Tag Archives: Medicare

It Costs $685 Billion a Year to Subsidize U.S. Health Insurance

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https://www.bloomberg.com/news/articles/2018-05-23/it-costs-685-billion-a-year-to-subsidize-u-s-health-insurance

 

It will cost the U.S. government almost $700 billion in subsidies this year help provide Americans under age 65 with health insurance through their jobs or in government-sponsored health programs, according to a report from the nonpartisan Congressional Budget Office.

The subsidies come from four main categories. About $296 billion is federal spending on programs like Medicaid and the Children’s Health Insurance Program, which help insure low-income people. Almost as big are the tax write-offs that employers take for providing coverage to their workers. Medicare-eligible people, such as the disabled, account for $82 billion. Subsidies for Obamacare and for other individual coverage are the smallest segment, at $55 billion.

In total, the subsidies are equivalent to about 3.4 percent of the U.S. gross domestic product.

Financing Americans’ Insurance

In 2018, subsidizing health coverage will cost taxpayers almost $700 billion.

Also known as the Affordable Care Act, Obamacare reduced the number of uninsured, but 29 million people will likely go without health coverage in an average month this year, the CBO said. Thirty-five million Americans could lack coverage by 2028 as rising premiums and the elimination of the individual mandate drive more people to drop coverage.

The subsidies in the Affordable Care Act are designed to insulate people in the program from premium increases. The CBO projected that monthly premiums for a mid-range plan in the program will increase by 15 percent by 2019, and by about 7 percent annually through 2028.

One reason for the rising premiums is the actions of President Donald Trump. Last year, Trump topped funding for the cost-sharing reduction payments made to insurers under Obamacare to help Americans afford health costs.

The non-payment of those subsidies, less enforcement of a rule requiring people to have insurance and limited competition caused insurers to raise their premiums by about 34 percent in 2018, compared to 2017. That increased the cost of the subsidies to the federal government, according to the CBO.

Aetna whistle-blower put on leave after accusing CVS Caremark of $1B billing scheme

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https://www.beckershospitalreview.com/legal-regulatory-issues/aetna-whistle-blower-put-on-leave-after-accusing-cvs-caremark-of-1b-billing-scheme.html

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Aenta’s former chief Medicare actuary was placed on administrative leave after filing a whistle-blower lawsuit alleging pharmacy benefits manager CVS Caremark overbilled Medicaid and Medicare for prescription drugs, according to The Columbus Dispatch.

Here are four things to know about the lawsuit.

1. Sarah Behnke, Aetna’s former chief Medicare actuary, filed the pending whistle-blower suit after her internal investigation found CVS Caremark has been allegedly overbilling the federal government for prescriptions since 2007, according to the lawsuit. Ms. Behnke accused CVS Caremark of inappropriately billing the government $1 billion-plus in fraudulent charges.

2. Aetna placed Ms. Behnke on administrative leave after the whistle-blower suit was unsealed in federal court in early April. The unsealing comes as CVS Health, the parent company of CVS Caremark, is attempting to buy Aetna for $69 billion.

3. Ms. Behnke’s lawyer told The Columbus Dispatch Aetna’s decision to place its then-Medicare actuary on administrative leave was “retaliatory and inappropriate.”

4. CVS Caremark rejected the allegations and said it will hand documents over to the court by June 1. The company said it was unaware who filed the lawsuit until after its parent put out an offer to Aetna. CVS Health spokesperson Michael DeAngelis told the publication, “We believe this complaint is without merit, and we intend to vigorously defend ourselves against these allegations.” Aetna officials declined The Columbus Dispatch‘s request for comment.

 

Americans’ Confidence in Their Ability to Pay for Health Care Is Falling

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http://www.commonwealthfund.org/publications/blog/2018/may/americans-confidence-paying-health-care-falling?omnicid=CFC1404232&mid=henrykotula@yahoo.com

President Trump is expected to soon address the nation about the rising cost of prescription drugs. But Americans are worried about more than drug prices. New findings from the Commonwealth Fund Affordable Care Act Tracking Survey show that consumers’ confidence in their ability to afford all their needed health care continues to decline.

