Render’s Practical Solutions podcast, featuring thoughtful analysis and insightful commentary on the legal issues facing the healthcare industry. My name is Alyssa James and I am an attorney with Hall Render, the largest health care focused law firm in the country. Today my colleague, Gregg Wallander, and I will be discussing the EKRA Law, which stands for Eliminating Kickbacks in Recovery Act of 2018. This law was passed in October of 2018 as part of a larger act known as the Support Act, which focused on substance use, disorder prevention, as well as opioid recovery and treatment. This law was passed with the intention of being a comprehensive law that would combat the opioid epidemic at various levels within the healthcare industry.

Alyssa James: Now, I am going to kick it over to Gregg to give us a little more background and an introductory discussion into EKRA and its implications.

Gregg Wallander: Thanks Alyssa. EKRA was ultimately buried in an opioid law when it was enacted, and really caught a lot of people by surprise. It was not part of the initial drafts of the Support Act, as Alyssa mentioned, but it ended up being buried in there like a peanut butter and jelly in between two slices of bread, and it’s right in the middle there.

Gregg Wallander: We are faced to deal with this law, which is very comprehensive. EKRA is an all-payer statute and it addresses services that are covered by any health care benefit program, so it applies to both federal payers as well as commercial insurers. The reason is because it’s a federal law and applies to programs affecting interstate or foreign commerce. But what it really does is establish criminal sanctions up to $200,000 fines and 10 years imprisonment for kickbacks with respect to services covered by any type of healthcare benefit program, as I mentioned. It prohibits kickbacks regarding the solicitation or receipt of remuneration for referrals to recovery homes, clinical treatment facilities, or laboratories.

Gregg Wallander: Laboratories have received the most scrutiny under this law at this point in time, and EKRA further criminalizes the payment or offer of remuneration to induce a referral. So soliciting or inducing the referral can cause liability under EKRA. This is a very broad statute that impacts the ability to pay, solicit or receive money in exchange for referrals or patronage for recovery homes, clinical treatment facilities, or laboratories.

Gregg Wallander: Now, where we see some of these issues in practice really come into play, what about employees? What about payments for marketing services, payments to independent contractors, those kinds of things?

Gregg Wallander: We have discounts with respect to pharmaceuticals. We have discounts with respect to laboratory services. We have discounts that go across the board in the healthcare continuum. We have employment arrangements and we have services arrangements. There’s a lot to deal with here with EKRA.

Gregg Wallander: Alyssa, let’s talk a little bit about the exceptions with EKRA. Let’s go through them and we can chat about them. As I mentioned, there are discounts across the continuum, but there is an exception under EKRA for discounts as long as they’re properly disclosed and reflected in the entity’s cost or charges. In the supply chain context, there are exceptions for this. There also is exception coverage language for Medicare coverage gap drug discounts. From a discount perspective, EKRA does have those two exceptions to keep in mind.

Gregg Wallander: Alyssa, let’s talk about payments to employees and independent contractors.

Alyssa James: Sure. Thanks Gregg. As you mentioned, there are several exceptions to EKRA. I think one thing that just kind of more broadly is important to note is that some of the exceptions under EKRA are less forgiving, or permit fewer activities than would be permitted under the federal Anti-Kickback Statute. I think it’s important to kind of keep in mind when you’re thinking through these types of arrangements that something may be permissible under the Anti-Kickback Statute but not permissible under EKRA, and so that’s an important distinction. To your point, Gregg, regarding payments to employees and independent contractors, there is an exception for that under EKRA, but that exception requires that the compensation that’s paid to those employees or independent contractors not be determined by, or vary based on: the number of individuals that are referred to a particular entity that’s a part of the arrangement, or outside of the arrangement; the number of tests or procedures that are performed; or the amount that is billed or collected from health care benefit programs.

Alyssa James: And so when you read the plain language of that exception, and then review the exceptions to the exception, if you will, EKRA on its face prohibits the commission-based payments that are very common, especially in the laboratory space for sales reps and similar positions. The types of arrangements that maybe would be permissible under the Anti-Kickback Statute, for example, don’t meet the corollary exception to EKRA because of those caveats of what those payments to employees and independent contractors cannot be based upon. EKRA really is trying to focus more on fixed-fee compensation for employees and independent contractors, which generally speaking is a pretty big shift for the industry as far as what would be permitted for those types of relationships.

Gregg Wallander: That’s spot on. We’ve spent a lot of time, as you know, dealing with questions from clients across the country. Every conversation seems to be, “Is this really true? Can we not pay a commission anymore? Can we not pay incentive for achievement in this regard? Every sales person is compensated in this manner.” We agree and understand this sentiment. It does seem very unrealistic that the intent was to be this broad when you’re dealing with the private commercial insurance world. But, as Alyssa mentioned payments to employees and independent contractors that are not determined by, or vary with individuals referred, number of tests performed, or amount billed, really cut off a lot of mainstream and accepted sales arrangements.

Gregg Wallander: There are already laws on the books as well as industry guidelines, like the Pharmacode and AdvaMed Guidelines, which govern institutional relationships and sales relationships between entities to remove issues of inducement. So there are already safeguards on the books, but yes, we’ve had to advise that this law is broad and it potentially implicates a number of commission-based and other sales relationships.

Gregg Wallander: I think there are entities saying, “Wait, it’s just really hard to believe that this can be intended in this manner.” We certainly empathize with that. I think a lot of folks have been saying, “Hey, let’s see how this develops and see if Congress changes its mind or realizes that this was really an overreach.” We’ve talked with our DC office folks about this, and it’s not clear that really there is an intent to revisit this.

Gregg Wallander: It can be politically expedient on either side of the aisle to say, “Hey, we’re against opioid abuse, and so we’re not going to touch any of these laws for fear of looking weak,” or some other term. Again, our interest is in making sure we get this right, but it’s not clear that this law is going away anytime soon.

Alyssa James: I think that’s exactly right, Gregg. In the law itself, there are references to regulations that may be promulgated in the future, and we’ve seen nothing to that effect. We have this law that on its face seems overly broad and much more restrictive than existing laws, and not just in the sense that it also applies to commercial patients in addition to federal health care program patients, but also just in the conduct that on its face, it permits.

Alyssa James: In the year-and-a-half since it has been issued, we’ve seen no proposed regulations or any discussion about forthcoming proposed regulations that would maybe help clarify or fine-tune a little bit the intent and maybe give some additional framework for healthcare organizations, especially labs and entities that contract with labs, to maybe give a little more flexibility, or at least move the needle a little bit back to where it was before. When we’re talking about this, even though we’re talking about this in the context of an opioid law, it’s important to remember that it applies to all laboratory services, not just those related to opioid testing and treatment.

Alyssa James: So it’s very broad, and I think there are a lot of stakeholders in the industry who maybe aren’t aware of how broad it is. Or, like you said, Gregg, just waiting to see what happens before they take action to restructure all of their compensation arrangements that they may have with employees or independent contractors, specifically, at least with regard to that exception. So far, we haven’t seen any sort of guidance or inkling from Congress or regulators that would help to narrow down that scope a little bit or provide any more clarity.

