As health insurers push for expedited trials, a federal judge designates the Anthem-Cigna suit for random reassignment and calls for a "special master" to accommodate the discovery process with both cases.
Two U.S. Department of Justice lawsuits to stop the mega-mergers of Anthem with Cigna, and Aetna with Humana will be expedited to accommodate the health insurance companies' contractual deadlines, but they will be heard by two different judges, a federal judge has ruled.
Because the two lawsuits were deemed "related cases," U.S. District Judge John D. Bates with the U.S. District Court in Washington, D.C., was assigned both cases last month.
The health insurance companies in both suits had asked for expedited trials at a hearing last week, however, and Bates sent the Anthem-Cigna suit back for reassignment, where it was handed to Judge Amy Berman Jackson, court documents show.
The DOJ suit alleges that Anthem's proposed $54 billion acquisition of Cigna and Aetna's proposed $37 billion merger with Humana would consolidate four of the nation's five largest health insurance companies, and harm consumers and healthcare providers by limiting price competition, reducing benefits, and decreasing incentives to provide wellness programs and lowering care quality.
The four insurers had sought trials this fall.
Aetna and Humana told the court that their case is time-sensitive because their contractual deadline to complete the deal falls on Dec. 31. Anthem and Cigna told the judge that their merger can be terminated by either party on April 30, 2017, if the deal has not yet been finalized.
The Department of Justice said it needed more time to prepare for the trials, which it suggested should be tried successively starting in mid-February 2017. DOJ argued that the insurers' self-imposed deadlines should not drive the timing of the trials.
How the Judge Ruled
"While the Court declines to embrace the specifics of defendants' scheduling proposals, it acknowledges their need for expedition and is inclined to accommodate their contractual deadlines to the extent reasonable," Bates wrote.
"But doing so would require a decision on the merits in Aetna's case before the year's end and another in Anthem's case not long thereafter. Given the complexity and importance of these cases, the Court cannot feasibly try and decide both in that timeframe. Ultimately, it will be fairer to the parties and better for the public if one of the cases is randomly reassigned to another judge in this district, who can give it prompt and full attention while this judge does the same with the other."
Anthem and Cigna had sought to retain Bates as the trial judge, believing it would facilitate an earlier trial, arguing that the government had first filed suit against their merger. However, Bates said that was "pure happenstance."
He called the Anthem-Cigna case "the better candidate for reassignment" because the Aetna-Humana case has a shorter deadline. "That counsels in favor of this judge retaining the Aetna matter—both in order to avoid further delay and out of consideration for the transferee judge," Bates wrote. "And just as the initial assignment of Anthem's case was random, its re-assignment will be as well."
Bates said the two suits involve common issues of fact, but are also "quite different."
"They involve different parties, different products and geographic markets, and raise very different factual issues," he wrote.
"That is not to say there is no overlap between the cases. For example, the parties in both cases may seek discovery from some of the same third parties. Such limited commonalities, however, do not make these cases "related… because any common issues are dwarfed by divergent ones."
To reduce "any risk of duplicative discovery," Bates called for the appointment of a "special master" judge to facilitate discovery in both cases.
Health insurance industry analysts at the credit rating agency predict the Anthem/Cigna merger will be blocked, while the Aetna/Humana merger will be approved.
Aetna's proposed acquisition of Humana likely will be approved, despite opposition from the Department of Justice, but a separate mega-merger involving Anthem and Cigna likely will not, Moody's Investors Service predicts.
"With respect to the Anthem/Cigna merger, in light of the DOJ lawsuit, and the overall negative reaction to the transaction from the healthcare community and politicians, we believe that it is unlikely the merger will be approved," Moody's said in a recent sector commentary.
"Our opinion also reflects the apparent discord between the two companies as reported in the press and as exhibited in their separate statements after the DOJ lawsuit was announced. As a result, our recent rating actions on these two insurers reflect their credit profiles absent a merger."
On the other hand, Moody' said there is "a reasonable probability" that the Aetna/Humana merger will be finalized, and as such, the credit outlooks for both insurers remain unchanged.
