Rising numbers of women in higher education and a growing desire among healthcare workers for work/life balance are fueling physician assistant job growth. But the head of a PA industry group says the lack of diversity among PAs is "disturbing."
A first-of-its-kind statistical profile of the nation's certified physician assistants shows that they are in high demand everywhere across the nation, with many recent graduates having three or more job offers.
The more than 76,000 responses to the National Commission on Certification of Physician Assistants survey, the group represent 80% of the more than 95,500 PAs working in the nation, also showed that 66% of PAs are women, and 86% of PAs are white.
Dawn Morton-Rias, president/CEO of the NCCPA, says a lack of diversity for PAs is a problem shared by many professions. For example, the most-recent data from the Association of American Medical Colleges for 2008 showed that 75% of physicians were male and white.
"This is a statistic that is disturbing across the board. Certainly as America becomes more diversified we want to have a much more diverse profession as well," she says. "We certainly are interested in partnering with the educational institutions and others to promote diversity within the profession."
"It's not that we are OK with it. It is what it is and this is what the data are showing. But we are attentive to the social demands that healthcare faces and we are interested in partnering to the best extent possible to recruitment and retention and certification of diverse PAs."
Morton-Rias says the predominance of women in the PA workforce has been gradual. "That hasn't always been the case. It's been in transition over the last several years to see more women in the profession," she says.
As for why, Morton-Rias says: "There are more women in higher education and seeking careers across the board. So that plays a part. And as people choose career paths they want work/life balance and the PA profession does that as well."
The survey also found that:
The median age of certified PAs was 38 in 2013
PAs, in their principal clinical setting, see an average of 70 patients per week
Over 75% of PAs practice in an office-based private practice or hospital setting
Over 52% of recent graduates have three or more job offers
Morton-Rias says the data on job offers support the perception that PAs have seen "phenomenal growth" in the last decade.
"There is high demand for PAs. They are utilized and integrated into the healthcare sector across all disciplines and settings and in all 50 states," she says. "Every state has legislation enabling physician assistants to acquire licensure. Evidence suggests that there is a continued demand for healthcare providers as implementation of the Affordable Care Act continues and growth in PA programs continue and we continue to see good employment across the United States."
The job prospects outlined in the survey are consistent with those of other sources. Physician and advanced practitioner search firm Merritt Hawkins says it received fewer than 10 requests to recruit PAs and NPs four years ago. Over the last two years requests grew by over 300% and the firm conducted close to 200 PA and NP searches last year.
"PAs and NPs are joining the ranks of primary physicians in the sense that they can pretty much point at a spot on a map and work there if they so choose," Merritt Hawkins President Mark Smith said. "It is not a feeding frenzy yet, but it is getting there."
For the time being, Morton-Rias says the nation's PA educational programs are trying to keep up with demand. "We currently have 187 programs, each of which graduates about 35–40 per year. Those numbers are not striking, but there is steady growth between 40–75 new PA programs in the pipeline," she says.
"We expect that the numbers of PAs will continue to climb. As is the case in healthcare across the board, the distribution challenge [is] to see where PA s go and where they choose to work."
"The programs are doing the best they can and the certification components that we are responsible for are meeting the needs of the current population and we are prepared to expand that as the number of certifications and recertifications continues to climb."
The data affected was non-medical patient identification data related to Community Health Systems' physician practice operations and does not include patient credit card, medical, or clinical information, CHS says.
Community Health Systems Inc. said Monday that its computer network was "the target of an external criminal cyberattack" between April and June that may have compromised the personal data of 4.5 million patients.
"The Company and its forensic expert, Mandiant (a FireEye Company), believe the attacker was an "advanced persistent threat" group originating from China who used highly sophisticated malware and technology to attack the Company's systems," Franklin, TN-based CHS said in a Form 8-K filing Monday with the Securities and Exchange Commission.
"The Company has been informed by federal authorities and Mandiant that this intruder has typically sought valuable intellectual property, such as medical device and equipment development data."
"However, in this instance, the data transferred was non-medical patient identification data related to the Company's physician practice operations and affected approximately 4.5 million individuals who, in the last five years, were referred for or received services from physicians affiliated with the Company."
HIPAA Violated
CHS said the data didn't include patient credit card, medical or clinical information. "The data is, however, considered protected under the Health Insurance Portability and Accountability Act because it includes patient names, addresses, birthdates, telephone numbers and social security numbers. The Company is providing appropriate notification to affected patients and regulatory agencies as required by federal and state law."
