Pain Management Practices Look to 2017

interventionalSince right before the New Year, The Ambulatory M&A Advisor has been covering predictions for 2017 from various aspects of the healthcare industry.  From Urgent Care to Regulatory views, we have covered it all.  For the final installment, The Ambulatory M&A Advisor takes a look at 2017 predictions from the Pain Management sector of the industry.

Challenges and Opportunities

Hans Hansen, MD, CEO of Pain Relief Centers says that in medicine, pain management practices are not considered bottom feeders, but are sometimes considered the light at the end of the tunnel, and patients hope it is not a truck.

So, when a primary care physician refers a patient in pain, Hansen says they usually do so because they are facing increased regulatory scrutiny due to financial constraints of chronic pain in an otherwise busy and more pressured primary care center.

“With the ACA, there is more need for physicians and healthcare providers so the services sometimes have to be sent to either specialists or semi-specialists with proper credentialing that would fall under the pain management specialist arena.  Our question mark when we see a patient is whether or not they are a candidate for interventional pain, controlled substance management, both, or for neither.  Do we have a beginning and end as an exit strategy, or is this going to be a patient we are going to see for a prolonged period of time?” Hansen says.

According to Hansen, the challenges pain management faces in the new year are to find a way to get the right service to the right patient in a cost-contained arena that regulators and insurers will assist us in offering access to care.

“We are seeing increased roadblocks in access to care and increased pressure in the pain management office due to cost cuts.  One of the most devious words in medicine is inaccessibility.  We want everyone to have excellent care despite payor source and despite diagnosis.  That is where our biggest challenge is.  Can we offer services that we think are correct and necessary in an ever shrinking reimbursement climate,” Hansen says.

Robert Twillman, Executive Director of the American Academy of Pain Management says that one of the largest challenges for pain management comes through sharp increases in the amount of regulatory activity coming out of state legislatures, other regulatory agencies within states, and even the Federal Government.

Twillman states that most of the regulatory issues are related to the continued attempt to address prescription drug abuse around the country.

“We are seeing a lot of things come down the pipe that make it more challenging for people to operate those types of practices.  We are also seeing some continued challenges in terms of working with pharmacies to get patient’s medications that they need.  We have seen that problem most acutely in Florida, but in other places as well.  It seems as though some pharmacies don’t even have adequate supplies to fill all of those prescriptions and many of them are also turning away a number of patients on the basis of their assessment of the patients,” Twillman says.

As far as reimbursements, Twillman says that there are continuing issues with Medicare not paying for certain procedures on patients.  According to Twillman, there are a lot patients with miofacial pain syndromes for whom a trigger point injection is very effective, very cheap and avoids the need to put them on opioids and other dangerous medications.

“But, Medicare is now apparently refusing to pay for those in some places.  What that leaves us with is a situation in which the payment systems is really pushing us toward the things that a lot of policy makers want to avoid.   It would not surprise me to see that practice of limiting payment for those kinds of things, be expanded even further into things like epidural steroid injections, nerve blocks and those types of things.  I think there are some real serious issues in terms of limiting the kind of care that we can provide.  Again, that limitation pushes us in directions that policy makers just don’t want us to go in,” Twillman says.

Barton Walker, partner with the law firm McGuire Woods agrees with Twillman and says that when looking at challenges that pain management faces in 2017, he sees continued scrutiny on urine drug testing and the continuation of an increasingly difficult reimbursement environment.

Policies and More

All sectors of healthcare have voiced their opinions on how they believe the new Presidential cabinet will impact their area of expertise.  Hansen believes that the shift in power and proposed changes by the cabinet will make things more chaotic for pain management.

“With the new administration that has threatened to push the ACA off of the block, we are going to have more uncertainty.  With uncertainty comes questions of access to care.  So, if we are uncertain and insurance companies are uncertain, there tends to be more difficulty in moving forward with a care plan that is supported by good clinical outcome, supported by best practice, and is supported by the payor sources,” Hansen says.

Walker says that if the part of the ACA that mandated Medicaid program expansion is rolled back, the pain management industry may see some uptick in uncompensated care or more individuals without coverage.

“On a positive note, you may see more private market solutions if state borders are opened to interstate competition,” Walker says.

M&A in the New Year

Hansen says that it is very hard for a small practice, or a solo practitioner to be responsible to MACRA, and these special pressures that Medicare has put on us for quality markers.

“They are starting to take money away from us.  It is not bad enough that we have more regulations, we are having trouble even figuring out how to meet the regulations.  It’s like sometimes you throw your arms up and join a hospital system because they can do what you can’t,” Hansen says.

According to Hansen, there will be more M&A and there will be more unhappy physicians unless they are younger and do not ‘know any better’.

“The older guys who have been in practice in the 90s-2000s, they are going to be ready to retire.  With any M&A you lose autonomy, and the physicians mantra to happiness is autonomy of decision, autonomy within the office to do the right  thing for the right reasons.  That is not going to happen.  They are going to have a big organization with a different set of goals  much more involved in the every day practice of medicine,” he says.

Walker has a more positive outlook on M&A for 2017 and he says that he continues to see a brisk pace of deals being accomplished.

“We continue to see a brisk pace of deals getting done. If we see meaningful tax reforms (including capital gain rate cuts), then you could see even more transactions,” Walker says.

As far as concerns with over saturation in the markets for pain management, Walker says there will always be a market for quality.

“In a crowded field, the best in class providers will still be able to do relatively well.  Providers will need to continue to focus on cost controls and efficiency,” He says.

 

If you have an interest in learning more about the subject matter covered in this article, the M&A process or desire to discuss your current situation, please contact Blayne Rush, Investment Banker at 469-385-7792 or Blayne@AmbulatoryAlliances.com.

 

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