Jean Haynes has been named CEO for Geisinger Health Plan, Geisinger Indemnity Insurance Company, and Geisinger Quality Options, Inc.; and executive vice president, insurance operations for Geisinger Health System. She will join Geisinger on Sept. 28.Most recently, she served as executive director of Boston Medical Center HealthNet.
Methodist Health System has named Nancy E. Simon as senior vice president/CNO for Methodist Health System as well as CNO for Methodist Dallas Medical Center. Simon begins the new position in October and will oversee the daily operational responsibilities for the nursing division at Methodist Dallas, plus system-wide duties involving staffing, fiscal management, and regulatory compliance of nursing services and other patient care departments for the hospitals within Methodist Health System.
The three issues, including one new issue not yet approved in other RAC regions, are applicable to durable medical equipment (DME) suppliers in Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
According to the DCS Web site, the issues include the following:
Pharmacy supply and dispensing fees. Pharmacy supply and dispensing fees when billed by a DME supplier are required to be accompanied with an oral anti-cancer, oral anti-emetic, immunosuppressive drug or inhalation drug. The absence of one of the aforementioned drugs billed on the same date of service or a denial of one of the aforementioned drugs represents an overpayment.
Wheelchair bundling. A potential vulnerability may exist if certain procedure codes are billed in conjunction with other procedure codes for the same date of service and the same beneficiary.
Urological bundling. A potential vulnerability may exist if certain urological procedure codes are billed in conjunction with other urological procedure codes for the same date of service and same beneficiary.
The RACs from regions B, C, and D have already posted approved issues for most other states. The only states CMS has not yet approved any RAC audit issues for are the Region B states Illinois, Kentucky, Ohio, and Wisconsin.
Editor's note: For the latest news on CMS-approved issues for DCS and other RACs, visit the Revenue Cycle Institute Web site. (For an updated list of approved issues in your state, visit the “Tools” section of the Revenue Cycle Institute Web site and download the free chart.)
Downey Regional Medical Center has filed for Chapter 11 bankruptcy protection in an effort to escape unprofitable HMO contracts in favor of patients in preferred provider organizations.
Just about everything went wrong that could possibly go wrong financially with the 199-bed nonprofit hospital 13 miles southeast of Los Angeles, managers acknowledged in documents sent to employees last week. Most important, hospital officials weren't aware of it until recently.
Internal reviews recognized a loss of nearly $100 million from financial reserves to cover operating expenses over the past decade, or about $1 million a month.
In those documents to employees, president of the new management team, Kenneth Strople, described staff as "feverishly working to fix literally thousands of problems," some of which involved its dysfunctional computerized financial systems.
"For over a decade, the hospital lost tens of millions of dollars annually. We have spent the last two years vigorously working to figure out why, and to correct the problems," one of the letters to employees said.
The hospital blamed much of the dysfunction on issues with five HMO contracts, and a lawsuit against the hospital from a physician group demanding millions of dollars it claims the doctors are owed from capitated risk pool funds.
The financial problems were recognized some time after a new team took over management of the hospital two years ago, says Downey spokesman Eric Rose.
Rose says Downey Regional has about 50,019 visits to its emergency room and treats a total of 71,764 patients a year.
Strople and other hospital executives have been scrambling to explain to employees how the hospital got itself into such deep trouble. He said that not only were the hospital's financial computer systems and processes broken, but "the so-called capitation model lost us lots of money and we did not know it," Strople wrote.
Although those financial systems are largely fixed, and the hospital has been able to move away from capitated contracts, "we are still facing the one-time transition consequences of exiting from capitation, that amounted to over $25 million."
Additionally, although the hospital is able to make its payroll, it has had "delays in paying vendors and putting aside money for capital expenditures."
"We are getting by, but some of our creditors have no more patience. For example, one of the physician groups has aggressively sought to obtain payments for capitation risk pools relating to 2006 and later.
"They sued us, demanding millions of dollars… (and) we do not have any reserves to pay them right now, so we needed to prevent them from taking more legal steps to grab the money the Hospital had set aside to meet your payroll."
