Lawmakers and telehealth advocates have lauded the U.S. Senate’s passage of bipartisan legislation to extend telehealth benefits to several patient populations battling chronic illnesses.
After another failed attempt to repeal the Affordable Care Act, the Senate has unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017.
The measure would let Medicare Accountable Care Organizations expand the use of telehealth, build broader telehealth benefits into Medicare Advantage plans and expand virtual care for stroke and dialysis patients.
“The CHRONIC Care Act will mean more care at home and less in institutions. It will expand the use of lifesaving technology,” Sen. Ron Wyden (D-Ore.), said on the Senate floor before the vote. “It places a stronger focus on primary care. It gives seniors, however they get Medicare, more tools and options to receive care specifically targeted to address their chronic illnesses and keep them healthy. Those are all important steps forward in updating the Medicare guarantee.”
Around the country, a handful of nursing-home companies have begun selling their own private Medicare insurance policies, pledging close coordination and promising to give clinicians more authority to decide what treatments they will cover for each patient.
These plans are recent additions to the Medicare Advantage market, where private plans have become an increasingly popular alternative to traditional fee-for-service coverage. Unlike other plans, these policies offered by long-term care companies often place a nurse in the skilled-nursing facility or retirement village, where they can talk directly to staff and assess patients’ conditions. Some provide primary-care doctors and nurses to residents in the homes or in affiliated assisted living facilities or retirement villages with the aim of staving off hospitalizations.
“The traditional model is making decisions based on paper, and in our model, these decisions are being made by clinicians who are really talking to the staff and seeing the patient,” said Angie Tolbert, a vice president of quality at PruittHealth, which began offering its plan to residents in 10 of its nursing homes in Georgia last year. “It’s a big shift in mindset.”).
Not everyone finds such plans superior. Some patients who are in disputes with the insurers have faulted the nursing home staff — who work for the same company — for not helping challenge decisions about coverage. They complain that the company holds an unfair advantage over Medicare beneficiaries.
“There’s a conflict there,” said Toby Edelman, a senior attorney with the Center for Medicare Advocacy.
In an Erickson Living retirement village in Silver Spring, Md., Faith Daiak signed up for an Erickson Advantage plan sold by a nurse whose office was in the main village building, according to her son, J.J. Daiak. After a bout with the flu last February weakened her enough to need a 10-day hospitalization, she was sent to her village’s skilled-nursing facility. There, the insurer repeatedly tried to cut short her stay.
Erickson Advantage first said it would stop paying for Daiak, 88, because she wasn’t getting healthier in the nursing facility. Her son appealed by pointing out that Medicare explicitly said as part of the 2014 settlement of a class-action lawsuit that patients do not have to be improving to qualify for skilled-nursing care.
Daiak’s appeal was denied, but the issue was sidelined in March when her rapid weight loss in the nursing home sent her back to the hospital, he said.
After Daiak returned to the nursing home with a feeding tube in her stomach, the insurer again tried to curtail her time there, saying she did not need that level of care. The family successfully appealed that decision after noting that Medicare’s manual said feeding-tube maintenance required the skilled care of a nursing facility.
In April, Erickson Advantage again said it would not continue paying for Daiak’s stay. It reversed that decision after Kaiser Health News asked the company about the case, J.J. Daiak said. He said the plan did not explain its turnaround.
Dolphine Williams (left) and Rita Coopersmith visit Faith Daiak in the Riderwood-ArborRidge Skilled Nursing Facility in Silver Spring, Md., on May 12, 2017. (Courtesy of the Daiak family)
While this Medicare Advantage plan touts its “team that knows you personally and wants to help,” J.J. Daiak said he found the registered nurse at Erickson’s Silver Spring community not helpful. “All I see is her trying to get Erickson out of having to pay for the nursing home,” he said. He subsequently switched his mother to traditional Medicare coverage with a supplemental Medigap policy, which she had until this year.
Erickson Living, the parent company of the nursing home and insurer, declined to discuss individual cases but noted that Medicare has given its insurance plans the best quality rating of five stars. In a written statement, the company said that “medical service determinations for Erickson Advantage members are based on reviews by licensed clinical staff and clinical guideline criteria. Our primary focus is always on ensuring that the healthcare being provided for our residents matches a patient’s needs and established clinical treatment protocols.”
Edelman said the dispute was particularly troubling because Erickson’s retirement villages are marketed on the promise that the company will care for seniors in all stages of aging. “They don’t tell you what they won’t pay for,” she said.
Popular Alternative
There are nearly 18 million enrollees in the overall Medicare Advantage market. Medicare pays private insurers a set amount to care for each beneficiary. In theory, this payment method gives the insurers motivation to keep patients from needing costly medical services such as hospitalizations.