Last week, we reported that the survey indicated a small but significant increase in the uninsured rate among working-age adults since 2016. In this post, we look at people’s views of the affordability of their health care. The Affordable Care Act Tracking Survey is a nationally representative telephone survey conducted by SSRS that tracks coverage rates among 19-to-64-year-olds, and has focused in particular on the experiences of adults who have gained coverage through the marketplaces and Medicaid. The latest wave of the survey was conducted between February and March 2018.1

Findings

Confidence in Ability to Afford Health Care Continues to Decline

In each wave of the survey, we’ve asked respondents whether they have confidence in their ability to afford health care if they were to become seriously ill. In 2018, 62.4 percent of adults said they were very or somewhat confident they could afford their health care, down from a high of nearly 70 percent in 2015 (Table 1). Only about half of people with incomes less than 250 percent of poverty ($30,150 for an individual) were confident they could afford care if they were to become very sick, down from 60 percent in 2015 and about 20 percentage points lower than the rate for adults with higher incomes. There were also significant declines in confidence among young adults, those ages 50 to 64, women, and people with health problems. Declines were significant among both Democrats and Republicans.

People in Employer Plans Have the Greatest Confidence in Their Insurance

We asked people with health insurance how confident they were that their current insurance will help them afford the health care they need this year. Majorities of adults were somewhat or very confident in their coverage; those with employer coverage were the most confident. More than half (55%) of adults insured through an employer were very confident their coverage would help them afford their care compared to 31 percent of adults with individual market coverage and 41 percent of people with Medicaid (Table 2). The least confident were adults enrolled in Medicare. Working-age adults enrolled in Medicare were the sickest among insured adults and the second-poorest after those covered by Medicaid (data not shown).2

One-Quarter of Adults Said Health Care Became Harder to Afford

We asked people whether, over the past year, their health care, including prescription drugs, had become harder for them to afford, easier to afford, or if there had been no change. The majority (66%) said there had been no change, one-quarter (24%) said it had become harder to afford, and 8 percent said it had become easier (Table 3). People with individual market coverage were significantly more likely than those with employer coverage or Medicaid to say health care had become harder to afford. About one-third of adults with deductibles of $1,000 or more said health care had become harder to afford, twice the share of those who had no deductible. About one-third of those enrolled in Medicare and 41 percent who were uninsured also reported that their health care had become harder to afford.

Only About Half of Americans Would Have Money to Pay for an Unexpected Medical Bill

Accidents and other medical emergencies can leave both uninsured and insured people with unexpected medical bills, which usually require prompt payment. We asked people if they would have the money to pay a $1,000 medical bill within 30 days in the case of an unexpected medical event. Nearly half (46%) said they would not have the money to cover such a bill in that time frame (Table 4). Women, people of color, people who are uninsured, those covered by Medicaid or Medicare, and those with incomes under 250 percent of poverty were among the most likely to say they couldn’t pay the bill.

Health Care Is Among People’s Top Four Greatest Personal Financial Concerns

Fourteen percent of adults said that health care was their biggest personal financial concern, after mortgage or rent (23%), student loans (17%), and retirement (17%) (Table 5). Those most likely to cite health care as their greatest financial concern were people who could potentially face high out-of-pocket costs because they were uninsured or had high-deductible health plans.

Policy Implications

Uninsured adults are the least confident in their ability to pay medical bills. But the risk of high out-of-pocket health care costs doesn’t end when someone enrolls in a health plan. The proliferation and growth of high-deductible health plans in both the individual and employer insurance markets is leaving people with unaffordable health care costs. Many adults enrolled in Medicare for reasons of disability or serious illness also report unease about their health care costs. An estimated 41 million insured adults have such high out-of-pocket costs and deductibles relative to their incomes that they are effectively underinsured. As this survey indicates, the nation’s health care cost burden is felt disproportionately by people with low and moderate incomes, people of color, and women.

The ACA’s reforms to the individual insurance market have doubled the number of people who now get insurance on that market to an estimated 17 million, with approximately half receiving subsidies through the ACA marketplaces. The ACA also has made it possible for people who were regularly denied coverage by insurers — older Americans and those with health problems — to get insurance. They are now entitled by law to an offer should they want to buy a plan.

