David L. Callender, MD, president of the University of Texas Medical Branch at Galveston, has named Donna K. Sollenberger to be executive vice president and CEO for the UTMB Health System. Sollenberger, who is CEO of the Baylor Clinic and Hospital and executive vice president of Baylor College of Medicine, will assume her new duties at UTMB Sept. 14.
All of the pieces are in place for a dramatic crackdown on fraud within the healthcare sector.
The problem is real. Waste and fraud in healthcare are getting a lot of scrutiny because any number of studies and estimates in recent months have shown that fraud and waste are adding billions of dollars to the nation's healthcare tab.
Recovery audit contractors are on the prowl at hospitals, looking for Medicare overbillings. The Justice Department is conducting high-profile arrests of Medicare/Medicaid con men accused of multimillion-dollar fraud schemes. The Obama Administration—desperate to find savings wherever it can to bring down the price tag of healthcare reform—is committed to an aggressive program to root out healthcare fraud.
"They believe there is a great deal of waste, and clearly fraud comes under their definition of waste," says Brian Roark, a partner in the litigation group at Bass, Berry & Sims, a Nashville law firm "There is every indication that the administration is going to increase the amount of resources the government devotes to finding and prosecuting fraud cases."
"The more that healthcare fraud waste is in the spotlight, it is going to lead to an increase in employees who see this and decide to bring a whistleblower lawsuit and it's going to urge the plaintiff"s bar to be more active as well," Roark says.
Who can blame them? There is plenty of money to be made in successful whistleblower lawsuits. A plaintiff who brings a lawsuit under the Federal False Claims Act can be awarded up to 30% of the settlement account. Do the math. "When you see these settlement amounts in the millions of dollars, the whistleblowers and their lawyers stand to recover significant amounts," Roark says.
The best defense against a whistleblower suit, Roark says, is to plan proactively to ensure that they"re never filed in the first place. "You want to create a culture of compliance and a culture where employees feel they can raise issues internally with the hospital as opposed to going to externally talk to a plaintiff's lawyer," Roark says.
"You want your employees to know that, from the moment they walk through the door, this is an organization that highly values and expects compliance with the law and, if employees ever become aware of issues or have doubts or concerns about things, that they raise them with the appropriate people and feel confident that those concerns will be addressed," Roark says.
That culture of compliance makes it easy for employees to report fraud through anonymous hotlines and e-mail in-boxes where they can send complaints, and even with exit interviews that specifically ask employees if they"re aware of fraud at your healthcare organization.
"If the HR person hears in an exit interview that the employee thinks there have been some billing irregularities, the HR person has to make sure that that gets communicated to compliance and legal, the people who can do something about it," Roark says. "When issues are raised hospitals have to proactively attack those issues. Conduct whatever review or investigation is needed to determine if the allegations have merit. If they do, come up with a solution to fix the problem."
Roark says the hospitals that avoid whistleblower suits often have effective compliance programs that include internal auditing and other processes in place that will find problems on their own before they get brought by the government or a whistleblower.
"The government absolutely looks favorably upon hospitals and healthcare companies that are making every effort to be in compliance." Roark says. "The government wants to see more than the hospital's words that they are trying to be compliant. The government wants to see action. 'Show us your compliance plan. Let us meet the people who are carrying out this compliance work.' They want tangible evidence of the hospital's efforts to be in compliance with the law."
Doctors in McAllen, TX, became part of the growing national furor over rising healthcare costs. As you may recall, a June New Yorker magazine article, paraded McAllen before the public as "one of the most expensive health-care markets in the country"—second only to Miami—costing the government $15,000 per Medicare beneficiary in 2006.
McAllen doctors have since come out swinging, saying the article didn't take into account the extreme poverty in the area or that many patients had co-morbidities by the time they had their first medical encounter. The story has had a lot of air time with the Medicare cost curve being a central focus for legislators and President Barack Obama, as witnessed in his televised address last week on healthcare reform.
In recent weeks, the President also has singled out high spenders like McAllen, while praising the efficiency and care coordination in places like the Cleveland Clinic and the Mayo Clinic in Rochester, MN.