Chapter 11 bankruptcy accomplishes this by providing "an automatic federal injunction against any creditor from collecting money or continuing any lawsuits until the matters are settled as part of the reorganization plan the federal court approves at the end of the bankruptcy proceeding."
In a statement, Downey officials said the bankruptcy filing "actually allowed the hospital to access new lending markets that have committed to providing DRMC with needed cash during the bankruptcy process."
Nate Kaufman, a Southern California-based hospital industry analyst, is doubtful that financial rescue will work.
Kaufman says the hospital should have been able to see growing financial problems as long ago as 2005, when days and accounts receivable were above 70 days, 30 days over the industry standard, which indicates how quickly the hospital receives reimbursement for services.
"If it was indeed the case in 2005, why are they just finding out about it now, and just starting to fix it?" he asks. "Did these guys just fall off a turnip truck yesterday?"
Kaufman also says even with the bankruptcy, he doesn't have high hopes the stand-alone hospital can remain viable as long as it is free-standing, and not in a hospital network.
"This (bankruptcy) will stop the hemorrhage, but it won't ensure the viability of the organization over the long term. The question is, if they have to buy new equipment and build new facilities, do they fit the profile of an organization that financial institutions would be wiling to lend to. The answer is no."
Downey Regional is listed as one of the 273 hospitals in the state with buildings that must meet seismic upgrade requirements in coming years, which in some cases may mean replacing entire buildings with new construction, or extremely expensive retrofits.
Meanwhile, hospital officials in the region are worrying about a "domino" effect if the hospital goes out of business or stops accepting emergency room patients, says Jim Lott of the Hospital Council of Southern California. That's because six other hospitals have taken their emergency departments offline in the last decade, including Los Angeles County's Martin Luther King.
Downey serves a high number of Medi-Cal and uninsured patients and serves a region with about .9 beds per 1,000 residents, fewer than the state average of 2.24 beds per 1,000 residents. The national average is 3.4.
"Downey Regional has become a critical part of the emergency medical services system," Lott says.
That EMS system may not be able to withstand the stress of Downey's emergency department goes offline as well, he adds. Some relief after re-enrollment may come from the new Kaiser Permanente hospital, a 352-bed unit that opened last week less than two miles away from Downey Regional. But that facility is only accessible to Kaiser enrollees.
Hospital officials described in painful detail what went wrong with its five capitated contracts. Those contracts required Downey to pay hospitalization costs for HMO members assigned to it, as well as pay actual costs for out-of-network charges when members were hospitalized elsewhere, which amounted to $1.8 million monthly.
When debiting the "risk pool," they said, "our prior risk sharing contracts with the physician groups allowed us to charge only an artificially low amount to the risk pool for ourselves for care provided here at the hospital. In fact, only about $1 million got debited per month, while the Hospital's actual cost of care ran nearly $3 million monthly."
The hospital has negotiated its way out of four contracts, but still has an agreement with Aetna. In the reorganization proceeding, it plans to "reject all of Aetna's contracts."
"With no cash reserves since March of 2008, and with credit markets in a free fall for the past year, the lack of working capital has caused the Hospital to struggle with liquidity," the documents continued.
"Filing reorganization actually makes lending to the hospital much more attractive for new lenders, who have committed to making necessary cash available as the Hospital manages the capitation exit consequences and finishes the fixes on its financial systems."
"DRMC expects to resume cash flow surpluses in the next quarter and therefore rebuild its investment reserves while repaying its accumulated debts over the next several years. In fact, since the new management team has been in place, the Hospital has seen a dramatic financial turnaround."
Soon after emergence from bankruptcy, the hospital should be able to replenish its depleted endowment.
The hospital will remain "open and operational" and will continue to meet its payroll, said Rose. He says he does not anticipate the patients will notice any difference. Suppliers will get paid in the hope they will continue to honor their contracts with the hospital, the documents said.
Fasten your seat belts: It's going to be a lively week with the Senate Finance Committee as it gears up Tuesday to consider 564 amendments to the healthcare reform bill introduced by panel chairman Max Baucus (D-MT) last Wednesday.
