A coalition of community mental- health clinics followed a playbook used by interest groups seeking U.S. government money: They created a trade association, doled out campaign contributions, and hired a former senator and Medicare administrator to lobby in Washington. The difference in this case is that some members of the association dedicated to fighting Medicare reimbursement cuts were stealing government money at the same time they were trying to keep it flowing, according to prosecutors. Lawrence Duran, a former board member of the trade group and an owner of Miami-based American Therapeutic Corp., a chain of seven clinics, was sentenced to 50 years in prison last month for orchestrating a $205 million Medicare fraud. Other unnamed association members "have been indicted or are under investigation," according to a Sept. 9 Justice Department court filing in the Duran case. Prosecutors announced a Medicare fraud indictment against Biscayne Milieu Health Center Inc. in Miami, also an association member, and its owner two days earlier. What unfolded in the case shows how Duran, and possibly others involved in fraud, took on the trappings of legitimate political players to gain access to lawmakers and influence national policy.
In a court document filed Thursday, UPMC accused Highmark Inc. of trying to have it both ways by pursuing a lawsuit presuming it is being harmed by the hospital system's advertisements, while at the same time telling some audiences that it isn't losing market share. "Highmark has taken to bragging in other venues," UPMC's filing said, of "alleged marketing successes." Highmark has said publicly that it was having a "very good July renewal period," the filing said, and that it's "doing extremely well maintaining our market position." Highmark called the filing "part of UPMC's misleading campaign to scare Highmark members into believing that they did or will shortly lose their relationships with their current UPMC doctors."Highmark members will continue to have access to UPMC hospitals and physicians through June 30, 2013." Highmark sued UPMC in U.S. District Court in July, claiming that the health system's "Keep Your Doctor" campaign falsely contended that the insurer's customers would lose in-network access to many regional hospitals in the middle of next year.
Michelle Malizzo Ballog was nervous as hospital staff wheeled her into surgery to replace a temporary stent in her liver. In a procedure two weeks earlier, also at University of Illinois Medical Center at Chicago, she had awakened too early from the anesthesia, an unsettling experience. But this time she didn't wake up. Monitoring errors were made while she was under anesthesia, and Ballog, whose youngest daughter had turned 1 the day before, stopped breathing and suffered cardiac arrest on the operating room table. She lapsed into a coma and died nine days later at 39. Her parents and sister had no idea at first that Ballog's death was caused by preventable medical errors, of which the monitoring problem was only the first. When they found out, they were livid. Bob Malizzo, Ballog's father, remembers angrily asking doctors: "How could this happen?" To the family's astonishment, hospital officials did not duck their questions, cover up their mistakes or hide behind lawyers. Instead, they shared the tragic details. As a result, the family made a surprising decision of their own: They chose not to sue and joined the hospital's safety review committee to help the medical center avoid making such errors in the future.
Citing economic challenges in the region and country, two of Western Washington's largest hospital systems announced a plan to combine forces, creating a new, nonprofit entity that would operate the largest health-care system in the state. The new entity would include Swedish Health Services in Washington, which operates five hospitals and clinics in King, Snohomish and Kittitas counties, and Providence Health & Services operations in King, Snohomish, Thurston and Lewis counties. In those counties, Providence operates three hospitals and 21 senior and community-service programs, including hospice, home health, nursing homes, assisted-living facilities and senior housing. In a conference call this week, the CEOs of Swedish and Providence portrayed the affiliation as one born of economic necessity. Insurance reimbursements are shrinking, and unemployment is persisting, and fragmented, uncoordinated care consumes an ever-larger share of budgets.
Ruth Reveron used her Hialeah rehabilitation center to fraudulently overcharge Medicaid by more than $1 million before authorities caught on, terminated her participation in the state-run medical program and turned her case over to Florida's attorney general, prosecutors say. But here's what the Agency for Health Care Administration, which administers the Medicaid program, missed: Nine months after Reveron's censure, her clinic—T&R Diagnostic and Rehab Center—remained open, and continued to successfully bill Medicaid up until her arrest in early September. Reveron's days in the physical therapy business appear over. She sits in a Miami jail cell, charged with Medicaid fraud and grand theft for heading up the long-running scheme, according to state investigators. But son Luis Yance, who the state claims participated in his mother's scam, has not been charged. He now runs his own rehab center in the same office building that held Reveron's now-defunct clinic.