He might also want to take a look at the town of Winona, MN, where Medicare costs are about two-thirds less than those in McAllen, says Mike Allen, CFO of Winona Health, a nonprofit integrated system that includes a 100-bed hospital, 50 physicians, a nursing home, and two assisted living facilities. In addition to having the distinction of being named Most Wired-Small and Rural Hospital by Hospitals & Health Networks magazine for the last several years, Winona Health is in a region that boasts the state's lowest Medicare beneficiary rates.
Allen says, according to the same The Dartmouth Atlas of Health Care data from which the McAllen numbers were cited, spending per Medicare beneficiary in Winona's HSA was approximately $4,900 in 2006. The state averaged $6,600 in the same study, lower than the national average of $8,300.
"We're the anti-McAllen," says Allen. "Some of the Medicare costs differences can be due to the cost of living and demographics in certain areas, but that doesn't explain costs of two to three times more in one part of the country vs. other areas."
Allen believes the region's coordinated care approach is a significant driver in lowering costs. He credits the Mayo Clinic, just 50 miles down the road from Winona, as a major cultural influence on providers in the state and across the Midwest. Many providers in the state and area are integrated, he says, pointing to Gundersen Lutheran Health System in LaCrosse, MN, and the Marshfield (WI) Clinic.
"Costs are lowered through care coordination and integrated healthcare systems where physicians work in the same organizations," he adds, noting that nearly all of Winona Health's physicians are employed by the system. "We also have less duplication of tests in this area." As a side note, Allen points out that the Midwestern culture may also affects costs. "Culturally, Minnesotans are pragmatic, which plays out in individual choices and how providers use the medical resources to treat people."
Still, for all the outrage over McAllen and all the talk about bending the Medicare cost curve, Allen is skeptical that anything meaningful will come out of a healthcare reform bill that rewards low cost, high quality providers, mainly because of politics.
"The McAllen story is known, but I am concerned that nothing will change because places like Texas that are high spending don't want to give any money back." At the same time, he adds, "low cost states in the low-cost areas don't have enough population, so they don't have the representation or political clout to push through healthcare reform that stops paying places like McAllen, TX, and rewards areas such as Minnesota, which spend less per beneficiary."
Politically, says Allen, it's easier and faster to just cut payment levels for all providers instead of segmenting out the high-quality, low-cost producers. "Of course, that's not a very well thought out strategy. Anybody can do that."
During the House Ways and Means hearings on the Tri-Committee health reform bill (HR 3200) mid-July, a question was asked numerous times by Republican members: Would larger employers be enticed to give up paying for their employees' health insurance under proposed "shared responsibility" requirements--which required all individuals to be insured--if the federal penalty was not high enough?
An analysis released Sunday from Congressional Budget Office Director Douglas Elmendorf took a look at this issue and several other coverage issues.
Under these so-called "pay or play" provisions of the House bill, larger employers must offer insurance to their employees or pay an 8% annual payroll tax. In most cases, "the combination of the subsidy from the current tax exclusion and the penalty for firms that did not offer qualified coverage" would provide a strong financial incentive for employers "to continue offering coverage to their workers," the CBO analysis said.
"Consistent with the available evidence, we anticipate that an employer would generally take into account the effects on all of its workers in deciding whether or not to offer coverage," CBO said. In most cases, having an "employer offer coverage would be the best option for the workforce overall, even with the new insurance exchanges."
Overall, CBO said that about 12 million people who would not be enrolled in an employment based plan under current law would be covered by one in 2016, "largely because the mandate for individuals to be insured would increase workers' demand for insurance coverage through their employer."
In other findings:
CBO said it did not anticipate a "substantial shift" from private insurance to Medicaid. Specifically, it said that about 1 million people who "would otherwise have employment based insurance or individually purchased coverage would end up enrolling in Medicaid in 2016."
CBO said that it anticipated that the number of enrollees in the public plan would be substantially smaller than predicted by the Lewin Group, "even if we assumed that all employers would have that option." CBO noted that analysts at the Lewin Group recently estimated that if all employers were given access to the insurance exchanges, more than 100 million people would end up enrolling in the public plan. CBO projected that only about 10 11 million individuals in the public option by 2019.
While CBO said it was not certain about the House bill's overall impact on premiums, costs could decrease because of healthier consumers purchasing insurance and of less cost-shifting due to covering the uninsured.
"The proposal would ultimately reduce the uninsured population by roughly two thirds, which would greatly attenuate the pressure to shift costs that arises today when uncompensated or undercompensated care is provided to people who lack health insurance," CBO said. One recent estimate indicates that hospitals provided about $35 billion in such care in 2008--an amount that would grow under current law "but would be expected to decline considerably under the proposal."
