Physicians who say they are involved in decision-making in a workplace environment that encourages collegiality, learning and respect report much lower levels of burnout.
Two studies published this week suggest that workplace culture plays a more important role in reducing physician burnout, and ensuing medical errors, than does improving safety protocols or using checklists.
One study by researchers at the NYU School of Medicine found that physicians who work in small, independent primary care practices with five or fewer physicians report dramatically lower levels of burnout than the national average.
Specifically, the NYU researchers found that 13.5% of 235 physicians who worked in 174 small, independent practices in New York City reported feeling burned out, compared with a national average of 54.4%.
While the scope of the study is limited, lead author Donna Shelley, MD, said the findings could help trace the root causes of physician burnout, which has become major concern.
“The more we can understand what drives low rates of burnout, the more likely it is that we'll find solutions to this problem,” said Shelley, a professor in the Departments of Population Health and Medicine at NYU Langone Health.
“The hope is that our research can inform ways for larger systems to foster autonomy within practices so that there is space to carve out a work environment that is aligned with doctors' needs, values, and competencies," she said, in remarks accompanying the study.
Burnout and Medical Errors
Clinical errors harm or kill hundreds of thousands of Americans each year, and physician burnout can be a contributing factor in these cases, according to the Institute of Medicine.
A study published this week by researchers at Stanford University School of Medicine found that physician burnout is at least equally responsible for medical errors as unsafe medical workplace conditions.
The Stanford researchers surveyed nearly 6,700 physicians in active practice across the nation, and 55% reported symptoms of burnout. In addition, 10% of the physicians made at least one major medical error during the prior three months.
"We found that physicians with burnout had more than twice the odds of self-reported medical error, after adjusting for specialty, work hours, fatigue and work unit safety rating," said study lead author Daniel Tawfik, MD, an instructor in pediatric critical care medicine at Stanford.
"We also found that low safety grades in work units were associated with three to four times the odds of medical error," Tawfik said.
The Stanford study found that rates of medical errors tripled in medical work units, even those ranked as extremely safe, if physician burnout was prevalent. Tawfik said burnout may be a bigger cause of medical error than a poor safety environment.
"Up until just recently, the prevailing thought was that if medical errors are occurring, you need to fix the workplace safety with things like checklists and better teamwork," he said. "This study shows that that is probably insufficient. We need a two-pronged approach to reduce medical errors that also addresses physician burnout."
Lowering Burnout Rates
NYU's Shelley said that burnout reflects "the practice culture and infrastructure" where physicians work.
"So the obvious question is: what is it about the work environment that results in low burnout rates in small practices?" she said. "It's important to study the group that's not showing high burnout to help us create environments that foster lower burnout rates."
Shelley said that physicians were asked about the "adaptive reserve" of their practices, which she described as a workplace culture that provides opportunities for growth and the ability to learn from mistakes by talking and listening to each other.
Physicians who said they're included in decisions and have control over their work environment reported lower levels of burnout.
"The good news is that a culture and systems can be changed to support primary care doctors in a way that would reduce the factors that are leading to burnout," Shelley said.
Only 16% of 302 specialty drugs examined in a new study were covered the same way by 17 major health plans, and half of the coverage decisions were consistent with FDA guidelines.
Tufts Medical Center researchers have found wide variations in specialty drug coverage among the nation's largest commercial health insurance plans.
James Chambers, lead author of a study that appears this week in Health Affairs, says his research team found that only 16% of 302 specialty drugs were covered the same way by all health plans.
About half the drugs (48%) were covered the same way by at least 75% of plans, and nearly 52% of insurance coverage decisions were in line with FDA guidance.
Chambers spoke with HealthLeaders Media about the study. The following is a lightly edited transcript.
HLM: Why did you do this study?
Chambers: The U.S. healthcare system is fragmented, particularly the commercial payer space. We tried in this study to get a better understanding of how that fragmentation and the large number of these payers translates into patient access to specialty drugs.
HLM: Your study uncovered a lot of variation between payers. How is this explained?
Chambers: We did expect to see some variation across these payers that cover different patient populations. So, these beneficiaries may have different characteristics that may lead insurance companies to tailor their drug coverage to specific patient populations.
They also would negotiate separately with product manufacturers for the prices they pay for these drugs. Given that they negotiate independently, that may also influence the differences across those decisions.
