Hello and welcome to Healthcare Insider, a sponsored content podcast series from Modern Healthcare Custom Media. I'm your host, Camille Baxter, and today we are speaking with Dr. John Di Capua, the CEO of North American Partners in Anesthesia, commonly known as NAPA, and Victor Zamora, Senior Vice President of Revenue Cycle Management for NAPA. Dr. Di Capua trained in anesthesiology at Harvard's Massachusetts General Hospital, followed by fellowships in pain management and cardiothoracic anesthesia. Since 1998, he has been a principal driver of NAPA's growth from a regional practice to the nation's leading anesthesia company. As CEO, he is passionate about infusing a performance based culture into healthcare and empowering clinicians to drive quality and operational improvements that support NAPA's patients first, partners always philosophy. He is deeply involved in the issues of perioperative operational management and clinical staffing models and lectures nationally on how anesthesia departments can provide quality and operational value to hospitals. Victor Zamora has more than two decades of experience in transforming revenue cycle services for both acute care and physician based organizations. At NAPA, he is responsible for all revenue cycle functions including departmental infrastructure, reporting, and service development. Victor is committed to helping NAPA's clients navigate the complex and evolving regulations of healthcare as the industry moves to a value based arena. Before we dive in, we'd like to thank the sponsor of this episode, North American Partners in Anesthesia. NAPA is the nation's largest single specialty anesthesia and perioperative management company. Clinician led since 1986, NAPA 6,000 clinicians now serve nearly 3 million patients annually and nearly 500 healthcare facilities in 21 states. Today we are talking to Dr. Di Capua and Victor Zamora about the No Surprises Act legislation and its independent resolution process known as IDR and how this will exacerbate the clinical staffing shortage. We will also discuss the short and long term strategies that hospitals can implement to continue providing their communities with access to quality healthcare. Dr. Di Capua and Victor, thank you so much for being here today.
Dr. John Di Capua:
Thank you, Camille. It's always a pleasure to be on with you once again and thank you for hosting these information sessions on very important topic in healthcare.
Thank you, Camille. Thanks for including me on the podcast.
It's great to have you both here. Dr. Di Capua, we've had you on a number of times, great to talk to you again. Victor, great to have you with us. So let me start with you Dr. Di Capua. Can you give us an update on the No Surprises Act legislation and what are the issues that are most troubling for the healthcare industry?
Dr. John Di Capua:
Absolutely Camille, and please feel free to call me John. The No Surprise Act call lots of attention, lots of positive attention because people in society were being surprised with large out of network bills. Pretty much everyone has felt this, I did. And certainly the concept of avoiding surprise bills to patients when they're at their most vulnerable period is absolutely something we should be doing. However, the idea which started with Congress and congressional law was executed to really achieve different needs and different goals. We're not just now trying to avoid surprise bills, we're actually trying to lower reimbursement to providers. And that's a bit of a problem because when you use the legislation in order to leverage providers to get reimbursed less, you may have some very negative consequences we're seeing today. We have to reduce healthcare costs, but it is, I think, a wrong assumption that the best place to begin that lowering of healthcare is to attack the providers.
That's not really where you're going to get your most fruit. They just tend to be the less organized so they're the easy picking. And that's why people are using the No Surprise Act in that way. When you have a service like anesthesia, you're already starting with a labor shortage. And labor shortage means threatening access to care. We're talking about surgery. We're talking about saving a fetus who needs to be delivered within minutes in the middle of the night, dealing with a motor vehicle accident, a trauma and saving a life. These are not elective procedures, so having enough providers to service people under those extreme circumstances is a mandate in this country. But we already have a shortage and by using the No Surprise Act as a lever to reimburse people less who are already working over time in order to compensate for the shortage, what we're really doing is incentivizing people to retire early, making the shortage even worse. That has a negative consequence to society.
And nobody's asking, what are we doing here? Why are we now penalizing the providers who are already working hard to make up with the shortage, which is brought up by increased demand, all good things where we have more people on earth, we're living longer, we've created ambulatory surgery centers, we have innovations in medicine making people candidates for surgery that would've been denied before. These are good things and they're requiring more anesthesia, but what we're doing is we're driving people out of the industry. And that leads to bad care, which always costs more money. In the end, what we're seeing is the No Surprise Act as being used in a way that is leading to higher cost, some healthcare not less, and that's a mistake.