But as this survey suggests, the ACA’s reforms did not fully resolve the individual market’s relatively higher costs for all those enrolled, compared to employer coverage or Medicaid. Moreover, recent actions by Congress and the Trump administration, including the repeal of the individual mandate penalty and loosened restrictions on plans that don’t comply with the ACA, are expected to exacerbate those costs for many. In the survey, people with individual market coverage are more likely than those with employer coverage or Medicaid to say that their health care, including prescription drugs, has become harder to afford in the past year. They express less confidence than those with employer coverage that their insurance will help them afford their care this year. As explained in the first post, there are a number of policy options that Congress can pursue that would improve individual market insurance’s affordability and cost protection. In the absence of bipartisan Congressional agreement on legislation, several states are currently pursuing their own solutions. But if current trends continue, the federal government will likely confront growing pressure to provide a national solution to America’s incipient health care affordability crisis.

 

 

 

 

 

Medicare Beneficiaries Feel The Pinch When They Can’t Use Drug Coupons

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https://khn.org/news/medicare-beneficiaries-feel-the-pinch-when-they-cant-use-drug-coupons/

This week, I answered a grab bag of questions about drug copay coupons and primary care coverage on the health insurance marketplace.

Q: My doctor wants me to take Repatha for my high cholesterol, but my Medicare drug plan copayment for it is $618 a month. Why can’t I use a $5 drug copay coupon from the manufacturer? If I had commercial insurance, I could. I’m on a fixed income. How is this fair?

The explanation may offer you little comfort. Under the federal anti-kickback law, it’s illegal for drug manufacturers to offer people any type of payment that might persuade them to purchase something that federal health care programs like Medicare and Medicaid might pay for. The coupons can lead to unnecessary Medicare spending by inducing beneficiaries to choose drugs that are expensive.

“The law was intended to prevent fraud, but in this case it also has the effect of prohibiting Part D enrollees from using manufacturer copay coupons … because using the coupon would be steering Medicare’s business toward a particular entity,” said Juliette Cubanski, associate director of the Program on Medicare Policy at the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

The coupons typically offer patients with commercial insurance a break on their copayment for brand-name drugs, often reducing their out-of-pocket costs to what they would pay for inexpensive generic drugs. The coupons help make expensive specialty drugs more affordable for patients. They can also increase demand for the drugmaker’s products. If patients choose to use the coupons to buy a higher-cost drug over a generic, the insurer’s cost is likely to be more than what it would otherwise pay.

In addition, consumers should note that the copay cards often have annual maximums that leave patients on the hook for the entire copayment after a certain number of months, said Dr. Joseph Ross, associate professor of medicine and public health at Yale University who has studied copay coupons.

The coupons may discourage patients from considering appropriate lower-cost alternatives, including generics, said Leslie Fried, a senior director at the National Council on Aging.

According to a 2013 analysis co-authored by Ross and published in the New England Journal of Medicine, 62 percent of 374 drug coupons were for brand-name drugs for which there were lower-cost alternatives available.

Q: Last year, my marketplace plan covered five primary care visits at no charge before I paid down my $2,200 deductible. This year, it doesn’t cover any appointments before the deductible, and I had to pay $80 out-of-pocket when I went to the doctor. Is that typical now? It makes me think twice about going.

Under the Affordable Care Act, marketplace plans are required to cover many preventive services, including an annual checkup, without charging consumers anything out-of-pocket. Beyond that, many marketplace plans cover services such as some primary care visits or generic drugs before you reach your deductible.

The likelihood of having a plan that offers some cost sharing for primary care before you reach your deductible (rather than requiring you to pay 100 percent of the cost until you hit that amount) varies significantly depending on whether you’re in a bronze, silver or gold plan, according to a recent analysis by the Robert Wood Johnson Foundation.

In 2018, 77 percent of silver-level plans offered some cost sharing for primary care visits before enrollees had paid off their typical deductible of $3,800, the analysis found. In most cases, that means people owe a copayment or coinsurance charge for each visit until they reach their deductible. A small number of plans offered a limited number of no-cost or low-cost visits first, and then people using more services either had to pay the full charge for each visit or owed cost sharing until the deductible was met.