A subset of Medicare Advantage plans are designed exclusively for people who either require or are expected to require at least 90 days of skilled services from nursing homes, assisted living facilities or other long-term care institutions. UnitedHealthcare directly offers three-quarters of these plans with about 40,000 enrollees, far more than those offered by nursing-home companies. Matthew Burns, a UnitedHealth spokesman, said the majority of the company’s plans are rated four stars or better on Medicare’s five-star quality scale.
“Our plans offer members quality and peace of mind — and they are considered above average to excellent by CMS quality and performance standards,” he said in a statement.
United also underwrites Erickson’s policies, which have around 200 enrollees, and were the first Advantage plans offered by a long-term care operator. Under the arrangement, Erickson Advantage decides when a nursing home stay is covered.
Nick Williams, PruittHealth’s care integration officer, said its Medicare insurance plan has resulted in 30 percent fewer hospitalizations among residents since it began last year. The company intends to expand the insurance coverage to residents at 42 of its other nursing homes in Georgia. Other nursing-home chains are experimenting with this model in Missouri, South Carolina, Virginia and elsewhere.
Anne Tumlinson, a Washington healthcare industry consultant who specializes in long-term care, said that when a nursing home’s company is on the hook for the cost of hospitalizations of their patients, it is more likely to make efforts to prevent them.
“It gets them out of hospitalizing people at the drop of the hat,” she said. “If you live in a nursing home or are living in assisted living and they have one of these plans going, they’re going to be investing heavily in 24/7 access to primary care.”
She said big insurers have so many different types of enrollees that they are less focused on the particular needs of nursing-home patients. “They’re too big, they’re bureaucratic, and they are insurers, not providers,” she said.
The Costs Patients Face
In Hingham, Mass., Suzanne Carmick has been frustrated with the Erickson plan’s unwillingness to pay for most of her mother’s prolonged stay. Last October, 98-year-old Lorraine Carmick went into Erickson’s nursing home after a hospitalization. Eleven days later, Erickson Advantage notified Suzanne Carmick it would stop paying for the facility because it said her mother was strong enough to move with the help of a rolling walker. Under Medicare’s rules, nursing home stays are not covered if a patient does not need daily physical therapy. Erickson said two or three days was sufficient for Carmick.
Suzanne Carmick appealed the decision, saying Erickson exaggerated her mother’s recovery, noting that she had dementia, an infection and was wearing two stiff leg braces. She said getting therapy five days a week provided in the nursing home would help her mother recover faster.
“She still cannot stand up or sit down or go anywhere … without an aide helping her by pulling her up or setting her in a chair,” Carmick wrote. “She is improving but is now supposed to stop or decrease PT [physical therapy], and she must start paying out-of-pocket?”
After a week’s extension, the nursing home began billing her mother at its daily rate of $463, which rose to $483 this year as Lorraine Carmick remained in the nursing home. A Medicare appeals judge subsequently ruled Erickson’s action was justified, based on the testimony from the nursing-home staff — all Erickson employees. If the insurer had covered a maximum stay, Carmick would have avoided more than $30,000 in bills she now owes. Suzanne Carmick said her mother has been on a wait list for six months for a bed on a less expensive floor in the nursing facility.
“It is a closed system where the skilled-nursing facility, physicians and Medicare Advantage plan are all one and the same,” she said. “The Erickson Advantage plan is turning out to be quite a disadvantage at this point.”
The Senate Finance Committee has unanimously approved a bill aimed at improving care for Medicare beneficiaries with chronic conditions.
Med Page Today reports that the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 {whew!} would increase access to telehealth for Medicare beneficiaries with chronic illnesses — including those in Medicare Advantage plans — as well as provide more incentives for enrollees to receive care through accountable care organizations (ACOs). It also would extend the Independence at Home demonstration program to keep people in their homes rather than hospitals, allow reimbursement for more non-health and social services, and extend permanently MA Special Needs plans that target chronically ill beneficiaries.”
“One thing we hear a lot from ACOs is they have trouble keeping beneficiaries in-house rather than going to a provider outside the ACO, and that makes it harder to coordinate their care,” a committee aide told the publication. “This bill says that if you go to a primary care doctor in the ACO, we’ll reduce or eliminate your cost-sharing for that primary care service. That will make beneficiaries stick to the ACO, and bring down their costs.”
Sen. Ron Wyden (D.-Ore.), the committee’s ranking member, told MedPagethat the measure is “transformative.”
“This is a formal recognition that this package of services — the focus on care at home, the focus on new technology, the expanded role for primary care and prevention, which inevitably leads to more non-physician providers — is the beginning of our push to update the Medicare guarantee. That’s why it’s transformative.”