CHS said in its SEC filing that it had "completed eradication of the malware from its systems and finalized the implementation of other remediation efforts that are designed to protect against future intrusions of this type."
CHS operates 206 hospitals in 29 states. Since learning of the attack, CHS said it has worked with federal law enforcement authorities to find those responsible for the attack.
"The Company will also be offering identity theft protection services to individuals affected by this attack. The Company carries cyber/privacy liability insurance to protect it against certain losses related to matters of this nature. While this matter may result in remediation expenses, regulatory inquiries, litigation and other liabilities, at this time, the Company does not believe this incident will have a material adverse effect on its business or financial results." CHS acquired Health Management Associates and its 70 hospitals in January.
Healthcare organizations "are coming to the realization as they transform from the fee-for-service to fee-for-value environment that they don't have the skills and capabilities and resources and experiences necessary to successfully do that transition," says an industry analyst.
Hospital and health system mergers and acquisitions dropped slightly in the first six months of 2014 but not enough to suggest any stalling of the industry-wide trend toward consolidation, KaufmanHall consultants say.
In the first of 2014, 43 hospital/health system M&As were announced, compared with 46 in the first half of 2013, says Kit Kamholz, managing director with Kaufman Hall.
"We really don't see it slowing down. We see continued consolidation at these levels," Kamholz says. "If we go back to 2009 or 2010, there were probably between 50 to 60 transactions done and now we are closer to 90 or 100. So the activity has almost doubled over that five-year period on an annual basis."
Of the 43 fully integrated transactions involving change of ownership so far in 2014, forty were acquisitions of not-for-profit organizations—33 by other not-for-profit organizations and seven by for-profit organizations. The total operating revenue of the acquired providers was $10 billion. The transactions occurred across a range of acute-care segments, including not-for-profit, for-profit, rural, urban, and academic health centers, KaufmanHall reports.
Kamholz says M&As are part of a healthcare industry-wide trend toward consolidation and the general belief that bigger is better when it comes to economies of scale, patient populations, market share, and leverage with payers.
"Organizations are coming to the realization as they transform from the fee-for-service to fee-for-value environment that they don't have the skills and capabilities and resources and experiences necessary to successfully do that transition," Kamholz says.
"[They] are coming to that realization at varying speeds. Those at the forefront that are now considering partnership opportunities, whether it be fully integrated or less-than-fully integrated, see that their organizations have gaps as they move towards that transition."
Kamholz says that over the past three or four years there has been an increase in joint ventures or loose partnerships that do not involve a transfer of ownership or assets.
"What is really unclear at this point with those types of relationships is whether there is any real value and benefit to them," he says. "None of them have been around long enough to stand the test of time and prove out a business concept. A few of them have subsequently terminated after forming."
Even though consolidation has been raging for more than five years, Kamholz believes the hospital and health system M&As will continue at a frenetic pace for the foreseeable future.
"There is a point where you reach a size and scale and capabilities that allow you to be successful in the marketplace. The hospital industry is so fragmented right now that we aren't anywhere near that level," he says.
"If you look at the airline industry, there are four or five major airlines now. Look at the drug store industry. You basically have CVS and Walgreens. I don't see the hospital and health system base ever getting that consolidated. We are still very much a mom-and-pop industry. There is a long runway to go from 5,000 providers today, of which half are affiliated with systems, to a point where you have a real level of size and scale that can drive success in the hospital industry."
Froedtert, Ministry Health Care Pursue Co-Ownership of Network Health Plan
Froedtert Health and Ministry Health Care will pursue co-ownership of Network Health, a Menasha, WI-based health insurance plan, the two health systems announced Friday.
Network Health provides commercial and Medicare Advantage health insurance plans to employers and individuals in northeastern Wisconsin. The company has been solely owned by Ministry Health Care since 2012.
"The anticipated transaction will position Froedtert Health and Ministry to jointly expand the Network Health service area into southeastern Wisconsin with Network Health offering Integrated Health Network as its provider network in SE Wisconsin," Ministry Health Care CEO/President Nick Desien said in a statement released with the announcement.
"This is a natural partnership that flows from the existing Integrated Health Network of Wisconsin relationship between Ministry and Froedtert Health," said Catherine Jacobson, president and CEO of Froedtert Health and chair of Integrated Health Network.
Integrated Health Network is a clinically integrated alliance of independent health systems, hospitals, and physicians that includes: Froedtert Health, the Medical College of Wisconsin, Columbia St. Mary's, Wheaton Franciscan Healthcare, Agnesian HealthCare and Ministry Health Care. It is one of the first multiple–system accountable care networks in the country.