Bronze plans were much stingier in what they offered for primary care before people reached their deductible, which was $6,400 or higher in half of plans. Only 38 percent of bronze plans offered any primary care coverage before the deductible, and generally patients still had to pay a copayment or coinsurace. A smaller percentage of bronze plans offered limited visits at no cost or low cost before the deductible.

The share of people who chose bronze plans grew from 23 percent in 2017 to 29 percent this year, said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. While premiums are typically significantly lower in bronze plans than other “metal”-level plans, it can be worthwhile to check out how plans handle primary care services before the deductible, she said.

 

 

Health Care Is an Investment, and the U.S. Should Start Treating It Like One

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https://hbr.org/2018/04/health-care-is-an-investment-and-the-u-s-should-start-treating-it-like-one

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We invest billions of dollars each year in medicines, new technologies, doctors, and hospitals — all with the goal of improving health, arguably our most prized commodity. Yet, investments in the U.S. health care system woefully underperform relative to those made in health care in other countries. For instance, the U.S. spends nearly 7–10% more of its national income on health care than other similar countries and yet life expectancy at birth remains, on average, two to three years lower.

To be sure, many factors influence health outcomes and the investments the health care system makes are only one input. But a large reason why investments in health care underperform is because we invest so much in services that are clearly low-value — i.e., offer little or no clinical benefit relative to the cost — and likely many more where the returns are gray. Investing limited health care dollars into low-value services crowds out our ability to spend on high-value services. So if we want to see better outcomes, we need to start to think like investors.

Examples of significant investments in low-value care services abound in the U.S. health care system, ranging from expensive imaging for benign medical conditions to routine pre-operative testing before low-risk surgeries like cataract surgery. Some research estimates that 42% of Medicare beneficiaries receive some form of low-value care.

Many factors contribute to our failure to disinvest from low-value services and invest more heavily in high-value services. For one thing, physicians, insurers, and patients often have limited data on the relative value of different health care services. There is an abundance of high-quality comparative effectiveness data for pharmaceuticals, largely because of the drug approval process, but there’s less data on the value of other expensive investments into health, such as doctor visits and hospitalizations. Put differently, there is no equivalent of the Food and Drug Administration for a large chunk of the health care sector, which means evidence on value in these sectors takes long to produce, in part because nobody requires that evidence to be generated. Furthermore, even when we have good evidence that a treatment or service is highly valuable, we frequently underuse it. Many medications for chronic conditions such as heart disease, e.g., statins, are routinely underused.

Physicians and businesses also generate income from performing low-value services. They may even be able to order these services themselves, effectively generating their own business. (For example, a cardiologist who performs and reads nuclear stress tests, which are frequently low value, has the ability to order these studies for his or her patient.) So reducing investments in low-value care services means spending less on doctors, hospitals, and other health care technologies. But, like pharmaceuticals, each of these entities is represented by powerful lobbyists (such as physician and hospital organizations), who will strongly oppose any steps to reduce payments.

Patients also frequently lack the information and ability to evaluate whether or not low value studies should be performed, and to hold their physicians accountable for choosing to provide low-value care. This issue is further complicated by the fact that labeling care as low-value is context dependent — advancing imaging for back pain is often not useful but sometimes it is. And moreover, some physicians may order unnecessary low-value testing because of the perceived threat of liability. Despite significant efforts to make physicians and patients aware of low-value services, we’ve observed little improvement in reigning in use.

Overinvesting in low-value services by physicians, payers, and patients leads to the underinvestment in high-value services. But affordability and timing is another critical issue that stymies investment in high-value care. Many high-value treatments take several years to yield significant health benefits. Because patients regularly change insurers, any individual insurer has less incentive to commit to investing in an expensive, high-value treatment if the return on investment could end up accruing to a competitor. Short-term budget constraints among both public and private insurers, and the fact that re-allocating resources away from low value services takes time, further limit investments in high-value services.

Consider, for example, the debate around the pricing of new Hepatitis C Virus (HCV) therapies. HCV is a chronic infectious disease that affects 3 million or more Americans. If untreated, HCV can cause liver dysfunction, liver failure, cirrhosis, and ultimately death. Until recently, the only available treatments for HCV were complex, multi-drug regimens with severe side effects and only modest efficacy. In the last half decade, however, several new HCV treatments have been developed with cure rates exceeding 90%. These new treatments typically cost $40,000-$50,000 per treatment course, but they have been shown to be cost effective over the long-term, as they can help patients avoid terminal liver disease, which is extremely expensive to treat, and reduce morbidity and mortality due to progressive liver disease.