The amendments touch nearly every aspect of the bill--meaning a very different version could be emerging from Finance. This bill, when completed and finally passed, will be merged with the healthcare reform bill passed in July by the Senate Health, Education, Labor and Pensions (STEP) Committee.
Here are three larger areas that could see changes as the committee marks up the bill:
Public insurance option. The current bill, called America's Healthy Future Act, doesn't have a public insurance option. It was excluded after Baucus convened a bipartisan group of senators on the Finance Committee and decided as an alternative to include options for state health insurance cooperatives, as initially proposed by Sen. Kent Conrad (D-ND).
One of the opponents of the co-ops is Sen. Jay Rockefeller (D-WV), who is chairman of the Finance Committee's Health Subcommittee. In a letter sent to Baucus and Senate Finance ranking minority member, Sen. Charles Grassley (D-IA), Rockefeller sharply criticized co-ops--saying it would be "irresponsible to invest over $6 billion" in the concept.
Instead, Rockefeller, who proposed an amendment, said that "inclusion of a strong public plan option in health reform was a must." The votes for a public option amendment may be there—depending on what Democratic moderates, such as Sen. Ben Nelson (D-FL), decide. The membership of the committee is 13 Democrats and 10 Republicans. Sen. Jeff Bingaman (D-NM), who was on Baucus' healthcare reform panel, said last week that he would support a public option if it's proposed.
Excise tax. The Chairman's Mark released last week imposes an excise tax on insurers if the aggregate value of employer sponsored health coverage for an employee exceeds a threshold amount. The threshold amount is $8,000 for individual coverage and $21,000 for family coverage for 2013. The tax is equal to 35% of the aggregate value that exceeds that threshold amount.
Numerous Democrats have complained that many middle income residents would be impacted by this threshhold, which they thought was too low. Senators from four of the states likely to be impacted—Senators Charles Schumer (D-NY), Robert Menendez (D-NJ), Maria Cantwell (D-WA), and John Kerry (D-MA)—have proposed a series of changes to the excise tax that would boost the threshold to $9,800 for an individual and $25,000 for a family, and raise the tax to 40%.
Employer mandate. In the bill released last week, Baucus dropped provisions that would establish an employer mandate; instead, companies would be required to defray costs of providing insurance tax credits to those employees who qualify for assistance. Kerry and Schumer have introduced an amendment to establish an employer mandate. The addition of an employer mandate would likely put the bill more in line with the versions passed by the House and the Senate HELP Committee.
With the House version, employers would be required to provide coverage if they have at least $250,000 in payroll. The companies would have to contribute 72.5% of their workers' premiums—or 65% for family coverage. Those companies would face a payroll tax, starting at 2% for companies with a payroll of $250,000 and increasing on a sliding scale to 8% for those with more than $400,000.
With the STEP version, employers with fewer than 25 employees would be exempt from so called pay or play requirements. Those with 50 or fewer fulltime employees that pay 60% or more of their premiums would get tax credits for up to three years to offset coverage costs. Larger companies (with more than 25 employees) that pay for less than 60% of premiums would face $750 annual penalties for each full time worker above the first 25.
The Department of Health and Human Services (HHS) will spend $650 million in economic recovery stimulus money to encourage Americans to adopt more "healthful lifestyle habits." The funds will be used with a community prevention and wellness initiative to increase physical activity, improve nutrition, decrease obesity, and decrease smoking across the country.
As part of the program, $373 million in cooperative agreements will be awarded to communities through a competitive selection process. The cooperative agreements will support evidence based prevention strategies for children and adults and will promote community partnerships through the public health initiative, called Communities Putting Prevention to Work, which the Centers for Disease Control and Prevention will lead.
The goal of the initiative is to "make disease prevention and health promotion top priorities in states and communities across the country," said HHS Secretary Kathleen Sebelius in announcing the funding.
The focus of the projects should be on changing systems and environments--for example, improving access to healthy foods and providing opportunities for physical activity—and putting into place policies, such as clean indoor air laws, to promote the health of a broad population, she said.