"With clinical integration, a proven care coordination model, and IT connectivity solidly in place, IHN has the infrastructure to contract directly with all payers and insurers on behalf of its members," said Jacobson.
Desien said the "partnership and expansion of Network Health will accelerate the growth of population health management programs in the communities we serve and we welcome the prospect of expanding our relationship and look forward to our continued discussions."
Ministry Health Care joined Integrated Health Network in September 2013. Since January, Integrated Health Network has been managing care for approximately 90,000 lives, including 55,000 lives through a partnership with UnitedHealthcare that created one of the nation's largest accountable care organizations.
Aurora Health Care, BAMC Sign Form Joint Venture
Aurora Health Care and Bay Area Medical Center agreed to form a joint venture, the two Wisconsin non-profit health systems said in a joint media release.
BAMC began the search for a partner in 2012 and identified Aurora in late 2013. The BAMC Board unanimously approved the agreement this month.
Aurora will serve as a minority partner in the 99-bed BAMC, adding capital and advanced services, while keeping health care local. The joint venture will allow for shared resources, such as technology and supply costs. In addition, the partnership will continue to improve the quality and efficiency of care for the community.
Aurora already has physicians and clinics in the Marinette area, but not a hospital, with the closest being a tertiary hospital, Aurora BayCare Medical Center, in Green Bay. The joint venture will provide BAMC with access to Aurora providers, depth of expertise in care management, supply chain and other areas.
In the coming months, the joint venture will establish its new board of directors, which will then develop a recommendation for facility, clinic and physician planning. BAMC will also work towards the same electronic medical record as Aurora, the two systems said.
Bay Area Medical Center is a 99-bed general acute care hospital located in Northeast Wisconsin. It includes a community primary/secondary care hospital, an outpatient surgery center, and a cancer center. BAMC offers select, advanced medical services, with an emphasis on heart & vascular care, women's services, diagnostic radiology, ambulatory surgery, obstetrics, cancer treatment, and emergency care.
Prime Healthcare Services Acquires St. Mary's Hospital in NJ
Ontario, CA-based Prime Healthcare has completed its acquisition of St. Mary's Hospital in Passaic, NJ. As part of the deal, Prime Healthcare will invest more than $30 million into St Mary's, which serves Passaic, Clifton, Wallington, Carlstadt, Rutherford/East Rutherford, and surrounding towns, Prime Healthcare said in a media release.
"Prime Healthcare is excited about its first partnership with a hospital in New Jersey and looks forward to helping St. Mary's Hospital provide the exceptional patient care residents of Passaic and the surrounding communities want and deserve," said Prem Reddy, M.D., FACC, FCCP, Chairman, President and CEO of Prime Healthcare Services.
"Prime Healthcare's motto is 'Saving Hospitals, Saving Jobs and Saving Lives,' and we plan to continue that at St. Mary's and help it become one of the best hospitals in the state and in the country."
Under the deal:
St. Mary's will continue as an acute care hospital with all current services.
Charity care levels for patients in need of financial assistance will be maintained.
All existing employees will be hired; the physician base will be maintained.
Catholic ethical and religious directives will be honored.
St. Mary's President/CEO Edward J. Condit said in a media release that selling the hospital to Prime will "strengthen St. Mary's financially so that it can dedicate more of its resources to providing even better community care."
The cost of having fewer choices doesn't spare healthcare. Most rural residents can expect to pay more for coverage purchased on health insurance exchanges.
Competition among health plans is a critical component that tempers prices for individual health insurance coverage under the exchanges set up by the Patient Protection and Affordable Care Act.
It makes sense. Give healthcare consumers more informed, apples-to-apples choices among several health plans competing for business on an open exchange and the consumers will gravitate to the best value.
That works in urban and more densely populated areas that have a number of health plans competing for customers using a plethora of providers. What about sparsely populated rural areas?
The answer is not surprising. People in rural areas mostly have fewer coverage options, and because of that most of them—though certainly not all of them—will pay higher premiums.
That's according to a study from the University of Pennsylvania and the Robert Wood Johnson Foundation. It's hard to provide a blanket conclusion to the report because it is fairly nuanced and provides several scenarios involving a 50-year-old non-smoker shopping for silver plan coverage in 2014.
"Rural residents do not have as many choices as urban residents in terms of premiums, issuers, plans, and plan types. They also have less availability of Health Maintenance Organizations, Exclusive Provider Organizations, and Preferred Provider Organizations, and greater availability of Point of Service plans," the study says.
