When the rising numbers of non-admitted patients held for observation is factored in, declines in readmissions disappear. Are hospitals trying to skirt readmissions penalties, or are there valid reasons for the increase in observational status?
A study out today in the New England Journal of Medicine suggests that the much-ballyhooed reduction in hospital readmissions in recent years all but disappears when researchers factor in the increase in non-admitted patients being kept for observational stays.
Study co-author Brad Wright, an associate professor of Health Management and Policy at University of Iowa in Iowa City, spoke with HealthLeaders Media on the subject.
The following is an edited transcript.
HLM: Does your study mean we've made no progress in lowering readmissions?
Wright: Yes, more or less. There is still a very small reduction in readmissions but yeah, you're reading that correctly. But that is only when we include observation in both components of the calculation. That is not just looking at people who were hospitalized who bounced back and now we are putting them all on observation. That takes away some of the reduction in readmissions but not all of it. It's when you also include the observation stays as initial index events. That's where the wipe out happens.
HLM: Are hospitals gaming the system?
Wright: I hesitate to say that. It's difficult to say that from the claims data. It could happen, but more than likely what we are seeing is simply the result of two different things. One being the increase in the use of observations, which is happening for a host of reasons alongside the readmissions reduction program. The argument we are making is not that hospitals are somehow purposely and malevolently gaming the system. It's just a confluence of events and these are the implications.
HLM: If it's not gaming, how else could this be explained?
Wright: One piece, and this is gaming of another sort, is audits from Medicare contractors. If they are denying payments for shorter inpatient stays that they think are inappropriate and should have been handled as observations, hospitals obviously don’t want to forego payment. So, there is pressure to put more patients in observation.
From the clinical side, you've given physicians a space where, as technology has improved, patients who would have at one time been handled in the inpatient setting can now be handled appropriately in an outpatient observation setting.
The other piece is that you create a space for physicians to ensure patient safety. Patients in the past would have been discharged home. You now have created an avenue for them to be kept in the hospital to rule out potentially life-threatening causes for whatever is going out with them.
HLM: Given your findings, has this effort to reduce readmissions been a big waste of time?
Wright: I don’t think we would necessarily say that. If you look at just the inpatient events, you see a reduction in those readmissions. Something seems to be working on that side of things. But it's not being applied to patients in observation. So, perhaps hospitals are focusing resources on insuring good transitions of care for their admitted folks when they're discharged, but they're maybe not doing that for the observation patients because they're not on the hook for having their finances penalized by that group of patients.
We're not saying get rid of the hospital readmissions program. We're not arguing for keeping it either. We are saying that you're missing out here because this group of observation patients looks a whole lot like a hospital stay. If we are trying to incentivize quality the way we figured out to do it, we should include this group of patients as well.
HLM: Is Readmissions a valid quality metric?
Wright: We're not trying to wade into the fray about the validity of readmissions as a quality measure. We're saying that for better or worse this is a metric that is widely used. We stay clear of whether or not this works. In my own personal opinion, I do think that readmissions are an important thing to measure. We have created a policy of paying hospitals a capitated amount. That puts pressure on them to get patients out of the hospital more quickly. So it's important that the pendulum doesn’t swing too far in the other direction, and you end up playing policy whack-a-mole and push it back in the other direction.
HLM: Are there ramifications for patients?
Wright: I saw recently that 10% of observation stays end up costing the patient more than an inpatient stay would, out of pocket. That never should happen. It's fine for them to be classified as outpatient until that time that their costs would exceed an inpatient stay. That should be the basis upon which we categorize them. It doesn’t seem right that patients who are technically outpatients should have to pay more than if they were an inpatient in the hospital.
HLM: Does your study come with caveats?
Wright: You have to put the caveat in that this is a commercially insured population, but that does include Medicare Advantage, so it's not completely different from FFS Medicare. But we have to be careful and we can't generalize. At the same time, because some of the other work that has looked across these different populations has found pretty comparable findings. There is a good chance that this would hold in other contexts.
