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Forty years of practice: Regulatory changes in medicine

 by Sarah F Fontenot, BSN, JD, CSP

As we mark the 40th anniversary of TMLT, we remember the physicians who were the first members of our community. From 2019, the physician practice of 1979 may look like “the good old days.” Many readers will have experience with a time when physicians had more autonomy and less regulation. Younger physicians may wonder what they missed.

The medical practices of today evolved in response to advances in communication technology, as well as waves of state and federal legislation. Let’s walk through time together to mark the sentinel changes that brought us to 2019.

In 1979
Most physicians in 1979 practiced in offices they owned, alone or with a small number of partners. They followed their patients both in and out of the hospital and kept voluminous records on paper (the concept of a “problem-oriented” patient record had begun in the 1960s.) The American Board of Family Practice was 10 years old.

Specific treatment choices for patients were subject to the physician’s medical judgment — within the guidelines of their field of practice, their peers, and professional society. Physicians had to obtain informed consent from patients and/or their loved ones; but, it was common to “not tell Mom” or withhold information from patients, particularly the elderly. Patient privacy was subject only to a patchwork of Texas state privacy laws and medical professionalism.

As they delivered care to patients, physicians were liable for any claim of negligence that might arise. In fact, the 1970s had been a time of high litigation across the country. In reaction to that crisis, TMLT was created to provide affordable, reliable coverage for physicians across Texas. Six other states passed tort reform regulations, including the 1975 legislation in California that would become the template for Texas tort reform 28 years later.

Medicaid and Medicare were 14 years old in 1979. The majority of people in the middle class were insured by their employer or their spouse’s/parent’s employer.

Local medical societies flourished. AMA membership was common (although the peak in membership was 75% in the 1950s), and physicians and their families formed a good part of their own social structure.

The 1980s
The practice of 1989 did not differ significantly from the practice of 1979. There were a few national developments pertaining to health care in the 1980s that affected some physicians.

EMTALA (1985) put pressure on those covering emergency room care. The prevalence of advanced practice nurses and physician assistants was growing in some regions (both professional options had begun with first educational programs in 1965).  The rules for home health care practices were revised in 1980 to make the service more widely available (the 3-hospital stay requirement for eligibility was eliminated in the Omnibus Reconciliation Act of 1980).


The 1990s
The 1990s were when medical practice really began to change.

Primary care physicians in metropolitan areas began taking advantage of the new specialty of “hospitalists” — a term coined in a 1996 article in the New England Journal of Medicine.

Managed care swept the nation, although the concept itself had flourished in some regions for decades already. By the end of the century, physicians everywhere — even in rural America — were signing payor contracts.

Under managed care, reimbursement was not the only thing that changed. There was a new level of involvement by private insurance companies in the care of patients. Practice protocols governed decisions formerly made independently in the exam room.

The tension between independent professional judgment and insurance company constraints led to the creation. of Independent Review Organizations (IROs) by the Texas legislature in 1997.

Managed care companies also successfully used an old law to protect themselves from liability for their decisions. The future of that “managed care shield” under ERISA (a 1974 federal law passed for entirely different reasons) became the hottest health care issue in Washington throughout the decade. The fight over that shield was so intense it was one of three debates permanently retired on the steps of the Capitol as Congress gathered to show their unity the day after September 11, 2001.

“Pay for performance” was introduced in the 1990s (also through private payers). For the first time, physicians saw their reimbursement tied to “quality indicators” such as lab values and patient outcomes.

The passage of HIPAA in 1996 created confusion about the looming privacy rule and how to comply. But changes in the final rule between the Clinton and George W. Bush administrations stalled the effective date of privacy compliance until 2003. The more immediate effect of the new law (a connection missed by most physicians) was funding to increase investigations into Medicare fraud and abuse.

A “paperless health care system” was the vision that spawned the HIPAA Privacy Rule. Although the first electronic medical record (EMR) was invented in 1972, it was not until the development of the Internet in 1990 that communication technology became relevant to health care. In 1991 the Institute of Medicine suggested that all physicians should switch to an EMR/EHR by 2000.

The 2000s
The new century began with a heightened focus on the quality of medical care in America, mainly due to the seminal IOM reports “To Err is Human” (1998) and “Crossing the Quality Chasm” (2001). In response, the Leapfrog Group — striving for “giant leaps forward in the quality and safety of American health care” — was founded in 2000. Surgeons were introduced to the implications of “never events” in 2001.