And finally, insurance companies have differing abilities to pay. Some insurance companies can simply pay more than others and could provide more generous benefits.
Now, saying all that, I didn't expect there to be quite as much variation as we found. Only 16% of the drugs we sampled were covered by each of the payers. Said another way, 84% of the drugs had some differences in coverage, meaning that some payers restricted access to the products when other payers did not.
HLM: How does this play out on the doctor/patient level?
Chambers: It has a significant impact on that interaction because it suggests that whenever a patient presents to a clinician and the clinician is judging the patient's clinical presentation and the symptoms, that they are tailoring the patient's treatment not just to the symptoms and presentation, but also to the patient's insurance coverage. This suggests that the differences across these payers is having a significant impact on the interventions that these physicians are able to prescribe for these patients.
HLM: Is this a good thing, perhaps, on a macro-economic level?
Chambers: It depends upon how you look at it. In some ways it could be seen as a good thing if it was the case that these payers are making judgements consistent with their patient population and consistent with a thorough review of the available clinical evidence that supports the decision. If that was the case, then it is a good thing.
What we've found after reviewing thousands of these coverage policies over the past several years is that payers should be more transparent in how they make those decisions. Some payers will tell us more thoroughly than others the evidence and clinical trials that they based their decisions on. It would benefit patients and physicians if payers were more transparent because these decisions have such a significant impact on patients.
Also, if every payer covered the same drugs in the same way, maybe it would take longer to really understand how safe and effective some of these products are. By virtue of the fact that we do have different payers making different decisions, hopefully tailoring their decisions to their beneficiary populations, means that maybe we could have a faster learning curve to determine if these treatments work and most importantly for which patients they provide the most value.
HLM: How should these study findings be used?
Chambers: I'd like to advance the debate about transparency in decision-making. It'd be great to start a dialog about what types of evidence the payers require when making these decisions. A better understanding for how these decisions are made has the potential to expedite patient access to these drugs, meaning that product manufacturers can develop evidence that best meets payers' requirements. Without this transparency in decision making, it's unclear just what evidence these payers are basing their decisions on.
HLM: Was any insurance company particularly generous or stingy?
Chambers: The goal of this work isn't to draw attention to which payers are most restrictive or not. We can't factor for some of the factors that may influence how restrictive they are; things like how competitive a state is, or what the budget available to those payers is.
We did find some differences across the payers and Health Care Service Corp. was one of the more generous payers in the sample. Blue Cross Blue Shield of Michigan seem to be one of the payers that most often added restrictions in its coverage.
But again, our goal was not to identify individual payers and shame those payers, as it were. It was more to determine the differences across payers and what that might mean for patients.
The potential sale comes just one year after tech billionaire Patrick Soon-Shiong, MD, acquired the nonprofit health system with a pledge to make it 'a leader in innovative healthcare delivery.'
Verity Health System said this week it may sell some or all of its six California hospitals to ease ongoing financial and operational problems.
"The top priority of Verity's board and management team is to establish a long-term, sustainable path forward for our hospitals, which are of critical importance to the communities they serve," Verity CEO Rich Adcock said in a media release.
"We are exploring a number of options to deleverage our balance sheet and address challenges our hospitals face after a decade of deferred maintenance, poor payer contracts, and increasing costs," Adcock said,
Verity's board has yet to make a final decision on a specific strategic option, but Adcock said the nonprofit health system will release information about the process when it's completed.
"As the board and management team work together to evaluate these options, the interests of our patients, employees and communities remain paramount," said Adcock, who was appointed CEO in January.
Redwood City, California-based Verity Health, formerly known as the Daughters of Charity Health System, was formed in 2015. BlueMountain Capital Management came in as a majority owner of the financially struggling health system with a pledge to contribute $260 million of capital and an option to purchase the system and convert it to for-profit after three years.
Less than two years later, however, Los Angeles tech billionaire Patrick Soon-Shiong, MD, stepped in and acquired BlueMountain's majority stake in July 2017 with a pledge to make Verity "a leader in innovative healthcare delivery, including personalized patient-centered healthcare solutions for every individual."
Last month, S&P Global Ratings revised its outlook for Verity from positive to stable.
"The outlook revision reflects an operating revenue shortfall in fiscal 2017 relative to budget expectations and ongoing operating losses through the nine-month year-to-date period ended March 31, 2018," said analyst Melanie Her.
