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ACEP Says It ‘Should Do More’ to Protect EPs

SoRelle, Ruth MPH

doi: 10.1097/01.EEM.0000855764.48424.18
    FU1-1
    Figure:
    corporate practice of medicine, ACEP, contact management group, private equity

    Spurred by growing emergency physician dissatisfaction with the corporatization of the specialty and the recent focus from the U.S. Federal Trade Commission and Department of Justice on mergers and acquisitions in health care, the American College of Emergency Physicians has quietly shifted its longtime stance, now entering the fray of resistance against contract management.

    The college has begun calling for greater transparency in employment agreements between contract management groups and emergency physicians, made statements opposing the corporate practice of medicine, and appealed for greater scrutiny of how private equity (PE) firms interfere with physicians' medical decision-making. (ACEP Policy Statement. October 2020; https://bit.ly/3QA5H6n; ACEP Statement on Private Equity and Corporate Investment in Emergency Medicine. April 18, 2022; https://bit.ly/3Oa6TeS; ACEP Amicus Brief. March 26, 2022; https://bit.ly/3xHSFek.)

    It is a stance on which the smaller and more activist-minded American Academy of Emergency Medicine was founded in 1993. The academy has often found itself a lone voice in the specialty advocating for the rights of emergency physicians who have found themselves at odds with—and at the mercy of—contract management groups.

    “ACEP has now cracked the door open on beginning to represent the bedside physicians against corporate forces,” said Robert McNamara, MD, the chair of emergency medicine at the Lewis Katz School of Medicine at Temple University in Philadelphia and a former president of AAEM.

    But ACEP, he said, needs to do more to stand up for individual physicians. “It is good that they filed a brief and released the position statement on private equity. But they still have ties to corporations. They're giving their highest award to Becky Parker, who was an Envision official and I think is with TeamHealth now.

    “They have strong links with EDPMA [the Emergency Department Practice Management Association, which represents emergency medicine physician groups and billing partners],” Dr. McNamara said. ACEP is “pretty much considered a mouthpiece of contract management. ACEP shouldn't be in bed with corporations.”

    Dr. McNamara, who has been the specialty's leading advocate for emergency physicians against contract management groups and private equity ownership for more than 30 years, didn't mince words: “This is a major step forward, but is also a scathing indictment of [ACEP's] failure to act against CMGs and PE over the last 30 years.

    “The blood is on their hands. ... I doubt we see anyone resigning or personally accepting blame. Sadly, they point to their antitrust policy, which is one of the major excuses they have used for their complicity by silence.”

    A resolution he and Thomas Scaletta, MD, introduced at the 2020 ACEP Council meeting stumbled over an ironic pitfall. ACEP Executive Director Susan Sedory wrote in an Oct. 17, 2021, memo to the 2021 ACEP Council that the college questioned whether emergency physicians having access to billings submitted by a contract management group under their name could draw federal scrutiny. “Subsequently, ACEP engaged outside counsel to advise on whether securing regular reporting of billing in a physician's name could inadvertently subject that physician to potential liability under the False Claims Act, since provision of this information could now leave them considered to be ‘knowing,’” Ms. Sedory wrote.

    ACEP's board of directors asked that a primer on false claims be written for emergency physicians, and that same document said the board had directed its state legislative and regulatory committee to compile a legal and regulatory reference related to the corporate practice of medicine and fee-splitting.

    Anticompetitive Labor Effects

    Ms. Sedory also presented the college's concerns about the encroachment of private equity into the practice of emergency medicine during an April Federal Trade Commission forum on the effects of mergers in the health care industry, calling private equity's effects “very real” and “harmful.” (FTC and DOJ Listening Forum on Effects of Mergers in Health Care Industry. April 14, 2022; https://bit.ly/3bjmOZZ.)

    ACEP, in preparation for its FTC testimony, distributed a questionnaire to its 40,000 members before the forum asking for firsthand experiences with acquisitions, but received only 110 responses. Most noted numerous anticompetitive labor effects, including reduced wages, infringement on their due process rights, and interference with physician autonomy to make independent medical decisions benefiting patients, Ms. Sedory said in her testimony.