A review of emergency department claims for employer-sponsored plans from 2009 through 2016 found that the average prices for higher severity billing codes rose faster than lower severity codes.
Emergency department spending per employer-sponsored plan enrollee increased 99% from 2009 to 2016, even as overall ED use for that cohort flat-lined, the Health Care Cost Institute reports.
HCCI examined trends in spending, price and utilization for five Current Procedural Terminology codes used to record the complexity and severity of ED visits over the seven-year span.
The findings:
While average prices for all five ER CPT codes were higher in 2016 than in 2009, the average prices for higher severity codes rose at a faster rate than low severity codes.
Combined with more use of the high severity codes, these price increases contributed to large spending hikes – per person spending for the two most severe codes grew by more than 100% over seven years.
ED visit spending per person increased 99% while overall ED use remained the same.
Overall ED spending growth was largely driven by higher severity visits, on which spending more than doubled.
Per person spending on the highest severity ED visit rose 145%, with price increasing 77% and use increasing 38%.
The second-highest severity ED visit experienced the largest price increase of any severity level (94%) and an above average increase in utilization (16%), resulting in a 124% spending increase.
A state-by-state review of the data found that:
Mississippi had the highest overall ED spending increase, rising 153% from 2009 to 2016 – 21 states saw spending increases of over 100%.
Nevada had the highest overall ED price increase, rising 147% from 2009 to 2016 – 25 states saw price increases of 100% or more.
Between 2009 and 2016, ED use remained unchanged in 18 states, decreased in 22, and increased in 11.
A U.S. District judge in South Carolina trebled the False Claims Act liability of three defendants who submitted nearly 39,000 false claims to Medicare and other government health programs.
The CEO of a medical testing lab and two affiliated sales executives have been hit with a civil judgment totaling $114 million for paying kickbacks to physicians for referrals.
The defendants are: Tonya Mallory, the former CEO of Richmond, Virginia-based Health Diagnostic Laboratory; and Floyd Calhoun Dent III, and Robert Bradford Johnson, co-owners of Alabama-based BlueWave Healthcare Consultants Inc., a third-party sales firm that contracted with HDL.
The facts:
The three defendants were found guilty of civil fraud in three whistleblower suits that were heard by federal jury in Charleston, South Carolina in January.
The defendants disguised payments to physicians as processing and handling fees of between $10 and $17 for each patient they referred to blood testing labs: HDL, and Singulex Inc., of Alameda, California.
Physicians referred patients to HDL and Singulex for medically unnecessary tests, which were then billed to federal healthcare programs.
The three defendants were found liable for submitting 35,074 false claims, worth $16.6 million submitted to Medicare and TRICARE by HDL, and 3,813 false claims, worth $467,935, submitted by Singulex.
Under the False Claims Act, the court trebled damages, offset settlement payments received from HDL and Singulex for the same claims, and awarded $63.8 million in penalties requested by the United States, for a total judgment of $114.1 million.
The deal includes Meridian Health Plan of Michigan, Inc., Meridian Health Plan of Illinois, Inc., and MeridianRx, and is expected to close by the end of the year, subject to regulatory approval.
WellCare Health Plans, Inc. said Tuesday that it will buy two state health plans and a pharmacy benefits management company owned by Meridian for $2.5 billion in cash.
The deal includes Meridian Health Plan of Michigan, Inc., Meridian Health Plan of Illinois, Inc., and MeridianRx, and is expected to close by the end of the year, subject to regulatory approval, Tampa-based WellCare said in a media release.
"Meridian is a well-performing health plan, and WellCare and Meridian share a similar commitment to serving our members through a comprehensive, integrated approach to healthcare," WellCare CEO Ken Burdick said in prepared remarks.
"This transaction strategically aligns with our focus on government-sponsored health plans, will strengthen our capabilities and growing business, and will meaningfully advance our growth agenda," Burdick said.
The Details:
Meridian is one of the largest privately held, for-profit managed care organizations in the nation, with 1.1 million Medicaid, Medicare Advantage, dual-eligible, and marketplace members in Michigan, Illinois, Indiana, and Ohio. The MCO is expected to generate more than $4.3 billion in total revenue this year.
