Cooperating for better care.

Medicare

Tag Archives

Chasing Medicaid dollars, hospitals rent or buy up nursing homes

By PHIL GALEWITZ

For Kaiser Health News

Westminster Village North, a nursing-home and retirement community in Indianapolis, recently added 25 beds and two kitchens to speed food delivery to residents. It also redesigned patient rooms to ease wheelchair use and added Wi-Fi and flat-screen televisions. This fall, it’s opening a new assisted-living unit.

“We have seen amazing changes and created a more home-like environment for our residents,” said Shelley Rauch, executive director of the home.

The nursing home can afford these multimillion-dollar improvements partly because it has, for the past five years, been collecting significantly higher reimbursement rates from Medicaid, the state-federal health insurance program for the poor. About half of its residents are covered by the program.

In 2012, the nursing facility was leased to Hancock Regional Hospital, a county-owned hospital 15 miles away. The lease lets it take advantage of a wrinkle in Medicaid’s complex funding formula that gives Indiana nursing homes owned or leased by city or county governments a funding boost. For Indiana, that translates to 30 percent more federal dollars per Medicaid resident. But that money is sent to the hospitals, which negotiate with the nursing homes on how to divide the funding.

Nearly 90 percent of the state’s 554 nursing homes have been leased or sold to county hospitals, state records show, bringing in hundreds of millions in extra federal payments to the state.

Even though Indiana’s nursing home population has remained steady at about 39,000 people over the past five years, Medicaid spending for the homes has increased by $900 million, in large part because of the extra federal dollars, according to state data. Total spending on Indiana nursing homes was $2.2 billion in 2016.

The funding enhancements were pioneered in Indiana, but hospitals in several other states, including Pennsylvania and Michigan, have also used the process. Advocates say it has been a key factor in helping to keep Indiana’s city and county hospitals economically vital at a time when many rural hospitals nationwide are facing serious financial difficulties.

Westminster Village North, a nursing home and retirement community in Indianapolis, recently redesigned patient rooms in the nursing home to ease wheelchair use. (Courtesy of Westminster Village North)

But critics argue that the money flow has not significantly improved nursing home quality and has slowed adoption of community and home health services.

More than two-thirds of Indiana’s Medicaid long-term-care dollars go to nursing homes, compared with the U.S. average of 47 percent.

Joe Moser, who until May was Indiana’s Medicaid director, said while in office that the hospital-nursing home marriages were partly responsible for keeping more people in nursing homes. “It is a factor that has contributed to our imbalance,” he said.

Daniel Hatcher, a law professor at the University of Baltimore and author of  the book The Poverty Industry, said this funding arrangement is a bad deal for the poor and undercuts the purpose of the Medicaid program. “The state is using an illusory practice and taking away money from low-income elderly individuals who are living in poor-performing nursing homes,” he said. He noted Indiana is ranked near the bottom of states for nursing home quality by several government and private reports.

But proponents of the practice say that even when hospitals get most of the money, it is well spent.

Marion County Hospital and Health Corp., the large safety-net hospital system in Indianapolis, owns or leases 78 nursing homes across the state, more than any other county hospital.

Sheila Guenin, vice president for long-term care there, said the hospital keeps 75 percent of the additional Medicaid dollars and the nursing homes get the rest. Still, the additional money has improved care. The transfer of the license to the hospital has kept several nursing homes from closing and increased staffing rates at many others, she said.

About 40 percent of the county hospital’s nursing homes have five-star ratings from the federal government, up substantially from 10 years ago, she said. Among the improvements at the nursing homes were the addition of electronic health records as well as high-capacity emergency generators to provide power in case of a natural disaster.

Still, some patient advocates said the extra funding is flowing to hospitals and nursing homes with little public accounting. Ron Flickinger, a regional long-term-care ombudsman in Indiana, said, “A lot of extra money is being spent here, but I’m not sure patients have seen it benefit them.”

A couple reads the paper in one of the common rooms at the Westminster Village North nursing home. (Courtesy of Westminster Village North)

Practice Dates To 2003

Medicaid, which typically covers about two-thirds of nursing-home residents, is jointly financed by the federal and state governments. States pay no more than half of the costs, although the federal match varies based on a state’s wealth. In Indiana the federal government covers about two-thirds of Medicaid costs.

The enhanced nursing-home payments began in 2003 when a financially strapped Indianapolis hospital owned by the county took advantage of the Medicaid funding provision to bolster its bottom line. In this case, the hospital purchased a nursing home, then provided the money for the state to increase what it spent on the home to the federally allowed maximum.