    Sixty-three percent of the 110 physicians who responded to the questionnaire said a merger had made it more difficult to find or keep a job. Sixty percent of the ACEP survey respondents said their compensation had been reduced, with “most experiencing a pay cut of more than 20 percent,” Ms. Sedory told the FTC.

    “[O]f the 40 percent who experienced no change in pay or raise after a merger, many noted that their overall hours were cut,” Ms. Sedory said, adding that CMGs' infringement on due process rights and interference with physician autonomy to make independent decisions benefiting patients were also a downside of mergers and acquisitions. Many surveyed also pointed to a shift by CMGs to use less skilled health care workers, “jeopardizing patient care,” she said.

    “We will be submitting these comments in our recommendations to the FTC and the DOJ and urge that guidelines for evaluating mergers must include a detailed assessment of these types of labor-related impacts,” she told the FTC members. “And once the guidelines are revised, it is important to investigate mergers that have led to these anticompetitive and harmful practices. Updated guidelines without weight [are] only half a solution.”

    ACEP President Speaks to FTC

    Gillian Schmitz, MD, the president of ACEP, would not speak to EMN for this article, but spoke at the FTC listening forum; her remarks, like Ms. Sedory's, come from a transcript. (FTC and DOJ Listening Forum on Effects of Mergers in Health Care Industry. April 14, 2022; https://bit.ly/3bjmOZZ.)

    She pointed out that “a high number of these independent practices [for which EPs work] have been acquired by hospitals, health systems, and corporate entities such as private equity and health insurance companies. The recent questionnaire we put out to members clearly demonstrated the negative firsthand impacts of acquisitions on our workforce. More than half indicated their medical decision-making autonomy was negatively impacted by the merger or acquisition of their employer.”

    Dr. Schmitz said interference in medical decision-making can significantly affect the safety and quality of care for patients. “More than half [of the doctors surveyed] indicated their due process rights were worsened or were eliminated after a merger,” she told the FTC. “Due process plays a foundational role in ensuring a physician can carry out their promise to patients without fear of retribution by their employer.”

    Dr. Schmitz said further erosion and contracts following acquisition concerned EPs and that many were considering quitting medicine because of the working conditions in their large national physician groups or hospital systems. “They feel trapped in a system that does not respect their autonomy or mental well-being, and have no other options available for them and their families,” she said. “A significant exodus of emergency physicians from the workforce threatens the health care safety net that emergency medicine provides, and the [past] two years have shown how important that net is.”

    ‘Sham Entities’

    Dr. McNamara's testimony to the FTC was even blunter. “Simply put, private equity does not belong in our nation's emergency departments,” he said. “[The] ED [is where] the most vulnerable patients are cared for, and it needs to be free of their profit-seeking methods. Private equity's blown under the radar to now dominate emergency medicine.”

    Most states prohibit lay ownership of medical practices specifically to keep the business influence out of the patient-physician relationship, he said. “[P]rivate equity flounces in by setting up sham professional entities using the license of well-compensated corporate physicians,” Dr. McNamara said. “In an emergency, you may not have the choice of where to go for care. When private equity owns the ED contract, the physician has no control over what you are charged, as seen with the surprise billing crisis. Profits are put over patients, and hospitals have incentives to award ED contracts to private equity.”

    The Elephant in the Room

    Dr. Schmitz also addressed private equity, consolidation, and corporate ownership in a speech to the ACEP Leadership Council last October. (ACEP. Oct. 29, 2021; https://bit.ly/39Lkhra.) “[H]istorically, it has been felt the ACEP is afraid to tackle these issues—that's the elephant in the room,” she said. “So, let's start talking about them.”

    ACEP maintained in a recent statement that it had put the autonomy of emergency physicians first for 50 years, but the college also noted, “[W]e are hearing from you, our current, former and future members, that ACEP should do more.” (ACEP. Protecting Emergency Physicians in a Shifting Health Care Landscape; https://bit.ly/3QBUnXc.)