Funded projects are to emphasize high impact, broad reaching policy, environmental, and systems changes in both schools and communities. For example, communities can work to make high fat snack foods and sugar sweetened beverages less available in schools and other community sites. In addition, funded communities will be encouraged to provide quality physical education in schools and enact comprehensive smoking bans.
"With two thirds of Americans overweight or obese and one in five Americans still smoking, this initiative is tackling two of the biggest health crises in the United States head on," said Jeff Levi, PhD, executive director of the nonprofit group Trust for America's Health.
The investment "will reduce rates of preventable diseases and give millions of Americans the opportunity to live healthier, higher quality lives," Levi said. Evidence based community prevention programs have shown success in "improving nutrition, increasing physical activity, and preventing tobacco use by making healthy choices easier choices."
The remainder of the funds for this initiative will be made available in the next several weeks to states, territories, and organizations to support, extend, and evaluate the reach of the community projects.
Communities interested in applying for Communities Putting Prevention to Work grants can find more information at www.grants.gov. The application deadline for the community projects is Dec. 1.
Many of the provisions outlined in Senate Finance Committee Chairman Max Baucus' healthcare plan, America's Healthy Futures Act, are attracting scorn from conservatives and left-wingers alike, with each party claiming the bill does not sufficiently address enough of its own demands.
The Montana Democrat sought to draft a plan through negotiations with members from each side of the aisle. The goal: A viable, lower-cost healthcare reform option that includes at least a few GOP strokes in what was to be overall, a liberal big-picture initiative. The attempt to please both sides, however, may have cast qualms over the entire piece of legislation.
Yet there are certain provisions that have gained positive attention and support from the long-term care industry. Early in the roughly 220-page bill, Baucus lays out his proposal for long-term care insurance, which includes a cafeteria plan, "a vehicle through which small businesses can provide tax-free benefits to their employees," according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance.
The change, he says, will ease participation restrictions and help boost the growing employer market. At the moment, the majority of the long-term care insurance market is made up of individual buyers, but Baucus' provision will help shrink the difference, Slome says.
"I think it's very positive," he adds. "People keep hoping for an above the line tax deduction across the board at the federal level, but the economy just can't support that at this point. So this is really the best that the industry is going to get."
If passed, this long-term care insurance provision could create a huge boom for the growth of employer-sponsored plans, whether they are voluntary or paid for, to some degree, by the employer, Slome says. "That creates increased awareness. That gets more people covered and we've got to get millions more people covered for multiple reasons, most importantly so they don't become dependent on the government."
Helping more people save for future medical care is a tremendous benefit to the long-term care industry, which often relies on Medicare, Medicaid, and other government funds to cover increasing costs. Such an improvement can have lasting effects on not only the long-term care industry, but on a vast segment of the country's population. The aging of the baby boomer generation (Americans born between 1946 and 1964) epitomizes the need for more widely available, employer-based long-term care insurance.
"Finally, some meaningful progress in the effort to make long-term care insurance more accessible and attractive to millions of younger, middle income Americans. This is the most positive step we've seen in some time and hopefully it won't get lost in the great health reform debate," Slome says.
Doctors are navigating through testing and treatment options for patients who may suffer from the pandemic flu, which so far has proved to be no more serious than a case of the seasonal flu—unpleasant, inconvenient, and contagious, but most people get over it. Health officials, who are worried about overwhelmed doctors and emergency rooms, stress that people should call the primary-care doctor before making an appointment. Their message: Take precautions against spreading the virus and don't panic.
Some experts say high costs for patients at big-city hospitals reflect a free-spending, out-of-control medical marketplace. Others say medical costs are higher in urban areas because the poor need more care and the rich demand it. Others say the profit motive is at play. Still others say that when lives are at stake, cost should not be an issue. Whatever the reason, the question itself has taken on added importance as the Obama administration pushes a massive expansion of medical care to the uninsured.
Few dispute the prowess of The Mayo Clinic, which brings in $9 billion in revenue a year and hosts 250 surgeries a day. But a battle is underway among healthcare experts and lawmakers over whether its success can be so easily replicated. Before embracing a fundamentally new approach to healthcare, dissenting experts and lawmakers say, Congress should scrutinize the assumption that a Mayo-type model is the answer.
