Home health agency acquires physician practice

In a move that could become more common under health system reform, organizations that provide home-based care seek to strengthen financial ties with doctors.

By Victoria Stagg Elliott — Posted Aug. 27, 2012

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A house call physician practice has become a division of a home health agency, and industry experts say the deal may be the first of many because of the Affordable Care Act.

Home Visit Doctors, a two-physician house call practice in Philadelphia, was acquired by the Visiting Nurse Assn. of Greater Philadelphia as of July 1. The American Academy of Home Care Physicians is getting more calls from home health agencies and nursing organizations looking to do similar deals. The acquisition price of Home Visit Doctors was not disclosed.

“I believe that home health care and primary health care is a marriage made in heaven,” said Stephen W. Holt, president and CEO of the VNA of Greater Philadelphia. “Having physicians gives us the ability to test, diagnose and prescribe treatment in the home.”

Physicians generally refer to home health agencies, but becoming employed by one, as internists Alfred Stillman, MD, and Alan Berg, MD, PhD, have, is atypical. In this situation, physicians may get additional financial stability while the home health agency improves its ability to implement aspects of health system reform.

For example, those involved in the transaction say the VNA of Greater Philadelphia wants to more easily meet Centers for Medicare & Medicaid Services requirements for Medicare beneficiaries receiving home-based care to have face-to-face encounters with physicians no more than 90 days before or within 30 days after initiating these services. The fraud prevention strategy, which is part of ACA, came into effect Jan. 1, 2011. It has been challenging for home care agencies because many patients who need home-based care do not have access to a physician.

“It’s good clinically, but it’s been difficult to meet,” Holt said.

The association is not participating in an accountable care organization, another facet of the health reform law. But Holt hopes having physicians on staff will make them a more attractive partner for a hospital or health system looking to do so or working toward reducing readmissions.

Drs. Berg and Stillman, who have long worked with the nursing association in some capacity, said the change makes their practice more economically viable. The number of house calls paid by Medicare grew from 2,147,385 in 2006 to 2,517,644 in 2010, but payment from the program per service during this period declined from 30.9% to 37.4%, depending on how it was coded, according to the American Academy of Home Care Physicians.

“We found ourselves unable to make sufficient money to cover our expenses as private practitioners,” Dr. Stillman said. “Now we’re doing what we love, and we’re getting paid for it. In return, the VNA is getting something very valuable: two senior clinicians.”

The VNA of Greater Philadelphia plans to bring in another primary care physician before the end of the year and expand into psychiatry.

The American Medical Association Council on Ethical and Judicial Affairs stated in a 2009 report that physicians employed by nonphysicians must exercise independent professional judgment that is in the best interest of the patient even if that puts a doctor at odds with their employer.

Patients who receive home health care through the VNA of Greater Philadelphia are not required to get medical care from the agency’s physicians. And those who receive care from Drs. Stillman or Berg are not required to receive home health care services from the VNA.

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