Verity's six California hospitals are: St. Francis Medical Center in Lynwood; St. Vincent Medical Center in Los Angeles, the oldest hospital in the city; O'Connor Hospital in San Jose; St. Louise Regional Hospital in Gilroy; Seton Medical Center in Daly City; and Seton Coastside in Moss Beach.
A new study examines vertical integration of physician practices from 2007-2017 and finds considerable variation among specialties, with oncology and cardiology leading the way.
A new study this week in Health Affairs examined the consolidation of physician practices by hospitals over the past decade and found that rates of growth were highest among medical and surgical specialty practices and lowest among primary care practices.
Within the specialties, the study found considerable variation in the levels of vertical integration from 2007 through 2017, ranging from 4 percentage points in dermatology to 34 percentage points in cardiology and oncology.
Study lead author Sayeh S. Nikpay, an assistant professor of health policy at Vanderbilt University School of Medicine, spoke with HealthLeaders Media about the findings.
The following is an edited transcript.
HLM: What prompted this study?
Nikpay: I work with hospitals and how they interact with reimbursement mechanisms. I was noticing there was a lot of research on vertical integration, a lot of studies trying to quantify the effect of vertical integration on cost, quality, and access. But we really didn't know anything about the basic descriptive facts about vertical integration.
So this paper shows that this is happening systemwide, albeit more in some systems than others. It opens up a lot of questions about why.
HLM: What are the key takeaways from this study?
Nikpay: Vertical integration has been happening consistently over the past decade, and it's not just happening in specific specialties. It's happening everywhere. It's medical specialists, it's surgery, it's primary care. This is a trend that has been happening consistently.
Also, it's uncertain what vertical integration actually means. We observe clinics that are owned or affiliated with hospitals, but we don't know exactly what that means. That could mean something from tightly integrated like a Kaiser, where they are not just integrated financially. They have shared electronic medical records. They are organizationally integrated as well. Or it could be a short-term contract to fill under the provider idea of a hospital to meet a short-term need.
HLM: What explains the variations in which specialties are acquired by hospitals?
Nikpay: It could have to do with demand for specific types of services. Oncology, cardiology, these are some of the most pressing and difficult problems that patients face. So, there is a lot of demand for those services.
We can't address this in our study, but our results hint that reimbursements policy might matter. Before 2007 there were changes to the way in which oncology drugs were reimbursed. We went from being able to charge Medicare what you wanted to only being able to charge average sales price plus 6%, as part of the Medicare Modernization Act.
Later on, there were changes to cardiology reimbursement, but we don't specifically test whether those reimbursement mechanisms that targeted oncology and cardiology may have played a role in vertical integration.
HLM: Is there a common denominator in vertical integration?
Nikpay: The common denominator is that every specialty experienced some increase. We found that it ranges from an increase of four percentage points to 35 percentage points, and it's happening systemwide.
Besides the fact that it is happening across different specialties, there is this idea that vertical integration is happening in response to the Affordable Care Act and new payment models. But, we don't see jumps in vertical integration around the introduction of the ACA in 2010, nor do we see jumps in vertical integration in 2014, with the ramp up of the ACA through Medicaid expansion and the marketplaces coming on line.
"The common denominator is that every specialty experienced some increase."
—Sayeh S. Nikpay
So, our paper does not support the idea that vertical integration is a response to new payment models introduced under the ACA. This was a trend that was happening before the ACA was even passed. Now it is true that vertical integration makes it easier to deal with value-based payment reforms. However, whether that is a contributing factor, it's not a causal factor looking at it intertemporally.
HLM: Then, what is driving this vertical integration?
Nikpay: The results show it's a bit of a puzzle. People are saying it's 340B that's causing all of these oncology clinics to vertically integrate. Well, maybe it's not just 340B because we're also seeing it in surgery, where 340B discounts wouldn't apply.
Or we're hearing new payment models are causing vertical integration. Well, our paper suggests maybe not because this already appeared to be happening before these new payment models were introduced.
The more nuanced story is that there is no one silver bullet that can explain this. It's not payment policy exactly. It's not these new delivery models. It's not just 340B. These might be contributing factors, but it’s a more complex picture that may represent an industrywide trend toward a new idea; a paradigm shift in the way we deliver medical care that has grown over time.