"Most notable is the fact that EPOs are available to half the number of rural residents as urban residents. These differences in plan types may reflect the notion that it is easier to develop and more strictly enforce a restrictive provider network in urban areas than in the more sparsely populated rural areas where there are fewer convenient choices of providers."
The bottom line is that most rural residents can expect to pay more. The study found that "monthly premiums are slightly higher in in rural areas than urban areas ($387 vs. $369)," and that "monthly premiums are meaningfully lower in states that are the most urban when compared to the least urban ($402 vs. $452)."
In 32 states, rural residents paid more in silver premiums than urban residents. In seven states and the District of Columbia there was no difference, or the data wasn't available, and in 11 states rural residents paid less.
"It seems to be simple supply and demand. It's the cost of having fewer choices," saysTimothy Putnam, president/CEO of Margaret Mary Health in Batesville, IN. "In our region there is just one product. There is one choice that people have and this is what comes with it. You take it or leave it. There is demand out there, but limited supply, so we know what happens to prices when that occurs."
On one extreme, the 9% of people in Nevada who live in rural areas would have had to pay about $554 a month for silver coverage this year, $201 more a month than urban residents. On the other extreme, the 55% of Mississippi residents who live in rural areas would have paid $470 a month for silver premiums, $72 less than Mississippians in urban areas.
The differences don't break down neatly along Red State/Blue State lines. Minnesota's rural residents could expect to pay $55 more per month for a silver plan than would urban residents. In Texas, rural residents would pay $20 less per month for similar coverage.
In Indiana, where Margaret Mary Health is located, rural residents pay $452 per month in silver premiums, only $1 more per month than urban residents. However, that is a statewide average that can fluctuate wildly among counties and healthcare service areas, again depending mostly upon competition.
To underscore the importance of competition, another study this month by the Urban Institute looks at premium costs in 10 states with varying numbers of plans in their exchanges, and made no distinctions between rural and urban settings. Not surprisingly, the states with more competitive health insurance exchanges saw significantly lower premiums than did states with less-robust exchanges.
It's unfortunate that rural Americans will likely have to pay a penalty in the form of higher premiums, but I have to confess that I was expecting the disparities to be much greater.
If we factor out the extremes on both ends, Mississippi, Nevada, and other states that skew the findings, the difference between many states is negligible. In 26 states, the premium costs fluctuate no more than $20 per month in either direction. Given the complexity of PPACA, the frenzied start-up for the exchanges, and the heels-dug-in resistance from many states, it could have been a lot worse.
It's hard to draw conclusions from all of this. One year does not constitute a trend. The focus now will be on premium costs in 2015, and whether the variable between urban and rural coverage widens or narrows.
Jeff Thompson, MD, CEO of Gundersen Health System and chair of the as yet unnamed partnership—not a merger or an acquisition—discusses the coalition's intention to improve quality of care, reduce costs, and collectively "get better faster."
Jeff Thompson, MD
CEO of Gundersen Health System
Six Wisconsin healthcare systems that provide healthcare access to 90% of the people in that state have formed a strategic partnership to improve clinical quality and lower costs.
Jeff Thompson, MD, CEO of La Crosse-based Gundersen Health System and chair of the partnership's board of directors, stresses that the affiliation "is a true partnership among our six organizations, not a merger or consolidation. It will allow us to more rapidly learn from each other, share best practices, and serve the needs of patients and families more efficiently."
The partnership's founding members are:
Aspirus – Wausau
Aurora Health Care – Milwaukee
Bellin Health – Green Bay
Gundersen Health System – La Crosse
ThedaCare – Appleton
UW Health – Madison
A commercial insurance plan for the six organizations is being offered through Anthem Blue Cross Blue Shield's Blue Priority network, and will be available through brokers, the federal Health Insurance Marketplace, and private health insurance exchanges.
The partnership intends to expand coverage options, and is evaluating other insurance carriers and administrative products. The partners are also open to extending membership to other healthcare organizations that can demonstrate delivering quality, value-based care.
Thompson says the partnership was developed to build on and advance clinical quality, efficiency, and customer experience attributes that are documented and shared among the six organizations.
In addition to providing healthcare access to most of Wisconsin, the six partners serve people in Illinois, Iowa, Michigan, and Minnesota. Each partner system uses the same electronic medical records system, making it easier for patients to access their records and share with doctors in the network.