Litigation in Texas had reached a crisis level by 2002. The AMA listed Texas as “a state in trouble” because of the number and size of malpractice claims in the state. As litigation costs increased, many liability insurance companies pulled out of the Texas market. Many physicians were left bare, scrambling for coverage, particularly in high-risk fields and in certain areas of the state. At the height of the crisis, TMLT was the only company insuring doctors of all specialties in all locations of Texas.

As physicians adapted to insurance company demands and increased scrutiny of billing practices, a new level of compliance began on April 14, 2003. This was when physician offices had to comply with the finally-released HIPAA Privacy Rule. Rampant rumors of criminal liability extending to even honest mistakes regarding a patient’s privacy resulted in a high level of anxiety that remains to this day.

2003 was a banner year for another reason — tort reform (commonly called House Bill 4 or HB4) was passed in June. It was followed in September by Proposition 12, which amended the Texas Constitution and ratified the ability of the Texas legislature to cap damages in medical malpractice litigation.

As the number of lawsuits filed fell in Texas­ — and as part of the tradeoff necessary to secure tort reform —  the Texas Medical Board received more funding from the state. The board also received a mandate to root out physicians who were not practicing according to the standard of care. The TMB became a concern for the average doctor, and fear of discipline (up to and including loss of license) replaced the fear of malpractice claims in the minds of many Texas doctors.

In 2009, changes to HIPAA introduced “meaningful use” and the HITECH Act. EMRs (now called EHRs) became pervasive and created headaches for physicians. “Health information technology” practices, cyber security, and the need for cyber liability insurance were also added to the compliance concerns of the average physician office.

The prevalence of EHRs also led to increased capability to investigate physicians for inaccurate billing practices.

To top the decade, EHRs also led to a short-term, but all-consuming new compliance issue with the proposed “red flag rules” in 2009. These rules, had they not been rescinded, would have made physicians liable for any patient identity theft resulting from their EHR.


The 2010s
All the “pay for performance” efforts of the 1990s came together to form the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This new law alters the reimbursement of every Medicare-participating physician based on their Merit-based Incentive Payment System (MIPS) score. The only way to avoid these reimbursement changes is to be a physician in a large, integrated, risk-based health care structure (called Advanced Alternative Payment Models or APMs), such as an ACO or Medicare Shared Savings program (Track 2 or 3).

MACRA passed in 2015 with a high level of bipartisan support. The change in administrations and philosophy in 2016 led to some alterations in detail — but not to the trajectory — of reimbursement reform.

The MACRA model is starting with Medicare, but will grow to include all government programs (Medicaid, Tricare, CHIP) in the next few years.

Even more importantly, the MACRA model (activities of value to the government such as achieving quality, using HIT to enhance patient care, increasing community access and health and reducing costs) is already leading the private insurance sector in its own reimbursement reform goals.

Interestingly, and with the significant exception of MACRA, the 2010s have not been a time for other health care related legislation. The decade has been a lull after two decades of significant growth in regulation.

However, medical practice compliance costs continue to grow. The need to employ office staff devoted entirely to compliance issues has increased office overhead. Consultants and vendors, especially for the EHR, have become increasingly necessary. Overhead rivaled income, particularly in an era of decreasing reimbursement.

Physicians consolidated to share the cost of compliance. Other physicians gave up their private practice to move within a hospital system where compliance concerns are addressed on a corporate level.

This transition worked well for many physicians —  particularly younger physicians who had not personally experienced the heyday of the 70s. Older physicians found the time and decision constraints of a corporate structure far more difficult to adjust to.

In 2016 — for the first time — less than half of practicing physicians owned their own practice.


Where we are today
In 2019 we can look back 40 years and understand the nostalgia for “the good old days”.

Looking forward, physicians must do what they can to preserve the best of the profession, efficiently manage the compliance needs of a modern practice, and advocate for their patients and communities.

Ten years is a flash-in-the-pan in the experience of most busy physicians. What will we be saying about the evolution of medical practice in the 2020s? Will this be a decade of professionalism and opportunity for physicians? Ultimately that is a more critical question than anything that has come before.