Meridian has 508,000 Medicaid members in Michigan and 565,000 Medicaid members in Illinois.
When the deal is finalized, WellCare will have the largest Medicaid membership market share in Michigan and Illinois, increasing its market position from four to six states.
WellCare will expand its MA business through the addition of Meridian's 27,000 MA members in Michigan, Illinois, Indiana and Ohio.
WellCare will add an integrated PBM platform that provides services and products to Meridian members and third parties.
WellCare willl fund the transaction through a combination of cash on hand, the company's undrawn $1 billion revolving credit facility, new debt of $600 million to $1 billion, and new equity of $800 million to $1.2 billion.
For the most part, providers support the Direct Provider Contracting proposal put forward by the Centers for Medicare & Medicaid Services, with some stipulations and considerable tweaking.
Key stakeholders are mostly supportive of a Medicare Direct Provider Contracting proposal but urging the federal government to keep it simple and not overwhelm providers with paperwork.
"Burden reduction must be a priority for the Innovation Center when implementing the DPC model," the Medical Group Management Association said in a letter to the Centers for Medicare & Medicaid Services.
"Collecting and reporting quality metrics remain technically challenging, data intensive, and administratively burdensome," MGMA said. "Bureaucratic barriers to care, including prior authorization and appropriate use criteria, are at odds with care delivery and financial models in which participants are accountable for care outcomes."
That concern was echoed byThe American Geriatrics Society, which urged that "CMS take care not to add further administrative burdens that may negatively impact patient care."
The National Association of Accountable Care Organization supports the DPC concept, but urged CMS to limit participation to primary care providers for the rollout.
"Primary care is more appropriate for this type of model, and specialty DPC Models would be too similar to bundled payment programs," NAACOS said. "Further, it would be much more complicated to structure per beneficiary per month payments for specialty care which is typically more complex and can include episodes of care with greater variation in clinical conditions, treatment protocols and related costs."
NAACOS argued that starting with a primary care focus would allow CMS to test the concept while focusing on beneficiary protections without having to consider more complex specialty-focused DPC models.
"For purposes of beginning a DPC Model test, CMS would contract directly with primary care practices to establish the practice as the main source of primary care for services," NAACOS said.
'Yet Another Capitation Scheme'
The Association of American Physicians & Surgeons said it was "disappointed" with the proposal, which it said "turns the concept on its head."
"The title of the RFI itself signals an unfortunate transformation of DPC from Direct Patient Care into what CMS calls, 'Direct Provider Contracting,'" AAPS said in its letter to CMS.
"We are concerned that CMS is not encouraging direct arrangements between patients and physicians. The RFI explains that to CMS, DPC means "direct provider contracting (DPC), through which CMS would directly contract with Medicare providers,'" AAPS said.
"In addition, CMS asks for feedback on countless requirements and conditions it is considering imposing on physicians seeking to contract with CMS," AAPS said.
"To us and our members, this approach by CMS looks much more like yet another third-party-controlled ACO or capitation scheme than anything resembling the agreements Direct Primary Care practices are currently offering their patients," AAPS said.
Federal prosecutors say Sonja Emery fabricated her extensive credentials and professional experience in a scam that collected nearly $2 million in consulting fees over five years.
A healthcare consultant indicted in Michigan for allegedly falsifying her credentials and work experience was arrested this week in California, where she's collected more than $1 million in consulting fees over the past three years from a nonprofit health plan.
Sonja Emery, 52, who has been known to use a long list of aliases, was indicted by a federal grand jury in Detroit on 11 counts of fraud and tax evasion, for a scam that ran from 2011 through 2014. She's been accused of continuing to deceive her employers since.
Emery was arrested on Tuesday and appeared before a federal judge in Oakland, California, who authorized her release on $50,000 unsecured bond. Prosecutors have appealed the decision.