Gregg Wallander: In moving forward, let’s round out a few of the final exceptions, and then we’ll move on to enforcement. There is an exception for: waivers or discounts of certain co-payments or co-insurance as long as it’s in good faith and not routine; certain transfers to federally-qualified health centers under the Anti-Kickback Statute safe harbor; and remuneration made pursuant to approved alternative payment models, meaning different kinds of payment programs for the government.

Gregg Wallander: If you’re outside of the employment context and you’re looking at discounts or other kinds of payments, there are some other exceptions to examine and find out if you fall within those. The main question we’ve gotten after looking at the exceptions relates to enforcement, and with respect to all federal laws, usually when they get put on the books, there’s a time lag for enforcement as the Department of Justice gets its arms around it and as everyone in the industry kind of gets their arms around it. It looks like we’ve had to wait about a year and a couple of months for enforcement. EKRA was enacted in 2018, but just this year at the start of 2020, we finally have an enforcement action. Alyssa, you want to chat a little bit about that and go from there?

Alyssa James: Sure. As you mentioned, we’ve seen one enforcement action back in February. That enforcement action involved an office manager of a substance abuse clinic in Kentucky. That office manager was allegedly soliciting kickbacks from the CEO of a toxicology lab in exchange for urine screening drug testing referrals.

Alyssa James: The period of time in which the alleged conduct occurred was from around December of 2018 to August of 2019. In the period of time after EKRA was enacted, of course, but not an overly long-standing arrangement before it was under investigation. The office manager who allegedly received a check of $4,000 from the CEO of the toxicology lab as a part of a larger package of promised inducements (that were not actually received) ended up being sentenced to five months in prison followed by an additional five months of home detention, and was assessed a fine $55,000.

Alyssa James: Although the alleged inducement or kickback was really only valued at $4,000, her fine there was $55,000 plus time in prison, which is obviously significant. It doesn’t go up to the maximum allowable under EKRA which is up to $200,000 in fines and up to 10 years in prison. But certainly, it would appear that the government is trying to let folks know that the enforcement under EKRA, if you find yourself in that position, will not be taken lightly given the prison time and the fine assessed in the one enforcement action that we do have.

Gregg Wallander: Yes. This is significant, as again, when we wait for a law to be enforced, and people have wondered, “Can the government really mean this?” Well yes, they do. It is going to be a law that is going to be prosecuted in some manner. My sense is that we’ll see some sporadic enforcement. I think it’s going to take some sort of a marketing relationship, or some sort of sales commission relationship that has been very commonplace and deemed very legal forever, that rises to a level to see if in fact there would be congressional action.

Gregg Wallander: I think everybody needs to understand and to respect EKRA. There is an enforcement now on the books, it’s there. There was a $4,000 inducement situation which resulted in a $55,000 fine and five months in jail. Pretty significant given what the issue was.

Gregg Wallander: We’re going to have to continue to monitor this. Our advice is to continue to monitor EKRA. I think folks need to be aware of the scope of EKRA and that you can’t just assume that because it’s not government, that you don’t need to review all your relationships. You do need to review them. Again, don’t assume that if it’s just commercial, that you can move forward. Again, the government’s recent enforcement action underscores the need to remain keenly aware of the statute and maintain compliant arrangements.

Alyssa James: I think that’s exactly right. I know we’ve seen an increase recently in the necessity of EKRA-related analyses in light of the COVID-19 pandemic, for example, and proposed arrangements with labs related to COVID testing. Again, EKRA is not limited to opioid-related services and testing and there was a flurry of new arrangements and continue to be, to some extent, as a result of the pandemic that we’re currently facing. It’s important to keep EKRA in mind there as well and the implications that it may have on those arrangements.

Alyssa James: Of course, I think when folks are faced with very time-sensitive analysis and arrangements because of the nature of COVID and wanting to get that testing up and running, it’s easy to quickly put those arrangements in place without vetting out some of the regulatory implications, especially those like EKRA that folks may not be as familiar with. While there have been waivers issued for certain fraud and abuse regulations related to COVID treatment and responses, which we’ve discussed on previous podcasts, there have been no published waivers that are corollary to that for EKRA. So, it’s something to keep in mind. Just because something is in response to the pandemic doesn’t mean that these regulatory implications may not still be there.

Gregg Wallander: Exactly. In wrapping up, if you’re dealing with recovery homes, clinical treatment facilities, and laboratories, be aware of all of your relationships. Take a good inventory of them. Talk with counsel and see if any modifications are necessary. Appreciate everyone listening today and hope you are all safe during this time.

Alyssa James: Thanks everyone.

Gregg Wallander: Thank you.

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Navigating COVID-19 Contracting, the Stark Waivers and Why Providers Need to Act Now

Navigating COVID-19 Contracting, the Stark Waivers and Why Providers Need to Act Now

Alyssa James and Joe Wolfe chat about the latest guidance on the Stark Law waivers and why timing and documentation are critical for health care organizations that intend to rely on the waivers. 

Podcast Participants

Alyssa James

Attorney, Hall Render

Joe Wolfe

Attorney, Hall Render

Alyssa James: Hello and welcome to Hall Render’s Practical Solutions podcast featuring thoughtful analysis and insightful commentary on the legal issues facing the healthcare industry. I’m Alyssa James, an attorney with Hall Render, the largest healthcare focused law firm in the country, and today my colleague Joe Wolfe and I will be discussing the explanatory guidance that was recently issued by CMS in order to clarify certain aspects of the COVID-19 Stark Blanket Waivers and discuss how providers can respond to the waivers and the explanatory guidance in order to better modify their relationships with their physicians if they so desire.

Alyssa James: On April 21st CMS issued explanatory guidance to further clarify and elaborate on its intent when it issued the Stark Blanket Waivers that we discussed in an earlier podcast several weeks ago. Those waivers were issued at the end of March in response to the COVID-19 pandemic of course. But before we dive into our discussion today about the details of the explanatory guidance and other recommendations for providers, Joe is first going to give us a quick recap of the Stark Waivers and the types of situations in which they may be relied upon in order to set the stage for our discussion today.

Joe Wolfe: Yeah, thanks Alyssa and thanks to everyone listening to today’s podcast. Alyssa and I have been working through this kind of analysis around the Stark Waivers for hospitals and health systems nationwide as they react and continue with their physician contracting and fraud and abuse and related compliance issues. And on top of that, we’ve also been working with healthcare organizations to help develop documentation supporting reliance on these waivers. And as Alyssa hit on already, these waivers were initially issued back on March 30th, were made retroactive to March 1st, so they do cover any activities that fall within their scope going back to that March 1st timeframe. And I think providers were happy to see that retroactivity. Now they’re set to expire at the end of the declared public health emergency period, and so that tells us a bit about our timeframe we’re talking about, going back to March 1st through the end of the national emergency.