HLM: What other trends are you seeing?
Nikpay: We can't say why, but one of the most striking findings is in general surgery. Surgeons, because of privileging, can operate in hospitals anyway, through the regular privileging system. But there could be cohort changes, and younger surgeons may be less likely to strike out on their own in private practice. They might want to be affiliated with a hospital so they can be part of the electronic health record, or not engage in the business of running a practice. Or, there have been changes to reimbursements for ambulatory surgical centers that could have made this less attractive to be in independent practice.
HLM: Given what you've seen with vertical integration in the past decade, what will the next decade look like?
Nikpay: I'll say two things. One, we are reaching a pretty high level of vertical integration in some of these specialties. You can't go up to 100%, given that there are some markets where it makes sense for practices to be community-oriented or unaffiliated. But at some point we are going to see these rates of vertical integration top out. Where that max out point is is not clear.
The other thing that matters is what is going to happen with the trajectory of healthcare policy. We've had eight years of operating in the ACA world. I'm sure that CEOs of hospitals have been operating under a certain set of assumptions and, given the surprising presidential election results, health policy has taken a different turn. The direction that it goes in will affect whether vertical integration is a good path forward or not.
HLM: Is vertical integration good or bad?
Nikpay: That's hard to say, and the study doesn't get at who's right or wrong. There is an abundance of evidence showing that vertical integration is associated with higher spending and higher prices. That is empirically known. Whether or not those spending or cost increases are justified depends upon quality, and quality we haven't plunged the depths of that question.
It's difficult to assess quality with the type of administrative data that is available. We have CMS Hospital Compare. We have other structural measures of quality, but it is hard to see if this is affecting the patient experience with coordinated care. It's even difficult to conceptualize care coordination. Until we have more targeted studies on quality, we can't do that cost-benefit analysis.
HLM: Anything else?
Nikpay: I've seen anecdotally the idea that hospitals are "gobbling up" oncology practices, and that's a little hyperbolic. It's more like it's systemwide and more hospitals are integrating with one or two oncology clinics rather than a core group of hospitals are gobbling up many practices. There are some outliers around the average, but massive consolidation is probably not correct.
A former corporate compliance officer at the four-hospital health system in Upstate New York blows the whistle on his old employers and collects a $1.9 million share of the settlement.
Health Quest Systems, Inc. and affiliated Putnam Hospital Center will pay $15.6 million to settle False Claims Act allegations that it submitted inflated and ineligible bills to Medicare, the Department of Justice announced.
In the settlement announced Monday, DOJ said that Health Quest and PHC admitted that:
From April 2009 through June 2015, Health Quest did not sufficiently document claims for evaluation and management services, which were billed two levels higher than justified by the medical records.
From April 2011 through August 2014, Health Quest submitted insufficiently documented claims for home health services.
From March 2014 through December 2014, Putnam Hospital submitted false claims for inpatient and outpatient services referred by two orthopedic physicians, a violation of the Physician Self-Referral Law.
The physicians received compensation from the hospital that prosecutors said exceeded the fair market value for the services to induce referrals to the hospital, a violation of the Anti-Kickback Statute.
LaGrangeville, NY-based Health Quest includes four hospitals and provides surgical, medical and home healthcare services in the Hudson Valley and Northwest Connecticut. Putnam Hospital Center is located in Carmel Hamlet, NY.
The settlement resolves three whistleblower lawsuits brought by former employees of Health Quest, who will share a portion of the recovered money. Whistleblower Tim Cleary, the former corporate compliance officer at Health Quest will receive nearly $1.9 million, DOJ said.
The health system issued a statement saying that it "cooperated fully with the government's investigation."
"We appreciate the opportunity to work with and finally resolve the matter with all relevant parties, including the U.S. Department of Justice," Health Quest President and CEO Robert Friedberg said. “Our intent is always to comply with government regulations."
"Today, with this matter settled, we can focus on what means the most to us: providing superior quality care for our patients," he said.
Health Quest will pay $14.7 million to the federal government, and $895,427 to the State of New York's Medicaid program, and the health system will enter into a Corporate Integrity Agreement with the Department of Health and Human Services.
Florida spine surgeon Johnny Clyde Benjamin, 52, used his Vero Beach office to manufacture counterfeit oxycodone, which was traced to the overdose death of a Palm Beach County woman.