That increase, in turn, drew down more federal matching funds. Since the federal remittance is larger than the hospital contribution, the hospital got back its initial investment and divided the extra money with the nursing home.

Other county-owned hospitals in Indiana slowly followed suit.

Hatcher said Indiana government leaders embraced the funding arrangement because it let them avoid the politically difficult step of raising taxes to increase state funding to improve care at nursing homes. “It’s a revenue generator for the state and counties,” he said.

All the Medicaid funding for nursing homes should be going to those homes to care for the poor, not shared with hospitals to use as they choose, he added.

The strategy, promoted by consultants advising hospitals and nursing homes in Indiana, is used heavily there because of the plethora of county-owned hospitals. But the federal government is tightening the rules about such payments.

Texas has secured Medicaid approval for a similar strategy starting this month, but federal officials have made the extra funding dependent on nursing homes meeting quality measures, such as reducing falls. Oklahoma is seeking to get federal approval as well.

And in a rule released last year, the federal Centers for Medicare & Medicaid Services announced that it would gradually force states to shift to payment systems that tie such reimbursements to quality of care. Michael Grubbs, an Indiana health consultant, said that rule does not stop the Indiana hospital funding program, but it’s unclear that it will last.

Nursing-home operators in Indiana say the financing arrangement has helped them keep up with rising costs and improve care for residents.

Zach Cattell, president of the Indiana Health Care Association, a nursing-home trade group, noted the number of nursing homes in the state earning Medicare’s top, five-star rating has increased 9 percentage points since 2011. He said the percentage of high-risk residents with pressure ulcers and those physically restrained also dropped significantly.

An Opportunity Or A Loophole?

In Indiana, the small, county-run rural hospitals generally are not facing the financial threat that has become common elsewhere, in part because of the extra Medicaid funding gained from buying nursing homes, hospital officials say.

“The money has meant a great deal to us,” said Gregg Malot, director of business development at Pulaski Memorial Hospital in northern Indiana. “I don’t see this as a loophole but see it as an opportunity for small rural community hospitals to improve our quality and access to care.”

His hospital is the only one in Pulaski County. The extra Medicaid revenue from acquiring 10 nursing homes statewide — about $2 million a year — has helped finance the hospital’s obstetrics care and the purchase of the hospital’s first MRI, so doctors don’t have to rely on a mobile unit that used to come twice a week, he said. The hospital also spent some of the funding to add a centralized telemetry unit to monitor patients.

Steve Long, CEO of Hancock Regional Hospital, in Greenfield, Ind., said his hospital recently built two fitness centers in the county with help from its extra Medicaid dollars. “This would not be possible without the additional funding.”

He rejects the notion that additional Medicaid money reduces the hospital’s incentive to add home- and community-based care in the community. He said new Medicare financing arrangements, such as accountable care organizations, give the hospital motivation to find the most efficient ways to care for patients after they leave the hospital.

But he acknowledged the hospital benefits from seeing more patients go to nursing homes licensed under its name.

“Welcome to health care — it’s a complex and confusing environment where we have all different competing incentives,” Long said.


AHA again attacks HHS OIG compliance reviews

 

The American Hospital Association (AHA) has again complained to the Centers for Medicare & Medicaid Services about “serious problems’’ with the hospital-compliance reviews by the Office of the Inspector General (OIG) of the Department of Health & Human Services.

AHA complained last week that the audits routinely include “fundamental flaws and inaccuracies, both in the OIG’s understanding and application of Medicare payment rules and in the procedures the OIG uses to conduct the audits.” The hospital trade organization asserted that this causes very overstated repayment demands, undermines hospitals’ reputations and steals time and resources from patient care.

The association added that the audits can lead to uneven and unfair application of Medicare payment rules. It notes that some hospitals aren’t audited and the appeals process operates inconsistently

Healthcare Dive noted that: “This is not a new issue for hospitals. In a June 2014 letter to then-HHS Secretary Kathleen Sebelius, the AHA called for an immediate halt to the audits, saying the OIG’s findings and estimated payments were incorrect and ‘entirely redundant.’ A recent uptick in penalties for alleged reimbursement fraud and abuse has galvanized hospitals to again press for audit reforms.

“AHA says OIG’s tendency to extrapolate its findings to all claims in an audit period is aggravating the problem of overall flawed reports.’’