"Our opinion is based on the reported progress that Aetna has been willing and attempting to make in addressing the DOJ's concern regarding Medicare Advantage competition by selling its current block of Medicare Advantage business in certain markets," Moody's said.
If approved, the mega-mergers would consolidate four of the nation's five largest health insurance companies. On July 21, filed in U.S. District Court for the District of Columbia, alleges that Anthem's proposed $54 billion acquisition of Cigna and Aetna's proposed $37 billion merger of Humana would harm consumers and healthcare providers by limiting price competition, reducing benefits, and decreasing incentives to provide wellness programs and lowering care quality.
"These mergers would fundamentally reshape the health insurance industry. They would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies, and restrict competition in key markets," Attorney General Loretta E. Lynch said at a news conference announcing the suits.
All four companies have said they will challenge the DOJ in court.
Moody's notes that if the Anthem/Cigna merger not be completed by Jan. 31, 2017, Anthem may owe Cigna a $1.85 billion break-up fee, although that deadline can be pushed back to April 20, 2017.
"In addition, both companies would have to implement a new non-merger strategy in a difficult political and economic climate," Moody's said.
"The combined company would have been the largest US health insurer by membership, and the company could have used this scale to negotiate lower costs and efficiencies with doctors, driving down premiums and giving Anthem a competitive advantage. It would also have provided Anthem some diversification, given Cigna's international segment and strong specialty business, and would have strengthened Anthem's presence in the commercial administrative services only segment and in the growing Medicare Advantage business."
According to Moody's, merger negotiations between Anthem and Cigna were already contentious even before the DOJ suit was filed, "with Cigna refusing multiple offers and Anthem making the details of its offers and Cigna's rejections public." In addition, the two companies gave different statements on the progress of the negotiations and the expected closing date.
Moody's notes that, by comparison, the Aetna/Humana negotiations have been relatively free of conflict, and have received less pushback from the provider community and regulators.
The DOJ alleges that the merged Aetna/Humana would reduce Medicare Advantage competition for more than 1.5 million customers in 21 states, and would reduce competition in commercial health insurance to more than 700,000 people on the public exchanges in Florida, Georgia and Missouri.
"We believe Aetna has made progress in meeting the DOJ's concerns, especially with respect to Medicare Advantage," Moody's said. "Although no one can predict the outcome of the legal challenge, we think there is a reasonable chance that Aetna may prevail."
While executive pay sunk, compensation growth for nurse practitioners and physician assistants outpaced that of physicians from 2015 to 2016, survey data shows.
Increasing demands on the healthcare industry make it a job seekers' market, with physician assistants and nurse practitioners in particularly high demand, according to Health eCareers' 2016 Healthcare Salary Guide.
In fact, compensation for NPs and PAs has risen more than that of physicians from 2015 to 2016, the survey of 19,754 healthcare professionals reveals, while healthcare executives and nurses have seen a decrease. Average pay changes were as follows:
Physicians and surgeons—$255,648, a 2.5% increase
Healthcare executives—$134,632, a 12.9% decrease
Physician assistants—$105,856, a 4.3% increase
Nurse practitioners—$100,549, a 5.3% increase
Healthcare IT—$91,251, a 2.2% increase
Registered nurses—$61,875, a 3.1% decrease
"This [trend] could, at least in part, be attributed to the physician shortage, which is causing healthcare providers to hire NPs and PAs in larger numbers, and having to pay them more to be competitive," Bryan Bassett, Health eCareer's managing director, said in a news release.
Overall, 87% report that their salary is the same as or higher than it was the year prior. Nonetheless, just 57% said they were happy with their current jobs and employers, while 43% reported actively looking for better opportunities.
Top desires for new positions included higher compensation, more rewarding or challenging work, better working hours, and the desire to work for a different organization. Eighty-six percent of job seekers surveyed said they were very confident or somewhat confident about finding a new position within a year.
Despite the stiffening staffing competition, employers' use of incentives such as increased compensation, more paid time off, and flexible work hours rose only 1% over the past year, from 60% to 61%.
It is the largest fine for a single entity, stemming from three separate breaches the electronic health records of more than 4 million patients.