Joe Wolfe: This recent guidance that was issued on April 21st spoke a lot about the importance of timing. Essentially, the government said that if you’re going to rely on these waivers, the amounts you’re paying should be made within the waiver period. I think more than anything that means that healthcare organizations need to do their analysis and need to move quickly. And that’s because any payments or disbursements, whether it’s in the form of a loan proceed or additional payments for services or space or equipment or other items that occur after the termination of the waivers are likely going to have to meet the requirements of an actual Stark exception. And for many of our clients, we’ve always recommended they try to meet a Stark exception. But if they’re going to try to rely on these waivers for potentially more aggressive compensation terms or if they’re looking to pay above previously contracted rates, they might still want to look to these waivers.

Joe Wolfe: There could be some room for analysis here if some obligations are going to fall after that waiver period. The government gave an example of loan repayments that were agreed to prior to the termination still being okay if they fell after the termination of the waivers without being problematic. That example seemed to be where you would have a repayment of an obligation falling after the termination rather than a new disbursement, and that may open up the opportunity for reconciliation type payments or recapture payments after the waiver period. However, again, those new disbursements of money likely will need to be analyzed more carefully and you may need to look to existing exceptions.

Joe Wolfe: I think the bottom line here is for healthcare organizations that are listening to this podcast, if you’re going to rely on a waiver, you should do the analysis. If you have an arrangement that may not fit squarely within an existing exception, you may want to take steps now to address questions to try to understand whether you could pursue a wavered arrangement. Now you’d want to get contemporaneous documentation in place. The government has said that you should be ready to produce that documentation if the government asks for it, so you should be taking those steps now. I think all of that will help reduce future headaches. The government has said it would work with the Department of Justice to address False Claims Act relater suits or whistleblower suits after the fact here, where parties have acted with a good faith belief that they’re falling under the waivers, and that’s where this really fits into the overall compliance part. If you’re going to take actions now, if you line up reliance on the waivers and you have a good faith reliance on those waivers, it could help you avoid future whistleblower suits or hopefully the government would step in to move towards a dismissal if there is a future whistleblower suit.

Joe Wolfe: The waivers themselves, as we hit on in the earlier podcast, they’re not just a free pass. If you’re going to use them, you should identify a COVID-19 purpose. There were six of them identified in the waiver documents. Second, you should fit within one of the Stark Waivers. There were 18 of them identified in the first go round. And then you should develop the documentation supporting the use of those waivers. For those first six COVID-19 purposes, they fell in a number of different categories. The first focused on diagnosis or medically necessary treatment of COVID-19 for patients or individuals. The second focused on securing the services of physicians and healthcare providers to furnish medically necessary services.  Third, ensuring the ability of health care providers to address patient and community needs.  Fourth, expanding capacity of health care providers to address patient and community needs. Fifth, shifting the diagnosis and care of patients to alternative settings of care. Then a final number six, a very broad category that discussed addressing medical practice or business interruption due to the COVID-19 outbreak. That really gets at the scope of some of these COVID-19 purposes that you should align with. And as a threshold matter, you should figure out which of those you actually line up with.

Joe Wolfe: The new guidance we’re here to talk about mostly today discussed some different areas that did need some clarification around action and timing of relying on these waivers, about amendments to the waivers, the application of the waivers, indirect compensation arrangements and special issues related to loan, recruitment and professional service agreements. Alyssa and I are going to step through some of that guidance in this podcast. So Alyssa, I’ll turn it to you to start the discussion on some of the explanatory guidance.

Alyssa James: Thanks, Joe. That was a great recap and I completely agree with the examples that you provided in that discussion thus far. As Joe said, now we’re going to walk through some of the explanatory guidance and specific parameters and examples that CMS set forth. Something that’s important to keep in mind as we evaluate the waivers and the corresponding explanatory guidance. In that in that recent explanatory guidance, CMS reiterated that financial arrangements and relationships with physicians and referrals from physicians must still satisfy all of the non-waived requirements of the applicable Stark exception. Because many of the waivers may only weigh one or a few components of an applicable Stark Law exception, healthcare organizations need to ensure that their arrangements with physicians continue to comply with the remaining non-waived components of those exceptions. So, it’s just important to keep in mind that the waivers are not a broad brush to do whatever you would like in your physician relationships. We need to really, as Joe hit on as well, clearly focus on what those waived requirements are and then make sure that we’re satisfying any other requirements of an exception that may not be waived in a particular scenario.

Alyssa James: CMS also issued guidance on how to amend certain compensation arrangements in light of the waivers if required for your particular circumstance while still remaining in compliance with Stark. Due to the fact that so many Stark exceptions require that compensation arrangements with physicians be in place for at least one year, CMS has received some questions from industry stakeholders in response to their issuance of the blanket waivers regarding the ability to amend a compensation arrangement to account for those COVID-19 adjustments that they may be considering. And then along with that, the ability to potentially amend those arrangements again in order to, for example, revert back to the standard compensation terms that were in place prior to the COVID-19 pandemic adjustments and wanting to make those adjustments back to the standard compensation terms at the end of the public health emergency period.

Alyssa James: And so, in its discussion CMS reiterated some old guidance from the 2009 IPPS final rule that allows subsequent amendments of compensation terms of arrangements, even if those occur within the first year, so long as those modifications are set in advance, otherwise comply with the requirements of the Stark exception. For example, they can’t take into account volume or value of referrals of course, and things of that nature. And then the overall arrangement must remain in place for at least one year after the amendment. Therefore, healthcare organizations and providers could amend an arrangement to change compensation in light of that organization’s response to COVID-19 and then amend the arrangement again at the end of the public health emergency period or any time prior to the end of the public health emergency period if they don’t desire to continue that modified arrangement throughout the entire declared emergency and revert back to the existing compensation terms. So, CMS has acknowledged there’s some flexibility there, not necessarily in conjunction with the waivers but just in conjunction with their guidance and interpretation of that one year requirement more broadly.

Alyssa James: A more practical solution I think that we’re seeing rather than amending an arrangement to adjust for COVID-19 and then amending again and that we’ve seen a lot of clients doing would be to maybe include language in the initial amendment that states that the compensation will revert back to the prior compensation structure at the end of the declared public health emergency period if that’s your desired timeframe. This eliminates the need for two separate writings to document the change and then shift back to the prior fee structure, which just can help streamline things and make it a little more practical for providers and their physicians. We typically find that if we can limit the number of signatures that need to be obtained, for example, and the number of documents, it just sets the parties up for success as far as not having to spend so much time preparing documents and signing things and such.

Alyssa James: So, if you know at the outset of your COVID-19 adjustments when you’re doing that initial amendment that you’re going to want things to revert back at the end of the declared public health emergency and not prior to that, again they can’t continue beyond that, but within that time period and you’re going to want to revert back to what the compensation was prior to COVID-19, you could go ahead and include that structure in the initial amendment and potentially alleviate the need to do a subsequent amendment a few months or however long down the road.

