The health system is looking for ways to address a projected $80 million net loss in 2020.
Two months after entering a joint clinical agreement with the University of Minnesota, M Health Fairview is considering layoffs that could trim 500 positions – about 2% of its staff – from the payroll.
StarTribune.com, citing internal memos from University of Minnesota President Joan Gabel and Fairview Health CEO James Hereford, said the staff cuts is one of several strategies contemplated over the past several weeks to address a projected $80 million net loss in 2020.
"The decision by Fairview to lay off employees is incredibly difficult," Gabel wrote. "There are sound financial reasons why this action is necessary, but it does not lessen the pain employees will feel or the concern that patients may have due to this news."
Other strategies to improve margins could include reducing operations at the health system's Bethesda rehabilitation hospital and shuttering the financially struggling St. Joseph's Hospital in downtown St. Paul, the newspaper reported.
Hereford did not dispute the newspaper's report but declined to provide further details in a statement to HealthLeaders.
"Healthcare is facing an affordability crisis and we must transform," he said. "We are rethinking everything we do to prepare for a future where we approach healthcare differently. This change requires innovation, courageous leadership and, inevitably, choices. We will do what's right for our most important constituents: our patients."
The staffing cuts would likely take effect in early 2020, and most would target unfilled positions, as opposed to layoffs. The potential closure of St. Joseph's could occur within the next three years. The money losing hospital was converted in 2017 to a mental health hospital. St. Joseph's lost $32 million in 2017 and $44 million in 2018, the newspaper reported.
"The affordability crisis that consumers are facing right now — it really does demand and give energy to the necessity of health care delivery transformation," Hereford told the paper. "Health care has played the blame game and tried to deflect and say its been somebody else's fault. We're not going to do that."
The Assistance Fund is the third foundation to settle allegations of conspiring with drug makers.
An Orlando-based foundation will pay the federal government $4 million to settle allegations that it funneled kickbacks from three drug companies to induce Medicare patients to use the companies' multiple sclerosis drugs, the Department of Justice said.
According to federal prosecutors in Boston, The Assistance Fund was supposed to be open to any Medicare patient with multiple sclerosis. Instead, a DOJ complaint alleged that TAF conspired with MS drug makers Teva, Biogen, and Novartis to use the fund as a conduit for money from those manufacturers to patients taking their MS drugs.
"The conspiracy enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their MS drugs," DOJ said. "The conspiracy also minimized the possibility that the companies’ money would go to patients taking competing MS drugs made by other companies."
The $4 million settlement was based on an analysis of TAF's ability to pay after review of its financial condition, DOJ said.
TAF is the third foundation to settle allegations of kickbacks in the last month. The other two foundations – Chronic Disease Fund, Inc. doing business as Good Days from CDF, and Patient Access Network Foundation – paid $2 million and $4 million, respectively, to resolve the alleged violations of the False Claims Act, federal prosecutors in Boston said.
Under the federal Anti-Kickback Statute, drug makers are prohibited from paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the companies’ drugs.
The statute also prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
"TAF cared more about helping its big pharma donors make money than about helping individual patients in need of life changing assistance," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
TAF, which describes itself as an independent charitable patient assistance foundation, issued a statementclaiming that the kickback allegations occurred under previous management.
"TAF will continue its normal operations, pursuing its work to help patients and families facing high medical out-of-pocket costs by providing financial assistance for their copayments, coinsurance, deductibles, and other health-related expenses," the company said.
Over the past decade, TAF said it has provided financial help to more than 78,000 people living with live-threatening and chronic diseases through its 60 disease programs.
TAF also entered a three-year Integrity Agreement with the Department of Health and Human Services Office of the Inspector General that requires, among other things, that TAF implement measures designed to ensure its independence, and that its interactions with drug maker donors are legal.
If the Senate passes the stopgap, President Trump is expected to sign it.
With a federal government shutdown looming at midnight, the Senate is expected today to vote on a continuing resolution to fund the federal government until December 20.
The stopgap measure, which passed the House 231-192 on Tuesday, includes a provision that would delay for one month the $4 billion in hospital disproportionate share cuts for hospitals.
The stopgap is expected to be signed by President Donald J. Trump.
The American Hospital Association issued a statement called the “temporary delay is a step in the right direction toward ensuring hospitals can continue to care for the most vulnerable in our communities."
"Until a more sustainable, permanent solution is reached, we continue to urge that these cuts be delayed for at least two fiscal years," AHA said.