'Remarkable Ability'
In court documents urging Emery's detention without bond, federal prosecutors said she has "a long-established pattern dating back to at least 2006 of obtaining healthcare related employment using false names and work history."
"This past behavior reveals Emery's remarkable ability to obtain employment under false pretenses and her willingness to use false identities," prosecutors said.
A government investigation linked Emery to eight different Social Security numbers and three different names, which she gave to employers and law enforcement agencies in California, Connecticut, Georgia, Louisiana, Michigan, New York, and Wisconsin, according to court documents.
She also allegedly claimed to be a registered nurse licensed in two states, but an investigation showed that she used the licensure numbers of two other people.
Apparently, healthcare organizations weren't the only ones fooled by Emery.
Federal prosecutors said Emery convinced local prosecutors in fraud cases on at least two occasions that she suffered from "brain tumor surgery" and cancer that "left her blind," without memory, and incapacitated—none of which was true. The documents Emery used to support her medical claims were forgeries, federal prosecutors said.
Contra Costa Health Plan
Since the alleged events took place in Michigan, Emery has been a contract consultant at Contra Costa Health Plan, a county-owned, nonprofit health plan, for the past three years.
A review of Contra Costa County Board of Supervisors records found that "Sonja Robinson, RN," doing business as "Healthcare Solutions USA," was unanimously awarded annual contracts worth $384,000 each year from 2016through 2018"to provide consultation on utilization review, authorization and referral processes for the Contra Costa Health Plan."
Contra Costa Health Plan said Robinson was paid about $960,000 since January, 2016. A spokesperson said the health plan "first learned about the allegations against Sonja Robinson on May 22, 2018, and took immediate steps on that day to prevent her from providing further services to the department. Ms. Robinson's contract was terminated effective May 25, 2018, and she has not provided service to CCHP since May 22."
CCHP said Robinson was hired through a national healthcare consulting firm, and was contracted to provide services in the Utilization Management Unit, where she performed administrative duties and did not provide direct patient care.
Court records indicate Contra Costa is at least the eighth employer Emery has duped.
"The jobs that Emery has repeatedly sought also raise substantial concerns about Emery's ongoing danger to the community," prosecutors said, noting that Emery successfully obtained jobs with titles such as director of medical services and interim Chief Clinical Operations Improvement Officer.
"The government does not presently have evidence that anyone was physically harmed as a byproduct of Emery taking these positions. Nonetheless, if Emery were to flee, consistent with her prior pattern of criminal activity, she likely would attempt to obtain another health-care related position, which could endanger patient welfare and pose a danger to the community," prosecutors said.
Michigan Indictment
The Michigan indictment, unsealed this week, said that Emery allegedly told clients and employers that she was a registered nurse, had worked in healthcare management and consultation for 25 years, and held degrees including a bachelor of science in nursing, master's degrees in health administration, and a doctor of philosophy degree—none of which was true.
She allegedly provided employers and clients with extensive false or forged documents and references validating her fabricated background.
Emery used fake Social Security numbers, misstated her tax liabilities, filed bogus W4 forms with the IRS, and lied about her tax status in a multi-year effort to shake federal auditors, according to the indictment.
A federal review estimates that 5 million people have lost health insurance coverage in the past year, and the number of people with subsidized coverage through marketplaces has fallen by 3 million.
The average premium for a benchmark plan in the Nongroup Health Insurance Market—not including tax credits—grew by 34% in the past year and will continue to see double-digit growth in the near term before leveling off in the next decade, the Congressional Budget Office says.
CBO blames the cost growth on three factors:
Insurers are no longer reimbursed for the costs of cost-sharing reductions through a direct payment;
A larger percentage of the population lives in areas with only one insurer in the marketplace;
Some insurers expected less enforcement of the individual mandate in 2018—which would probably encourage healthier enrollees to leave the market.
As a result, CBO projects that the premiums for benchmark plans will increase about 15% from 2018 to 2019.
Despite those increases, CBO projects the market for nongroup health insurance will be stable in most areas of the country over the decade. Premiums for benchmark plans are expected to increase by about 7% per year between 2019 and 2028.