An orthopedic surgeon in Vero Beach, Florida, was sentenced to life in prison for his leading role in a counterfeit oxycodone ring that was linked to the death of a Palm Beach County woman.
Johnny Clyde Benjamin, Jr., MD, was convicted by a federal jury in April in the 2016 overdose death of Maggie Crowley, 34, of Wellington.
Prosecutors said Crowley died after overdosing on counterfeit oxycodone pills that contained a Fentanyl analog, Furanyl Fentanyl, a powerful synthetic opioid that is much stronger than heroin or oxycodone.
A subsequent investigation determined that Benjamin, 52, was the source of the counterfeit drugs, which he was manufacturing from his Vero Beach office and distributing mostly outside of the South Florida area,prosecutors said.
Crowley was among 590 opioid deaths in 2016 in Palm Beach County, a record high. The number of people dying from fentanyl in their system rose to 310 from 91 a year before.
Crowley's family confronted Benjamin at the sentencing hearing in Fort Lauderdale on Friday, where they made emotional pleas for a lengthy sentence, as TCPalm.com reported.
Crowley's husband, Shaun Crowley, told the court Benjamin was "an absolute monster."
Her parents asked the judge to sentence Benjamin to life in prison.
"Now that Maggie is gone, there is a bottomless, empty hole in my soul," said her mother, Margaret Divita.
"There hasn’t been a day gone by we don’t cry for her," said her father, Joseph DiVita, according to media accounts.
Benjamin's attorney Philip Reizenstein told local media that he would appeal the conviction and sentence.
The health system incorrectly billed for two types of severe malnutrition, which are classified as major complications or comorbidities that trigger higher Medicare payments, HHS says.
An incorrect Medicare billing code for "severe malnutrition" could force the University of Wisconsin Hospitals and Clinics Authority to return $2.4 million in overpayments to the federal government.
The Office of the Inspector General at the Department of Health and Human Services found the alleged error after examining $9.5 million in Medicare payments for 497 claims submitted by the health system from 2014 through 2016.
Auditors based their findings on a random sample of 100 claims totaling $1.7 million.
"The Hospital complied with Medicare billing requirements for severe malnutrition diagnosis codes for 10 of the 100 claims that we reviewed. However, the Hospital did not comply with Medicare billing requirements for the remaining 90 claims," HHS said.
UWHCA strongly contests the findings and the recommendation to return the overpayment.
"It is well-established that patients with malnutrition are at an increased risk of adverse outcomes, complications, readmissions, and longer lengths of stay," Troy G. Lepien, chief compliance officer at UWHCA said in a letter to HHS.
"UWHCA has devoted significant resources to ensuring our patients' nutrition needs are addressed and thus that they have improved outcomes. UWHCA also takes pride in the strength of its billing and coding compliance program," Lepien wrote.
The auditors said that "Nutritional Marasmus and other/unspecified severe protein-calorie malnutrition are two types of severe malnutrition listed in the International Classification of Diseases, Clinical Modification."
"Previous OIG reviews have determined that hospitals incorrectly billed for Kwashiorkor, a third type of severe malnutrition. Nutritional Marasmus and other/unspecified severe protein-calorie malnutrition are each classified as a type of major complication or comorbidity (MCC). Adding MCCs to a Medicare claim can result in a higher Medicare payment," HHS said.
For 88 claims, the billing errors resulted in net overpayments of $562,361.
"These errors occurred because the health system used severe malnutrition diagnosis codes when it should have used codes for other forms of malnutrition or no malnutrition diagnosis code at all," HHS said.
Auditors said the medical records held no evidence that the malnutrition was severe or that it had an effect on the treatment or the length of the hospital stay.
"On the basis of our sample results, we estimated that the Hospital received overpayments of at least $2,412,137 from 2014 through 2016," the audit said.
Follow Up
UWHCA issued a statement Friday morning saying it "intends to appeal all claims denied based on the OIG recommendations."
"UW Health strongly disagrees with the findings and recommendations in the OIG report. Most importantly, we believe the contractor did not apply nationally-accepted evidence-based standards to assign malnutrition diagnosis codes. UW Health uses the most up-to-date definition of malnutrition and current methodology for assessing malnutrition."