CNN reports that the Senate had hoped to pass the resolution Wednesday, but the effort got bogged down for procedural reasons. Senate aides told the cable news network that objections had been resolved.
"Nothing is easy," Sen. John Thune, R-South Dakota, told CNN.
In September, the Centers for Medicare & Medicaid Services released its final rule for instituting $4 billion in cuts to DSHs at the start of fiscal year 2020, which is October 1. CMS first introduced these cuts in 2017 and has received significant push-back from DSH advocates since.
Bruce Siegel, MD, CEO of America's Essential Hospitals, said earlier this year that "the trajectory of the cuts — $44 billion over six years — simply would be unsustainable for essential hospitals, which already operate with no or narrow margins and high levels of uncompensated care."
The settlement resolves allegations that the hospital knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements.
Louisville's Jewish Hospital & St. Mary's Healthcare Inc. will pay the federal government $10.1 million to settle whistleblower allegations that it knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements, the Department of Justice.
The federal complaint also alleged that Jewish Hospital failed to get a treating physician's signature on prescription orders establishing medical necessity, failed to confirm that refills were reasonable and necessary, and failed to document that the medications were delivered.
The settlement also resolves allegations that Jewish Hospital submitted claims to Medicare that led to improper payments to Medicare beneficiaries in the form of free blood glucose testing supplies and waiver of co-payments and deductibles for insulin, all violations of the Anti-Kickback Statute, DOJ said.
Attempts Wednesday to contact Jewish Hospital & St. Mary's Healthcare, Inc. for comment were not successful.
"Healthcare providers will be held accountable when then knowingly submit false claims for prescription drugs that do not meet requirements to establish medical necessity," said Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division.
The settlement resolves allegations originally brought in a whistleblower lawsuit filed by Robert Stone, a pharmacist, who will receive $1.85 million of the settlement.
DOJ last month resolved related civil complaints against Sanford Health, which agreed to pay $20.2 million.
A South Dakota neurosurgeon has been named in a federal whistleblower complaint alleging that he paid himself hundreds of thousands of dollars in kickbacks by using medical devices distributed by two companies that he owns, theDepartment of Justice said.
The government’s complaint alleging violations of the False Claims Act and the Anti-kickback statute, claiming that Wilson Asfora, MD, of Sioux Falls, and his two companies – Medical Designs LLC, and Sicage LLC Medical Designs.
"Despite receiving numerous warnings that he was performing medically unnecessary procedures with the devices in which he had a financial interest, Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs and Sicage," DOJ said
"The Department of Justice will seek to hold accountable physicians and medical device companies that receive or pay illegal kickbacks in any form," said Assistant Attorney General Jody Hunt of DOJ's Civil Division. "Improper inducements have no place in our federal healthcare system where medical decisions should be based on the healthcare needs of patients and not on a physician’s personal financial interest."
DOJ filed its complaint in a whistleblower lawsuit pending in the U.S. District Court for the District of South Dakota.
After months of feedback from payers and providers unhappy with a proposal to mandate price transparency in healthcare, the Trump administration unveiled its final rule on the topic.
Declaring "a major victory" for patient choice and affordable healthcare, President Donald Trump on Friday unveiled his administration's final rule on hospital price transparency.
"I don't know if the hospitals are going to like me too much anymore with this, but that's OK," Trump said at a White House event to announce the rule.
"We're stopping American patients from just getting, pure and simple, two very simple words: ripped off. Because they've been ripped off for years, for a lot of years," he said.
The final rule—which takes effect on January 1, 2021, one year later than initially proposed—requires hospitals to provide patients with easily accessible information about standard changes for items and services offered.
This includes making all standard charges available in a single data file that can be read by other computer systems, as well as making "shoppable services" information available on their websites in a consumer-friendly manner.
Additionally, hospitals must make information about shoppable services, which can be scheduled by patients in advance, available in a "prominent location online" and describe the information in plain language.
The Centers for Medicare & Medicaid Services also issued a separate proposed rule that would impose price transparency requirements on health insurers.
"I'm sure they'll be thrilled," Trump said of insurers. "This will allow you to see your out-of-pocket costs and other vital price information before you go in for treatment, so you're going to know what it's going to be and you're going to be able to have lots of choices, both in terms of doctors, hospitals, and price."
The final rule provides CMS with additional enforcement and auditing capabilities, including the ability to issue monetary fines of $300 per day for hospitals that don't comply.
Health and Human Services Secretary Alex Azar applauded the president for implementing "revolutionary change" to the healthcare system.