Many physicians, experts in public health, and, of course, representatives of the pharmaceutical companies which produce these new treatments contend that these drugs should be made available to all patients with HCV who could benefit from them. But both private and public payers have raised objections over the price of these therapies, in large part because the population of patients who require treatment is so large. Payers contendthat they simply cannot afford to cover the cost of these drugs for all patients who are eligible for them and still provide coverage for other health care services that patients use. And state Medicaid agencies and small insurers frequently assert that short-term budget constraints prevent them from paying for costly, high value therapies like those for HCV.

In cases like this, it may be instructive to think about the circumstances through the lens of a portfolio manager who is choosing how to allocate investments. When given the opportunity to invest in an expensive asset, with high potential for significant future returns on investment, an investment manager would not pass it over due to lack of funds, because this capital could likely be acquired at a cost below the asset’s expected return. The manager would reduce holdings in investments with lower expected returns and re-allocate these funds into more promising investments. If the investment were valuable enough, the manager might even find ways to raise additional capital to invest in this asset.

In health care, this means at least two things: (1) wrestling with the factors that continue to promote use of low-value services (like lack of information and financial incentives for patients, and inappropriately structured financial incentives for physicians) and (2) recognizing that high-value investments often require large financial outlays today that ultimately reap future benefits.

Aside from reducing the use of low-value services, one potential solution is to identify and develop sources of long-term financing for high-value services. Mortgages exist to spread the costs of a home or a car out over a longer period of time, thereby allowing people to buy a product that they otherwise could not afford. Similar approaches could be used to help finance high-value health care investments that otherwise would be unaffordable.

For both public and private insurers, a long-term view should be feasible. State governments already rely heavily on capital markets to finance infrastructure investments and it’s quite possible that the returns on these investments fall below high-value health care investments like HCV drugs. Private insurers could also access private capital markets and design contracts with other insurers that allow them to partake in some of the long-term benefit of early high-value care when individuals switch between plans. For instance, an insurer that covers HCV therapy for an individual could, in theory, be compensated by future insurers, even Medicare, that treat that patient and benefit from that patient already being cured of HCV.

Ultimately, reducing investments in low-value care will require coordinated action from many actors. Patients and providers need more robust and up-to-date information on the value of different services. Insurers must look hard at the services they cover and discourage utilization of low-value services and encourage use of high-value services, even those that are high cost. Innovators developing new drugs, devices, and procedures should look beyond profits alone and incorporate the need to add value into their investments. And policymakers must create incentives for all of the above to consider value when making decisions about how to invest their health care dollars.

These actions are important because not only does underinvesting in high-value services make them less accessible, it may also make them less available in the future. Many expensive high-value treatments — like HCV therapies, new cancer treatments, and gene therapies — are the product of extensive research and development, which are undertaken because the expected returns are thought to exceed the known costs. A failure to reduce investments in low-value care and reinvest these resources in high-value therapies will reduce incentives to develop future therapies that can deliver significant value to patients.

 

 

 

‘What The Health?’ Medicaid, Privacy And Tom Price’s Return

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https://khn.org/news/podcast-khns-what-the-health-medicaid-privacy-and-tom-prices-return/

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President Donald Trump’s former New York doctor says Trump’s lawyer and private head of security “raided” his office and took the medical files relating to Trump, an act described by White House press secretary Sarah Huckabee Sanders as “standard operating procedure.” Except that’s not how the federal health privacy law is supposed to work.

Meanwhile, Seema Verma, who heads the federal agency in charge of Medicare and Medicaid, met with reporters for a wide-ranging discussion of states’ efforts to remake their Medicaid programs and the administration’s goals of encouraging people to work to help lift them out of poverty.

Plus, Robert Blendon, a professor at Harvard University’s Kennedy School of Government and its T.H. Chan School of Public Health, talks about how health issues fit into the complex politics of the 2018 midterm elections.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Alice Ollstein of Talking Points Memo and Margot Sanger-Katz of The New York Times.