Thompson spoke with HealthLeaders Media about the partnership soon after the announcement. The following is an edited transcript.
HealthLeaders: Why did Gundersen join this partnership?
Thompson: When we first started, the talk was about putting together an insurance network. We felt like if it was going to be an insurance network we weren't interested. We were already in a variety of networks.
But if you are interested in developing a group of organizations that do not want to spend all of their time with the merger, governance, and asset allocation and all that kind of thing, but want to spend their time improving care and lowering costs, then there are some real possibilities.
We talked around that for a while and felt that being an organization that could have an insurance product and eventually take risk across a broader population had some real advantages.
But probably the biggest advantage for our patients and our organization was to put together a group that all had the ability and track record of quality improvement and working on cost reductions and saying, 'If we all commit to making each of us better, how we can get better faster?'
That is what we believe we can accomplish and that is why we came together.
HealthLeaders: Is there a specific agenda as this partnership progresses?
Thompson: That all has not been completely designed out. We do have a number of subgroups under the new organization. A business group has already formed and chosen a leader for supply chain. We are all in buying groups, but we do believe there are some things in the supply chain and contracting that as a group we can do better at and find where each of us are saving.
Our quality committee has already met and will work on making sure our data connects and that we have the same definitions. They've already started their conversations about where we might be able to get the most improvement. We believe there is an opportunity for the groups to focus in certain areas. We just haven't designated those. We expect in the next couple of months to have that started.
HealthLeaders: What does this partnership mean for healthcare consumers in Wisconsin?
Thompson: I don't think most of that will change hardly at all, at least not right away. The earliest thing that will occur is the network will have a relationship with the [Anthem] Blue Cross and Blue Shield Blue Priority insurance product. But at no point did we say we are going to limit it to a single insurance product. It's not about insurance products. It's about trying to become better more quickly. So we believe that that will come first, but there will be more opportunities afterwards.
There will be an advantage for those employers who have employees spread across the parts of five states that these organizations cover. And the state of Wisconsin could be served by this group as well.
HealthLeaders: Will this partnership facilitate other collaborations?
Thompson: That is a potential. We all recognize that. But we believe that right now, as things are changing rapidly, as the opportunities are there, our focus is best left on making care more reliable and bending the cost curve down. If we as a group can work together on that, then those other things will either happen or not.
Whether we are part of a big organization or not is less important to our communities. What is important to our communities is that the care be even more reliable and the cost of the care becomes less.
HealthLeaders: Where do you see this partnership in five years?
Thompson: We have the potential to prove that you don't need a merger and governance and asset changes to cooperatively accomplish things that are part of all of our own missions.
We all have a mission to take care of patients in our communities and we believe that will drive us to great performance. It will be likely that other people will ask to be a part of this when they see our success, so it is likely we will grow. But again, our target is not to become big. Our target is to become better, faster.
HealthLeaders: Are you saying that being under one ownership arrangement is irrelevant?
Thompson: Certainly trying to get to that adds a ton of complications and we don't believe it necessarily helps us.
We believe right now with the strong commitment to boards of the organizations, the CEOs, the senior leadership of the organizations, that we can improve more quickly, we can take out costs, and that all of the complexities of governance and asset changes and all of that are not going to slow us down because we aren't doing that.
HealthLeaders: Does this partnership require government approval?
Thompson: We've checked with a number of lawyers and they don't believe it does, because we are not merging and we are not sharing price data and things like that. But we are working on quality improvement.
We are working on sharing best ways to reduce costs. We will all have multiple outside partners, so we believe right now that it does not come even near the gray areas of antitrust issues. Besides, there are other giant competitors in the region.
Looks like when lawmakers return next month, Congress will retroactively approve another stopgap measure related to oversight of outpatient therapy services at critical access and small rural hospitals.
Things have gotten so dysfunctional in the U.S. Capitol that Congress can't even act on a bill to delay something.
Since 2012 Congress has suspended a Centers for Medicare & Medicaid Services rule that requires direct physician oversight of outpatient therapy services at critical access and small rural hospitals.
The oversight rule was suspended because it proved particularly burdensome in areas where physicians tend to be in short supply. The practical effect was that relatively routine outpatient services such as drawing blood were restricted or even eliminated because physicians weren't readily available to provide immediate supervision.
That delay of the oversight rule actually expired on Jan. 1, 2014, but Congress has signaled that it will continue to delay the rule while lawmakers work on a more permanent fix. (Sound familiar?)