"Several international nutrition organizations have published evidence-based guidelines for diagnosing and coding malnutrition, and UW Health uses a metric that incorporates these current understandings."
The acquisition comes as the consortium finalizes the $1.4 billion acquisition of Curo Health Services. Humana will have a 40% stake in a separate home-health and hospice services unit.
Humana Inc. and private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe this week finalized their $4.1 billion acquisition of Kindred Healthcare, Inc.,the companies said.
The deal, which was first announced in December, coupled with the soon-to-be finalized $1.4 billion purchase of privately held Curo Health Services, will make the three companies the nation's largest providers of hospice services.
Humana's acquisitions come as health insurers integrate outpatient services with their Medicare Advantage plans, as Forbes reports. Major payers including Humana, UnitedHealth Group, Anthem, Aetna, and Cigna are strengthening ties to providers that will funnel more seniors from doctors and clinics to insurance companies.
The acquisitions come amid speculation that Humana could be acquired by Walmart.
Under the Kindred acquisition:
Kindred's long-term acute care hospitals, inpatient rehabilitation facilities and contract rehabilitation services business, collectively known as Kindred Healthcare, were separated from Kindred's home health, hospice, and community care businesses, collectively known as Kindred at Home.
Kindred Healthcare will be operated as a separate specialty hospital company owned by TPG Capital and Welsh, Carson, Anderson & Stowe, Humana's private equity partners in the deal.
Kindred at Home will be operated as a standalone company owned 40% by Humana, with the remaining 60% owned by TPG and WCAS.
Humana will have an option to buy the remaining ownership interest in Kindred at Home over time through a put/call arrangement, the companies said.
Humana, TPG, and WCAS are also finalizing the previously announced $1.4 billion purchase of which provides hospice services at 245 locations in 22 states. Humana will have a 40% stake.
Louisville-based Kindred Healthcare generates annual revenues of about $3.4 billion, and includes 38,300 employees providing healthcare services in 1,831 locations in 45 states.
That includes 75 LTAC hospitals, 19 inpatient rehabilitation hospitals, 13 sub-acute units, 98 inpatient rehabilitation units and contract rehabilitation service businesses which served 1,626 non-affiliated sites of service.
Policymakers say modifications will encourage the use of new technologies by home health agencies and more effective care planning as data is shared by patients, caregivers, and providers.
The Centers for Medicare & Medicaid Services this week proposed an update of the payment model for home healthcare agencies that federal officials say will reward value over volume.
"Today's proposals would give doctors more time to spend with their patients, allow home health agencies to leverage innovation and drive better results for patients," CMS Administrator Seema Verma said Monday in a media release.
"The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care," she said.
Under the proposed rule change, CMS would allow the cost of remote patient monitoring to be reported by home health agencies as allowable costs on the Medicare cost report form.
The system now pays for 60-day episodes of care and relies on the number of therapy visits a patient receives to determine payment. However, the Bipartisan Budget Act of 2018 eliminated the number of therapy visits as a payment factor for home health, beginning in 2020.
The proposed rule would also implement a new Patient-Driven Groupings Model for home health payments that would eliminate the use of "therapy thresholds" to determine payment and changes the unit of payment to 30-day periods of care.
CMS said this modification will encourage the adoption of new technologies by home health agencies and more effective care planning as data is shared among patients, their caregivers, and their providers.
CMS projects that Medicare payments to HHAs in 2019 will increased by 2.1%, or $400 million, based on the proposed policies.
CMS also wants to eliminate the requirement that the physician estimate how much longer skilled services would be needed when recertifying the need for continuing home healthcare, as this information is already gathered on a patient's plan of care.
Verma said the initiative will advance the Administration's MyHealthEDatainitiative that gives patients ready access to their personal health data.
The Medicare Payment Advisory Commission reports that 3.4 million Medicare beneficiaries received home healthcare in 2016. The program spent about $18.1 billion on home healthcare services that year, and more than 12,200 agencies participated in Medicare.
The CMS proposed rule appears to be in line with a MedPAC recommendation that Medicare eliminated the number of therapy visits as a payment factor. However, that recommendation was made moot when Congress did exactly that under the Budget Act.
"Eliminating the number of therapy visits as a payment factor would base home health payment solely on patient characteristics and result in a more patient-focused approach to payment," MedPAC wrote.