Among the takeaways from this week’s podcast:

  • Five states are seeking permission from federal officials to impose a lifetime limit on Medicaid eligibility. But despite the many changes the Trump administration officials have been making to Medicaid, they have shown no public interest in this yet.
  • Trump is considering regulations that would defund Planned Parenthood from the Title X Family Planning Program. Although anti-abortion groups would applaud such a move, it could backfire on the Republicans in November by energizing a wave of blue voters in the midterm elections.
  • Although former HHS Secretary Tom Price raised eyebrows this week with his comment disparaging the removal of the penalty for not having insurance, that stance is somewhat consistent with the administration’s earlier promise to find new ways to regulate the insurance markets.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

HHS Secretary Alex Azar to Supreme Court: Time to rule on Medicare case that affects $4 billion

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HHS Secretary Alex Azar Credit: Chris Kleponis-Pool, Getty Images

HHS Secretary Alex Azar

Lower court’s decision about disproportionate share hospital payments undermines the ability HHS has to administer Medicare reimbursement, Azar says.

Health and Human Services Secretary Alex Azar asked the U.S. Supreme Court to review an appeals court case won by numerous hospitals over disproportionate share hospital payments.

Azar said the decision affects between $3 and $4 billion in Medicare funding and therefore, the Supreme Court’s review is warranted.

At issue is whether the Centers for Medicare and Medicaid Services needed to go through a notice and comment rulemaking to get stakeholder feedback before deciding on its own to include Medicare Advantage beneficiaries in its calculations for DSH payments.

Medicare pays hospitals for providing inpatient care and gives an additional payment known as disproportionate share hospital adjustment to hospitals that serve a significantly disproportionate number of low-income patients.

The payment is based on two percentages. The first is a Medicare fraction, which is calculated using the number of patient days for patients who are entitled to benefits under Medicare Part A and for supplemental Social Security income benefits.

The second percent includes patient days attributable to patients who are not entitled to benefits under Medicare Part A.

Medicare Advantage, or Medicare Part C, established in 1997, allows individuals to receive benefits under Parts A and B through enrollment in a private MA plan.

Prior to 2004, CMS did not count a hospital’s Medicare Part C patient days when calculating the Medicare fraction used to determine DSH payments. Starting in 2004, CMS made a decision on its own interpretation of a rule and determined Part C patients were entitled to benefits under Medicare Part A within the meaning of Medicare-fraction provisions.

Hospitals challenged CMS’ interpretation done without notice and comment rulemaking. A district court sided with the government, but in 2017 the U.S. Court of Appeals in the District of Columbia ruled with the hospitals.

The appeals court said HHS needed notice and comment rulemaking before providing Medicare Administrative Contractors the payment calculation that is passed on to hospitals.

The decision undermines its ability to administer the annual Medicare reimbursement process in a workable manner, HHS said.

“The D.C. Circuit’s contrary decision would significantly impair HHS’s ability to administer annual Medicare reimbursements through the MACs that act on its behalf,” the Supreme Court filing said. “It would also impose significant costs on the government. Just with respect to the Medicare-fraction issue in this case, the decision below affects between $3 and $4 billion in Medicare funding.”

Solicitor General Noel Francisco filed the petition in April on behalf of Azar, against health systems Allina Health Services, doing business as United Hospital, Unity Hospital and Abbott Northwestern Hospital; Florida Health Sciences Center dba Tampa General Hospital; Montefiore Medical Center; Mount Sinai Medical Center of Florida dba Mount Sinai Medical Center; New York Hospital Medical Center of Queens; New York Methodist Hospital; and New York Presbyterian Hospital and New York Presbyterian Hospital Weill Cornell Medical Center.

 

Congress Urged To Cut Medicare Payments To Many Stand-Alone ERs

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https://khn.org/news/congressional-advisers-urge-medicare-payments-to-many-stand-alone-ers-be-cut/

The woman arrived at the emergency department gasping for air, her severe emphysema causing such shortness of breath that the physician who examined her put her on a ventilator immediately to help her breathe.

