The WCB April 2022 DME Ground Rules Amendments Are Transforming Physician Compensation & Quality of Care In New York.
Introduction
In April 2022, significant amendments to the Workers' Compensation Board (WCB) regulations ushered in a new era for healthcare providers in New York. One of the most notable changes involves the way physicians are compensated for dispensing durable medical equipment (DME) in their offices. Historically, strict prohibitions existed against physicians profiting from such practices. However, these amendments have opened up fresh opportunities for healthcare providers, ultimately reshaping the healthcare landscape.
A Shift in Perspective
Historically, the relationship between physicians and DME companies was a tightly regulated one. Physicians who dispensed DME in their offices for Workers' Compensation patients were limited to receiving reimbursements that covered only the acquisition cost of the items, applicable taxes, and any associated shipping and handling expenses. This model left little room for physicians to generate additional revenue from their services, potentially impacting the quality of care they could provide.
The Impact of April 2022 Amendments
On April 4, 2022, the WCB introduced a series of amendments, among which were changes to the DME fee schedule. The most significant change was the removal of the restriction that previously confined healthcare providers to billing only for the acquisition cost of in-office DME. Now, physicians have the option to bill payers at the fee schedule rate, a move that allows them to directly profit from prescribing and dispensing DME.
This change in policy is monumental, as it effectively redefines what constitutes "undue influence" or “impermissible fees in connection with the performance of professional services." Physicians who see Workers’ Compensation patients are no longer limited to reimbursement based solely on the cost of materials; they can now receive additional compensation in the form of profits for referring patients for DME dispensed in-office.
Quality of Care and Physician Income
The shift towards allowing physicians to profit from dispensing DME is a game-changer for the healthcare industry. It has the potential to improve the quality of care delivered to patients in several key ways:
1. Reduced Pressure on Patient Volume: The healthcare industry has traditionally relied upon an, arguably, outdated revenue model - physicians relied on seeing a high volume of patients to compensate for limitations in their revenue streams. This focus on quantity can often lead to rushed appointments and reduced attention to individual patient needs. By offering an additional source of income through DME dispensing, physicians can now place less emphasis on patient volume and more on quality of care to injured workers.
2. Enhanced Patient Experience: When physicians are not solely driven by the need to maximize patient appointments, they can devote more time and attention to each patient. This translates to improved patient experiences, as physicians can offer comprehensive consultations, answer questions, and provide personalized care to injured workers.
3. Investment in Technology and Equipment: With the potential for increased revenue from DME, physicians can invest in state-of-the-art equipment and technology to better treat injured workers. This can lead to better outcomes and a higher standard of care.
4. Reduced Financial Stress: The ability to generate additional income through DME can alleviate financial stress on physicians and healthcare practices. This can, in turn, lead to a more motivated and satisfied medical workforce, which is essential for maintaining high-quality care in the workers’ compensation system.
OIG Advisory Opinion 22-07
In April 2022, the Office of Inspector General (OIG) issued Advisory Opinion 22-07, addressing physician ownership in medical device companies. This opinion examined an arrangement in which physicians held ownership in a company manufacturing products they might use in their surgical procedures. The OIG determined that the arrangement posed a low risk of fraud and abuse under the Federal Anti-Kickback Statute.
Key factors contributing to this determination included transparency to patients regarding ownership interests, the nature of the ownership interest, and the legitimacy of the company. This opinion aligns with the broader shift towards allowing physicians to profit from DME dispensing, recognizing the potential for such arrangements to benefit both physicians and patients while maintaining ethical standards.
Conclusion
The Workers' Compensation amendments of April 2022 have ushered in a new era of compensation for healthcare providers. By allowing physicians to profit from dispensing DME, the amendments have shifted the focus from quantity of injured workers' seen to the quality of care delivered. This change will ultimately improve healthcare outcomes. Furthermore, the alignment of these changes with OIG Advisory Opinion 22-07 underscores the potential for ethical and beneficial physician-owned businesses in the healthcare industry. As we move forward, these amendments mark a significant step towards a healthcare system that prioritizes both the financial well-being of providers and the quality of care delivered to patients.