Now, more than halfway through 2014, it looks like Congress will retroactively approve another stopgap measure for 2014 when lawmakers return next month following a long summer vacation.
The Senate approved the delay by unanimous consent this spring, and a House version is set for a floor vote after easily clearing committee in July. Also, there does not appear to be any fiscal note tied to the legislation.
So, about the time 2015 rolls around, hospitals will be covered for 2014.
It's not completely a moot point. Even retroactively, the delay means that rural providers will get some measure of protection when recovery audit contractors are resurrected.
"For instance, if the Medicare program or the Inspector General wanted to go back and go after the hospitals potentially for noncompliance with direct supervision requirement, this enforcement delay would not allow that to happen. So, it does protect hospitals," says Lisa Kidder, vice president of legislative affairs at the American Hospital Association.
Kidder says the rules around physician oversight are ambiguous.
"What does 'immediately available' mean? This can always be second-guessed," Kidder says. "Different Medicare contractors in different states may interpret the requirements a little differently, so hospitals are never 100% sure that what they have put into place would mean that they are in compliance according to their contractors."
Adopt a default standard of "general supervision" for outpatient therapeutic services and supplement with a reasonable exceptions process with provider input to identify those specific procedures that require direct supervision.
Ensure that for critical access hospitals the definition of "direct supervision" is consistent with their conditions of participation that allow a physician or non-physician practitioners to arrive within 30 minutes of being called.
Prohibit enforcement of CMS's retroactive reinterpretation that the "direct supervision" requirements applied to services furnished since Jan. 1, 2001.
Roslyne Schulman, director of policy at AHA, says PARTS has not been scored by the Congressional Budget Office, so it's not clear if the bill will carry a fiscal note, which would otherwise prove problematic. The biggest reason for kicking the can with the "Doc Fix" bill is the cost.
"We have talked internally on that and we don't think there would be a large score attached to it," Schulman says. "There really aren't any costs associated with it. It sets up a panel. It has some prohibitions on the OIG. But there really aren't a lot of things that cost money to the Medicare system."
Patient Safety Considerations
Another hurdle for PARTS includes provisions for patient safety. Schulman says that's been taken into consideration.
"PARTS adopts a default standard of general supervision, which means the services are furnished under the overall direction and control of a physician, but their presence is not needed while the services are being furnished," she says.
"The bill would adopt a default standard of general supervision for outpatient therapeutic services but they would be supplemented with an exceptions process, in which CMS could identify specific services that due to safety concerns would require direct supervision."
PARTS has a lot going for it. It appears to be a practical and effective provision to allow rural providers to operate at greater efficiency within the limits of their staffing. At the same time, it keeps in place critical standards for patient safety and provider accountability.
The bill won't get taken up before the new 114th Congress is called into session next January, so it's difficult to predict how it will be received. That shouldn't stop rural providers who support PARTS from contacting their Congressional delegation today. There's already been enough delay.
An attorney representing one of the whistleblowers alleging that Community Health Systems committed fraud says that as a nation, "we have a healthcare delivery system where doctors and individual decision making, to some degree, have been shoved to the side by corporate managers."
Wayne T. Smith
Chairman and CEO of CHS
Community Health Systems, Inc. and federal prosecutors have agreed to a $98.1 million payout to settle system-wide fraud allegations levelled by whistleblowers against the Franklin, TN-based for-profit hospital chain.
While they have agreed on a settlement, CHS and federal prosecutors disagree on what prompted 119 hospitals in the nation's largest acute care hospital chain to allegedly overbill Medicare, Medicaid, and TRICARE from 2005-2010 for inpatient services for patients who may not have needed to be hospitalized.
CHS Chairman and CEO Wayne T. Smith said the hospital chain was struggling "to operate in a complex and everchanging regulatory environment."
"The question of when a patient should be admitted to a hospital is, and always has been, a matter of medical judgment by the individual physician responsible for a patient's care," Smith said in a media release.
"Unfortunately, shifting and often ambiguous standards make it extremely difficult for physicians and hospitals to consistently comply with the regulations. We are committed to doing our best, despite these challenges. Because this is an industry-wide issue, we hope the government will work to devise sound and reasonable rules for the important decision about whether to admit an individual for inpatient care, and we appreciate the opportunity to engage in meaningful dialogue with the government over these incredibly complicated issues."
A CHS spokesperson amplified Smith's point by saying that the shifting standards, "such as the two-midnight rule, which has had numerous updates, clarifications, and additional guidance attached to it since it was issued in August 2013… make it difficult for ALL providers to consistently comply with regulations."