The patient lived across the street from the emergency department in suburban Denver, said Dr. David Friedenson, who cared for her that day a few years ago. The facility wasn’t physically located at a hospital but was affiliated with North Suburban Medical Center several miles away.

Free-standing emergency departments have been cropping up in recent years and now number more than 500, according to the Medicare Payment Advisory Commission (MedPAC), which reports to Congress. Often touted as more convenient, less crowded alternatives to hospitals, they often attract suburban walk-in patients with good insurance whose medical problems are less acute than those who visit an emergency room located in a hospital.

If a recent MedPAC proposal is adopted, however, some providers predict that these free-standing facilities could become scarcer. Propelling the effort are concerns that MedPAC’s payment for services at these facilities is higher than it should be since the patients who visit them are sometimes not as severely injured or ill as those at on-campus facilities.

The proposal would reduce Medicare payment rates by 30 percent for some services at hospital-affiliated free-standing emergency departments that are located within 6 miles of an on-campus hospital emergency department.

“There has been a growth in free-standing emergency departments in urban areas that does not seem to be addressing any particular access need for emergency care,” said James Mathews, executive director of MedPAC. The convenience of a neighborhood emergency department may even induce demand, he said, calling it an “if you build it, they will come” effect.

Emergency care is more expensive than a visit to a primary care doctor or urgent care center, in part because emergency departments have to be on standby 24/7, with expensive equipment and personnel ready to handle serious car accidents, gunshot wounds and other trauma cases. Even though free-standing emergency departments have lower standby costs than hospital-based facilities, they typically receive the same Medicare rate for emergency services. The Medicare “facility fee” payments, which include some ancillary lab and imaging services but not reimbursement to physicians, are designed to help defray hospitals’ overhead costs.

The proposal would affect only payments for Medicare beneficiaries. But private insurers often consider Medicare payment policies when setting their rules.

According to a MedPAC analysis of five markets — Charlotte, N.C.; Cincinnati; Dallas; Denver; and Jacksonville, Fla. — 75 percent of the free-standing facilities were located within 6 miles of a hospital with an emergency department. The average drive time to the nearest hospital was 10 minutes.

Overall, the number of outpatient emergency department visits by Medicare beneficiaries increased 13.6 percent per capita from 2010 to 2015, compared with a 3.5 percent growth in physician visits, according to MedPAC. (The reported data doesn’t distinguish between conventional and free-standing emergency facility visits.)

“I think [the MedPAC proposal] is a move in the right direction,” said Dr. Renee Hsia, a professor of emergency medicine and health policy at the University of California-San Francisco who has written about free-standing emergency departments. “We have to understand there are limited resources, and the fixed costs for stand-alone EDs are lower.”

Hospital representatives say the proposal could cause some free-standing emergency departments to close their doors.

“We are deeply concerned that MedPAC’s recommendation has the potential to reduce patient access to care, particularly in vulnerable communities, following a year in which hospital EDs responded to record-setting natural disasters and flu infections,” Joanna Hiatt Kim, vice president for payment policy at the American Hospital Association, said in a statement.

Independent free-standing emergency departments that are not affiliated with a hospital would not be affected by the MedPAC proposal. These facilities,which make up about a third of all free-standing emergency facilities, aren’t clinically integrated with a hospital and can’t participate in the Medicare program.

The MedPAC proposal will be included in the group’s report to Congress in June.

Even though stand-alone emergency facilities might not routinely treat patients with serious trauma, they can provide lifesaving care, proponents say.

Friedenson said that for his emphysema patient, avoiding the 15- to 20-minute drive to the main hospital made a critical difference.

“By stopping at our emergency department, I truly think her life was saved,” he said.

 

 

Ascension’s decision to cut back services stirs debate among Milwaukee officials

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https://www.beckershospitalreview.com/hospital-management-administration/ascension-s-decision-to-cut-back-services-stirs-debate-among-milwaukee-officials.html

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Milwaukee officials are urging Ascension Wisconsin to postpone its controversial scale back of services at Milwaukee-based Wheaton Franciscan-St. Joseph Hospital, which primarily serves a low-income neighborhood, according to Wisconsin Public Radio.