Also, proposed changes in Medicare's payment rates would alter some of Medicare's payment methods--or "at least test such changes--which might ultimately reduce private insurance costs to a limited degree," CBO said.
The major health reform bills working their way through the House and under development in the Senate would expand Medicaid and provide new options for families whose children are eligible for each state's Children's Health Insurance Program (CHIP), according to a new policy brief from the Robert Wood Johnson Foundation.
However, each establishes--or is expected to establish--"different income eligibility limits, allows for different approaches for private insurance coverage, and specifies different arrangements for how the federal government will share the costs," the briefs' researchers note.
In the House, the bill (HR 3200) introduced earlier this month would expand Medicaid to all individuals with incomes up to 133% of the federal poverty level. The cost of covering this new group would be fully paid for by the federal government. (The Congressional Budget Office has estimated that the cost of Medicaid and CHIP provisions would run $438 billion over 10 years.) In addition:
No state could reduce the eligibility levels or benefits in place for Medicaid beneficiaries as of June 30, 2009. This "maintenance of effort" provision would mean that new federal dollars to help expand Medicaid would go mainly to states that have had "less generous eligibility levels and benefits in the past," the report said.
Medicaid would cover all newborns for up to 60 days if they did not have coverage from other sources.
Adults without dependent children who become newly eligible for Medicaid could instead sign up for private coverage through a health insurance exchange--if they were enrolled in "qualified health coverage" at least 6 months before they became eligible for Medicaid.
To expand the number of primary care providers willing to care for Medicaid populations, payment rates for primary care services would be increased with new federal funding.
While the Senate Health, Education, Labor, and Pensions (HELP) Committee, which completed its reform bill in July, does not have jurisdiction over Medicaid and CHIP, it has sketched a plan that it is suggesting to the Senate Finance Committee. Among the areas being discussed:
If Medicaid eligibility is expanded on the basis of income, should the House's limit (of 133% of the federal poverty level) remain? The HELP committee had suggested going up to 150% of the federal poverty level, while a Senate Finance Committee discussion draft released in spring 2009 had suggested a lower threshold of 115%.
Should the federal government cover all of the costs of enrolling all of these people in Medicaid, as the House has proposed?
Should low- and moderate-income individuals and families with incomes too high for Medicaid--and up to 400% of the federal poverty level--be eligible for taxpayer-funded credits to help them purchase private health insurance coverage?
Should states be able to use Medicaid dollars to help pay the costs of employer-sponsored health insurance for Medicaid-eligible individuals?
Supporters of Medicaid and CHIP have said that they are more cost effective when compared to private insurance, according to the brief. Also, they have said that dollars spent on Medicaid stretch further than dollars spent on private coverage because Medicaid programs get a discount on prescription drug costs and have lower overhead costs than commercial insurers.
On the other side, those who oppose expansion said the need is not there to now expand public coverage options. Some have said that the federal government should not spend any more dollars on public insurance programs of any type and should instead use federal resources to subsidize the purchase of private health coverage.
The decision of how and whether to expand coverage for uninsured low-income people "will depend in part on whatever Congress and the president decide is affordable," the researchers concluded. It also will also depend on what can be paid for through additional revenues and any savings reaped through healthcare reforms.
In addition, those savings must be counted as "scorable" by the CBO. The less in revenue or savings that Congress is able to identify, the fewer people are likely to be covered through health reform legislation, the brief said.
Though it looks like the Senate won't vote on health reform legislation before the August recess, a glance into a crystal ball reveals some clues as to what sectors of the industry will see the greatest impact, both positive and negative.
Blair Childs, senior vice president for Premier, Inc., which works with 2,200 hospitals and 58,000 other healthcare sites to improve quality and affordability of healthcare, offered his insights for this list. In the center of the reform conversation, Premier maintains the nation's most comprehensive repository of clinical, financial, and outcomes information and operates a helthcare purchasing network.
The envelope please… Here is a list of those health industry sectors likely to emerge as winners or losers when reform is finally set in stone.
Almost Certainly Winners
Primary care physicians. The final health reform package may include subsidies and reimbursement formula changes that will be a positive change for internists and family practitioners.