Federal prosecutors said flatly that the fraud allegations stemmed from a "deliberate corporate-driven scheme."
"Charging the government for higher-cost inpatient services that patients do not need wastes the country's healthcare resources," said Assistant Attorney General Stuart F. Delery for the Justice Department's Civil Division. "In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate healthcare available."
Even though the settlement terms don't include a guilty plea, Daniel R. Levinson, inspector general of the Department of Health and Human Services said that "in an effort to ensure the company's fraudulent past is not its future, CHS agreed to a rigorous multi-year Corporate Integrity Agreement requiring that the company commit to compliance with the law."
CHS had already set aside $102 million to cover the settlements and legal bills.
The settlement also resolves several whistle-blower lawsuits levelled by CHS employees in hospitals in several states. The whistleblowers' share of the settlement has yet to be determined, DOJ said.
Reuben Guttman, an attorney with Grant & Eisenhofer representing whistleblower James Doghramji, MD, a former emergency physician at CHS's Chestnut Hill Hospital in Philadelphia, spoke with HealthLeaders Media about the settlement. The following is an edited transcript.
HLM: CHS CEO Wayne Smith says that the billing irregularities are due to complex and shifting federal requirements. Do you buy that?
RG: I don't think he has a legitimate point. This is a company that is crying out for additional scrutiny and oversight and this is a poster child for a Congressional investigation. In theory, doctors are supposed to make decisions.
In practice, people like Mr. Smith and companies like CHS have set up a dynamic where individual patient medical necessity is secondary to marketing and money. We are at a point where we have a healthcare delivery system where doctors and individual decision making to some degree have been shoved to the side by corporate managers.
This is a story about a company that was gobbling up suburban hospitals for no medical rationale. It's not that they can run them better or that they were providing significant expertise. It was just about extracting cash from the Medicare/Medicaid system.
CHS was designing its admissions criteria on a centralized basis. CHS in Nashville was tracking exactly what was going on in all of these hospitals. They knew the economics at a micro level. I don't think plausible deniability exists here.
HLM: Do you have a sense of the value of the alleged fraud versus what CHS is paying for?
RG: If you actually look the cash flow for this company, this is a very significant amount of money that they have put off. It is probably not significant in relation to the actual cost to the United States government or individual payers or what the government could extract if they tried the case, but it is a number that pushed the edge of the envelop in terms of paying something that is significant but allows the company to go forward.
The most significant thing about these cases is that they make the wrongdoing to some degree transparent as a catalyst perhaps for Congressional oversight. The reality is that unfortunately, many of these settlements are nothing more than the fee for a license to continue to break the law. What is apparent to us is that a lot of large companies are gaming the system and thinking 'what is the likelihood of getting caught, and if we get caught what is the penalty?' The penalty becomes part of the game.
We have to have a penalty system that is hard to calculate in advance and that will make it more difficult. But in reality you have to change the healthcare delivery system in the sense that we rely on the integrity of these types of corporations that have put medical decision making secondary to making money.
You can see when a train wreck is about to occur when you look at the debt service for a company. You are not going to create additional sick people. There are only a certain number of sick people. This is a situation that is going to be ripe for fraud.
HLM: Was there a smoking gun for prosecutors or whistleblowers in this case?
RG: In all of these cases, the complexity of the cases, you don't find smoking guns. It requires you to find the smoke and the pieces to the gun and put it all together. Then, the trick for somebody who is doing lots of fraud cases is to look at the facts that aren't there, or the rules that don't exist, or to see what appears to be facially neutral practices are driving impropriety.
For example, if you have an innocuous practice that says when somebody comes into an emergency room and there is a rule that says they should be put on an IV, you can look at that and say that is not a smoking gun, putting someone on an IV.
But wait a second, when you put someone on an IV that means you are going to streamline them into an admissions situation as opposed to giving them bottles of water, maybe they will be OK, and we will send them home. You have to look at facially neutral practices and how they are driving an unlawful result. That is the trick to uncovering fraud. It's extraordinarily complicated.
You have two things that are going on. One is you have companies engaged in these facially neutral practices that have an unlawful result for the purpose of deceiving regulators. Two, more significantly, it is a way of creating a cult and convincing people internally that they don't have to worry about it because nobody internally is putting the pieces together. People who are paid well generally don't want to do it.
This is the simple question you need to ask: What person or entity knowingly exposes somebody to infectious diseases in order to make a buck? That is the cutting question, because the reality is that while hospitals are places to get well they are also places that are dangerous because there are infectious diseases in hospitals. You don't want to admit somebody unless it is medically necessary.
