DOGRA CPA LLC

Understanding Health Care Industry

Factors to Impact a Physician's Practice

Health Care Industry

Healthcare is an ever-changing industry. It continues to grow as providers make out-of-the-box efforts to ensure affordable health care and set higher standards of service. Given the current state of things, it will only be justified to say that health care is being revolutionized. With authoritative bodies like HSS and Congress, all such efforts are expected to bear fruitful results.

Sincecountless efforts have been made in this direction, a physician’s flexibility to embrace change and act accordingly can be one of the mostinfluential factors determining his success. Changes have been made in state and federal laws that will have a direct influence on a physician’s practice.


Areas in the health-care industry where changes have been observed are described below.

Managed Care
Mostof the Americans receiving health care today accomplish so through somesort of managed care arrangement. With the passage of time, PPO and POSare emerging as public preferences despite the presence of HMOs. This has brought about certain changes in the manner medical services are provided.

Todeal with competition and profitability that continues to decline, physicians are getting affiliated to delivery systems establishing physician, inpatient or outpatient services. However, things get tricky as disagreements among affiliated physicians regarding concerns and objectives continue to mount.

Medicare Reimbursement
Medicaretakes care of the large portion of fees physicians charge. Despite the fact that the health care reform did not accomplish any comprehensive reform legislation, congress continued to consider it so.  One of the most noteworthy is the Balanced Budget Act released in 1997. It was aimed at improving the Medicare advantage program.

Anotherexample is one that intended to include changes that will be implemented in the health care industry within the next 10 years. Whatever is the case, beneficiaries will increase fees and reduce spending, which means that physicians providing services to Medicare patients will continue to receive lower reimbursement.

Stark III Regulations
StarkIII released a set of rules according to which arrangements for indirect compensations will now be treated as direct arrangement compensations. The regulations established the following:

•Recruitment of physicians
•Renovation of office equipment and environment
•Non-monetary compensation
•Compliance training
•Professional courtesy
•Compensation of fair market value

Sharing Of Medical Information
Incompliance with the Patient Safety and Quality Improvement Act 2005, efforts will be made to reduce medical errors by reporting accurate information. The bill establishes voluntary reporting of errors observedwith heath care providers. Since the information will be held in confidence, such a report cannot be used in proceedings, legal or criminal thereof.

Medicare Reform
In2003, The Medicare Prescription Drug, Improvement and Modernization Actof 2003 appeared on the scene. Provisions include higher reimbursement rates, incentives for physicians, and establishment of HSAs etc. A demonstration program specifying the use of RAC was established to detect underpayment or overpayment and to find out if any reductions in cost have been achieved through RAC. The demonstration proved to be successful and was implemented in 50 states.

Health Savings Account
Theseaccounts are similar to IRAs allowing individuals to make contribution so as to cover cost of a high-deductible policy. There is criterion to deem an individual eligible. This criterion is the amount you must have paid and the figure inflates each year.
Bottom-line,the information listed above intends to help physicians acknowledge thevariety of factors that can influence their practice.