The proposed rule also includes information on the implementation of home infusion therapy temporary transitional payments. In addition, the proposed rule solicits comments on elements of the new home infusion therapy benefit category and proposes standards for home infusion therapy suppliers and accrediting organizations of these suppliers as required by the 21st Century Cures Act.
Court documents show how the co-conspirators established a handful of shell companies that were all designed to facilitate referrals for the now-defunct Pacific Hospital of Long Beach.
A California hospital executive's plea agreement provides a detailed look at a long-running scheme dubbed "Operation Spinal Cap" that allegedly bilked the federal government of nearly $1 billion in fraudulent claims.
George William Hammer, 65, of Palm Desert, California, was the former chief financial officer of the physician management arm of the now-defunct Pacific Hospital of Long Beach. He pleaded guilty in May to tax evasion based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings, the Department of Justice said.
According to a plea agreement, unsealed last week, Hammer and eight co-conspirators at Pacific Hospital and affiliated shell companies accumulated more than $950 million from 1998 through 2013.
Alleged ringleader Michael Drobot, the former owner of Pacific Hospital, paid more than $40 million in illegal kickbacks to doctors, chiropractors, and other medical professionals over a 15-year period in exchange for referring thousands of patients who received surgeries, imaging, and other services at the hospital.
How They Did It, Allegedly
In one example cited by prosecutors, Pacific Specialty Physician Management, Inc., a company that was "only in existence for Pacific Hospital's benefit," paid the office expenses of an orthopedic physician group referred to as "Downey Ortho."
In exchange, Downey Ortho provided referrals that generated $142 million of Pacific Hospital's claims to insurers between 1998 and 2014, of which the hospital was paid $56 million.
The scheme also used sham contract options that would provide physicians with monthly payments that were supposedly for the purchase of the physician practice.
"In reality, however, PSPM and the Kickback Induced Surgeons would not desire or expect to consummate any ultimate sale transaction," the plea deal read. "Rather payments, in the guise of an option contract, which would often vary from month to month, were made exclusively to 'reward' physicians to refer patients…."
PSPM also steered co-conspirator physicians to specific durable medical equipment vendors who had mutually beneficial financial arrangements that offset PSPM’s kickback costs.
Hammer and his co-conspirators attempted to hide kickbacks made under the sham option contracts. They deducted "termination of option fees" as "other deductions" and took a corresponding deduction on PSPM's income taxes from 2011 through 2013, and avoided about $2.1 million in federal taxes.
Hammer pleaded guilty to one count of Aiding and Assisting in the Preparation of a False Tax Return. He could face up to three years in prison and one year of probation. Under the plea deal, he will also forfeit $500,000, and could testify for the government in the prosecution of his co-conspirators, some of whom were identified by federal prosecutors as:
Daniel Capen, MD, 68, of Manhattan Beach, an orthopedic surgeon, who pled guilty to conspiracy and illegal kickback charges. Capen accounted for approximately $142 million of Pacific Hospital’s claims to insurers, on which the hospital was paid approximately $56 million.
Timothy Hunt, MD, 53, of Palos Verdes Estates, an orthopedic surgeon who referred spinal surgery patients to Capen and other doctors. He pled guilty to a conspiracy charge involving his receipt of illegal kickbacks stemming from various financial relationships with Pacific Hospital and related entities.
Lauren Papa, 52, of Tarzana, a chiropractor, who plead guilty to a conspiracy charge involving her receipt of illegal kickbacks to refer patients to a neurosurgeon with the understanding that the neurosurgeon would perform the surgeries at Pacific Hospital.
Tiffany Rogers, MD, 53, of Palos Verdes Estates, an orthopedic surgeon, who was named in an indictment unsealed last week in connection with receiving illegal kickbacks to refer patients for spinal surgeries at Pacific Hospital.
Brian Carrico, 64, of Redondo Beach, a chiropractor, was charged in connection with the receipt of illegal kickbacks to influence the referral of patients to Pacific Hospital.
An indictment unsealed Wednesday alleges that Carrico and his co-conspirators submitted approximately $80 million in claims to the federal workers' compensation program and were paid approximately $56 million in connection with patients referred to Pacific Hospital.
William Parker, 64, of Redondo Beach, was charged in a separate indictment unsealed last week in connection with the same kickback scheme involving Carrico and his companies.