Chicago-based Advocate Health Care Network will pay $5.55 million in fines for multiple potential violations of the Health Insurance Portability and Accountability Act that potentially jeopardized the electronic health records of more than 4 million patients, the Department of Health and Human Services announced Thursday.
The fines stem from three separate security breaches of electronic medical records in the summer of 2013 that the 12-hospital system self-reported, and represent the largest single HIPAA-related levy against a single entity, according to HHS's Office for Civil Rights.
Two of the data breaches involved potential access to unencrypted health records taken from stolen laptop computers, and a third involved the potential unauthorized access to patient records through a third-party consultant.
"We hope this settlement sends a strong message to covered entities that they must engage in a comprehensive risk analysis and risk management to ensure that individuals' (electronic protected health information, ePHI) is secure," OCR Director Jocelyn Samuels said in remarks accompanying the settlement.
"This includes implementing physical, technical, and administrative security measures sufficient to reduce the risks to ePHI in all physical locations and on all portable devices to a reasonable and appropriate level."
The agreement is not an admission of liability by Advocate, nor a concession by HHS that Advocate is not violating HIPAA rules and is not liable for civil penalties, the settlement states.
Advocate issued this statement: "Protecting the privacy and confidentiality of our patients while delivering the highest level of care and service are our top priorities. As all industries deal with the ever-evolving digital landscape and the impact it has on security, we've enhanced our data encryption measures to prevent this type of incident from reoccurring. While there continues to be no indication that the information was misused, we deeply regret any inconvenience this incident has caused our patients. We continue to cooperate fully with the government to advance our patient privacy protection efforts."
Cyber Attack Puts Banner Health Patients at Risk
In an unrelated case, Phoenix-based Banner Health announced a cyber attack of the health system's food and beverage outlets in June and July that jeopardizes the credit card and personal data of 3.7 million employees, patients and patrons.
Readmissions among new mothers have been quietly rising. Now, researchers have identified comorbidities and other factors that contribute to maternal readmissions after childbirth.
A major goal of hospitals and health systems is to prevent 30-day readmissions among medical and surgical patients with conditions including COPD, heart failure, and hip and knee replacements.
But there's one cohort of patients about which little is known.
Readmissions among postpartum women have been quietly and sharply rising. They increased from 1.72% in 2004 to 2.16% in 2011—a 27% jump—a study by researchers from Brigham and Women's Hospital in Boston has found.
The study was designed to uncover trends in postpartum readmissions over time, to understand common indications and associated diagnoses that contribute to readmissions, and to determine maternal, delivery, and hospital characteristics associated with readmissions.
Researchers reviewed postpartum readmissions within the first 6 weeks of delivery in California, Florida, and New York. Patients more likely to be readmitted were those who were publicly insured, were black, had comorbid diseases such as hypertension and diabetes, and had a cesarean section.
Common reasons for readmission were infection, hypertension, and psychiatric illness.
Patients were usually readmitted seven days post-discharge. On average, those with hypertension were admitted on postpartum day three, those with infections on postpartum day five, and those with psychiatric illness on postpartum day nine.
The strongest predictor for postpartum readmissions were maternal comorbidities of psychiatric disease, substance use, seizure disorder, hypertension, and tobacco use.
The researchers expressed hope that the data may lead to the development of new obstetrics quality metrics and to new strategies to decrease the rates of postpartum readmission.
The study was presented at the American College of Obstetricians and Gynecologists May 2016 annual meeting and received designation as a Donald F. Richardson prize paper at the event.
The Pennsylvania hospital system is one of several that see the popular game as a threat to patients' physical safety and privacy, and a threat to hospital data security.
Outside of the presidential race, perhaps no topic has been as divisive in our culture this summer as Pokemon Go.
Proponents of the video game sensation say it's bringing people together—some towns sponsoring Pokemon walks and it's encouraging physical activity. Mental health advocates say the game can help some persons with mental illness.
Michigan's Mott Children's Hospital is one of several healthcare organizations that encourages young patients to get out of bed and play the popular game.
But the tide may be quickly turning.