The Justice Department on Tuesday accused giant insurer UnitedHealth Group of overcharging the federal government by more than $1 billion through its Medicare Advantage plans.
In a 79-page lawsuit filed in Los Angeles, the Justice Department alleged that the insurer made patients appear sicker than they were in order to collect higher Medicare payments than it deserved. The government said it had “conservatively estimated” that the company “knowingly and improperly avoided repaying Medicare” for more than a billion dollars over the course of the decade-long scheme.
“To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers,” said acting U.S. Attorney Sandra R. Brown for the Central District of California, in a statement announcing the suit. “The primary goal of publicly funded healthcare programs like Medicare is to provide high-quality medical services to those in need — not to line the pockets of participants willing to abuse the system.”
Tuesday’s filing is the second time that the Justice Department has intervened to support a whistleblower suing UnitedHealth under the federal False Claims Act. Earlier this month, the government joined a similar case brought by California whistleblower James Swoben in 2009. Swoben, a medical data consultant, also alleges that UnitedHealth overbilled Medicare.
The case joined on Tuesday was first filed in 2011 by Benjamin Poehling, a former finance director for the UnitedHealth division that oversees Medicare Advantage Plans. Under the False Claims Act, private parties can sue on behalf of the federal government and receive a share of any money recovered.
UnitedHealth is the nation’s biggest Medicare Advantage operator, covering about 3.6 million patients in 2016, when Medicare paid the company $56 billion, according to the complaint.
Medicare Advantage plans are private insurance plans offered as an alternative to traditional fee-for-service option.
Medicare pays the health plans using a complex formula called a risk score, which is supposed to pay higher rates for sicker patients than for people in good health. But waste and overspending tied to inflated risk scores has repeatedly been cited by government auditors, including the Government Accountability Office. A series of articles published in 2014 by the Center for Public Integrity concluded that improper payments linked to jacked-up risk scores have cost taxpayers tens of billions of dollars.
Tuesday’s court filing argues that UnitedHealth repeatedly ignored findings from its own auditors that risk scores were often inflated — and warnings by officials from the Centers for Medicare & Medicaid Services (CMS) — that it was responsible for ensuring the billings it submitted were accurate.
UnitedHealth denied wrongdoing and said it would contest the case.
“We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with CMS about our approach under its unclear policies,” UnitedHealth spokesman Matt Burns said in a statement.
Burns went on to say that the Justice Department “fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works. We reject these claims and will contest them vigorously.”
A spokesman for CMS, which has recently faced congressional criticism for lax oversight of the program, declined comment.
Central to the government’s case is UnitedHealth’s aggressive effort, starting in 2005, to review millions of patient records to look for missed revenue. These reviews often uncovered payment errors, sometimes too much and sometimes too little. The Justice Department contends that UnitedHealth typically notified Medicare only when it was owed money.
UnitedHealth “turned a blind eye to the negative results of those reviews showing hundreds of thousands of unsupported diagnoses that it had previously submitted to Medicare, according to the suit.
Justice lawyers also argue that UnitedHealth executives knew as far back as 2007 that they could not produce medical records to validate about 1 in 3 medical conditions Medicare paid UnitedHealth’s California plans to cover. In 2009, federal auditors found about half the diagnoses were invalid at one of its plans.
The lawsuit cites more than a dozen examples of undocumented medical conditions, from chronic hepatitis to spinal cord injuries. At one medical group, auditors reviewed records of 126 patients diagnosed with spinal injuries. Only two were verified, according to the complaint.
The Justice Department contends that invalid diagnoses can cause huge losses to Medicare. For instance, UnitedHealth allegedly failed to notify the government of at least 100,000 diagnoses it knew were unsupported based on reviews in 2011 and 2012. Those cases alone generated $190 million in overpayments, according to the suit.
While Medicare Advantage has grown in popularity and now treats nearly 1 in 3 elderly and disabled Medicare patients, its inner workings have remained largely opaque.
CMS officials for years have refused to make public financial audits of Medicare Advantage insurers, even as they have released similar reviews of payments made to doctors, hospitals and other medical suppliers participating in traditional Medicare.
But Medicare Advantage audits obtained by the Center for Public Integrity through a court order in a Freedom of Information Act lawsuit show that payment errors — typically overpayments — are common.
All but two of 37 Medicare Advantage plans examined in a 2007 audit were overpaid — often by thousands of dollars per patient. Overall, just 60 percent of the medical conditions health plans were paid to cover could be verified. The 2007 audits are the only ones that have been made public.
CMS officials are conducting more of these audits, called Risk Adjustment Data Validation, or RADV. But results are years overdue.
The Justice Department has joined a California whistleblower’s lawsuit that accuses insurance giant UnitedHealth Group of fraud in its popular Medicare Advantage health plans.