"Today's transparency announcement may be a more significant change to American healthcare markets than any other single thing we've done, by shining light on the costs of our shadowy system and finally putting the American patient in control," Azar said.
Hospitals Say They'll Sue
Not surprisingly, payer and provider stakeholders responded to the new final rule with a chorus of boos and promises of litigation.
In a joint statement, the American Hospital Association, Association of American Medical Colleges, Children's Hospital Association, and Federation of American Hospitals called the proposed rule "a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care."
"Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery," the hospital groups said.
"Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration's authority," the hospitals said.
Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals, said the final rule "would unfairly advantage health plans in negotiations with providers and threaten essential hospitals' ability to participate in networks and maintain access to services."
"Information without context—for example, how and why the cost of patient care varies among hospitals—is of little practical use to consumers," she said. "Essential hospitals typically have higher costs due to their commitment to complex services vital to communities, such as trauma and behavioral health care."
In addition, Feldpush said the final rule would create an administrative nightmare for hospitals that would hurt patient care and drive up costs.
"These policies undermine hospital'’ ability to negotiate equitable payments while giving consumers little actionable information with which to make informed care decisions," she said.
On the payer side, Matt Eyles, president and CEO of America's Health Insurance Plans, said price transparency "should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs, and should put downward pressure on premiums for consumers and employers."
"Neither of these rules—together or separately—satisfies these principles," he said.
Study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk.
When it comes to frail patients, there's no such thing as low-risk surgery.
A Vanderbilt University Medical Center-led study has determined that even a laparoscopic gallbladder removal can prove to be a high-risk and even fatal procedure for frail patients.
"It's been established that frailty is a strong predictor of complications and death related to surgery, but what we learned in this study is that frail patients have alarmingly high rates of postoperative death, no matter how minor the surgical procedure," lead author Myrick "Ricky" Shinall Jr., MD, said in a media release. "Our data indicate that there are no 'low-risk' procedures among frail patients."
"A laparoscopic cholecystectomy is one of the most common operations I do as a general surgeon, and this has really given me pause to think that for frail to very frail patients — about 10% of our sample — this is a big deal," said Shinall, an assistant professor and general surgeon at Vanderbilt University Medical Center.
The study, published this week in JAMA Surgery, looked at 432,828 patients who underwent a non-cardiac surgical procedure, and found that patients who were frail or very frail had up to 43% higher mortality rates after surgeries with low and moderate operative stress, such as minimally invasive gallbladder removal.
Patient frailty is measured before surgery by a Risk Analysis Index that assesses symptoms such as unintentional weight loss, shortness of breath, weakness, and difficulties with daily activities like walking, eating or bathing.
The study looked at patient medical records over four-years from the VA Surgical Quality Improvement Program database, a representative sample of all surgeries conducted across the country in the Veterans Health Administration. The data included patient information for a minimum of one year following surgery, and the patients' postoperative mortality was noted at 30, 90 and 180 days.
Shinall and his colleagues created an Operative Stress Score and put patients into five categories of physiologic stress, ranging from the lowest (OSS1) to the highest (OSS5). Of the study's patient sample, 8.5% were classified as frail, and 2.1% were very frail.
The 30-day mortality rates for frail patients undergoing the lowest stress operations and moderate stress operations were 1.55% and 5.13%, both exceeding the 1% mortality rate often used to define high-risk surgery.
For very frail patients, 30-day mortality rates after the lowest and moderate-stress procedures was 10.34% and 18.74%.
For frail and very frail patients, mortality continued to rise at 90 days and 180 days after surgery, reaching 43% for very frail patients 180 days after moderate-stress operations.
With such a high risk, the study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk, with patients and their families made aware of the heightened risk.
"The greatest volume of surgeries performed at hospitals are those that cause moderate operative stress, and it is expected that all procedures at ambulatory surgical centers are considered to be those with a low mortality risk, but clinicians spend little time considering whether or not their patients can actually endure the stress of surgery," Shinall said.
"It is worth pausing to assess every patient to determine whether they are frail, and if they are, taking steps to mitigate the factors contributing to their frailty before a procedure is ever scheduled or re-evaluating whether they should even undergo a procedure at all," he said.
The joint venture will use telemedicine, in-home providers, and care management oversight to provide 'all essential elements of inpatient care in the home.'
Highmark Health and Contessa are partnering to provide patients with "hospital-quality care in the comfort and convenience of their homes," the two companies said in a joint press release.
The joint venture, Home Recovery Care LLC, will use telemedicine, in-home providers, and care management oversight that the two companies claim will provide "all essential elements of inpatient care in the home."