Victor, the IDR process is complicated and the problems are different for consumers and healthcare organizations. Can you briefly explain how this works?
Absolutely. Thank you, Camille. I think as John said, the intent of this No Surprises Act with really an altruistic intent to lower cost for patients and employers, what we refer to as end payers. The law effective January 1st, 2022 really sets out to provide these independent dispute resolution processes or what I refer to as arbitration processes, and it really follows the paths to work streams. We'll start with the first, which CMS refers to as the consumer or the patient. It requires that providers and facilities provide uninsured patients or patients who opt not to use their healthcare insurance plan with good faith estimates. Once the patient requires or requests one of those estimates, if the actual cost of those services provided is equal to or exceeds $400, then the patient can opt into initiating an independent dispute resolution process, essentially an arbitration process to try and lower the estimate for the actual cost to the initial estimate.
The second work stream is for out of network claims being processed for out of network providers. And again, the law sets out to really provide an arbitration process or again, an independent dispute resolution process for out of network claims processing. Now, we don't necessarily think we're going to see a lot of volume for the good faith estimates process, or at least not as high in the volume that we would expect to see on the out of network claim dispute resolution process. And that essentially is because the particular guidelines that were actually provided as part of the independent dispute resolution process really provided the insurance carriers with more leverage to kick providers out of network for a few different reasons. Now, let's talk about the process first. The process does require that you wait until you receive your payment for an out of network claim. If you disagree with that payment, you can initiate an independent dispute resolution process first by initiating and notifying the insurance carrier that you wish to initiate a negotiation period, which lasts about 30 days.
If you can't mutually agree on reimbursement for the services that you provided, you can then initiate the actual independent dispute resolution process. You've got about 10 days after that 30 day period to initiate notifying payer. You then have approximately another three to six days to mutually agree upon what we refer to as an independent dispute resolution entity. Those are the firms that have been certified by CMS to actually process the arbitration claims and make a determination for the decision, the ultimate payment determination on those claims. It does require that the arbitration firm or the IDRE, the independent dispute resolution entity, that they review and consider seven various factors including a factor that we refer to as the qualifying payment amount or the QPA, the initial guidance set out to start the negotiation process using the QPA, which essentially is the insurance carriers median rate.
And we'll talk a little bit about those challenges a little later on because there is some vague and lack of clarity and auditing and visibility into how that QPA or qualifying payment amount is actually calculated. Both entities who are participating in the arbitration process must provide supporting documentation relative to the patient's conditions, the cost of services, the market share, including addressing any factor that would support the cost of the actual services that you're seeking. After 10 days, you have a final submission period, and then the IDRE or the certified entity processing the arbitration claims has 30 days to make a determination. Once they've made that determination, the payment must be issued by the insurance carrier after that decision is made. I think what you'll notice through that process is that without any additional extensions granted as any part of that process, the process alone will take almost four months.
Now, if you compare that in contrast to what it takes or how lengthy of a process it is to process an in-network claim, an in-network claim will be processed if submitted electronically within two weeks. So you can see how lengthy the process has become, how labor intensive the process is. CMS does provide a lot of job aids, template documents for each portion of the notification process and template documents that would allow you to notify insurance carriers as well as process and make your submissions. We have found that not only does this add more cost and length of processing claims to the provider, but in several cases also the CMS program, the IDREs or the independent dispute resolution entities have been overwhelmed because CMS underestimated the volume of bases that were actually going submitted. And in addition to that, we've also seen that it's adding cost to the insurance carriers as well.
I think most insurance carriers saw this as an opportunity to kick providers out of network and perhaps leverage a lower cost of reimbursement or lower reimbursement to providers that would start at the median rate. Since then, there has been guidance that has been provided. There are several lawsuits underway, one of which not necessarily vacated the qualifying payment amount, but essentially determined that it cannot be weighed any heavier than any other factor and information that the provider is providing. So it has been somewhat of a very complex process. Again, it's added some significant strain and cost to all participating parties, and there's a lot of support underway at the moment to try and change the process to help streamline it and make it much easier for providers who are heavily dependent on that reimbursement cover services.
Yeah, it sounds incredibly complex. I was sitting here while you were talking, adding up the timeframes as you were going through the description of the process. So can you talk a little bit about how the IDR process is impacting healthcare providers?