CBO also found that:
In an average month in 2018, about 244 million of those people will have health insurance, and about 29 million will not. By 2028, about 243 million are projected to have health insurance and 35 million won't.
Net federal subsidies for insured people in 2018 will total $685 billion. That amount is projected to reach $1.2 trillion in 2028.
Medicaid and CHIP account for about 40% of that, as do subsidies in the form of tax benefits for work-related insurance. Medicare accounts for about 10%, as do subsidies for coverage obtained through the marketplaces established by the Affordable Care Act or through the Basic Health Program.
Since CBO’s most recent report comparable to this one was published in September 2017, the projection of the number of people with subsidized coverage through the marketplaces in 2027 has fallen by 3 million, and the projection of the number of uninsured people in that year has risen by 5 million.
Projected net federal subsidies for health insurance from 2018 to 2027 have fallen by 5%.
A panel of policy experts offered the Senate Finance Committee their wish list of top priorities for rural healthcare in the coming years.
Sen. Ron Wyden, D-Oregon, asked a panel of rural health policy experts testifying before the Senate Finance Committee on Thursday what they'd do if they could "wave a magic wand" to create longer-term stability for rural providers and the seniors they serve.
Here's how they responded:
"We have talked to people in communities where rural hospitals have closed and almost always the first thing we hear is the disappearance of the emergency department. My top priority is maintaining access to emergency care."
—George H. Pink, deputy director of the Rural Health Research Program at the University of North Carolina
"Mine would be building that integrated system that would include beyond hospital-based services, particularly post-acute care after hospitalization and care for the elderly with chronic conditions which was in part addressed by the Chronic Care Act. We need to move forward with some of the innovations that are coming out of that."
—Keith J. Mueller, director, RUPRI Center for Rural Health Policy Analysis, University of Iowa
"The flexibility to develop a model in each rural committee that meets their needs so they can keep emergency care and other services. It would allow critical access hospitals to merge into a different model which would limit their need to have inpatient beds and be able to have emergency departments and do outpatient care to keep the financials healthy in that model." —Karen M. Murphy, RN, founding director of Glenn Steele Institute of Health Innovation at Geisinger, Danville, Pennsylvania
"My top priority would be recognition of the difficulty of acquiring and retaining providers in rural communities. Rural healthcare and rural communities create an environment that is unique. The opportunities that have been demonstrated in some of our ACO models create not only the integration of hospitals and physicians, but include all components of healthcare across the continuum. This environment is motivating and inspiring and it could create a platform for transforming healthcare." —Susan K. Thompson,RN, CEO, UnityPoint Accountable Care, West Des Moines, Iowa
A federal indictment alleges that a former fraud investigator for Anthem Blue Cross took bribes and provided coconspirators with billing codes that would bypass the insurer's fraud protection firewalls.
Five Californians—including a physician and a former fraud investigator—have been arrested and charged in a scheme that submitted bogus claims to health insurers and used some of the proceeds to provide patients with "free" cosmetic procedures, the Department of Justice said.
The arrest follows the unsealing of a federal indictment this week that details a multi-year scheme that lured patients into two San Fernando Valley clinics to receive free cosmetic procedures—including facials, laser hair removal and Botox injections—which were not covered by insurance.
The conspirators allegedly submitted at least $20 million in claims to the insurance companies, which paid approximately $8 million on those claims, the indictment said.
The scam used the patients' insurance information to fraudulently billed insurers for unnecessary medical services or for services that were never provided. In exchange, the alleged scammers calculated a "credit" that patients could use to receive "free" or discounted cosmetic procedures, the indictment said.
One of the coconspirators, Gary Jizmejian, 44, of Santa Clarita, was a former senior investigator at the Anthem Special Investigations Unit, the anti-fraud unit within Anthem.
The indictment alleges that Jizmejian took bribes in exchange for providing his coconspirators with confidential Anthem information that helped them submit fraudulent bills to Anthem.
