Some doctors reject Providence billing rules

Contentious contract negotiations that came down to a final take-it-or-leave-it offer from Providence Sacred Heart Medical Center to its emergency room doctors has roiled long-standing professional ties and caused two physicians to resign.

One departing physician, Dr. Jovan Ojdrovic, blames a “new corporate culture that has seeped into our hospital.”

Sacred Heart is forcing emergency room doctors to shoulder more responsibility for unpaid patient bills. Ojdrovic said it risks putting doctors in the untenable position of weighing financial concerns against what’s best for patients.

“It’s a question that bothers me to the core of my professional soul,” he said. “I will never be put in the position of having to perform a wallet biopsy of my patients.”

Hospital officials say they are not asking emergency room doctors to change how they care for patients. Chief Executive Officer Elaine Couture said the region’s largest hospital would never permit such a scenario.

Rather, the contract that went into effect in early April reflects difficult changes facing many doctors and other well-paid hospital employees: the riches of providing medical care are waning. Oncoming reforms and budget struggles that are cutting Medicare and Medicaid payments, along with a work force left poorer and uninsured by the economic downturn, have forced hospitals to trim costs.

“Gone are the days when there was plenty of money in health care to go back and forth,” she said.

One way to shave spending is to revamp emergency room contracts.

Emergency medicine doctors historically formed businesses that would contract with hospitals to provide professional services. The contract would normally cover doctors, advanced registered nurse practitioners and physician assistants.

Nurses, aides and administrative staff remained hospital employees.

Sacred Heart has a contract with Spokane Emergency Physicians. The contract called upon the doctors group to bill patients separately for emergency room care. Yet because about half or more of all patients using emergency rooms are poor or uninsured, hospitals provided a subsidy to the doctors group to help them recoup at least a portion of those losses from unpaid bills.

Now hospitals are demanding emergency doctors shoulder more of those unpaid bills.

“The contract includes a significant reduction in subsidy from the hospitals,” said Dr. Jeff Collins, chief medical officer for Sacred Heart.

Dr. David McClellan, an emergency room doctor who bargained for months on behalf of his physicians group, agreed. Many of the physicians were displeased by the tenor of the negotiations, but were left with little choice.

Sacred Heart gave doctors an ultimatum on the evening of March 30: sign the contract by 8 the next morning or Sacred Heart would sign a deal with a national medical services company.

McClellan declined to discuss the compensation and subsidy cuts taken by physicians.

“The negotiations did go right down to the wire,” he said, “but there was never a possibility we wouldn’t come to the ER the next day and care for patients.”

Compensation projections shared with his colleagues included some rollbacks of at least 30 percent, Ojdrovic said.

When the sides negotiate again in two years, the outcome will be worse for the doctors, Ojdrovic predicted.

“My suspicion is they would prefer to have our group gone,” Ojdrovic said. “It’s a replay of what happened at Deaconess (Medical Center). Knowledgeable, well-regarded emergency physicians with years of service in our community were basically given their walking papers.”

Deaconess last year signed a contract with a subsidiary of Emergency Consulting Inc., a national company that provides professional services for hospital emergency departments. Many of the hospital’s longtime emergency physicians, including medical fixture Dr. James Nania, left.

Couture said the savings achieved by contracting with national company is attractive. In fact, Sacred Heart was prepared to sign a pact with such a company had the Spokane Emergency Physicians group rejected the hospital’s final offer. The hospital, she said, would have saved money. But the financial incentive didn’t outweigh the value of employing a local physicians group.

Ojdrovic said such hardball tactics were puzzling, especially in light of Sacred Heart’s continued profitability exceeding $28 million a year.

“My worry is that it is exactly this type of corporate culture that has infected Sacred Heart, where under the watch of Providence the bottom line is now becoming No. 1 and patient care No. 2,” he said.

He fears that the hospital will be caught shorthanded during a crisis or surge of emergency room patients.

Couture said the region’s busiest emergency room, treating 80,000 patients a year, remains a top-notch operation. It treats twice as many people as it did seven years ago and Couture said Sacred Heart is committed to continue its role as the trauma care backbone for Eastern Washington.

While Deaconess continues to provide emergency room care, it no longer shares the designation as a Level II trauma center in Spokane.

The issue represents a delicate balance for physicians.

Emergency rooms are required by law to treat anyone seeking help – regardless of their ability to pay. Last year, for example, the two Providence hospitals, Sacred Heart and Holy Family, swallowed $112 million in uncompensated care – which includes charity care write-offs; unpaid patient bills abandoned as uncollectible bad debts; and the difference between what the hospitals submitted for Medicaid reimbursement and what they received from the federal/state program that insures the poor. The numbers are up from about $81 million in 2009.

And yet the emergency room has become much more: too many people are using it for non-emergency purposes.

“That doesn’t matter for us,” said McClellan. “Everyone gets care.”