The model is available now for some Highmark commercial plans in western Pennsylvania, and will be made available to all plan members and Medicare Advantage members in that region starting on January 1, 2020. The model may soon expand into West Virginia and Delaware.
"Creating a value-based experience that enables patients and families to heal in the home is a priority for Highmark Health," said Monique Reese, senior vice president, Home and Community Care for Pittsburgh-based Highmark Health.
"Through the Home Recovery Care Model, Allegheny Health Network will provide high-quality in-home services such as home care, home infusion, and durable medical equipment," she said.
Under the Home Recovery Care model, patients are monitored for 30 days to ensure they are sticking with physician-devised care plans, and attending follow-up appointments with primary care physicians and other specialists.
"This new collaboration with Contessa enables us to deliver on Highmark Health's mission to create a remarkable customer experience," said Highmark's Tony Farah, MD, chief medical and clinical transformation officer.
"We are laser focused on achieving the quadruple aim — to transform health care through proactively improving clinical outcomes and driving better patient and clinician experiences, thereby lowering total cost of care," he said.
Study finds large discrepancies in the severity of illness among patients when they receive heart transplants.
Hospitals left to their own discretion may not be picking the sickest patients for heart transplants, a new study shows.
University of Chicago-led researchers looked at more than 29,000 adults on the national heart transplant registry from 2006 through 2015 and found large discrepancies in the severity of illness among patients when they receive heart transplants.
"These are all patients with end-stage heart failure who have exhausted most of their options. They all need transplants, but there aren't enough donor hearts to go around," said study led author William Parker, MD, a pulmonologist and ICU physician at the University of Chicago.
"But the system is set up such that transplant centers have a lot of control over determining which patients receive top priority for transplant, which makes it a very nuanced problem," he said.
Over the decade-long study period, the average "survival benefit" – which is scored as the percentage increase in chances of survival – for heart transplants ranged from 30% at low survival benefit hospitals to 55% at high survival benefit centers. One-quarter of the 113 transplant centers studied were low benefit centers, and one quarter were high benefit centers, the study found.
For heart transplant recipients, the overall survival rate was about 77% across all centers.
Parker said the findings suggest that the high survival hospitals prioritize sicker patients, giving hearts to patients with lower chances of survival without a transplant and boosting their survival benefit.
Conversely, the low survival hospitals are "playing it safe" and giving organs to less critically ill patients who receive a smaller benefit from the transplant.
"I don't think anybody's acting in bad faith. They're doing what they have to do to get their patients taken care of," Parker said. "But we found that centers that take risks on sicker candidates still manage to achieve good post-transplant outcomes, which leads to more lives saved."
Parker sees a connection between his study results, and federal regulations that until 2018 required hospitals to rank heart transplant candidates on a three-tier scale.
The rankings relied on the intensity of treatment they receive. Patients on high-dose inotropic medications, or those receiving mechanical heart support devices like intra-aortic balloon pumps, were deemed the highest priority.
In a study last year in the Journal of the American College of Cardiology, Parker and his colleagues showed that the rules incentivized hospitals to overtreat patients with more intensive therapies to boost their status for transplant.
"When I started to dig more into the data, it turned out that most patients on the list, over time, had become the top priority tier," he said. "Centers that had lots of nearby competitors were much more likely to overtreat their candidates to get them into the top priority tier."
Parker says his new study suggests that some hospitals during the study period cherry-picked transplant recipients, overtreated them to raise their profile on waiting lists, with the anticipation of an easier post-transplant recovery with higher survivability rates.
The Organ Procurement and Transplant Network in 2018 implemented a new six-tier model for assessing patients in need of a heart transplant.
In his new study, Parker re-coded transplant candidates according to the new six-tier system and found that – while providing more balance in the selection process – it still doesn't account for how hospitals will likely change their practices to adapt to the new system.
Parker said problem is stubborn because hospitals control which heart patients get transplants, relying on a system that matches treatments with severity of illness.
Other organ transplant programs rely on objective measures based on MELD lab tests, which remove much of the discretion in candidate selection that hospitals now have. Because of that, Parker does not anticipate big changes under the newer six-tier model.
"If the system was working perfectly, the variation among centers would be very small," Parker said. "But there are good reasons to believe that the new system won't actually allocate hearts to the sickest patients either because centers still would have a lot of influence on deciding the priority status of patients at their center and who actually gets transplanted."
Seema Verma says the feds will crackdown on 'shady recycling schemes (that) drive up taxpayer costs and pervert the system.'