Alyssa James: And now Joe is going to talk us through some of the additional guidance that CMS provided regarding things like indirect compensation arrangements and loan arrangements with physicians.

Joe Wolfe: Yeah, thanks Alyssa. First, one question that emerged from the initial Stark Blanket waiver guidance was how does this work with respect to indirect arrangements? And for those of you familiar with a Stark analysis, you know that an indirect arrangement is triggered if you have an unbroken chain of financial arrangements between a healthcare organization and a physician. And there is a more granular analysis around aggregate compensation that varies with the volume or value of referrals and if the entity has knowledge of the indirect financial relationship. And so, as healthcare organizations do the analysis around indirect arrangements, they would obviously like to know if they can rely on these Stark waivers. The government came out and said that the waivers do not apply to indirect compensation arrangements, and that is a practical matter there may not even be a need to look to the waivers because in many instances physicians will be deemed, if they’re owners of a physician organization, they’ll be deemed to stand in the shoes of their physician organization, or if they’re an employed position they may be permitted to stand in the shoes of their physician organization. So as a practical matter, many of those arrangements that may be indirect actually would become direct once you look to those deeming or permissive stand in the shoe rules.

Joe Wolfe: The government also pointed out that parties have the option to request individual waiver for their indirect financial arrangements if they have concerns about them fitting within a Stark exception and they’re unable to rely on the waivers. So again, the government here clarifying that these really are intended, the waivers are intended to protect direct financial arrangements including situations where physician stand in the shoes.

Joe Wolfe: The new guidance also spoke to the issue of repayment options for loans between entities and physicians. The government actually gave a significant amount of flexibility, noting that loans do not need to be repaid in cash. And in fact, healthcare organizations could look to in kind repayment as long as those in kind repayments are commercially reasonable. If there are situations where repayments are not commercially reasonable, those repayments may not fall within the waivers themselves. The government spoke about the need for the aggregate value of any in kind payments to be consistent with the amounts of the loan balance that’s being reduced through those in kind payments. And so, I think healthcare organizations that are going to look to in kind repayments should really do their work to make sure that they understand why the services they’re using to reduce that balance line up with any reduced payments.

Joe Wolfe: There also was some discussion around having a physician practice remaining in the community considered as in kind services. CMS did caution that relocation services to a community to establish a practice may be deemed to be a benefit to the community and not to the recruiting hospital. And I think that’s an important distinction that we’ve seen arise in prior commentary, that if the situation is one where the community is benefiting from those in kind services that may not be as appropriate to look at that as a viable in kind service that would reduce any outstanding payments. So again, the government did provide some alternatives here beyond just standard loan repayment.

Joe Wolfe: The government also talked about the repayment of loans, some of the timing issues that may arise as we think about the practical usage of these waivers. The government talked about in this guidance disbursements of remuneration after the termination of the waiver period having to satisfy an applicable Stark exception. That’s something Alyssa and I have both talked about, that if you’re going to have disbursements of loans or additional payments for services that are going to extend after the waiver period year, it’s going to be very challenging to rely on the waivers. That’s why you need to be doing some analysis using the facts and circumstances of your arrangement and really thinking about the timing and whether it’s going to be appropriate to continue to rely on those waivers. And if you’re, again considering these, you’re going to consider pursuing a wavered arrangement, you should do your review and your analysis and prepare that documentation now before the waiver period is over. And so, really this is some very helpful government guidance speaking to the timing and the ability to rely on the waivers and offering up some potential for in kind services to help reduce what liabilities are out there.

Joe Wolfe: I’m going to turn things back to Alyssa to step through a bit more of the guidance and then to close out the podcast.

Alyssa James: Yeah, thanks Joe. That was a great discussion of some of the additional guidance and options that providers may have. The last item that CMS addressed in its supplemental explanatory guidance is the concept of whether or not providers could potentially restructure income guarantees and other terms associated with existing physician recruitment arrangements with independent physicians and or physician groups in their communities. As you may be aware, there are instances where hospitals will enter into recruitment arrangements to relocate a physician to their service area and community, and that physician may be practicing completely independently or may be employed by another third party group practice. And so, those arrangements can be a great benefit for the community in order to get providers recruited to that area that may otherwise not have the means to relocate and start up a new practice in a service area that may have a needy population there.

Alyssa James: And so, there’ve been some questions CMS has received regarding whether or not those recruitment arrangements could be modified to potentially, for example, increase the income guarantee associated with that in response to the hospital and the physician practice’s COVID responses. In this explanatory guidance, CMS reiterated its long standing position that recruitment arrangements really should not be able to be amended to provide additional or potentially additional compensation to the recruited physician, because the purpose of that recruitment arrangement exception under Stark is to permit a physician to relocate to the community. If you’re amending a recruitment arrangement, CMS takes the position that that physician is already there and so they’ve already relocated their medical practice and the recruitment arrangement exception is not appropriate then to modify compensation terms midway through.

Alyssa James: That said, CMS did also note that there may be instances where other Blanket waivers would be appropriate to assist a physician or physician practice whose practice was experiencing interruption or struggling due to the COVID-19 pandemic. For example, providers could consider reduced rental rates to help these physicians or possibly below fair market value loans, those options that Joe described earlier, in order to assist the physicians in the community without restructuring their existing recruitment arrangement. So, all in all in this explanatory guidance, CMS has taken some follow-up questions that they’ve received from industry stakeholders and tried to clarify how the Blanket Waivers may or may not be applied to certain arrangements, which I think is helpful for providers and healthcare organizations as they look to utilize the waivers as well as maybe evaluate whether or not the utilization of a waiver is or isn’t appropriate for their organization and a particular physician arrangement.

Alyssa James: We hope that this discussion today has been helpful and has helped to interpret and discuss this additional guidance provided by CMS. When we’re evaluating modifications to various physician arrangements during the pandemic, of course it’s always important to remember to always pursue any compensation modifications or other arrangements with the proper purposes. Joe talked at the beginning about these proper purposes, but it’s just always important to keep that in mind with any sort of physician relationship. Also, remember to take action now to evaluate, potentially implement, and then also to prepare to wind down any compensation adjustments or modifications or new arrangements that you’re entering into during this COVID-19 time in order to ensure compliance with the waiver requirements regarding timing. As we’ve discussed, that timing element is very specific and very important when relying on the waivers, and so to make sure that you’re doing what you can now in order to make sure that you comply with those timeframes down the road. And as always, ensure that your organization’s strategic goals during this time are in line with the legal and compliance guidance and recommendations that have been issued by CMS and that we’ve discussed here today as well as on prior podcasts and articles that we’ve written in order to ensure that those strategic goals are in line with the legal requirements and vice versa. Joe, do you have anything else to add? Closing thoughts before we wrap up here today?