In September 2012, Jizmejian gave his coconspirators insurance billing codes—CPT Codes—that Jizmejian knew could be used to submit fraudulent claims to Anthem without Anthem detecting the fraudulent claims, the indictment said.
Jizmejian also allegedly gave his coconspirators the billing code for an allergy-related lab test and told them to submit to Anthem large numbers of bills with this CPT code. The coconspirators used this billing code to submit approximately $1 million in fraudulent claims to Anthem, according to the indictment.
Jizmejian allegedly helped mask the fraud at the clinics by helping coconspirators avoid responding to inquiries from fraud investigators, diverting attention of other Anthem SIU investigators away from the clinics, and closing Anthem investigations into fraud at the clinics, the indictment said.
When reached for comment, Anthem Blue Cross issued the following response:
Mr. Jizmejian is no longer an Anthem employee.
Anthem fully cooperated with the government's investigation.
We have no further comment on pending government charges or activity.
The indicted coconspirators were identified as:
Roshanak Khadem, aka "Roxanne" and "Roxy" Khadem, 50, of Sherman Oaks. Khadem owned and operated the two clinics at the center of the alleged scheme—R&R Med Spa, which was located in Valley Village until early 2016, and its successor company, Nu-Me Aesthetic and Anti-Aging Center, which operated in Woodland Hills.
Roberto Mariano, MD, 59, of Rancho Cucamonga, a physician who helped operate the clinics;
Marina Sarkisyan, 49, of Panorama City, who was the office manager at the clinics;
Lucine Ilangezyan, 38, of North Hills, an employee and insurance biller for the clinics.
All five defendants are charged with one count of conspiracy to commit healthcare fraud and 13 counts of healthcare fraud. Each count charged in the indictment carries a statutory maximum sentence of 10 years in prison.
The not-for-profit, federal qualified health center has served Manhattanites for more than 50 years, and CEO Brian McIndoe says new name reflects its renewed emphasis on patient-centered care.
Manhattan's William F. Ryan Community Health Network has a new name.
The not-for-profit, federally qualified health center, with 19 sites across the Big Apple, is now Ryan Health.
"We just celebrated our 50th anniversary and healthcare has changed over those 50 years, and more so over the past several years," says Brian McIndoe, president and CEO of Ryan Health.
"After 50 years we felt we needed a clear direction going forward for the next 50 years. We wanted to change our name and logo because now we are focusing on our patient-centered care."
So far, Ryan Health has spent about $140,000 on the rebranding, mostly on internal signage and a website redesign. Total cost is expected to be between $270,000 and $300,000 when the rebranding is finalized in the coming months, McIndoe says.
The new name might also clear up some confusion with the clinic's more than 46,000 patients and other healthcare consumers.
"We have six major primary care sites but when you said 'William F. Ryan' the public thought of one site, our oldest site on West 97th St., which is also our largest site," McIndoe says. "They didn’t correlate the other five primary care sites as part of the network of William F. Ryan. We want people to think of our five other primary care sites."
McIndoe concedes that it's a challenge to gain attention in media- and advertising-saturated Manhattan.
"We've been in New York City for 50 years and we have a great reputation, so I don’t think we are going to get lost, but this is the Mecca, and we have to make sure that doesn’t happen," he says.
"We're always conscious about how we can reach our audience. We try to do that in a cost-effective manner. When our patients have a good service at Ryan, they reach out to friends and family and tell them how well we treated them with good clinical care and also with dignity and respect they deserve," he says.
Patients and potential patients will notice the difference when they go to the clinic's new website, and when the interact with the care teams, McIndoe says.
"That really means that, when a patient comes in, they are going to see the same patient service rep, the same nurse, the same provider. So, they get a comfort level with that care team," McIndoe says. "Our goal is that, if they feel more comfortable, they are more ready to share their concerns, and we can treat the patient as a whole, as opposed to piecemeal when they see different providers or nurses."
Ryan Health includes six community health centers, seven school-based health centers, four community outreach centers, a mobile medical van, and a staff of nearly 600 people.