Justice officials filed legal papers to intervene in the suit, first brought by whistleblower James Swoben in 2009, on Friday in federal court in Los Angeles. On Monday, they sought a court order to combine Swoben’s case with that of another whistleblower.
Swoben has accused the insurer of “gaming” the Medicare Advantage payment system by “making patients look sicker than they are,” said his lawyer, William K. Hanagami. Hanagami said the combined cases could prove to be among the “larger frauds” ever against Medicare, with damages that he speculates could top $1 billion.
UnitedHealth spokesman Matt Burns denied any wrongdoing by the company. “We are honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided, and confident we complied with program rules,” he wrote in an email.
Burns also said that “litigating against Medicare Advantage plans to create new rules through the courts will not fix widely acknowledged government policy shortcomings or help Medicare Advantage members and is wrong.”
Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and people with disabilities — about a third of those eligible for Medicare — at a cost to taxpayers of more than $150 billion a year.
Although the plans generally enjoy strong support in Congress, they have been the target of at least a half-dozen whistleblower lawsuits alleging patterns of overbilling and fraud. In most of the prior cases, Justice Department officials have decided not to intervene, which often limits the financial recovery by the government and also by whistleblowers, who can be awarded a portion of recovered funds. A decision to intervene means that the Justice Department is taking over investigating the case, greatly raising the stakes.
“This is a very big development and sends a strong signal that the Trump administration is very serious when it comes to fighting fraud in the health care arena,” said Patrick Burns, associate director of Taxpayers Against Fraud, based in Washington, a nonprofit supported by whistleblowers and their lawyers. Burns said the “winners here are going to be American taxpayers.”
Burns also contends that the cases against UnitedHealth could potentially exceed $1 billion in damages, which would place them among the top two or three whistleblower-prompted cases on record.
“This is not one company engaged in episodic bad behavior, but a lucrative business plan that appears to be national in scope,” Burns said.
On Monday, the government said it wants to consolidate the Swoben case with another whistleblower action filed in 2011 by former UnitedHealth executive Benjamin Poehling and unsealed in March by a federal judge. Poehling also has alleged that the insurer generated hundreds of millions of dollars or more in overpayments.
When Congress created the current Medicare Advantage program in 2003, it expected to pay higher rates for sicker patients than for people in good health using a formula called a risk score.
But overspending tied to inflated risk scores has repeatedly been cited by government auditors, including the Government Accountability Office. A series of articles published in 2014 by the Center for Public Integrity found that these improper payments have cost taxpayers tens of billions of dollars.
“If the goal of fraud is to artificially increase risk scores and you do that wholesale, that results in some rather significant dollars,” Hanagami said.
David Lipschutz, senior policy attorney for the Center for Medicare Advocacy, a nonprofit offering legal assistance and other resources for those eligible for Medicare,said his group is “deeply concerned by ongoing improper payments” to Medicare Advantage health plans.
These overpayments “undermine the finances of the overall Medicare program,” he said in an emailed statement. He said his group supports “more rigorous oversight” of payments made to the health plans.
The two whistleblower complaints allege that UnitedHealth has had a practice of asking the government to reimburse it for underpayments, but did not report claims for which it had received too much money, despite knowing some these claims had inflated risk scores.
The federal Centers for Medicare & Medicaid Services said in draft regulations issued in January 2014 that it would begin requiring that Medicare Advantage plans report any improper payment — either too much or too little.
These reviews “cannot be designed only to identify diagnoses that would trigger additional payments,” the proposal stated.
But CMS backed off the regulation’s reporting requirements in the face of opposition from the insurance industry. The agency didn’t say why it did so.
The Justice Department said in an April 2016 amicus brief in the Swoben case that the CMS decision not to move ahead with the reporting regulation “does not relieve defendants of the broad obligation to exercise due diligence in ensuring the accuracy” of claims submitted for payment.
The Justice Department concluded in the brief that the insurers “chose not to connect the dots,” even though they knew of both overpayments and underpayments. Instead, the insurers “acted in a deliberately ignorant or reckless manner in falsely certifying the accuracy, completeness and truthfulness of submitted data,” the 2016 brief states.
The Justice Department has said it also is investigating risk-score payments to other Medicare Advantage insurers, but has not said whether it plans to take action against any of them.
Caroline Poplin, M.D., writing in Med Page Today, says that “Republican ‘repairs‘ are unlikely to make things better, either for the insurers or the currently insured.”
”Insurers will be able to charge their oldest customers five times more than younger ones for identical policies, and significantly reduce benefits in plans with lower premiums. There will be new restrictions preventing people from waiting until they are sick to sign up (insurers contend this is a big problem), but the IRS will not enforce the individual mandate, which was intended to force healthy people to sign up.