Joe Wolfe: Thanks everyone for listening to this podcast. As we’ve hit on a number of times, the time to act, to ensure compliance is now. We think that it’s important to act within the waiver period and documentation is always more compelling if it’s created at the time you were entering into the arrangements. And so, we think developing that documentation in writing right now is critical, whether it’s in the form of an amendment or a separate written agreement or some other type of supporting documentation. We’ve seen all of those approaches. We recommend that you do that now. You may want to capture the parties and the term, the type of the financial arrangement that you’re entering into, likely the proper COVID-19 purpose that you’re looking to, and the applicable waivers you’ve relied on. And Alyssa and I are hoping a number of healthcare organizations do that kind of analysis and we’re pointing healthcare organizations to developing best practices and making sure you have the tightest record that can help you down the road should you ever have to show that to the government or have to navigate a later compliance issue. And so again, thanks for listening in. I’ll turn things back to Alyssa to sign off.

Alyssa James: Thanks Joe, and thank you everyone for joining us today. If you’d like to learn more about topics that you heard in today’s episode, please feel free to visit our website at or reach out to either Joe or me via email. Joe can be reached at and I can be reached at Please remember that the views expressed in this podcast are those of the participants only and do not constitute legal advice. Thank you very much for joining us.

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Accelerated Payments and the $100 Billion Health Care Relief Fund: Financial Strategies for Providers and Suppliers

Accelerated Payments and the $100 Billion Health Care Relief Fund: Financial Strategies for Providers and Suppliers

The massive $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) signed into law March 27, 2020 includes $100 billion in reimbursement for hospitals and other health care entities to help cover COVID-19-related expenses and lost revenue.

Hall Render attorneys Liz Elias, John Williams and Lori Wink provide a 45-minute information briefing on the $100 billion health care fund, the CMS accelerated payment program and other key funding provisions included in the CARES Act. The briefing will also include recommendations about what you can do now to ensure your organization is prepared to access funding as soon as possible.

Podcast Participants

John Williams

Attorney with Hall Render

Liz Elias

Attorney with Hall Render

Lori Wink

Attorney with Hall Render

John Williams: Well, good day everyone. I hope everybody can hear me. I’m John Williams. I’m the office managing partner for Hall Render’s office in Washington D.C. I’m also the head of our Federal Advocacy service line. I want to thank everybody for joining us for this webinar on financial strategies for providers and suppliers regarding accelerated payments and the $100 billion healthcare release fund provided for in the CARES Act.

I am very pleased to be joined today by two outstanding lawyers who practice in the areas of Medicare reimbursement and regulatory matters. Liz Elias from our Indianapolis office and Lori Wink from our Milwaukee office. To give you an idea of where we’re headed today, Liz is going to walk you through the accelerated payment program. Lori is going to talk about the $100 billion in healthcare funding provided for in the CARES Act and then I’m going to discuss what might come next in a Phase 4 bill or as we discovered in the last 12 hours… 24 hours what might come as early as this week.

When we’re done, we hope you’ll know what actions you should be taking now and what steps you should take in the future and with that, I will turn it over to Lori. Lori.

Lori Wink: Thanks John. Without stating the obvious, we’re here today because expenses at health care organizations are increasing as they’re preparing for the COVID surges in treating patients. We see expenses increasing across the boards for our clients and at the same time there’s a significant disruption to non-emergent clinical services because there is cancellations and postponing of non-essential elective surgeries and procedures and clinical visits.

What we’re hearing across the country is about where… there’s a 40% decrease in these types of services being provided. One client we talked to, that was about a 200 bed hospital was losing on average about $4 million a week as a result of lost revenue and some critical access hospitals we’re talking to are seeing about a 70% decrease in this type of revenue and services because there’s no surge or cases yet in that case… cases related to COBIT in those situations but they still have the decline in revenue.

There are a number of relief funding opportunities available. In here we’ve listed 12 of the options. Today we’re going to talk about the accelerated payment program and the hundred billion in funding, but we do have full attendance that we’re releasing related to these other sources of funding and we do have additional webinars on these fundings and we’ve already had at least the first one with respect to telehealth. On the release funding strategies, what we’re recommending our clients do is they first establish a dedicated work group to really lead the funding sources and applying for the funding sources.

The next step would be reviewing these funding sources and we’re really making sure and encouraging our clients to monitor deadlines to understand the payment process with respect to these funding sources, whether it’s first come first serve under them. We need to get those applications in quicker and confirming eligibility. Then at the same time, you helped our organization’s need to track the expenses and the lost revenues related to COVID-19. There aren’t really specifics that we’re seeing on… at least in what we’re talking about today with respect to what those expenses in lost revenues are you. So you really need to create policies and procedures and just start that implementation process so you have something that’s defensible as time goes on.

Lori Wink: And then you need to submit the applications and the request as soon as possible, especially for those first come first serve and as those deadlines are approaching, then maintain the necessary documentation related to those expenses and then prepare for any reports that need to be submitted to the agencies that are releasing the funds and any subsequent audits that may occur in the future. The next slide is really just to emphasize those immediate stuff about identifying the source is in developing those policies and procedures for capturing the revenue and with that I’m going to turn it over to Liz.

Liz Elias: Thanks Lori. I’m going to talk about the accelerated payment program. Although it’s being only used a hundred times in the past five years, the CMS accelerated payment program is an existing program that allows CMS to accelerate and advance Medicare payments in order to provide emergency funding and address cashflow issues that might be caused by claims processing delays. It’s historically been used in response to natural disasters to accelerate cash flow.

However, under the CARES Act, the program has been greatly expanded. It’s essentially now a bridge loan that if it’s timely repaid can be interest free and likely won’t be viewed as debt on the balance sheet. It’s important to understand the eligibility for the accelerated payment program is not limited to hospitals. It can be accessed by other types of healthcare entities enrolled in the Medicare program as long as those providers have billed Medicare for claims within the last 180 days, they’re not in bankruptcy proceedings, they’re not under active medical review or any type of program integrity investigation, and they do not have any outstanding delinquent Medicare overpayments.

Perhaps most importantly, there is no specific need-based threshold to apply for the accelerated payment program. As far as what providers can request, most hospitals can request up to a 100% of the Medicare payment amount based on a six month look back period. However, critical access hospitals can request up to 125% of their payment amount for six months lookback period. Other types of providers and suppliers can request up to a 100% of the Medicare payment amount but only for a three month lookback period. These accelerated payment requests are submitted to the Medicare Administrative Contractors or in short the MACs.

It’s important to realize that the accelerated payment program as of this time are not in any way part of the $100 billion in the public healthcare and Social Services Emergency Fund that was also created by the CARES Act. The accelerated payment program is an entirely separate program. The applicable CMS guidance is not specific on how providers should calculate their accelerated payment amount or what types of documentation is required for that request. However, in speaking with various MACs over the past week and a half, we’ve gotten some information. CMS is providing the MACs a listing of the amount that each provider or supplier is able to obtain through this accelerated payment process, and that amount is the maximum that a provider can be approved for, the providers and suppliers can request less.