The news service speculated: “The AHA may be hoping HHS scales back the review process altogether, which would not be particularly surprising with the pressure in President Donald Trump’s administration to roll back regulatory burden. Recently, the CMS said it will take a more targeted approach in some areas to finding and investigating Medicare fraud and improper payments. It will focus on providers whose claim error rates or unusual billing practices stand out compared to similar providers.’’

“But while hospitals call for reforms in the OIG compliance reviews, a recent Wall Street Journal report raised serious concerns about hospital safety. Reviewing hundreds of Joint Commission inspection reports, the Journal found about 350 hospitals that maintained accreditation in 2014 despite Medicare violations. More than a third of those had additional deviations in 2015 and 2016.’’

To read more, please hit this link.

 

 


Rural hospitals struggle to stock costly drugs

 

By SARAH JANE TRIBBLE

Kaiser Health News

MOUNTAIN VIEW, Ark.

Hospital pharmacist Mandy Langston remembers when Lulabelle Berry arrived at Stone County Medical Center’s emergency department last year.

Berry couldn’t talk. Her face was drooping on one side. Her eyes couldn’t focus.

“She was basically unresponsive,” Langston recalls.

Berry, 78, was having a severe ischemic stroke. Each passing second made brain damage more likely. So, Langston reached for the clot-busting drug Activase, which must be given within a few hours to work.

“If we don’t keep this drug [in stock], people will die,” Langston said.

Berry survived. But Langston fears others could die because of an unintended bias against rural hospitals built into the U.S. health law. An obscure Obamacare provision forces rural hospitals like Langston’s to pay full price for drugs that many bigger hospitals buy at deeply discounted rates.

For example, Langston’s 25-bed hospital pays $8,010 for a single dose of Activase — up nearly 200 percent from $2,708 a decade ago. Yet, just 36 miles down the road, a bigger regional hospital gets an 80 percent discount on the same drug.

White River Medical Center, a 235-bed facility in Batesville, Ark., buys Activase for about $1,600 per dose. White River participates in a federal drug discount program Congress approved in the early 1990s. The program offers significant price breaks on thousands of drugs to hospitals that primarily serve low-income patients. One federal report found the average discount ranged from 20 to 50 percent, though as illustrated with Activase, it can be much higher.

Rural hospitals have long wanted to be part of the so-called 340B program, too, but were blocked from participating until the Affordable Care Act of 2010. That historic health law added rural hospitals to the overall program. But, unlike bigger hospitals, rural hospitals can’t get discounts on expensive drugs that treat rare diseases because of a last-minute exclusion written into the ACA.

That seemingly minor detail in the law has left rural hospital pharmacists and health care workers struggling to keep medicines in stock, and wondering if they will be able to adequately care for patients.

Arkansas, for example, is in the “stroke belt,” where medical staff depend on Activase to help them battle one of the highest rates of stroke deaths in the country. When Langston went to restock Activase this year, it was so expensive she left a reorder unfilled for more than week, anxiously keeping only one dose of the clot-busting drug on hand.

“Usually strokes come in clusters,” Langston said. “I didn’t want two people to come in and we were going to [have to] choose which one we were going to treat.”

In Atlantic, Iowa, pharmacy director Crystal Starlin sparingly stocks oncology drugs at Cass County Memorial Hospital. Newly diagnosed cancer patients might have to wait a couple of days to start treatment.

“We just can’t keep the extra [drugs] on hand,” Starlin said.

In Vermont, North Country Hospital closed its infusion center this spring due to the soaring cost of medicines.

“That was one area we could not afford to be in,” said chief executive Claudio Fort. North Country is the only hospital in a two-county region along the Canadian border and its roughly dozen active chemotherapy patients now must drive 45 minutes away for treatment.

The rare-disease exclusion was not publicly debated before being added into the ACA. Rather, it was tucked into the law at the very end of the process. How it wound up in the law is a bit of a mystery.

Former PhRMA chief executive Billy Tauzin said he doesn’t recall negotiating the exclusion. But, he said, the industry has consistently raised concerns about the drug discount program’s reach.

“It’s a question of how deeply you can afford to discount drugs that are expensive,” said Tauzin, who abruptly stepped down just before the ACA passed.

After the health law passed, PhRMA battled for years — in federal court — to keep rural hospitals from getting discounts on rare-disease drugs.

Congressman Peter Welch, a Democrat from Vermont who represents North Country, said it is clear whom the law hurts and helps.

“The pharma lobbyists pay attention, and their lawyers pay attention to the fine print,” Welch said. The pharmaceutical industry changes that fine print … [and] many legislators don’t even realize [that it] will have this adverse impact on hospitals in their communities.”