The Medicare Payment Advisory Commission on Thursday voted to repeal the contentious sustainable growth rate formula and replace it with a controversial plan that would include reimbursement cuts to specialists and pay freezes for primary care physicians.
MedPAC is charged with advising Congress on Medicare payment policy issues, including reimbursements to physicians, hospitals, labs and imaging centers. SGR was put in place as part of the Balanced Budget Act of 1997 to help control Medicare spending. It soon became apparent that significant cuts in physician reimbursements would be required to help reduce spending.
Typically Congress has ignored MedPAC's payment reduction recommendations. It's been 10 years, for instance, since Congress has actually enacted any cuts to physician reimbursements.
Now the proverbial chickens are coming home to roost. Unless some action is taken before Jan. 1, 2012, Medicare payment rates for physicians will drop by 29.4%. In the current political climate, however, Congress and President Obama are unlikely to intercede and delay the cuts as they have in the past.
Details
MedPAC has proffered a plan that calls for $335 billion in reimbursement reductions over 10 years. The so-called "doc fix" will account for $100 billion. Specialist would see their reimbursement rates reduced by 5.9% each year for three years and then frozen for seven years. PCP reimbursements would remain unchanged for the next 10 years.
The remaining $235 billion would come from
Cuts to Medicare Part D drug plans (32%)
Post–acute care facilities (21%)
Medicare beneficiaries (14%)
Hospitals (11%), labs (9%)
Durable medical equipment (6%)
Medicare Advantage plans (5%)
Other providers (2%)
MedPac first unveiled the proposal in September and it was greeted with a resounding thud.
Industry Reaction
MedPAC's proposal brought howls of protests from the American Medical Association.
"The recommendation voted on today by MedPAC flies in the face of their previous recommendations to stop harmful physician cuts that threaten access to care for patients," AMA President Peter W. Carmel, MD, said in prepared remarks.
"There is already a 20% gap between Medicare payment updates and the cost of providing healthcare to seniors. Many physicians may also face upcoming payment penalties related to electronic prescribing, health information technology and quality reporting programs. Adding additional physician payment cuts to this mix will leave many physicians unable to care for Medicare patients or make the investments needed to participate in new models of care that can increase coordination and reduce costs."
The American Hospital Association this week told MedPAC that it should stop punishing hospitals – which are already facings cuts of $155 billion in reimbursement cuts over 10 years under the Affordable Care Act.
Instead, AHA gave MedPAC a list of 40 recommendations that the hospital lobby said could generate savings, including medical malpractice reform, and budget reduction proposals from both the Obama Administration and from House Republicans.
AHA said it would even support raising the Medicare eligibility age and eliminating first-dollar coverage on MediGap plans if that would help the nation's hospitals avoid additional reimbursement cuts over the next decade.
In a letter this week to MedPAC Chairman Glenn M. Hackbarth, AHA President/CEO Richard Umbdenstock said he supports eliminating the SGR, but not at the expense of hospitals.
"Offsetting the cost of the repeal with Medicare cuts to hospitals and other providers is merely 'robbing Peter to pay Paul' and is the wrong approach," Umbdenstock said in the letter. "Making cuts to providers, such as hospitals, that, according to MedPAC itself, are already seeing negative Medicare margins, could endanger beneficiary access to those providers."
Instead of passing the costs onto other providers, Umbdenstock said MedPAC could pass the costs onto seniors by considering "offset suggestions, such as eliminating first-dollar coverage for MediGap plans or raising the Medicare eligibility age."
Umbdenstock says MedPAC and the federal government should consider tort reform, which he said adds between $50 billion and $100 billion each year to the nation's healthcare bill.
"Across the nation, access to healthcare is being negatively impacted as physicians move away from states with high insurance costs or stop providing services that may expose them to a greater risk of litigation," he said.
"The increased costs that result from the current flawed medical liability system not only hinder access to affordable health care, they also threaten the stability of the hospital field, which employed 5.3 million people in 2009, and continues to be one of the largest sources of private-sector jobs."