Health information technology. Money to subsidize electronic medical records for physicians and hospitals may be a part of the final reform package. Computerized medical records may avoid duplication and simplify evaluation of patients.
Comparative effectiveness. Companies that develop and execute value-based purchasing algorithms may get a chance to expand and flourish in the decade ahead. Measurement of best practices is certain to emerge as a growth industry.
Possible Winners
Nurses. Nurse practitioners and other in allied health professionals may be given more opportunities to expand scope of practice, especially in rural settings and other underserved areas.
Rural healthcare. The Obama Administration has made it clear that improving access to healthcare in rural areas, and helping rural providers improve their services, is a top priority in this administration. He nominated Kathleen Sebelius as secretary of Health and Human Services and Regina Benjamin, MD, as surgeon general, both with a high focus on rural health. Many lawmakers on the Senate side are from rural areas too.
Pharma. Pharmaceutical companies that switch to generic drug manufacturing have a chance to be a winner. One effort to cut costs will be to promote the wider prescribing of generic drugs when evidence shows they are just as effective as drugs much more expensive.
Medical education. There may be more money targeted for scholarships and loan forgiveness to augment the thinning workforce. The National Health Service Corps may also get a boost.
No Change or Too Tough To Call
Medical attorneys. The Obama Administration has declined to put a cap on medical malpractice awards.
Testing laboratories. While redundant testing and tests that reveal clinically irrelevant information may decline, labs may get a boost with an increase in genetic testing especially when it may be predictive of a patient's sensitivity to a certain drug. Pathologists also seek greater involvement in clinical decision-making to guide physicians in appropriateness of tests.
General acute care hospitals. While there may be fewer patients admitted for certain procedures that are not deemed effective, and thus not worthy of payment, with a public option, more patients will get appropriate acute care. Ideally, if health reform works, fewer people will have their illnesses go undiagnosed. Elimination or reduction of disproportionate share money that now goes to hospitals could hurt.
Academic medicine. Hospitals that now serve as both medical teaching and research facilities as well as provide an important safety net for their communities may see both good and bad from health reform. Funding for research may increase, but payment for certain expensive technologies not necessarily more effective than other methods may suffer.
Possible Losers
Health plans. The creation of a public option may create enormous competition for health plans, which may be forced to greatly lower their costs to continue to appeal to employers and individuals. Price competition will be intense. Even if there isn't a public plan, there will be more regulation and transparency in the health insurance market.
Specialty physicians. While more people will have insurance coverage and will receive specialty care they previously could not afford, fees for specialists may get cut and difference given to primary care.
Pharma. Pharmaceutical companies heavily vested in high-priced medications will see competition and price cuts. The U.S. also may authorize importation of prescription drugs to further reduce costs.
Almost Certainly Losers
Imaging. The implementation of new formula that in effect reduces payment for certain kinds of imaging is almost certain to take effect. There may also be an elimination of a loophole that now allows physicians to self-refer patients to imaging services in which they have an ownership stake.
Biologics. Congress is working to allow the Food and Drug Administration to approve generic copies of expensive biologics, such as Avastin, Genentech's cancer drug, which costs $50,000 per year. This would be certain to drive down costs.
Physician-owned specialty hospitals. Proposals in both the House and Senate would outlaw any physician-owned hospital that is not yet operating and would restrict expansion of those existing facilities. Lawmakers have concerns that physician self-referral may be causing overutilization.
Durable medical equipment. Medicare payments for common home medical equipment devices have been cut by 9.5%. More cuts are expected.
Home health agencies and providers of home healthcare. These sectors may take a financial hit.
Skilled nursing homes. Nursing homes may take a financial hit. If a hospital is not reimbursed for care to a patient who has to be readmitted within 30 days, hospitals may keep patients longer. Also reimbursement to nursing facilities may be cut.
Health insurer Aetna Inc., said its profit skidded 28% in the second quarter due to higher medical expenses in its commercial business, which it expects to continue for the rest of the year. The company said it earned $346.6 million, or 77 cents per share, compared with $480.5 million, or 97 cents per share. Premium revenue grew 12 percent, and medical membership was flat at 19.1 million.
Patient falls have been a problem in hospitals for quite some time.
Nancy Donaldson, RN, DNSc, FAAN, clinical professor and director of the Center for Research and Innovation in Patient Care at University of California San Francisco School of Nursing, took the impact of and attention paid to patient falls into account when she began a project to reduce the incidence of patient falls and the severity of fall-related injuries.