Generally speaking, these requests are going to be processed on a first in, first out basis and initially CMS stated that the MACs were going to issue payments within seven calendar days of receiving a request. However, in a briefing last evening, CMS Administrator Seema Verma stated that 17,000 accelerated payment applications have already been approved. Currently they are operating faster than the promised timeline. 25,000 applications have been received to date.

We wanted to give you an example of one of the accelerated payment request forms. This is WPS’s version of its form as of last Friday on April 3rd. Most MACs have revised their forms to simplify them and remove some of the certifications that are normally present under the regular accelerated payment program. However, we have confirmed with multiple MACs that they will accept all versions of the accelerated payment form whether it’s the CARES Act revision or the original form. Important to note on your form, when you’re completing your requests you should not include Part C or Medicare Advantage in your payment requests and we believe that the PSNR is a good source to determine what your request amount should be. There isn’t guidance out there specifically to point to a specific data source for you to use but the PSNR would be a good place to get that information.

Additionally, we’ve gotten information from the MACs encouraging us to tell providers that you would want to complete separate forms for sub units like inpatient rehab facilities and inpatient psych facilities and you’d want to send those in ideally in a separate emails so that they all have their own separate delivery timeline to the Mac. Likewise, if you bill under multiple MPIs, you would want to submit a separate request form for each NPI. Some MACs, they’re requiring these forms to be signed by an authorized official. If you’re not sure of who might be listed on your 855 as your authorized official, the person… if you complete a Medicare cost report, the person who signs your Medicare cost report is an authorized official and would be a good rule of thumb to use for signing these accelerated payment requests.

As far as the funds transmissions, these payments are coming through as regular Medicare remits. It is supposed to be the only thing that is on that remit and the remittance advice is somehow supposed to state that it’s the accelerated payment. The first payments went out overnight last Thursday on April 2nd. Anecdotally we’re hearing early reports that the initial payments are matching the requests or within the realm of reason. We do want to caution providers to watch the remittance advices carefully. We have received some information that CMS has given only three months of payment for some hospitals.

Similarly we are hearing that some critical access hospitals are not receiving the 125% payment amount. They’re receiving the 100% payment amount. These are being corrected as they’re being brought to the attention of the MACs and CMS is also working to update its list but if you do find yourself in a situation where the payment doesn’t closely match your requests, you might want to reach out to your MAC to see if you might fall into one of these outliers in the CMS data.

This is just an example just so you can see what the sort of processes and the requested amount and how they’re lined up with a payment and that this also has a critical access hospital and they’re just… you can see that as an example. As I said at the outset of my remarks, this is essentially a loan. It does have to be repaid. Currently the way the recruitment process is going to work for all providers regardless of what type of provider you are, the recruitment is going to start on day 120 after you’ve received your accelerated payments, and that recruitment is going to be against your paid claims.

Starting on day 120 you might experience a dip in your Medicare payments for some period of time while that recruitment is happening. For other providers besides hospitals, the recruitment period is going to last 90 days and on day 210 if there’s any remaining balance, providers will have 30 days to pay that outstanding balance or interest could start being assessed on day 241. There are supposed to be demand letters that are sent by the MACs, but we would recommend that providers calendar these dates so that you keep track of them internally just in case you don’t receive communication from your Mac. Just to recap, recruitment starts on day 120. Day 210 is your 30 day warning and on day 241 is when the interest could start to accrue.

Similarly for hospitals, they will also be assessed interest, but the interest for hospitals will not begin until one year after the accelerated payment is received. Likewise, you should get a demand letter from your MAC at the one year mark. The interest rate is currently set at 10.25%. The [HA 00:13:45] sent a letter earlier this week to advocate for a lower interest rate and possible loan forgiveness. However, in response to the HA’s letter from Monday, CMS Administrator Seema Verma made a statement that CMS is required to use that 10.25% interest rate because it is set by the treasury department and their hands are tied. We’ll have to watch and see if there are any further changes made to reduce that interest rate but right now CMS is saying that they don’t have the ability to adjust that interest rate.

Provide may also request an extended repayment plan if the recruitment process is not feasible for you at the 120 day timeline. There is a CMS manual process that outlines that and you should reach out to your MAC if you have any questions about the extended repayment plan, and just again to summarize for the hospitals, the deadlines would be day 120, interest day 365 would be your sort of warning and then you would have another 30 days. On day 395 is when your interest could start accruing and with that, I’m going to kick it back to Lori for some discussion on the $100 billion healthcare relief fund.

Lori Wink: The 100 billion in funding. Let me give you a roadmap as to where I’m going with this. First I’m going to start with a summary of the statute and the statute really is three pages of text in the CARES Act. There is no regulations and there’s no written guidance that we have with respect to the implementation of these laws. What we have are proposals from different associations that I’ll go through and arguably those are a little bit dated because then we’re going to go through the information that we have from CMS.

With respect to the hundred billion in funding, the CARES Act allows a hundred billion that’s available to providers until expended. That really makes it sound like it’s a first come first serve process, but we’ll wait and see how that works out and it’s for responses to the COVID-19 crisis. Is for eligible healthcare providers for healthcare related expenses and lost revenues that are attributable to the coronavirus. Now importantly in the CARES Act, eligible healthcare providers for purposes of this funding includes public entities, Medicare, Medicaid, enrolled suppliers and providers, for profit and non for profit entities that treat individuals with suspected or actual COVID-19. Now my slides aren’t working. There we go.

Importantly, this is not tied to the Medicare definition of a provider. It includes more than just hospitals and includes nursing facilities, physicians, ambulatory surgery centers, federally qualified health centers, rural health clinics, home health agencies and the list goes on. With respect to what’s eligible, again, it’s covered expenses and lost revenues. Now the CARES Act does stipulate that when they’re paying for the expenses or lost revenues, it cannot be reimbursements that are… expenses and revenues that are covered from other sources or other sources are obligated to pay for those.

The act also may include broad funding definitions. It includes alternative care sites, supplies including PPE, operational issues, surge capacity, et cetera, but because these are broad definitions, I really think that’s almost a good thing right now because as long as you can arguably and reasonably demonstrate that the expenses and the lost revenues are attributable to the COVID-19 crisis, I think there’s an argument that they’re covered under the funding source. Now, just to help put this in context, the Medicare budget in the last couple of years, it’s about 700 billion or this is a hundred billion, but it’s not just for Medicare. It includes Medicaid, uninsured population and private payers. It’s all the expenses and lost revenues related to this pandemic.

They’re also reporting in payment obligations or stipulations under the CARES Act. Providers are required to submit reports and maintain documentation to support the expenses and the lost revenues. Again we really encourage you to make policies and procedures or develop policies and procedures to help define those revenues and how they’re going to be captured and then maintain that documentation. It does say that HHS will provide these payments on a rolling basis so they’re not all at one and it does require that a provider apply for and justify the need for payment under the $100 billion which… I’ll come back to that point in a little bit, and then the options for HHS to provide those payments include prepayments, prospective payments and retrospective payments.