Absolutely. Let's start with purely the length of the process that as I mentioned before. As I said, an in-network claim would easily be processed for moderately sized claims in approximately two weeks and so lengthened in that process to have to participate in a process where you have to use additional resources. And on average, NAPA has been relatively experienced and already initiating hundreds of batches of submissions through this process. In comparison to an in network claim, it has increased our labor cost about four times. In addition to that, think about the working capital stream on a healthcare organization who has to cover the cost of their providers and pay their clinicians timely. So waiting almost four months to be paid and reimbursed on claims for services that were provided has significant financial strain on an already struggling healthcare organization. So that's been relatively difficult. The qualifying payment amount, the QPA or the insurance carrier's median rate, which initially was the starting point of any negotiation and considered to be weighed heavier than any other factor, luckily that has been overturned and needs to be weighed just as heavily as any other factor.
But there's a lack of clarity. There's a lack of visibility into how the insurance carriers are actually calculating the QPA. As an example, we are anesthesia providers. We provide anesthesia staffing, both certified registered nurse anesthetists and anesthesiologists. And so we are experts at negotiating anesthesia rates because we know we understand the financials and the economics of what the service cost. However, if you have another specialty such as a primary care organization or radiology services organization that also has sort of what we refer to a bantam rate embedded into their agreement where they're not custom or accustomed to actually negotiating prevailing rates for anesthesia services, that could superficially lower the median rate. And so there are initiatives underway to try and push to isolate the impact of bantam rates. And in addition to that, the submission process is significantly more difficult than just the submission of a claim.
The IDREs and the CMS process require that you either submit a single claim or batch your claims. Now it makes more economic sense typically to batch your claims or submit your claims in batches. The problem with the batching process is that it has to be batched by entity. I'll provide a little more clarity on that subject. As an example, NAPA could be submitting claims to one insurance carrier that we may be out of network with, but we have to batch our claims. And in this day and age, there are a lot of employer sponsored plans by employer. And so you can imagine we are submitting claims for the IDRE process or the independent dispute resolution process for one particular insurance carrier, but we may be submitting over a hundred batches, in some cases, over 200 batches because they have to be batched by entity or by employer.
And so that in itself is overly burdensome, creates significantly more work for the resources that we have. And in a day and age where healthcare organizations really should be focused on simplifying administrative operations and tasks and processes, this is actually adding to it a tenfold. So it's a pretty significant impact to resources.
It certainly sounds like it. Thank you for giving us a better understanding of the impact of that process. John, I want to come back to you. So for hospitals, this sounds like the third leg of a broken stool. More clinicians are retiring early, less people are choosing healthcare as a career, and now financial pressures are exacerbating the clinical staffing shortage problem. How can hospitals get ahead of this issue?
Dr. John Di Capua:
Yeah, unfortunately, I think the current political climate and the force behind the No Surprise Act is going to continue to make a bureaucratic nightmare for providers in order to submit bills and get paid. That is going to have the impact of having earlier retirements and more frustration, more work dissatisfaction, which in the end as I said before, is going to increase cost because this is a must have industry and at the end going to be competing heavily for the shortage of available providers. And bad care always leads to more costs. So the question really is what can we be doing about it? Because I don't think the No Surprise Act is actually healthy for this country. The idea is good, but the execution has been very, very poor. But first what we want to do with all our institutions, all of our partners, is to look at how do we attract people, critical people, anesthesiologist, CRNAs, to that institution, how do we partner to create a destination of choice?
And that takes a level of communication between us and the perioperative leaders that maybe in the past was taken for granted. We have to enter into that partnership in order to say, what's it going to take to both attract and retain the available workforce? Otherwise, we will struggle and pay more to compensate for lack of workplace satisfaction. We have to work together actually with our hospitals and ASCs to negotiate with insurance companies. We have a great example of entering a new state in the Midwest where we partnered with the hospital, and together we went to the insurance company and said, "Look, we need to provide this care. You need to be fair to everybody involved." And we had contracts in place with record time because of that partnership. The hospitals have a lot of pull in a community, and so we need to work together in order to meet all our goals.
And I think one of the most important things we have to do right now is start to think about how do we drive value? How do we create efficiencies with our hospitals and ASCs to do a couple things? One is to make sure that all cases get done. Two, to minimize the burnout of the available staff that is trying to cover all of these locations that are being used inefficiently. At the end, I'm not afraid of covering the locations, I'm afraid of the people that we don't have that all of a sudden causes a lot more overtime and working on vacations on the remaining people. And that means they're going to retire earlier because they don't want to have that kind of work environment forever. And we're seeing that. We're seeing earlier retirements in 2020 compared to 2019. Some people might say that's the pandemic. Okay, fine.