Donaldson was able to begin her project with the help of the Collaborative Alliance for Nursing Outcomes Partners for Quality (CALNOC), formally known as the California Nursing Outcomes Coalition, and information gathered from 33 acute care hospital CALNOC members that identified 77 medical-surgical units to serve as project sites.
Coaches and linkers collaborate
The project, which began in 2002 and lasted through the fourth quarter of 2006, used a telephone-based coaching tactic to collaborate with "linkers," or fall prevention champions, located throughout the CALNOC system.
The idea of a linker was crafted by Donaldson using Havelock's Linkage Model, which emphasizes the transfer of knowledge from knowledge generators to users. In this case, it was the coaches' knowledge being shared with the linkers, who in turn shared their information with a CALNOC hospital.
"In the field of education, coaching is effective, not only for facilitating changes in practice, but also for building individual and organizational capacity for continuous improvement," says Donaldson.
The linker was the facilitator between the CALNOC hospital and the coach. Every three to six weeks, the coach talked with the linker on the phone for 30 to 60 minutes.
The coaching team was made up of six registered nurses with specialized knowledge and skills related to research utilization, evidence-based practice, nursing services administration, and fall prevention strategies.
"We used the telephone because it was too expensive to hold monthly visits," says Donaldson. "We did try to regionalize the calls and most of our coaches made at least one site visit."
From there, participating hospitals were asked to fill out a self-assessment tool to take inventory of policies and procedures related to fall risk assessment, prevention, and performance.
Once staff members at the CALNOC hospitals filled out this self-assessment tool, the coaches were assigned to linkers in each facility. The coaches' main purpose was to help linkers develop and implement improvements in fall-related organizational policies. Coaches were also encouraged to:
Monitor, listen, assess progress, and elicit feedback
Provide information and support
Identify action, help with planning, and clarify next steps
Provide referrals
Identify resources in the form of individuals, information, and energy
Also, each coach's work was customized to a specific hospital culture and focused on targeted areas of priority work.
Like the coaches, linkers were encouraged to:
Develop an understanding of the organization's fall patterns
Report on fall incidents monthly
Enter fall-related data in an event-reporting system
Mixed results
After the linkers and coaches collaborated for two years, CALNOC distributed another self assessment to determine if there were any improvements in the rate of patient falls from when the project first began.
Although the data showed that little change had been made in preventing patient falls, there was an increase in how often hospitals reported on such events.
Prior to the initiative, 53% of CALNOC hospitals were not evaluating fall prevention equipment, but after the initiative, the percentage climbed to 89% of hospitals.
Also, hospitals that reported fall rates monthly or more often increased from 3% prior to the initiative to 39% after taking part in the initiative, or quarterly from 18% to 57%.
Overall, hospital responses to a fall incident became more systematic, incorporating more elements that would help improve fall prevention in the future.
In addition to improving these percentages on reporting and evaluating fall preventions, the CALNOC hospitals also took away some valuable practices.
The hospitals learned that they must build in a sufficient timeframe for assessing performances along with a leadership commitment. The best performing sites had strong commitment to falls reduction at the top levels along with focusing on the initiative for a minimum of two years.
Also, many sites discovered it was better to customize fall prevention strategies to individual patient needs and to thoroughly investigate each fall.
Continuing to focus on falls
As a follow-up to the patient falls initiative, CALNOC is looking at the difference between the best performers and the worst performers in the project by looking at the data from 2006.
"We look at the data and see who was the best for falls, and look a year later, half the best are no longer the best and half that were the worst are no longer the worst. There is a lot of shifting going on, which is interesting," says Donaldson.
Donaldson wants to see if any parallels can be drawn between the factors that make the best performers the best, and if any of those factors can be found in the worst performers as well.
All sides agree on one thing in the strange case of a South Florida hospital that secretly repatriated a seriously brain injured patient back to Guatemala. During the early hours of a steamy July 2003 morning, Martin Memorial Medical Center chartered a private plane and sent 37-year-old Luis Jimenez back to the Central American country without telling his relatives in the U.S. or Guatemala. Underlying the dispute is the broader question of what's a hospital to do with a patient who requires long-term care, is unable to pay, and doesn't qualify for federal or state aid because of his immigration status.