Many dislike the fact that the game is a distraction, causing people to crash their cars and even walk off the edges of cliffs. And, on top of that, some oblivious players have been trying to catch Pokemon in inappropriate locations, such as Arlington National Cemetery and at the Holocaust Museum.
So it's no surprise that, despite the fitness and possible behavioral health benefits, some hospitals are beginning to ask that patients abstain from playing the game while in their facilities.
Pennsylvania-based Allegheny Health Network, a division of Highmark Health, recently asked Niantic, Pokemon Go's manufacturer, to remove all AHN locations from the app.
"Because Allegheny Health Network hospitals and other facilities are technically public places, they are open to being identified as Pokemon gym locations," stated a memo to all AHN employees. "The presence of Pokemon Go players in our facilities compromises physical safety, patient privacy, computer security, and personal safety."
The Pokemon gyms mentioned in the memo are locations where players can can pick up helpful items and battle other players. The gyms can be anywhere the game manufacturer considers to be public, which apparently included some AHN facilities.
"Watch out for people walking around focused on their smartphone virtual world and not on their immediate surroundings—which is a concern for patients and visitors in our facilities," the memo continued.
"Remind players that unauthorized photography is prohibited on AHN premises. Immediately contact physical security to report anyone observed taking unauthorized pictures on AHN premises."
ANH isn't the only health system to come out against Pokemon Go. Massachusetts General Hospital recently asked staff to stop using the app while at work, and the American Hospital Association requested that Niantic remove its locations from the game.
Several large commercial payers, including Aetna, Anthem, and UnitedHealthcare will participate in Medicare's two-track successor to the Comprehensive Primary Care initiative.
Comprehensive Primary Care Plus, Medicare's far-reaching program promoting the use of patient-centered medical homes at primary care practices, passed its first milestone this week.
The Centers for Medicare & Medicaid Services Monday identified 14 payer regions and the agency's payer partners in each region. Primary care practices have until Sept. 15 to submit applications to participate in the program, which is slated to launch in January 2017.
The 14 CPC+ payer regions feature 10 statewide regions: Arkansas, Colorado, Hawaii, Michigan, Montana, New Jersey, Oklahoma, Oregon, Rhode Island and Tennessee. Ohio is a statewide payer region for CPC+ but shares its region with Northern Kentucky.
The three other CPC+ payer regions are the Greater Kansas City Region in Kansas and Missouri, the North Hudson-Capital Region of New York, and the Greater Philadelphia Region of Pennsylvania.
CMS has enlisted 57 payer partners to help launch CPC+ in January, according to a CPC+ fact sheet.
In addition to Medicare and Medicaid, several large commercial payers are participating in CPC+, including Aetna, Anthem, Arkansas Blue Cross Blue Shield, Blue Cross Blue Shield of Michigan, Horizon Blue Cross Blue Shield of New Jersey, Tufts Health Plan, and UnitedHealthcare.
The regions were selected by CMS based on payer interest and coverage. "By aligning Medicare, Medicaid, and private insurance, CPC+ moves the healthcare system away from one-size-fits-all, fee-for-service to a model that supports clinicians delivering the care that best meets the needs of their patients and improves health outcomes," CMS said in a media release.
In April, CMS announced plans to expand the agency's patient-centered medical home pilot program for primary care, rebranding the effort from Comprehensive Primary Care (CPC) to CPC+.
As many as 5,000 primary care practices may participate in CPC+, which is slated to run over a five-year period beginning in January 2017.
CPC was launched in late 2012. As of October 2015, more than 400 primary care practices were participating.
From a clinical perspective, CPC+ is designed to help primary care practices achieve several objectives, according to Monday's press release: boosting care for chronically ill patients, giving patients 24-hour access to medical services and information, providing preventive care services, engaging patients and families as clinical partners, and boosting care coordination.
"CMS and partner payers are committed to supporting primary care practices of all sizes, including small, independent, and rural practices," said Patrick Conway, MD, CMS deputy administrator and chief medical officer. "We see CPC+ as the future of primary care in the U.S. and are pleased to partner with payers across the country that are aligned in this mission to transform our healthcare system."