The rare-disease exclusion means that certain types of hospitals — including critical access, sole community and rural referral centers — cannot get discounts on rare-disease drugs, or on drugs that are “designated” to treat a rare disease. (Rare-disease drugs are also known as orphan drugs, which is a federally approved category of drugs that treat a disease affecting fewer than 200,000 people. Often, they carry price tags of up to $100,000 a year or more.)

The Food and Drug Administration gives the designation as a first step when it agrees with a drugmaker’s request to study whether a drug can be used to treat a specific rare disease. This can happen even if a drug is already FDA-approved and on the market for use in treating a common condition. The next step — the ability to market the medicine as an orphan drug — comes once research confirms that the drug is safe and effective in treating a specific, less common condition.

The popular clot-buster Activase has not won final approval to treat a rare disease but, on two separate occasions in 2003 and 2014, the FDA has given it the orphan designation while research is ongoing.

About 450 orphan drugs have been approved by the FDA. But thousands of drugs are “designated” and more are identified every week.

The list includes generic drugs such as the hormone melatonin and the autoimmune drug abatacept. In other words, medicines used to treat everything from sleep troubles to arthritis have ended up “designated.”

The small town of Mountain View, Ark., known for its crafts and music scene, is about two hours north of Little Rock and nestled in the rolling Ozarks. Arkansas’ mountainous terrain makes it essential for local hospitals to stock lifesaving stroke drugs. The state reports some of the nation’s highest rates of stroke deaths. (Sarah Jane Tribble/KHN)

Some drugmakers, such as Janssen Pharmaceuticals, have voluntarily offered discounts to rural hospitals on all of their orphan drugs including Remicade, whether they’re approved or designated. In contrast, drugmaker Genentech sent letters to rural hospitals on Jan. 1 listing dozens of drugs that would not qualify for discounts, including Activase and cancer drug Avastin.

Susan Willson, a Genentech spokeswoman, said the company is “deeply committed to ensuring that people have access to the medicines they need.” But, she added, the company believes the federal drug discount program has “grown well beyond its original intent.”

Several federal reports in recent years from the Medicare advisory board, as well as the Government Accountability Office and the Office of Inspector General, have evaluated the federal drug discount program’s growth. About 40 percent of U.S. hospitals now participate in the program and House Republicans held a hearing this summer questioning the program’s growth.

But for Dana Smith, director of pharmacy at Dallas County Medical Center in Fordyce, Ark., the discount program’s growth and problems are a separate issue.

“Basically, Genentech is saying to me that rural health care and the patients in rural America are not as important as patients in urban areas,” Smith said, adding the pharmaceutical industry “knows we have less manpower to fight them.”

Back at Stone County, emergency room medical director Dr. Barry Pierce paused one recent afternoon at the nursing station and recalled those tense days with just one dose of Activase. Stone County now keeps two doses of the stroke drug on hand.

Pierce noted that Stone County is at least 45 minutes away from the next nearest hospital and, echoing Langston’s concern, he said: “If we don’t have the drugs we need, people will die.”

 


University Hospitals, SummaCare to offer co-branded Medicare coverage

Lerner Tower, part of the University Hospitals complex in Cleveland.

University Hospitals, based in Cleveland, and SummaCare, an Akron, Ohio-based health insurer,  will offer co-branded Medicare coverage.

Called University Hospitals Medicare Advantage from SummaCare, the coverage will be available in markets with University Hospitals facilities. The partnership  says that the plan is to encourage more holistic, value-based care than fee-for-service care.

“We expect our members to achieve improved quality of care, better health outcomes and an overall outstanding patient experience,” Anne Armao, SummaCare vice president of marketing and consumer engagement, said.

UH will provide special care managers to help coordinate services with SummaCare.

To read more, please hit this link.


Probe suggests Joint Commission accreditation a joke

The Joint Commission, the accrediting organization for about 80 percent of U.S. hospitals,  rarely revokes its approval of facilities out of compliance with Medicare rules, reports The Wall Street Journal.

The WSJ, after digging into  Joint Commission inspection reports from 2014 through 2016, found that in 2014, about 350 hospitals with Joint Commission accreditation had violated Medicare requirements that year, and about a third had additional violations in 2014, 2015 and 2016.

The paper reported that the commission  revoked accreditation for just 1 percent of hospitals out of compliance with Medicare. More than 30 hospitals retained their accreditations even though the Centers for Medicare & Medicaid Services found their violations important enough to cause, or likely cause, serious patient injury or death.

