News and Insights

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Beginning October 1, 2014, House Bill 2045 will require the Arizona Health Care Costs Containment System Administration (“AHCCCS”) to pay hospitals based on diagnosis, which will replace the current methodology of paying by length of stay.  AHCCCS will have authority to make additional adjustments to the payments based on other factors, including the number of beds, available specialty services, and geographic location.

H.B. 2045 also requires physicians to report the “direct pay price” of the 25 most common procedures performed. Hospitals with at least fifty inpatient beds must report the prices of their 50 most common inpatient and outpatient services. These prices will be made public by AHCCCS. “Direct pay price” generally means the price that will be charged by a health care provider for a service regardless of the payor. Practices with fewer than three “health care providers,” which includes more types of providers than medical physicians, are exempt from the reporting requirement. Providers that fail to comply with these requirements may be liable for unprofessional conduct. These provisions may require a review of the physician’s fee schedule, which could impact the determination of usual, customary, and reasonable charges.

In connection with the requirement to report prices, health care providers will also need to obtain the signature of patients who are enrollees of health systems or networks with which the health care provider is contracted.

See H.B. 2045 here.

See the press release for H.B. 2045 here.

By Steve Lawrence, Shareholder, Milligan Lawless, P.C. (2013).

The following is an abstract of Mr. Lawrence’s article, Regulatory Issues that Affect Funding of Physician-Backed Medical Enterprises: A Primer:

This paper provides a summary of key federal regulatory issues that affect funding of physician-based medical enterprises. Margins in medical practices continue to face pressure from all sides. As physician compensation from core medical practices declines, physicians seek new avenues to profit. Many physicians start or sponsor spin-off businesses related to their practice or their medical background. As angel investors, venture capitalists and private equity firms consider investing in such medical businesses, the regulatory constraints on such enterprises becomes an important concern. Beginning with a hypothetical scenario suggested by recent regulatory enforcement cases, this paper examines key federal laws that govern physician-backed medical enterprises that could affect funding of such enterprises – the Stark law, the anti-kickback law and the False Claims Act.