Two Tracks
CPC+ has two tracks for physician practices. Track 1 features a relatively simple financial model and less ambitious clinical goals than Track 2.
Highlights of the Track 1 model include physician practices receiving a per beneficiary per month (PBPM) care management fee ranging from $6 to $30. In addition, a performance-based payment incentive as high as $2.50 PBPM will be paid to primary care practices at the beginning of a CPC+ performance year.
The Track 2 model includes a PBPM care management fee based on a five-tier risk-stratification scale. The lowest four tiers mirror the risk-stratification scale for Track 1, with fees ranging from $9 to $33.
In the fifth tier, physician practices can earn a $100 PBPM fee for treating high-risk patients. In addition, a performance-based payment incentive as high as $4 PBPM will be paid to primary care practices at the beginning of a CPC+ performance year.
Despite modest gains in the past year among states that are considered top performers in price-transparency, the vast majority of states again post failing grades.
Forty-three states have received failing grades on a test that scrutinizes healthcare price-transparency laws. But for the first time since the annual grades were first issued in 2013, three states earned an "A" grade.
The Report Card on State Price Transparency Laws gauges the strength and effectiveness of state regulations based on a handful of metrics: the source of price data, the participation level of hospitals and physician practices, whether patient prices are listed on an out-of-pocket basis rather than a price-charged basis, the scope of the services that have pricing information, and whether the pricing information is readily available online.
Last year, New Hampshire was the only state to receive an "A," and 45 states received a failing grade. This year, Colorado and Maine join New Hampshire at the top grade level. They earned "B" grades last year.
The report card was prepared by the Newtown, CT-based Health Care Incentives Improvement Institute and Berkeley, CA-based Catalyst for Payment Reform.
Most states face an unmet need for healthcare price transparency, the report says. "It's typical in American healthcare for consumers to go into an appointment or procedure knowing nothing about what it will cost until long afterward. State laws mandating healthcare price transparency for consumers can help fix the mystery surrounding healthcare prices."
Dozens of states have laws that refer to price transparency, but provide little to help consumers shop for and choose care, the report says. It suggests that the laws need to be redesigned or implemented more effectively.
"Most states have approached the subject of price transparency at the legislative level, as only seven states have no statutes addressing it. But in 37 other states, the lack of transparency comes from weaknesses in the design and implementation of their laws, earning them each a D or F."
4 Keys to Better Price Transparency Laws
State legislators should focus on four key areas to create or improve price transparency in healthcare markets, the report card says. It offers the following guidance:
Rich data sources: Regulators can take two approaches to ensuring access to sufficient data to support price transparency—either mandate providers and health insurers to report prices, or require creation of an all-payer claims database (APCD). Under the APCD approach, pricing data is collected from a broad array of sources, including private health plans, Medicaid and Medicare, state employee health programs, and dental insurers.
Meaningful price information: Prior to service, patients value accurate estimates of charges for medical services, with out-of-pocket expenses specified. Additionally, cost estimates are easier for patients to interpret when they include hospital and physician-practice charges on one bill.
Scope of procedures and services: Pricing information should include as many types and settings of services as possible. Ideally, a healthcare provider should be able to offer pricing information on inpatient and outpatient services as well as multiple service lines and surgical procedures.
Accessible websites: Offering price information to patients online is essential to any healthcare transparency legislation. Metrics to gauge price-transparency websites include ease of access, data accuracy, and user-experience with online tools such as cost estimators.
This year's report accompanying the letter grades includes remarks from Judith Hibbard, MPH, DPH, a professor at the University of Oregon's Health Policy Research Group. She says there are three primary goals to achieve meaningful price transparency in healthcare: reducing the burden of information processing on patients, interpreting the meaning of data for patients, and highlighting best options for patients.
Lexington Medical Center denies whistleblower claim that the hospital provided financial incentives to physicians in exchange for referrals, says the Department of Justice.
Lexington Medical Center in West Columbia, SC, will pay $17 million to resolve whistleblower allegations that it violated the Stark Law and the False Claims Act by providing financial incentives to 28 physicians for improper referrals, the Department of Justice announced Thursday.