    AAEM board member Vicki Norton, MD, told the FTC that emergency physicians suffer the negative consequences of corporate emergency department consolidation. The hospital-ED contract at her first job at a southeast Florida HCA hospital was owned by two physicians, she said, and she bought a home and moved across the country with a newborn to find only a month before she started that the contract had been sold to a corporate group called Sheridan Healthcare, which had a deal to staff the radiology and emergency departments. (Sheridan later merged with EmCare to become Envision.) “I was given an employment contract and told ‘take it or leave it,’” she said.

    The contract had a restrictive covenant and a noninterference clause, Dr. Norton said. “The quality of care at the site and the treatment of the physicians working there became so bad over the next two years that the entire original group of physicians which staffed the ED for over 10 years ended up leaving, including myself,” she told the FTC.

    Physicians Need Protection

    Laura Wooster, the senior vice president of advocacy and practice affairs for ACEP, said in a statement the college provided to EMN that ACEP was committed to protecting emergency physicians. “[T]he need for solutions has become more urgent as consolidation and corporate investment in health care increases,” her statement said. “ACEP will continue to seek and leverage opportunities to speak out on these issues and call for stronger protections for physicians on the job.”

    An ACEP statement said the college had heard from members that it should do more to empower physicians to make decisions in the best interest of patients and their own livelihood, uphold employer best practices, and provide physicians with due process, transparency in billing, and fair compensation. (ACEP. Protecting Emergency Physicians in a Shifting Health Care Landscape; https://bit.ly/3QBUnXc.)

    “ACEP is standing up to protect physicians' right to due process, to prevent interference with physician autonomy in medical decision making, and to mitigate a worrisome shift toward expanding the scope of nonphysicians, such as PAs or NPs, in the emergency department,” the statement said.

    ACEP Backs AAEM Suit

    ACEP also entered an amicus brief in March supporting the lawsuit filed last December by the AAEM Physician Group (AAEMPG) against Envision, the contract management group owned by the private investment firm KKR. EMRA, the organization representing more than 17,000 emergency medicine residents, students, fellows, and alumni, also filed a declaration of interest in the suit, noting that “[t]hese issues are critically important to EMRA's members as they begin their medical careers.” (ACEP. March 25, 2022; https://bit.ly/3xHSFek.)

    The suit alleged that the CMG had violated the state's prohibition on the corporate practice of medicine, offered unlawful kickbacks in exchange for patient referrals, required physicians to sign contracts with illegal restrictive covenants, and committed unfair business practices. (EMN. 2022;44[3]:1; https://bit.ly/3Mx2HEZ.) The suit has been moved from the California Superior Court to the Northern District of California federal court.

    ACEP's brief singled out the corporate practice of medicine, and said it recognized that “unregulated corporate involvement in medicine may threaten physician autonomy and adversely impact quality of care.” The brief also said the college strongly believed that “physicians must focus primarily on patient care and never prioritize profits over patients.”

    ACEP did not contribute funds to the suit, and did not respond to EMN's questions about whether it would. Dr. McNamara estimated that the suit would cost at least $2 million to litigate. “The organization [AAEM] is putting pretty much its entire reserves on the line,” he said.

    Inconsistent with the Law

    David Millstein, the attorney for AAEMPG, said California has been strong and consistent in limiting the influence of commercial entities in the practice of medicine, and he called the case an opportunity for the court to apply those principles to modern-day emergency medicine.

    “In our case, violations have been accomplished not only by controlling every aspect of physician practice, including billing hours, pressuring benchmarking and hiring and firing in the way we see in all large groups like Envision, but it also involved the acquisition of other hospital contracts for physician services,” he said. “This practice known as cross-subsidization is not only illegal under California and federal law as an offer of payment of consideration for the referral of patients, but it also affects the independence of physicians and is itself a corporate practice violation because it allows commercial interests to intrude on the practice of medicine.”

    Mr. Millstein said AAEM is asking for a judicial declaration that Envision's model is inconsistent with California law and to prohibit the company from operating in that fashion now or in the future.

    “I was impressed that ACEP felt this was important enough to support [opposing] the corporate practice of medicine,” he said. “I think the reason is the rise of major capital investment in the so-called management groups. I call them that because they are supposed to be groups that physicians employ, but it looks much more like groups of lay entities that employ physicians. I think there is a growing appreciation that those groups pose an existential threat to the practice of medicine. ACEP might, under normal circumstances, be sympathetic to the growth of these groups like Envision, but on a grassroots physician level, there is widespread concern.”