”So people will likely pay more for policies that cover less. Insurers will be able to charge higher premiums, but people who find the new policies too expensive may drop them without necessarily paying a penalty. If the healthy leave disproportionately, premiums will rise higher. This dynamic can result in a ‘death spiral,’ or simply the status quo ante, where insurers offer policies attractive to only the healthy and the wealthy; the poor and the sick, though they retain ‘access’ to health insurance, cannot afford it.
”But at the end of the day, what people want is not access to health insurance, but to affordable healthcare when they need it. It is not clear why policy analysts thought private for-profit insurers offering people a choice of plans would accomplish this.
”A choice of plans — so each family can choose the plan ‘best for it’– allows people to splinter the risk pool: healthy people at low risk can choose meager plans, forcing up the cost of more comprehensive plans the sick need. Also, the purpose of insurance is to cover the risk of a future event.”
“The fairest and most efficient way to get affordable healthcare for all is through social insurance, Medicare-for-all …just as Social Security ensures every American a modest retirement however long he or she lives. Everyone is in the same risk pool, everyone pays, everyone gets what they need.
“The healthy subsidize the sick, the rich help the poor, automatically. No money is diverted to insurance company underwriting, profits or administration. The federal government controls costs in a transparent, accountable way. People who hate government can sign up for Medicare Advantage.
“Although details vary, social health insurance works for every other developed country — each of which covers all its people and gets better health outcomes for far less than we pay. If that’s what we want, in the end, that’s what we must do.”
U.S. District Judge John Bates has backed the Justice Department and blocked Aetna’s proposed $37 billion takeover of Humana over antitrust concerns. Judge Bates ruled that Medicare Advantage and traditional Medicare should not be considered the same market. Therefore, the deal would violate antitrust laws as Aetna and Humana would have an “unlawful” Medicare Advantage market share in 364 counties across 21 states and that the deal would be anticompetitive in 17 counties across 3 states.
Here are five reactions collected by Becker’s Hospital Review to the ruling.
1. American Medical Association President Andrew Gurman, M.D., called the “court’s ruling … a notable legal precedent by recognizing Medicare Advantage as a separate and distinct market that does not compete with traditional Medicare. This was a view advocated by the AMA, as well as leading economists. AMA also applauds the decision for protecting competition on the public exchanges.”
2. Matthew Cantor, partner at Constantine Cannon, said he thought whether Medicare Advantage and original Medicare should be considered the same market was never “a real significant dispute.” However, in Becker’s words, “he found it interesting Judge Bates gave little weight to Aetna’s argument that its exit from ACA exchanges in the 17 complaint counties was a business decision.”
Mr. Cantor said while as a matter of law the ruling will be hard to reverse, the “most important part now is how the Trump administration is going to react to this. I would think they would be receptive and listen to what the merging parties have to say, particularly if it scores them political points on the repeal and replacement of the ACA.”
3. Randal Schultz, a partner at Lathrop & Gage and chairman of the firm’s healthcare strategic business planning practice group, said the judge’s ruling was logical and an easy decision. He said should Aetna successfully appeals the deal and if the deal does go through, he hopes that the court makes insurers “disclose financial information about the actual cost of care. By putting requirements on merged groups to release actual healthcare costs … it opens up a black box [and] people will know what it actually costs to insure a population.” Doing so would push more employers toward self-insuring their workers, he said.
Regarding the looming decision of Indianapolis-based Anthem’s proposed $54 billion acquisition of Cigna, Mr. Schultz added, “I’ll be shocked if the other case doesn’t come down the same way.”
4.Aetna spokesperson T.J. Crawford said “We’re reviewing the opinion now and giving serious consideration to an appeal after putting forward a compelling case.”
5.Aetna Chairman and CEO Mark Bertolini and Humana CEO Bruce Broussard said jointly: “After putting forward a compelling case that addressed each of the Department of Justice concerns, we are disappointed with the court’s decision and will carefully consider all available options. We continue to believe a combined company will create access to higher-quality and more affordable care, and deliver a better overall experience for those we serve.”
Federal officials this month warned 21 Medicare Advantage insurers with high rates of errors in their online network directories that they could face heavy fines or have to stop enrolling people if the problems are not fixed by Feb. 6.
Among the plans that were cited are Blue Cross Blue Shield of Michigan, Highmark of Pennsylvania, SCAN Health Plan of California as well as some regional plans owned by national carriers such as UnitedHealthcare and Humana.
The action follows the government’s first in-depth review of the accuracy of Medicare Advantage provider directories, which consumers and advocates have complained about for years. More than 17 million Americans, or nearly a third of Medicare beneficiaries, get coverage through private Medicare Advantage plans, which are an alternative to traditional Medicare.