Some of the proposals that are out there, the first one, and again, I know these are a little bit dated. These were actually pretty good last week. Their proposal was to have a per bed payment for every hospital, would be 25,000 per bed, 30,000 for hotspots. If you had a 240 beds staffed hospital back they don’t define how bad is defined, we’re assuming it would be something akin to staffed bed versus licensed beds. You’d get about $6 million with a 25,000 per bed. Now in comparison, some hospitals that we’re talking to that are right around that 240 staffed bed level, they’re losing about $3 million at least a week in revenue from cancellations with no surges. It’s covering only about two weeks of just lost revenue, not the increase in expenses.

Some of these hospitals at about that size are applying for the accelerated payment through the accelerated payment program and they’re getting about 53 million. Some other proposals that are out there. There’s one proposal from about a group of nine hospital and physician groups and they propose to use the periodic interim payments for providers and suppliers. I think that one would be kind of difficult to implement. It’s tied to some older Medicare laws. It’s still used in some parts of the country but I think it was… just be more difficult, and then there’s the Federation of American Hospitals which they really advocate for most of the payments to be going to hospitals because they’re on the front line of treating patients in this crisis and they advocate for streamlined application process. It’s kind of a phased payment approach paying the hardest hit areas with immediate relief and then in June paying for March and April impacts and then final impacts in October.

But most importantly, we do have some reports out of Washington. The first report came out, I think it was late last week and the proposal was to pay hospitals and providers for uninsured patients that have the COVID-19. Under that proposal they would receive roughly the Medicare equivalent. In other words, what they get paid if they billed Medicare for the same service, and there would be a requirement that they don’t balance bill the patient, which would be the difference between the charges and what they ultimately got paid from Medicare. Estimates that have come out related to this type of funding, it would be about $40 billion or about 40% of the total that’s to be expended under this particular provision of the care act.

We do think that long-term it could impact the uncompensated care payments that hospitals get. We do think that would obviously be less impact than the direct payment through this a hundred billion in funding, but it would have some impact and it would also affect states disproportionately in hospitals… disproportionately depending on what did their uninsured patient population of, and then just yesterday, CMS Administrator Verma announced a second proposal where CMS would distribute about 30 billion this week yet and those distributions would be based on Medicare revenue and interestingly, the Medicare revenue is not defined, so we don’t know what the lookback period is to define how much different hospitals or different organizations would be getting and we also don’t know what types of revenue is Medicare or CMS would be looking at when they make that distribution, when they’re looking at hospitals and clinics and nursing facilities.

She did say that this would essentially be a grant with no strings attached, which is also interesting because the CARES Act did require, as I mentioned, that you maintain documentation to support the payments from the a hundred billion and it did require an application to justify the payment from the hundred billion source. We’ll see where that goes. How this is going to get paid as… what she said, it would be a direct deposit for Medicare providers as long as you’re set up for direct deposit. If you are not, it would require a simple registration and then the money would be released and she did say this was not a first come, first serve payment process so it’s available to all health care providers.

The other important thing to realize about this proposal is it’s really going to focus on organizations, healthcare providers with the majority of their payments or a lot of their payments coming from Medicare because it’s Medicare revenue. If it’s a provider with Medicaid private pay or a large uninsured population, those payments would be delayed and those would be released in the next round of funding and going to turn it over to John to see if has some input on these two proposals out of Washington.

John Williams: Thanks Lori. As regards the uninsured issue, just some background on the politics of all this. I’ve had a lot of people ask me, why are they going to use this uninsured money out of the $100 billion fund? And the answer is it’s pure politics. The administration does not want to reopen enrollment due to special enrollment under the Affordable Care Act. They have made a political decision that they are not going to breathe life into the Affordable Care Act if it can all be helped during this pandemic. That is the reason that they have decided that they were going to use this first chunk of money out of this fund to go to the uninsured.

John Williams: The other thing I would add too is… and Laura sort of touched on it. There was a Kaiser report that came out yesterday that shows that doing this… using this pool of money to fund payments for uninsured coverage could take up to somewhere between 14 to up to 40% of the 100 billion. That could end up being a really big chunk of change out of this fund, and as I’ll talk a little bit later, there’s already talk about getting more money into this. I think the only other thing I’ve got to add on that one Lori, is that what we’ve learned in the last 12 hours or so is that HRSA is going to be the entity responsible for making these direct deposits and HHS mentioned within the last couple of hours that they’ve already put out $1.3 billion to community health centers through HRSA so I think folks could probably look for those deposits to come from HRSA.

Lori Wink: Thanks John. Then the last thing that I just wanted to mention before turning it over to John again are, there are additional sources of payment both from the Medicare and the Medicaid program that are being just implemented through the regular payment process. For example, CMS has suspended the sequestration cuts from May 1st through December 31st and hospitals are receiving an additional 20% increase in payments when they treat patients with the COVID-19 diagnosis. They have eliminated the 15% reduction in clinical lab tests from 2021 to 2024 and I think that’s important because lab has just been such a focus with COVID-19 crisis, and as we move forward the CMS will cover… Medicare will cover the COVID-19 vaccine without any cost sharing once that vaccine is developed and they have delayed any Medicaid DSH cuts.

The last one I wanted to mention, and again, these are just examples, is that CMS and Congress has really expanded telehealth coverage for this crisis and I think it’s really important to think about that as we move forward because telehealth has been very limited in terms of coverage. Historically this has really expanded it and I think there’s some thought that that might become a permanent change and I know John has some thoughts on that he’d like to share also.

John Williams: I do, Lori. Thank you. Yeah. The telehealth stuff to me is fascinating because we’ve been following telehealth on Capitol Hill for years and years now and there’s always been a resistance to widespread expansion of the use of telehealth. Most people who are big advocates of telehealth believe that using telehealth will bring down the overall cost of healthcare. Well, the impediment in Washington for years has been the Congressional Budget Office and the Congressional Budget Office is the entity that’s responsible for determining what the cost of legislation is, and the folks that do healthcare at CBO, as we call it, they’ve always believed that the expansion of telehealth will cause an increase in Medicare spending because it will be so popular, it will be so utilized that it will actually cost the government more money than it’s going to save.

But, as I’ll mention again later, we are now in a world where no one is caring about cost and I think everybody is really seeing firsthand the benefits of telehealth and so I think you’re going to see a significant expansion that it’s here to stay as far as telehealth was concerned. Future legislation. In the days and weeks after CARES past we heard Democrats on the Hill saying that we’re going to need a fourth stimulus bill right away. From the minute the CARES passed they’re already advocating for a fourth. Republicans at that point were saying, no, you know what? We need to wait and see what impact CARES has on the situation before we go any further. That’s now changed. It’s completely changed and Republicans are on board and I think it’s really for two reasons.