The Centers for Medicare & Medicaid Services on Tuesday detailed a proposed rule that it says will ensure that state supplemental payments and financing arrangements for their Medicaid programs are transparent and in line with federal law.
CMS Administrator Seema Verma said the proposed Medicaid Fiscal Accountability Rule would crack down on impermissible financing arrangements to ensure that federal Medicaid dollars are spent in ways that support the direct needs of Medicaid beneficiaries.
"We have seen a proliferation of payment arrangements that mask or circumvent the rules where shady recycling schemes drive up taxpayer costs and pervert the system," Verma said Tuesday in a speech at the National Association of Medicaid Directors conference in Washington, D.C.
Citing recommendations for enhanced oversight from the Government Accountability Office and the Office of Inspector General, Verma said the proposed rule would create new requirements for states to report provider-level information on Medicaid supplemental payments.
"Today's rule proposal will shine a light on these practices, allowing CMS to better protect taxpayer dollars and ensure that Medicaid spending is directed toward high-value services that benefit patient needs," Verma said.
CMS says states are using various schemes to bypass federal Medicaid laws, including generating extra payments for private nursing homes that arrange with local governments to bypass tax and donation rules.
Another scheme uses a loophole to tax managed care facilities 25 times higher for Medicaid business than for similar business. That additional tax revenue is then spent by states to generate additional payments, with no commiserate increase in state spending.
As a result of these schemes, CMS says Medicaid supplemental payments have grown from 9.4% of all other Medicaid payments in 2010 to 17.5% in 2017.
"We’ve seen payments increasing dramatically over the years for governmental providers that are able to self-fund the state match, to levels that often far exceed even Medicare payments and have little connection to improving the health of Medicaid beneficiaries," Verma said.
"This rule will shine a light on these practices and help to set reasonable limits that even the playing field, addressing a source of government distortion and unfair competition in many markets. The government should not be placing its thumb on the scale," she said.
Increasingly, CMS says, states are relying upon "high-risk financing mechanisms" to fund their portion of Medicaid, including intergovernmental fund transfers, certified public expenditures, provider taxes, and provider donations, which puts more money into play, but provides no clear link to improved patient care.
"Now, I recognize that these schemes often have their roots in self-interested providers, egged on by opportunistic consultants seeking to leverage regulatory loopholes or hide behind a lack of transparency," Verma said.
"I know that most state leaders want to make sure every dollar is supporting value and improving care for Medicaid beneficiaries, and those of you that are doing the right thing have nothing to worry about," she said. "We have your back."
Provider Groups Raise Concerns
The nation's safety net hospitals panned the proposed rule, and urged CMS to withdraw it.
Beth Feldpush, senior vice president of policy and advocacy with America's Essential Hospitals, said the proposed rule "oversteps" the goal of transparency and accountability "with deeply damaging policies that would harm the health care safety net and erode state flexibility."
"This regulation would undermine the financial stability of state Medicaid programs by restricting the flexibility states have to meet their commitment to vulnerable patients and avoid spending cutbacks that threaten access to care," she said.
Feldpush said that flexibility allows states to respond to health crises that require expanded services, such as the opioid epidemic.
"Indeed, flexibility seemed to be a hallmark of the administration’s approach to Medicaid, but today’s proposal turns that perception on its head," she said. "It is less about transparency than it is an attack on the very flexibility states need to keep their Medicaid programs afloat and protect the safety net in the face of growing demands on program resources."
A spokesperson for the National Association of Medicaid Directors said they were still reviewing the proposal but would issue remarks during the 60-day public comment period that will follow the proposed rule's release.
Mark Parkinson, President and CEO of the American Health Care Association and National Center for Assisted Living, said that "provider taxes and supplemental payment arrangements both have become very important financing sources for long term care providers."
"We welcome discussions with CMS on balancing adequate Medicaid base rates with the potentially devastating effects of any changes in Medicaid financing," he said. "This includes the vital need to protect provider taxes and supplemental payments, which are often used to offset inadequate base rates."
The proposed rule would also provide new definitions for Medicaid "base" and "supplemental" payments, which would allow CMS to better monitor and enforce statutory requirements around the non-federal share of Medicaid spending and requirements for upper payment limits.
It would also clarify definitions and processes associated with provider ownership categories to close loopholes that have allowed states to attempt to inappropriately fund their share of Medicaid expenditures and to be more consistent with the statute.
To ensure payments align with state and federal Medicaid goals, states would also be required to sunset supplemental payments and tax waivers after no more than three years, with the option to request renewal.