The Centers for Medicare & Medicaid Services in October reported some of the results of the audit, but they had not released names or statistics from the individual plans.nt
“Because Medicare Advantage members rely on provider directories to locate an in-network provider, these inaccuracies pose a significant access-to-care barrier,” Medicare officials wrote in a report released last week outlining the problems.
Unlike traditional Medicare, the private Medicare plans typically restrict beneficiaries to a network of doctors and hospitals.
Piedmont Community Health Plan, a small Medicare plan with about 5,200 members in southwest Virginia, had the highest rate of inaccuracies among the 54 insurers examined. Officials found errors in the listings of 87 of 108 doctors checked in Piedmont’s directory, according to the report. Most of the errors involved providing the wrong locations for doctors and doctors who should not have been listed.
Piedmont officials did not return calls for comment.
Piedmont and two other plans with the highest error rates — a WellCare plan in Illinois and Emblem Health’s ConnectiCare subsidiary — were required by Medicare to submit specific business plans detailing how they intend to address the issue.
The individual plans receiving warning letters cover more than 1.4 million beneficiaries. Most operate in numerous states, although CMS generally limited its review to a specific state or geographic area.
The federal review focused on reviewing primary care doctors, cardiologists, ophthalmologists and oncologists. It involved individual calls to check on the listings for 108 doctors in each health plan. “We encountered several instances where a call to a provider’s office resulted in determining that the provider had been retired or deceased for a long period of time, sometimes years,” the report said.
The CMS report found almost half of the 5,832 doctors listed had incorrect information, including wrong addresses and wrong phone numbers. Most health plans had inaccurate information for between 30 to 60 percent of their providers’ offices, the report said. The report blamed the insurers for failing to do enough to keep their directories accurate. Members rely on the directories in both deciding whether to join a plan and then in searching for doctors to treat them.
“We saw a general lack of internal audit and testing of directory accuracy among many” Medicare Advantage organizations, the report said.
CMS’s survey found the most error-prone listings involved doctors with multiple offices that did not serve health plan members at each location.
The health plans were sent the warning letters Jan. 6 and given 30 days to fix the mistakes or face possible fines or sanctions, which could include suspending marketing and enrollment. CMS officials said the report was not issued before the annual open enrollment period — which ended Dec. 7 — because of the need to allow the health plans to review the findings before the report was made public.
Medicare Advantage members have until Feb. 14 to disenroll and join traditional Medicare but after that they are locked into their plan for the rest of the year. Seniors may be able to request permission to change plans on a case-by-case basis by calling 800-MEDICARE.
Another 32 companies with less serious mistakes also received letters saying their directories did not comply with a rule that took effect last year requiring plans to contact doctors and other providers every three months and to update their online directories in “real time.”
ConnectiCare spokeswoman Kimberly Kann acknowledged the difficulties. “Keeping these directories up-to-date is a two-way street and we are working with doctors and other medical professionals to continue providing quality service,” she said.
WellCare spokeswoman Crystal Warwell Walker said the Tampa, Fla.-based company took the survey results seriously. “We modified our data gathering techniques and online reporting options to ensure that when more than one address is listed for a provider, that provider is practicing at that location on a routine basis and access to care is not compromised,” she said.
CMS is continuing its investigation of provider directories this year and expects to examine all 300 companies by end of 2018.
The “public option,” which stoked fierce debate in the run-up to the Affordable Care Act, is making a comeback — at least among Democratic politicians.
The proposal to create a government-funded health plan, one that might look like Medicare or Medicaid but would be open to everyone, is being advocated by some federal officials, and gaining traction here in California too.
Amid news that two major insurers were pulling out of Affordable Care Act exchanges, 33 senators recently renewed the call for a public option. The idea was first floated, then rejected, during the drafting of the federal health law, which took effect in 2010.
Dave Jones, the elected regulator of California’s private insurance industry, endorsed the idea of a state-specific public option in an interview last month with California Healthline, though he did not specify how it might work. Democratic presidential candidate Hillary Clinton includes a public option in her campaign platform, and President Obama urged Congress to revisit the idea in a JAMA article published in August.
A public option “would look just like an insurance plan,” except that the state or federal government would pay for medical care, potentially set up the network of doctors and hospitals, and make rules about paying providers, according to Gerald Kominski, director of the UCLA Center for Health Policy Research. Private industry could be involved in these or other aspects of running the health plan, much as they do in Medicare Advantage and managed Medicaid plans.
California Healthline interviewed Kominski to better understand how a public option could work. The interview was edited for length and clarity.
Q: When we talk about a public option, do we mean a health plan for which the government takes the risk, sets the coverage rules and pays out the claims — and enrollees pay premiums just as they would to an insurance company?
