Despite President-elect Barack Obama's plans for an ambitious push to expand health coverage nationwide, states are slashing health services to their poorest residents amid the economic downturn. The unprecedented cuts in public assistance come as millions of Americans are losing their jobs and health insurance. In many cases, the cuts are so deep that even the massive federal rescue package being assembled on Capitol Hill may not be enough to restore services being eliminated, health officials warn.
Two Queens, NY, hospitals are facing bankruptcy and may close by February, the Queens borough president announced. The two private hospitals, St. John's Queens and Mary Immaculate, had sometimes been given millions of dollars in state subsidies just to meet their payrolls, according to other hospital officials. But with the state facing a $15 billion budget gap, the state was less likely to help hospitals that had limited long-term viability.
Two large Illinois hospital systems have agreed to settle lawsuits alleging they overcharged tens of thousands of uninsured patients and provided inadequate financial assistance. As part of the agreements, Resurrection Health Care and Advocate Health Care are offering to recalculate patients' bills and give refunds to needy patients eligible for free or discounted medical care.
Blue Cross Blue Shield of Massachusetts announced it has signed an innovative contract with a hospital and two physicians groups that will slow the rate of medical cost increases while rewarding top-performing doctors with bigger paychecks. Mount Auburn Hospital in Cambridge and its affiliated doctors and Hampden County Physician Associates of Springfield signed the so-called Alternative Quality Contract. The contract offers the possibility of higher payments over five years if doctors meet quality and efficiency targets. Blue Cross said the new approach could change the way medical payments are made and cut annual increases in payments in half by reducing hospital expenses for care and procedures.
New York Attorney General Andrew Cuomo announced a settlement on Tuesday with UnitedHealth Group, one of the nation's largest insurers, which will require an overhaul of the databases used to determine out-of-network medical bill payments nationwide.
The settlement resulted from a year-long investigation into what Cuomo's office called "a scheme to defraud consumers" by underpaying patients by hundreds of millions of dollars over the last decade.
Ingenix, a subsidiary of UnitedHealth, operated the databases for determining 'reasonable and customary' rates for care. However, the attorney general's office claims Ingenix understated the market rates of medical care by up to 28%. Because insurers often reimburse patients for out-of-network expenses based on a percentage of the local market rate, many patients were getting shortchanged, according to investigators.
Although the operation is based in New York, the settlement will have a nationwide impact because the databases are used by the entire industry.
The investigation was initially sparked by a 2000 lawsuit from the American Medical Association, which was concerned that the underpayments were driving a wedge between patients and doctors. "Unfortunately, patients were getting mad not only at insurers, but they were also mad at their doctor. The insurer said they were paying what's 'usual, reasonable, and customary.' If you're a patient and you hear that, you think your doctor charged you an unreasonable fee. That's not what was happening at all," says AMA President Nancy H. Nielsen, MD.
America's Health Insurance Plans (AHIP) responded to the settlement by saying the announcement is an opportunity to shed light on out-of-network charges, which is "one of the root causes of rising medical costs."
In a statement, Karen Ignagni, president and CEO of AHIP, said that provider networks ensure affordable access to high-quality healthcare providers, and consumers and employers would pay "significantly higher healthcare costs" if not for networks.
"Consumers would be shocked to see the wide variation in charges billed by out-of-network providers. As policymakers pursue healthcare reform, they should look carefully at the dramatic differences in billed charges for out-of-network services, especially as experts report that there is no correlation between the level of charges and the quality of care provided," said Ignagni.
Although UnitedHealth has not acknowledged any wrongdoing, the company has agreed to pay $50 million toward the creation of a new, independent database that will be used to determine market rates for medical costs in specific regions. The new database will be operated by a university, although the location has not yet been determined. In the meantime, Ingenix will continue to run operations.
WellMed Medical Management of Florida has purchased PPGO, a physician practice management company, and is taking over physician practice management duties of 60 independent physicians that serve more seniors in the Orlando area. The company will operate under the name WellMed Medical Management of Florida.
Raleigh, NC-based Rex Healthcare recently started an online "wait meter" for its urgent-care clinics in Cary and North Raleigh, a tool designed to help patients avoid the busiest times when possible. A third Rex Express Care clinic in Knightdale also will post its wait times online when it opens in May. Eventually, the system could handle online patient registration, said Lisa Schiller, Rex's vice president of marketing.
Palmetto Health and Greenville Hospital System University Medical Center have formed a new corporation to run Palmetto Health Baptist Easley, effectively making GHS a co-owner of the Pickens County, SC-based hospital. Under the recently approved plan, GHS will pay $45 million for a 50% interest in the hospital, said GHS CEO Michael Riordan. GHS also has agreed to give as much as $5 million to Baptist's foundation, he said.
The American Board of Physician Specialties has formed the American Board of Hospital Medicine. Representatives from the ABPS, the American Board of Medical Specialties, and the American Osteopathic Association Bureau of Osteopathic Specialists founded the ABHM. It is first board of certification specializing exclusively in hospital medicine, according to a release.
The Centers for Medicare & Medicaid Services approved expansion by subsidiaries of WellCare Health Plans Inc. in several states. CMS approved the expansion of the company's Medicare Advantage private fee-for-service plan for three WellCare subsidiaries, a filing with the Securities and Exchange Commission said. They are WellCare Health Insurance of Arizona, WellCare Health Insurance of Illinois Inc., and WellCare Health Insurance of New York.