We're seeing more retirement to '21 compared to 2020, and now we're seeing more retirements in 2022 compared to '21. I'm talking about it's a upwards slope, and we're not training more people. So I know where this is going to end. It's going to end where somebody's going to get hurt, and they're not going to have surgery. And that's a problem we have to avoid. So we have to think about efficiency, and we have to think about regional care team models. How do we work with a hospital system that covers a large community and say, how do we use each one of your centers to come up with the best product but minimize duplication?
Because at the end of the day, identifying best practices leads to better care, and it also creates a lot of value by not paying extra people, you're certainly not going to pay over time for those. And I want to start to train more anesthesia providers. That's both an issue we could do in the short term and the long term. So there's a lot of positive things that we do with our partners, our hospitals, and ASCs, but it's very different than we've done before.
John, I know you're very passionate about training and professional development, and we've spoken about this before, training more people is a complex undertaking and it's also a long-term strategy. So what plan do you propose to address that?
Dr. John Di Capua:
Well, we're very fortunate because amongst the medical school application pool that are applying to residencies, there's a huge amount of interest amongst medical students in anesthesia. So a lot of people want to go into anesthesia for a variety of reasons, and the limiting factor is not the number of people that want to go into the field. The limiting factor is the number of training programs, and that's been limited for decades now because of caps on federal spending for education. Well, the kind of perverse thing has happened because I've said before that all of these things are leading to higher cost, we've reached a point where training a resident without federal funding turns out to be more cost effective than paying providers overtime to cover the community. And so it becomes a natural win-win with hospitals and ASCs to say, forget about whether we get paid by the federal government.
Let's just start a training program that'll do two things. One it's going to immediately help staff that hospital the minute the resident shows up, because think of a resident as the equivalent of a CRNA and a supervised model. Okay, they're not quite, but they're one more body to help take care of all these patients than you had before. So they're additive to your staff. And then when they graduate, you have fully trained anesthesia providers, whether they be physicians or CRNAs that can serve the community for decades. So everybody wins, and it costs less than paying locums or overtime. The beautiful thing that we've seen is we cover anesthesia in every possible location. We're blessed because there are so many institutions that have such a diverse clinical program that they would be perfect for supporting anesthesia training programs. The material is there. All it takes is for the anesthesia clinicians to say, I would be interested in education. And the hospital to say, we'll support the concept with all of the other things we need to do.
But in the end, if you have that partnership, we will start to fix the problem at its root. And the root is we don't have enough providers, and we're pushing them out of medicine. So we've got to do something to go the other way. Oh, the other thing I'm proud of is we are taking this opportunity as we start new training programs because we're actively doing it now, to really focus on the whole concept of diversity, equity, inclusion, and justice. And we're really, we're asking the question, how do we get more underrepresented people into our specialty? Because for example, we take care of a wonderful institution in the Bronx. The vast majority of that population is Latinx. And it's wonderful when you have people that understand the culture, speak the language, taking care of patients. There's an immediate bond that happens there that brings people at ease, that it really does in the end drive better care. And so for a whole host of reasons, we're adding that to our mission when we say we want to train more people.
John, these sound like real world strategies.
Dr. John Di Capua:
We love working with hospitals and ASCs. I think this disruptive moment is now forcing us to be more successful at sitting at the table. So we really appreciate you bringing these information sessions to the forefront so that we can tell our story and hopefully get other people to think similarly so we can start to tackle the problems.
Yeah, I think it's so important and some of the themes you talked about, we've both talked about partnership, collaboration, and really using that to streamline the complexity of some of these processes. Thank you, Dr. Di Capua and Victor Zamora for talking with me today about the No Surprises Act and how it applies to the healthcare industry.
Dr. John Di Capua:
Thank you, Camille, as always, and look forward to another session with you in the future. Take care.
Thank you, Camille. It's been a pleasure. Thank you very much.
This has been a sponsored episode of Healthcare Insider, created in collaboration with NAPA. For more information about NAPA, please visit napaanesthesia.com. I'm your host, Camille Baxter. Look for more episodes of Healthcare Insider at modernhealthcare.com/podcasts or subscribe at Apple Podcasts or your preferred podcaster. Thanks for listening.