That is what the public option would be. But that still leaves out the answer to a lot of questions about how actually that would occur. How would a government agency essentially become the insurer? So we have two examples. We have the Medicare program and we have the Medicaid program.
Medicare establishes the rules. It contracts with insurance companies to pay the bills. And that’s the way that Medicare has operated for over 50 years.
Now we have Medicare Advantage plans, where the contracting is not to pay bills but is basically contracting with insurers to bundle the services. And rather than pay the doctors and hospitals, the government pays the insurer and puts the insurer at risk.
Q: Insurers have opposed this idea in the past, and they’re opposing it again now that it’s being raised by members of Congress.
Private insurers could participate as administrators or providers on behalf of the state. But here’s one concern that I have with that model: California has four large insurance companies in the exchange that account for about 90 percent of the market.
Let’s say that California wanted to create a public option and hire an insurance company to administer that product for it. What would be the reason or the incentive for any of those companies to agree to be the plan administrator for the public option when the public option would be competing with the product that they’re already offering? They would be competing with themselves.
Q: Some provider groups may be opposed to a public option because they say that government programs like Medi-Cal pay very little and they believe a public option plan would also pay little. Is this necessarily the case that a government program would pay low rates?
It’s not necessarily the case, but it is in fact what we observe in the Medicare and the Medicaid/Medi-Cal programs.
Q: Do you think a public plan would help bring down costs in the healthcare system by negotiating for lower payments to hospitals and doctors?
I think that is possible in other areas of the country, where there are markets with one or two health insurance plans in the exchange. I think California has one of the most competitive ACA marketplaces. And so would the public option in California dramatically reduce premiums? I think the answer is no. It would have little or no effect.
For some people, the advantage is that we think that the public option’s going to be around because the state’s not going to back out of its commitment, whereas private insurers come and go in the marketplace.
Q: Is there something about California’s healthcare system that uniquely primes the state for a public option?
I think so. One of the things that’s unique about California is the high percentage of managed-care enrollment. The public option in California would probably include or be based on a managed-care model and Californians are pretty receptive to that model.
Q: So if the public option could include private insurance, why are the insurers so opposed?
Well, the simple answer is they don’t want more competition. And again it goes back to, why was this battle so intense during the development and enactment of the ACA back in 2009 and 2010? The insurance industry said we cannot compete with a plan, a government plan, that pays doctors and hospitals using Medicare fees or fee schedules.
You remember the fundamental rule of business is you don’t want more competition. You want the market to yourself.
Well, that’s where you can’t ignore the political environment. And so the short answer is in the current political environment, doing something at the national level is extremely difficult. Even though there might be arguments to develop a public option at the national level, it’s very challenging in the current political environment to get the agreement.
Q: Do you think it would be more effective or easier to implement a public option at a state or national level?
Q: Is there something that’s more efficient about a national public option?
Potentially. It’s economies of scale. You know, the larger your potential market nationally, the lower the potential costs per person. You just get administrative savings and efficiency. But it’s not easy to create a national program. One issue that’s challenging is how to put together a national network of doctors and hospitals that would participate. That’s a lot of work.
Q: Do you think the idea of a public option is more viable now than it was when it was debated before and ultimately stripped from the Affordable Care Act?
A: Well, I think that what makes it more attractive right now is the fact that we’ve got large insurance companies pulling out of the exchange marketplaces. And because of that … the idea of a public option to provide stability and protection for people in the exchanges has resurfaced. And I think with good reason.
South County Health, a small nonprofit system in bucolic southern Rhode Island, owes a large part of its success to its ability to manage transitions of care – an increasingly urgent imperative as healthcare moves from fee-for-service to value-based reimbursement.
The system’s flagship is South County Hospital, a 100-bed community hospital. The system also includes South County Home Health Services (a home health agency); South County Surgical Supply (home medical supplies); South County Medical Group, with 65 physicians and advanced-practice providers, and two Medical and Wellness Centers, one in Westerly and the other in East Greenwich, with urgent-care facilities and an array of primary-care and specialist physicians.
South County Hospital has long had very high marks for quality and patient satisfaction. Indeed, surveys have often called it the best hospital in its state and one of the best in New England. It was recently awarded a five-star rating by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), putting it in the top 2 percent of those surveyed nationwide.
Louis R. Giancola, the system’s president and chief executive, attributes much of the hospital’s success in patient satisfaction — and fiscal stability — to the strong engagement of its staff, which “we keep in the know’’; a “supportive board’’; the long-term loyalty of people in the service area, and the “nimbleness of a community hospital’’. Having a relatively affluent market with many well-insured people hasn’t hurt either, he acknowledged.
Mr. Giancola.
A particular point of pride is: “We’re good at transitions of care. Maybe that’s a result of our being small.’’
