A recent court decision in New Jersey determined that doctors who own outpatient-surgery centers in North Jersey are in violation of a state law prohibiting self-referral.  There are 200 surgical centers in New Jersey and about 5000 nationwide.  You can bet that its going to be a good Christmas bonus for the hundreds of lawyers in that state who will be working overtime to overturn that ruling which if stands will effectively shut down these centers in the state that the Soprano’s reside.

Traditionally, surgery centers have been well received by payors because the cost was significantly lower than performing the procedures in a hospital setting.  However, under the caption of greed, return to investors, and opportunity to gain margin, these centers who are most often done in partnership with public or private companies have ratchet their prices up significantly and have employed sophisticated specialty repricing vendors, bill negotiation services, and exclusive networks-not to mention the “cherry picking” of the easy cases which pump up volume and artificially make outcomes look better compared to hospital counterparts who are left holding the bag with more complex and less insured patients.  Certainly this is not true in all of the 5000 centers across the US but the trend became so overwhelming, a ban was sought by using the self-referral angle called the Codey Act and how this relates to the federal self-referral (Start I, Stark II, Stark III) is beyond me.

So, we now have a judge’s ruling on a self-referral business where at least the potential for savings exist but was shown to end up being a higher cost-and the entity suing was our good friend the insurance company!  Maybe its time we partnered with them to fight POPTS!  It is noticeable that the New Jersey Hospital Association is silent on the issue-silence probably means support but why speak up and tick off the docs.

I am not a lawyer and don’t play one on TV but the “savings” argument has never even been made for POPTS.  Can’t this case be a big assistance for fighting POPTS-at least in New Jersey?

Thoughts?

Larry@physicaltherapist.com