“It’s clearly a failed system and time for a change,” said Ashish Jha, M.D., a health policy researcher at Harvard’s T.H. Chan School of Public Health and a practicing internist, told the paper.  The probe “shows accreditation is basically meaningless—it doesn’t mean a hospital is safe.”

To read more, please hit this link.


When hospital giants hire your GPs

By JENNY GOLD

For Kaiser Health News

MOUNTAIN VIEW, Calif.

When Dr. Sarah Azad followed her mother into the field of obstetrics eight years ago, she thought she’d be in private practice for the rest of her career. At the time, independent practices abounded in Silicon Valley.

“From the time we were young, my mom’s patients loved her. She was a part of their lives. That’s just always how I’ve seen medical care,” she said.

But over the past decade, she’s watched as physician after physician sold their practices and went to work for one of the large hospital systems in town. Today, Dr.,  Azad runs one of the last remaining independent OB-GYN practices in Mountain View.

The number of physician practices employed by hospitals increased by 86 percent from 2012 to 2015, according to a study conducted by Avalere Health for the Physicians Advocacy Institute, a health policy-focused nonprofit.

Perhaps nowhere has the trend been more pronounced than in Northern California.

As large hospital systems like Sutter Health, Stanford Medicine and the University of California at San Francisco gobble up doctor practices, they gain market muscle that pushes costs upward. It’s a key reason why Northern California is now the most expensive place in the country to have a baby.

A study published this week in Health Affairs found that large doctor practices, many owned by hospitals, exceed federal guidelines for market concentration in more than a fifth of the areas studied. But the mergers are typically far too small for federal antitrust authorities to notice.

“When you have less competition, prices go up,” said Martin Gaynor, a healthcare economist at Carnegie Mellon University. “If you’re an insurance company and you don’t reach an agreement with Sutter, then you have a hard time offering an attractive insurance product because it’s so big and pervasive. So you don’t have the same negotiating power, and Sutter can extract higher prices.”

In the San Francisco Bay Area, the reimbursement rate for a vaginal delivery is two to four times higher for physicians who work for large hospital systems than for those who are independent, according to a Kaiser Health News analysis. The news organization examined claims data provided by Amino, a health-cost transparency company, plus results from medical cost calculators available from certain employers to help workers comparison shop.

The extra money for physician services goes to the hospital system, and doctors, now on salary, might take home no more than before. Although switching from independent practice spares OB-GYNs the considerable hassles of negotiating with insurers and running an office, doctors say the lion’s share of the benefit goes to hospital systems — not to physicians or patients.

In Northern California, Sutter, Stanford and UCSF all mentioned quality as a reason why their physician prices are higher, and it might seem intuitive that integrating care among disparate physicians leads to better care.

“Sutter Health-affiliated doctor groups consistently rank among California’s highest performers,” Dr. Jeffrey Burnich, senior vice president at Sutter Health Medical and Market Networks, wrote in an email. In the long run, “by improving care quality and efficiency, we reduce costs.”

But in general, research suggests bigger is not necessarily better.

Fewer patients of small physician-owned practices, for example, are admitted to the hospital for preventable conditions than those of large hospital-owned practices, according to a 2014 study published in Health Affairs. A report from the National Academy of Social Insurance showed that the integrated delivery networks of large hospital systems have raised physician costs without evidence of higher quality. And a recent paper, also published in Health Affairs, found that high-price physician practices, which cost at least 36 percent above average, had no better quality than low-cost practices.

“All of the evidence that we see shows that the quality in these larger systems is the same or worse,” said Kristof Stremikis, associate director for policy at the Pacific Business Group on Health, which represents employers that provide health insurance.

A Personal Connection

On a sunny day last spring, Dr. Azad walked into her patient’s room wearing a colorful headscarf. Just weeks from her due date, Ruby Lin sat on the end of the exam table holding her belly. The two women greeted each other like old friends.

“Hi! You look great,” Ms. Lin told Dr. Azad.

“Thanks — I’m not where I hoped I’d be,” Dr. Azad replied, rolling her eyes and touching her stomach. The doctor gave birth to her fourth child just months earlier and hadn’t lost the “baby weight” she wanted to yet.

Dr. Sarah Azad examines patient Ruby Lin in Mountain View, Calif.  Dr. Azad’s mother was also an obstetrician.

Photo by Jenny Gold/KHN

This was Ms. Lin’s second baby with Dr. Azad as her physician. “I get very nervous about seeing doctors and especially OB-GYNs, and Dr. Azad is the only one I’m comfortable with,” said Ms. Lin.