South County Hospital, like virtually all health systems these days, faces many challenges in dealing with the rewards and penalties involved in the forced-march transition to value-based reimbursement. Mr. Giancola notes:
“Medicare incents us to improve patient satisfaction, reduce hospital infections and avoid various patient injuries. Most commercial payers (insurers) have followed suit. I believe the threat of reduced payments has focused our attention on these measures even though we sometimes complain that the measures are not always fair.’’ (See below.)’’
“It’s all about blocking and tackling. The biggest issue is readmissions within 30 days. {South County has long had lower readmission rates than most hospitals.} We’ve really focused on managing the transition from the hospital to another level of care. The important element is good communication between the hospital providers and the skilled-nursing facility, home health and the doctors caring for the patients in the community.’’
Part of South County’s recognized success in overseeing clinically successful and financially efficient transitions – and, in so doing, reducing costly readmissions — has been its emphasis on using, when possible, home health care instead of nursing centers to save money and improve care, Mr. Giancola said.
The Centers for Medicare & Medicaid Services and other regulators and payers have been pushing hard for better patient-care management, especially since the Affordable Care Act took full effect. Much of South County Health’s work in this area involves helping primary-care physicians to be better traffic managers of their patients’ care.
Another transition success story he cites is medication reconciliation. “Often patients are confused about their drugs and that can lead to readmission because they take drugs that are contra-indicated or they take two meds designed to address the same problem. We’ve hired pharmacists that review meds in the hospital to ensure they are reconciled and the patients get clear advice on discharge.’’
He notes as an example of what might sometimes be unfair pressure from the Feds: CMS’s making hospitals put many patients who have to stay in the hospital for a night or two into “observation’’ status instead of as inpatients, thus slashing potential hospital reimbursement.
Bundled payments, Medicaid and an ACO
An increasingly important strategy for controlling costs and improving care is bundled payments.
South County Health participates in a bundled-payment program for joint-replacement patients with Blue Cross for their Medicare Advantage and commercial-insurance members. (Cambridge Management Group has been doing a lot of work in bundled-payment programs and so this particularly caught our eyes.)
With older-than-average market demographics, the joint-replacement business is a major contributor to the system’s bottom line. (However, while the system is financially stable, its operating margin is only about 2 percent; the system is closely managed.)
Mr. Giancola said that, as with many things in the brave new world of value-based medicine, it’s unclear what sort of savings may come out of the move to bundled payments. However, he thinks that the clinical benefits are clear:
“The bundling process helps us to get a better handle on the clinical process. Having to report quality throughout the entire episode of care makes for better transitions and final outcomes.’’
South County Hospital’s leaders are happy that the Affordable Care Act has put so many uninsured people into Medicaid. While Medicaid reimbursements lag those of Medicare it’s a lot better than no insurance for low-income people. Many of those people, of course, have long used the emergency room as their major source of “free’’ (to them) medical care.
But, perhaps surprisingly, Mr. Giancola told us, Medicaid expansion has not yet cut the flow of people into South County Hospital’s ER, despite efforts encouraged by public and private insurers to promote more and better preventive care to keep people out of the ER. “ERs are too handy for lots of people,’’ he observed.
South County Hospital has had to deal with many other changes, whose long-term fiscal effects are difficult to predict. One is the rising number of employed physicians, hired, Mr. Giancola says, to ensure that the hospital can maintain the range of services that patients want and need in an acute-care facility, such as obstetrics.
Mr. Giancola notes that’s expensive. “Hiring doctors away from private practices to be based in the hospital puts them in more expensive places, with expensive support staffs, equipment and technology. The jury is out on whether the increase in hospital-employed physicians will save money in the long run.’’
Also unknowable at this point is whether South County’s participation in an Accountable Care Organization with Blue Cross & Blue Shield of Rhode Island (BCBSRI) and Integra Community Care Network will ultimately save money. Integra is a partnership of Care New England Health System and its network physicians, Rhode Island Primary Care Physicians Corporation and South County Health and its network physicians. Focused on population-health management, the ACO provides incentives for Integra’s providers to proactively manage patient health, with a heavy emphasis on prevention of illness, while trying to restrain costs.
South County Health, as befits a, well, beloved local institution is big on promoting community-wide collaboration of institutions that can help improve not just healthcare in a clinical sense, but population health.
Toward that end, it has brought together such diverse agencies as the YMCA, the five Federally Qualified Health Centers in its area, school systems, the local Community Action Program and community members to harness the resources of the community. Whatever happens to the ACA, the move toward community and population health will continue, and South County Health will help lead it in southern Rhode Island.
Mr. Giancola has written: “Our long-term goal is to inspire the broader community to see health as a community issue and to mobilize government, schools, businesses and citizens at large to rally around efforts to ensure a healthy community.’’