St. Joseph Hospital, which primarily serves patients covered by Medicare and Medicaid, plans to shutter its surgical and medical units, slowly sifting out inpatient care by July 1. Roughly 51 percent of the hospital’s patients are covered by Medicaid, 5 percent are uninsured and about 20 percent are covered by commercial health plans.

The closure of the surgical and medical units would leave no general acute care hospital north of downtown Milwaukee, an area plagued with widespread health disparities. Ascension, however, emphasized it is not leaving the city. Another Ascension hospital, Milwaukee-based Columbia St. Mary’s, is located 5.6 miles southeast of St. Joseph’s.

“We aren’t abandoning where low-income [patients] live, we are actually strengthening our ability to serve the people that live in the city of Milwaukee by combining the efforts of Columbia St. Mary’s and St. Joe’s,” Bernie Sherry, senior vice president who oversees the Wisconsin market of St. Louis-based Ascension Health, told Becker’s Hospital Review.

Since Ascension disclosed it would stop providing surgical and inpatient care at St. Joseph Hospital April 5, the health system has received criticism from multiple city officials and residents.

“We have an economic model now where if you have money, you’re going to get the best healthcare in the world, but if you’re poor, guess what? Get on a bus, hopefully you can get to a hospital five miles away and maybe you’ll get healthcare,” Milwaukee Alderman Michael Murphy told WPR. Mr. Murphy also emphasized that the implications of reducing services at St. Joseph go beyond the individual hospital.

Milwaukee Alderman Bob Donovan is asking Ascension to delay the closure of these units by one year to collect community feedback and find ways to mitigate the loss of services prior to phasing them out.

“If this request is rejected, I have already contacted the Office of the City Attorney and have asked them to watch carefully the process followed by Ascension to ensure that at a minimum, the corporation is in full and exact compliance with applicable state and federal laws and regulations,” said Mr. Donovan, according to WPR.

St. Joseph is part of Milwaukee-based Wheaton Franciscan Healthcare, which merged with St. Louis-based Ascension in 2016.

Banner Health settles whistleblower case for $18 million

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https://www.azcentral.com/story/money/business/health/2018/04/12/banner-health-settles-whistleblower-case-18-million/511848002/

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Banner Health has agreed to pay more than $18 million to settle whistleblower claims that the Phoenix-based health system admitted patients who could have been treated less expensively at outpatient facilities.

The settlement resolves a whistleblower case brought by a former Banner Health employee who claimed one dozen hospitals in Arizona and Colorado overcharged Medicare for brief, inpatient procedures that should have been billed on a less costly outpatient basis, the U.S. Attorney’s Office in Arizona said.

The settlement resolves allegations that Arizona’s largest health provider “inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period,” according to a statement from the federal prosecutors.

The settlement involved Medicare billing at one dozen hospitals from November 2007 through December 2016.

The case was brought by former Banner Health employee Cecilia Guardiola under the federal False Claims Act, which allows individuals to bring lawsuits on behalf of the government and collect a portion of any settlement. Under terms of the settlement, Guardiola will be paid $3.3 million.

Banner Health said in a statement that the settlement does not include any findings of wrongdoing and allows the system to avoid the costs and disruption of ongoing litigation.

“Banner Health is fully committed to adhering to all legal and regulatory requirements and providing patients with the highest quality of care,” the statement read. “Although the rules that dictate when a hospital can accommodate a physician’s request to admit a Medicare patient are complex and evolving, our policy has always been to make those decisions in accordance with government guidelines.”

Guardiola, a registered nurse and a law school graduate, was hired by Banner Health in October 2012 as a director overseeing clinical documentation. She resigned three months later after she determined her efforts to bring “ethical compliance” would be ineffective, according to a statement issued by Kreindler & Associates, a law firm representing Guardiola.

During her brief stint at Banner, Guardiola evaluated Banner’s clinical documentation as well as short-stay inpatient claims.

She discovered that Banner hospitals billed an “inordinate and improper number of short-stay claims, particularly those for expensive cardiac procedures,” according to the statement.

In all, she discovered more than 650 examples of Banner billing Medicare for an inpatient claim even though the patient was admitted and discharged the same day, the statement said.

She also discovered that two hospitals, Banner Boswell and Banner Del Webb, identified some cardiac procedures as urgent rather than elective to prevent claims from being denied, the statement said.