This sort of well-established, personal relationship is Dr. Azad’s favorite part of being a doctor, and she considers it a hallmark of independent practice. At the larger practices owned by hospital systems, she said, patients may be more likely to have the doctor on call deliver their baby rather than the obstetrician whom they’ve grown to know over months.

But  Dr. Azad says that running a medical practice in one of the most expensive parts of the country is getting harder. “Rent goes up 3 percent per year. Water and utilities went up 18 percent last year alone. But seven years later, [the insurers] are still paying me the same amount, despite any efforts to negotiate.”

At first, Dr. Azad tried reaching out to the insurance companies directly to ask for higher rates. They refused even to meet with her, she said. Then she hired a consultant to negotiate on her behalf. Nothing worked.

“One insurance contract responded saying, ’You don’t even have 2 percent of market share. Basically drop our contract or not — it doesn’t affect us,’” she said. Another insurer told her they couldn’t raise her rates because they had to pay too much to the larger health systems in town, she said.

Independent doctors in the Bay Area are reimbursed, on average, a median $2,408.45 for a routine vaginal delivery, which includes prenatal and postnatal visits, according to the Kaiser Health News analysis of Amino claims data.

That compares with $5,238.13 for the same bundle of services for Stanford physicians and $8,049.84 for doctors employed by University of California-San Francisco.

Health data company Amino provided Kaiser Health News (KHN) with median billing amounts for Bay Area obstetricians. KHN used a Medicare provider database to determine where each doctor worked. In cases where the doctor’s employment status was unclear, a reporter retrieved the information by calling the health system or physician directly. KHN then calculated the average median billing amount for a routine vaginal birth for each health system.

The Amino database did not contain many claims from doctors employed by Sutter, so KHN also reviewed OB-GYN charges on several insurers’ online cost estimators. The review found that obstetricians employed by Sutter Health are reimbursed about three times more for the same service than independent doctors, or about $6,452 for a vaginal delivery.

Many doctors are mystified as to why prices vary so dramatically — independent or not.

Same Office, Same Pay

After nearly a quarter-century in independent practice, OB-GYN Ken Weber sold his practice to Stanford, where he now works. His office is in the same place, across the street from  Dr. Azad. Both physicians admit patients to the same local hospital.

But insurers now pay about twice as much for his services as before.

He still makes the same amount, he said. Stanford’s health system gets the rest.

“It doesn’t make sense to me from the insurance company’s standpoint, because they’re losing all these doctors to the bigger groups and having to pay more. And if they just had negotiated with us fairly, I think we could come to some middle ground,” Weber said.

Dr. Weber said he hung on to his independent practice as long as possible, but he grew increasingly frustrated. “It’s hard to know that you’re doing the same work someone else does at Sutter or Stanford or wherever,” yet insurers are paying more for patients to see the other person, he said.

Nonetheless, there have been some real benefits to selling his practice, he added: He no longer has to worry about dealing with billing or maintaining compliance with the new electronic health-record regulations.

For their part, the big Bay Area hospital systems caution against oversimplifying the many factors that go into paying for obstetrical care. A Stanford spokeswoman, Samantha Dorman, said the health system incurred significant costs when it integrated new provider groups. For instance, many were not yet on electronic health records and needed updated equipment. Dorman added that Stanford reduced physician charges a few years ago to be more in line with other practices.

A UCSF spokeswoman said that just looking at physician reimbursement rates was misleading because while the system charges more for physician services, it charges less for other hospital services. Overall, she said, their costs are competitive.

For its part, Sutter suggested that it was not accurate or fair to judge physician price discrepancies on online cost calculators. According to  the aforementioned Dr. Burnich of its Medical and Market Networks service, the rates provided are inconsistent and often out-of-date.

The agreements between hospitals and insurers have “gag clauses” barring either party from divulging rates. The bottom line, for many patients, is that it’s almost impossible to determine either the cost or the value of the various health care providers available to them. This is particularly problematic for patients with high-deductible plans, who may be on the hook for a significant portion of those costs.

Meanwhile, the type of consolidation that  Dr. Azad has witnessed in Northern California is spreading quickly throughout the country, and it is extremely difficult to reverse.

The most consolidated places like Northern California, Pittsburgh and Boston have become a “poster child of what not to do,” said economist Gaynor of Carnegie Mellon. “We should look at places that have consolidated and think about how to avoid that.”

Kaiser Health News correspondent Sydney Lupkin contributed to this report.