Federal prosecutors said the hospital's inflated deals to either buy physician practices or hire 28 physicians violated the Stark Law because they were not commercially reasonable or provided compensation in excess of fair market value.
"This case demonstrates the United States' commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient's best interest, and not because the physician stands to gain financially from the referral," Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division, said in a statement.
Lexington Medical Center denied any wrongdoing, but said it agreed to the settlement to avoid costly and expensive litigation.
"While Lexington Medical Center was prepared to vigorously defend the case and to demonstrate why it believes the compensation paid to Lexington Medical Center employed physicians is in accordance with all laws and regulations, the outcome of this inquiry reflects the challenges hospitals face navigating highly complex employment law regulations for physicians," the hospital said in a statement.
Lexington Medical Center CEO and President Tod Augsburger said he was "pleased to be able to resolve this matter and to commit all our resources to the care we provide patients."
"After cooperating fully with the federal government throughout this entire process, Lexington Medical Center will continue to strengthen our efforts to ensure full compliance by evaluating internal and external processes," Augsburger said.
"We are proud of the relationships we have with our physicians and the outstanding care they provide to our patients every day."
The settlement resolves allegations filed in a lawsuit by David Hammett, MD, a former physician employed by Lexington Medical Center, in federal court in Columbia, SC. The lawsuit was filed under the whistleblower provisions of the False Claims Act, and Hammett will receive approximately $4.5 million of the settlement.
As part of the agreement, Lexington Medical Center, which is owned by the Lexington County Health Services District Inc., will enter into a Corporate Integrity Agreement with the Department of Health and Human Services-Office of the Inspector General that requires Lexington Medical Center to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.
Neurosurgeons employed by UPMC allegedly submitted claims for assisting with or supervising surgical procedures performed by others when those clinicians did not participate in the surgeries to the degree required.
The University of Pittsburgh Medical Center, the University of Pittsburgh Physicians, UPMC Community Medicine, Inc., and Tri-State Neurosurgical Associates-UPMC, Inc. will pay $2.5 million to settle False Claims Act allegations, the Department of Justice said this week.
U.S. Attorney David J. Hickton said the settlement resolves several of the allegations in a whistleblower lawsuit filed in federal court in Pittsburgh. The settled claims contended that UPMC violated the False Claims Act by submitting false claims for payment to the Medicare program.
Specifically, neurosurgeons employed by UPMC allegedly submitted claims for assisting with or supervising surgical procedures performed by other surgeons, residents, fellows, or physician assistants, when those neurosurgeons did not participate in the surgeries to the degree required.
"Today's settlement demonstrates our commitment to protecting federal health care programs from fraud," Hickton said. "By pursuing False Claims Act cases like this, we send a clear message that healthcare providers must follow the rules when they deal with federal healthcare programs, and that this office will hold accountable those who do not."
Hickton said the settlement also resolves allegations that one neurosurgeon submitted claims to Medicare for spinal decompressions that were not performed. Several claims in the whistleblower suit were not resolved in the DOJ settlement, and the whistleblowers will continue to independently pursue those claims.
In a statement provided Thursday, UPMC said:
"The settlement announced today wraps up the government's investigation of billing submitted to Medicare, Medicaid and TRICARE by three UPMC-affiliated entities for professional services. UPMC learned that some of the billing these entities submitted did not accurately reflect the services performed, and resulted in more reimbursement than was due. The physicians themselves did not submit these bills.
UPMC discovered the billing discrepancies, disclosed the errors to the United States Attorney's office, conducted an internal review, and fully cooperated with the government's review. UPMC took steps to strengthen the processes and practices in the billing systems that had allowed incorrect billing. Under the settlement, UPMC admits no liability.
While the settlement also includes some of the allegations raised by three former UPMC employees, who filed a whistleblower (or qui tam) lawsuit under the Federal Civil False Claims Act, the government, after an extensive investigation, declined to intervene in or take up the vast majority of those allegations.
Given that the government has declined to intervene, if the whistleblowers choose to pursue their lawsuit without the government, UPMC will defend the matter vigorously."