One, the longer that it takes to get the money out the door the more pressure there is on law makers to do more. The other reason is that members of Congress are home with their constituents because Congress is in recess. They are at home getting an earful about website’s not working, about cheques not arriving and a whole host of other issues. On Monday of this week, house speaker, Nancy Pelosi hosted a conference call with all the democratic members of the house representatives and here’s what we know from people who are in that, who were part of that call and from other folks that we talked to on the Hill about what it is that Pelosi really laid out as what she wants for what we’re calling Phase 4 or the four stimulus package.

First thing is that the speaker Pelosi has said that the next bill is going to cost at least a trillion dollars. I think it’s going to end up being more than that. Congress never comes in below initial cost estimates of legislation and I think once that everybody starts getting their interests and their projects into a piece of legislation like that, we’re going to go way over a trillion dollars but what you’re seeing on the screen now is what Pelosi outlined on that call, and you’ve probably heard about some of these things already. You’ve probably heard, for example, that it’s taken up to eight weeks for paper checks to arrive from the IRS to those folks that don’t have direct deposit. So they feel like they need to do more about that.

The 350 billion for the Paycheck Protection Program isn’t enough. SBA is already… I mean, SBA was never built to distribute that much money this fast and we’ve also heard, I’m sure you have too, that banks are shutting off loans and so it’s been pretty much a hot mess and so they’re going to need more money for that. In the last 24 hours we’ve heard more about that and I’ll get to that in a moment as well. I like to highlight the OSHA protections here for a second. I had a health system that I spoke with earlier this week, ask me if there was any appetite on Capitol Hill to ease OSHA restrictions given everything that’s going on and the answer to that is actually no. The appetite on Capitol Hill at this point is to increase OSHA protections for medical personnel and for first responders.

Now, something else that’s happened in Washington is that the democratic leadership on healthcare related committees in the House and the Senate have made clear that they’re going to seek additional funds in the next bill that will cover things like those that you see here on the screen. Some of these are controversial. I spoke to the Democratic staff director for the house energy and commerce committee over the weekend and one of the things that he said to me is that the Democrats in the House and the Senate want to make the next stimulus bill as bipartisan as possible and if that’s the case then some of the stuff that you see on this screen are complete non-starters.

Again, this special enrollment period for the Affordable Care Act that Trump administration has already said that’s a nonstarter with them. I don’t think that’s really in the cards. The other thing… the main reason I was calling the staff director was the Medicaid Fiscal Accountability Rule or MFAR. Back when CARES was being negotiated towards the end, the House Democrats introduced their own alternative proposal, to CARES and one of the things that was included in that piece of legislation was a two year moratorium on finalization of MFAR and that never happened because that version of the bill was never adopted and I was calling to lobby for… not a moratorium, but for complete withdrawal of MFAR in the next piece of legislation and the response that I got was, look, this is going to be as bipartisan as possible so if we’re going to get enormous pushback on MFAR then we’re going to drop it and it’s not going to be in the next package.

We could see the withdrawal of MFAR, we could see a two year moratorium on finalization of MFAR or we could see nothing on MFAR. Now, where the white house has been on all of this is a bit vague in terms of what they want in a fourth bill. They’ve mentioned some hazard pay for workers, more aid to states and then as most of you may have seen yesterday Treasury Secretary Mnuchin formally requested another 250 billion for the Paycheck Protection Program. Now this is something that Congress is going to have to pass legislation in order to make happen. This is not before stimulus bill. This is an interim spending bill that the White House wants passed to bolster the Paycheck Protection Program, which is running low on money.

Now this morning, Senator Shuster and Speaker Pelosi released their counter proposal to this and part of that would include of the $250 billion that the city administration is asking for, is using 125 billion of it and channeling that money through community based lenders. It’s for farmers, minority and veteran owned businesses and other nonprofits in rural areas. Of note, they also asked for another $100 billion for hospitals, community health centers and health systems. The Democrat leadership on the Hill has already started advocating for more for hospitals because they know that this 100 billion is not going to be enough and they’re also asking for $150 billion more for state and local governments.

We’re talking about a half a trillion dollars when you total this up and this is not even before stimulus bill. This is an interim spending bill to get us over this hump until they can do a fourth bill. When we do get to a fourth stimulus bill, politics is going to again come into play in return for more money for businesses like insurance companies who got left out of the last one. Democrats on the Hill are going to want more direct payments to individuals, more worker protections and other things that are important to them. We’re going to get back to the typical legislative horse trading that goes on when legislation is passed. One of the things that Democrats are proposing is what they’re calling a hero fund and that would be hazard pay of about $13 an hour up to $25,000 limit for essential workers like janitors, store clerks, delivery drivers who have put their own personal safety at risk to help us all get through this.

As for outlook and timing for either an interim bill or a for spending bill Senator Mitch McConnell, the senate majority leader said yesterday that he wants the Senate to pass this interim spending bill tomorrow so that the House can have it by Friday. That’s a little bit easier for the Senate to do. Again, as I mentioned, Congress’s in recess. They’re going to try to hold these votes by voice vote. In the Senate they only have a hundred senators. It’s a lot easier to get a hundred senators on board with a voice vote than it is in the House.

It only takes one member to object to stop a voice vote and so again, managing a hundred is easier than managing it in the House where they have 435 members. If the House is going to act quickly and approve this interim spending on a voice vote, it’s going to take someone not objecting and if those of you who follow this stuff closely like I do you recall it with a third stimulus bill there was one Congressman from Kentucky who objected to doing it by voice vote and ended up having, having a lot of people fly back to Washington in order to vote.

I know they’re going to try to avoid that and try to do a voice vote and get that interim bill out by the weekend. Phase five. There’s going to be a Phase 5. Everybody’s sort of agreed upon that. There’s going to be more for healthcare in that, but we don’t know what that’s going to entail yet. Whatever doesn’t make it into Phase 4, it’s probably going to make it into Phase 5. For those of you who are interested in infrastructure matters, bridges, roads, those types of things, that is something that’s being talked about for Phase 5 and they’re talking about another trillion dollar bill in Phase 5.

Infrastructure has been talked about for years in Washington, but there’s never been the political will to make the tough choices on that, like increasing the gasoline tax and other taxes to pay for it but again, we’re in a world now where nobody really seems to be worried about how much this stuff costs and how it’s being paid for. On that happy note we’re right up against our time, maybe a little bit over. We’d like to thank you for joining us. We have resources available for COVID-19 funding and federal advocacy. You can see the names of those folks listed here on this slide. We will be sending out a PDF and recording of our webinar via email for those who are registered so look for those in your inbox.

Again, thank you for joining us. We hope you come away with a better grasp of what you should be doing right now and what to expect in the future. I know we’ve gotten a number of great questions. Please check out for more information there and some possible answers to your questions. Please contact us. You see our contact information right here, if we can help you navigate any of these issues. Thank you again for joining us. Everyone please stay safe and healthy as we all continue to navigate these unprecedented times. Good day everyone.