Study: Preferred skilled nursing facility networks linked to greater readmission-rate cut

A new study in Health Affairs says that hospitals that refer patients to a preferred network of skilled nursing facilities reduced readmissions for those patients more than hospitals that offered a wider list of facilities for patients to choose from.

FierceHealthcare reported that researchers “identified four ‘case hospitals’ with a preferred SNF network and 12 that did not use such a network, and compared Medicare readmissions data. Between 2009 and 2013, the rate of readmissions from SNFs in the network fell  by 6.1 percentage points, while it decreased by 1.6 percentage points for the other hospitals.” To read the Fierce article, please hit this link.

Fierce reported that “The researchers found that in the four case hospitals, patients were more likely to have coordinated care plans that shared the load between the hospital and SNF, which can be crucial as these patients are often among the sickest. In one case, a hospital nurse practitioner visited patients at the in-network SNFs each day. Those patients also received a weekly visit by a physician, in addition to care from the team at the nursing facility.”

Among the findings, reports Fierce:

  • “Hospitals with networks took advantage of existing provider relationships. These existing relationships also offered more leverage to improve performance, instead of relying solely on quality ratings.
  • “An understanding of cost drivers led hospitals to create a SNF network. Some of the case hospitals decided to implement a network because they saw they were spending a lot on nursing home care, and others were pushed by outside motivators, like Accountable Care Organization participation.
  • “Data management is key. Gathering data from the SNFs in the network is necessary to maintaining quality and can make it more successful.
  • “Interpretations of ‘patient choice’ vary. Many of the hospitals without networks had a very strict view of ‘patient choice,’ and thought a preferred network was too limiting.”

 


How off-the-radar mergers create healthcare near-monopolies

By JAY HANCOCK

For Kaiser Health News

Hospitals have gone on a doctor-buying spree in recent years, in many areas acquiring so many independent practices they’ve created near-monopolies on physicians.

Research published on Sept. 5 throws new light on the trend, showing that large doctor practices, many owned by hospitals, exceed federal guidelines for market concentration in more than a fifth of the areas studied.

But it goes further, helping answer some of health policy’s frequently asked questions: How could this happen? Where are the regulators charged with blocking mergers that have been repeatedly shown to drive up the price of health care?

The answer, in many cases, is that they’re out of the game.

Doctor deals are typically far too small to trigger official notice to federal antitrust authorities or even attract public attention, finds a paper published in the journal Health Affairs.

When it comes to most hospital-doctor mergers, antitrust cops operate blind.

“You have a local hospital system and they’re going in and buying one doctor at a time. It’s onesies and twosies,” said Christopher Ody, a Northwestern University economist and one of the study’s authors. “Occasionally they’re buying a group of five. But it’s this really small scale” that adds up to big results, he said.

The paper, drawing from insurance data in states covering about an eighth of the population, found that 22 percent of markets for primary-care doctors, surgeons, cardiologists and other specialties were “highly concentrated” in 2013. That means that, under Federal Trade Commission guidelines, a lack of competitors substantially increased those doctors’ ability to raise prices without losing customers.

The research didn’t sort physician groups by ownership. But other studies show that large, predominant practices are increasingly owned by hospitals, which see control of doctors as a way to both coordinate care and ensure patient referrals and revenue.

According to one study, hospitals owned 26 percent of physician practices in 2015, nearly double the portion from 2012. They employed 38 percent of all physicians in 2015, up from 26 percent three years earlier.

In the study by Ody and colleagues, only 15 percent of the growth by the largest physician groups from 2007 to 2013 came from acquisitions of 11 doctors or more.

About half the growth of the big practices involved acquisitions of 10 or fewer doctors at a time. About a third of the growth came not from mergers but from hiring doctors out of medical school or other sources.

Federal regulations require notification to anti-monopoly authorities only for mergers worth some $80 million or more — far larger than any acquisition involving a handful of doctors.

Very few of the mergers that drove concentration over the market-power red line — or even further — in the studied areas would have surpassed that mark or a second standard that identifies “presumably anti-competitive” combinations.

But the little deals add up. In 2013, 43 percent of the physician markets examined by the researchers were highly or moderately concentrated according to federal guidelines that gauge monopoly power by market share and number of competitors.

(A market with three practices in a particular specialty, each with a third of the business, would be at the lower end of what’s considered highly concentrated. A market with one doctor group doing at least 50 percent of the business would be highly concentrated no matter how many rivals it had.)

Bigger and fewer doctor practices, fueled largely by hospital acquisitions, do drive up prices for patients, employers and taxpayers, several studies confirm.