    That concern extends to which companies can have booths or buy sponsorships at ACEP meetings. The college now requires exhibitors to complete a profile attesting to ACEP-approved employment policies, said Steve Arnoff, a college spokesperson.

    Hope for More Suits

    The American Academy of Emergency Medicine has long held that these companies are bad for emergency medicine. The academy's written statement to the FTC noted, “The most deleterious of these employers are Emergency Department corporate management groups (CMGs) with private equity backing and/or ownership (TeamHealth, Envision [previously Emcare], APP, Schumacher, USACS, etc.). Emergency departments act as the safety net for medical care in this country, providing care to patients in their most vulnerable moments. While these companies argue that they have no undue effect on physician practice, this could not be further from the truth.” (AAEM Statement to FTC. https://bit.ly/3xM1VOu.)

    Contract management groups' agreements often start small, but frequently become larger consolidations that dominate hospital networks and geographical regions, the AAEM statement said. “Due to the piecemeal nature of the acquisitions, these mergers are often overlooked as a source of anti-competitive and unfair business practices. Additionally, thirty-three states have instituted the corporate practice of medicine (CPOM) doctrine, a law prohibiting layperson ownership of medical practices. However, these laws are often not enforced or [are] bypassed through ‘paper owners,’” physicians who are owners on paper but do not run the business or have input into how physicians are treated or how the business is operated.

    “The corporate consolidation and business practices in Emergency Medicine are harming our patients and the entire health care system,” the AAEM statement said. “The anti-competitive and suppressive action of private equity-backed companies cannot be allowed to continue unchecked.” The group urged the FTC to investigate these practices.

    Dr. McNamara said he hopes to see more suits like the one AAEM filed in California. “We would be able to put them [CMGs] out of business or have them to revert to what they should be—providers of services to doctors.”

    Ms. SoRellehas been a medical and science writer for more than 40 years, previously at the University of Texas MD Anderson Cancer Center, The Houston Chronicle, and Baylor College of Medicine. She has received more than 60 awards, including the Texas Human Rights Foundation Award. She has been a contributor to EMN for more than 20 years.

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    • jmsaussy12:51:40 PMIt’s a little late. Many of the people who hold leadership positions in ACEP are intimately involved in CMGs. You can’t benefit monetarily from your practice of medicine or leadership positions within a CMG and&#160;turn around and say CMGs are killing our specialty. It's the fox guarding the hen house. Many of us have moved on from medicine and particularly from EM. What we once loved is killing us emotionally, mentally, and spiritually. I, for one, thought I’d be walking the hallowed halls of medicine until I took my last breath. Turns out drowning in the corporatization of medicine was my last breath in EM.<br>
    • tonyduar11:24:50 AMThis should be a wake up call for all emergency&#160;physicians working in the trenches. Do not be mistaken that you are indeed enslaved by the CMG that controls your practice and your paycheck. Hospital corporations driven by profit motives periodically turn over their EDstaffing contracts; one CMG leaves, and a new one enters. Trench docs often suffer the collateral damage of loss of employment. The new incoming CMG cheaply recruits new docs to take your place rather than “buy you out“ from the exiting CMG. Make no mistake about it, the CMG that hires you also puts a price tag on your head to prevent the next CMG from “poaching” their “property“ if and when&#160;they lose the contract to continue staffing your hospital ED. That price tag is quite often not transparent in the employment contract you sign with the CMG. That dirty secret is rather buried in the contract between the CMG and your hospital to which you are not privy. This is a nasty business. I’ve lost jobs without cause due to CMG turnover at my hospital on account of the $75,000&#160;“ransom” placed on my head by the CMG to which I was essentially enslaved! I sincerely hope that this grassroots movement leads to the liberation of future generations of emergency&#160;physicians from the stronghold of CMGs.
    • scordovano10:05:57 AM Having been an intermittent member of ACOEP and ACEP over the past 27 years, their silence on these issues has been deafening. I would love to attend a conference and NOT see an Envision, TeamHealth or any other PE-owned or -subsidized corporate entity booth recruiting EPs. It&#160;is grotesque.