Part of the increase results from a reimbursement quirk. Medicare and other insurers pay hospital-based doctors more than independent ones. But another part comes from the lock on business held by large practices with few rivals, Ody said.

“It’s a problem,” said Martin Gaynor, a healthcare economist at Carnegie Mellon University and former head of the FTC’s Bureau of Economics. “All the evidence that we have so far … indicates that these acquisitions tend to drive up prices, and there’s other evidence that seems to indicate it doesn’t do anything in terms of enhancing quality.”

The American Hospital Association, a trade association, declined to comment on the study since officials hadn’t seen it. But the AHA often argues that “hospital deals are different”and that doctor acquisitions keep patients from falling through the cracks between inpatient and outpatient care.

The FTC has moved to block or undo a few sizable doctor mergers, including an orthopedics deal in Pennsylvania and an attempt by an Idaho hospital system to buy a medical practice with dozens of doctors.

But the agency largely lacks the tools to challenge numerous smaller transactions that add up to the same result, said Ody.

An FTC spokeswoman declined to comment on the study’s findings.

Ody urged state attorneys general and insurance commissioners to look more closely at doctor combos. Sometimes state officials can question mergers overlooked by federal authorities. Or they can block anti-competitive practices, such as when hospitals seek to exclude competitor physicians from insurance networks.

Beyond that, “I hope that people notice this [research], and I hope people think creatively about what kinds of solutions might be appropriate for this,” he said. “I don’t know what they are.”


Giving patients pills to take home at hospital discharge may cut readmissions

To try  to reduce the number of hospital readmissions, many hospitals across America across America are starting “meds to beds” and/or “meds in hand” programs in which patients get prescription drugs to take home with them just before they’re discharged.  Indeed a 2016 survey by the American Society of Health-System Pharmacists found that about 35 percent of U.S. hospitals offer discharge prescriptions.

The Washington Post reports: “Many hospitals begin the meds-to-beds program with a single department, such as cardiology or transplant medicine, see how well it works and then add more.”

“And once Medicare acted {to penalize hospitals for what deems excessive readmissions}, other insurers began levying penalties for early readmission as well,”  Joshua Seidman, a senior vice president at the health-care consulting firm Avalere, told The Post. Thus many hospitals have started “transitions of care” programs that link patients with such post-discharge services  as follow-up physician visits and medications to be used at home.

“Data published this year by the Kaiser Family Foundation suggests such efforts work: Hospital readmissions have fallen since 2012, although how much can be attributed to the new prescription programs isn’t broken out by Kaiser. Tricia Neuman, senior vice president and director of Kaiser’s program on Medicare policy, told The Post: “For older patients with complex medical conditions or dementia, taking their drugs, as prescribed, can be a serious challenge unless they have the support they need once they get home. Programs that target patients as they transition from one setting to another can help avoid preventable U-turns to the emergency room or hospital — which could lead to better patient care and lower costs.”

To read more, please hit this link.

 


AHA sends Congress suggestions for regulatory relief

The American Hospital Association has forwarded some options to Congress to consider for regulatory relief for healthcare organizations.

Tom Nickels, the AHA’s executive vice president for government relations and public policy, told Congress that although the government has eased some  rules, a huge burden on hospitals remains.

He wrote: “Indeed, the regulatory burden faced by hospitals is substantial and unsustainable. In addition to the sheer volume, the scope of changes required by the new regulations is beginning to outstrip the field’s ability to absorb them.

 Here are a few highlights as summarized by FierceHealthcare:

  • “Offer an Anti-Kickback safe harbor and Stark exemption for clinical integration agreements and patient assistance, as these laws can hinder care coordination.
  • “Issue an enforcement moratorium on the ‘96-hour’ rule, which requires critical access hospitals to certify that a patient could reasonably be transferred or discharged within 96 hours.
  • “Allow providers access to patient substance abuse treatment records without an individual patient’s consent.
  • “Suspend the “deeply flawed” star ratings on Hospital Compare, which Nickels said experts have disputed as accurate indicators of clinical quality.
  • “Reduce the number of clinical quality measures to the ones that ‘matter,’ as the Centers for Medicare & Medicaid Services currently uses upwards of 90 measures.
  • “Protect Medicare payments to disproportionate share hospitals.
  • “Adjust readmission rate evaluations to account for social risk factors.
  • “Make bundled-payment programs voluntary.”

To read the AHA letter, please hit this link.

To read the FierceHealthcare commentary, please hit this link.


Page 1 of 27123...Last

Contact Info

info@cmg625.com

(617) 230-4965

Wellesley, Mass