There are corporate executives who are knowingly and recklessly putting people at risk. That is unconscionable.
HLM: Do you feel this is a fairly widespread practice in the hospital sector?
RG: I wouldn't be surprised.
A CHS spokesperson reached for comment late Tuesday said "This investigation was not about the quality of care provided or the location of the care that was provided for any patient–or even how long patients were in the hospital. It is about whether the hospital could rely on the physician's signed orders in the medical chart to establish the patient status as inpatient–and then bill for the exact care that was provided. It is about the "status" of the patient–inpatient or observation–while that patient was in the hospital.
Also, BayHealth and Peninsula Regional form an interstate collaborative, Tenet Healthcare acquires its 80th hospital, and Lahey Health and Winchester Hospital finalize their affiliation.
Jeff Seraphine
Eastern Group Director for
LifePoint Hospitals
Duke LifePoint Healthcare has expanded its footprint in North Carolina with the acquisitions of two health systems.
The for-profit hospital chain announced this month that it has finalized acquisitions with Sylva, NC-based WestCare Health System and Clyde, NC-based MedWest Haywood. The two health systems will switch to for-profit tax status.
Jeff Seraphine, Eastern Group director for Nashville-based LifePoint Hospitals, says not-for-profit providers are more accepting of a change in tax status. "We still will run into some biases from some organizations but it's hard to argue about our commitment to quality. Everybody is facing the same challenges," he says.
"We accept the charity care policies the communities have been operating with, so that becomes a moot point. However, we still run into some biases and those seem to be driven by some old stereotypes that are still carried less by the boards and more from some of the leadership in the hospitals."
"They seem to be carried on from decades of stereotypes in the industry, but when these boards have the opportunity to look objectively we find that we do very well."
In the WestCare deal, Duke LifePoint bought Harris Regional Hospital, an 86-bed hospital in Sylva; Swain County Hospital, a 48-bed hospital in Bryson City; and WestCare Medical Park, an outpatient center in Franklin.
WestCare will be governed by a regional board of trustees that includes local physicians and community leaders and representatives from Duke LifePoint.
Seraphine declined to say how much Duke LifePoint paid for the health system, but he said it would invest a minimum of $43 million in capital improvements over the next eight years and provide new resources to help the system grow, recruit new physicians, enhance services and improve health care delivery throughout the region.
In the MedWest deal, Duke LifePoint acquired the 169-bed Haywood Regional Medical Center and its assets. While again declining to state the purchase price, Seraphine says Duke LifePoint will invest a minimum of $36 million in capital improvements at Haywood over the next eight years. MedWest Haywood will now be known as Haywood Regional Medical Center.
The acquisitions mean that Duke LifePoint now operates seven hospitals across North Carolina, along with Marquette General Health System in Marquette, MI, and Twin County Regional Healthcare in Galax, VA.
Duke LifePoint also expects to finalize the acquisition of the three-hospital Conemaugh Health System in Johnstown, PA later this year.
Bayhealth, Peninsula Regional form HealthPartners Delmarva
Bayhealth of Dover, DE and Peninsula Regional Medical Center in Salisbury, MD have formed HealthPartners Delmarva interstate collaborative.
Bayhealth, with hospitals in Dover and Milford, and Peninsula, which operates Peninsula Regional Medical Center, jointly announced that the collaboration allows them to share the best practices, but is not an acquisition of one health system by the other. The focus is on improving patient care and access and is not a consolidation of workforces.
"Creating the best experience for our patients will mean identifying and adopting best practices that focus on convenience, safety, time, and cost efficiency," Bayhealth CEO/President Terry Murphy said in a media release. "By bringing together the experience, innovation and patient-centered values of our two health systems, we can be even more prepared for the new realities of healthcare."
Peggy Naleppa, MD, president/CEO of PRMC said the two health systems are "similar-minded" and place a premium on patient-first values.
"Together we have as our goal to provide patients greater access to best-in-class healthcare and to leverage for the benefit of our patients the combined intellectual assets of each health system," Naleppa said.
Tenet Acquires 80th Hospital with Emanuel Medical Center Deal
Tenet Healthcare Corp. has completed the acquisition of Emanuel Medical Center, a 209-bed hospital in Turlock, CA, located about 100 miles southeast of San Francisco, the Dallas-based hospital chain announced.
The deal creates the third hospital for Tenet in California's Central Valley, along with Doctors Medical Center of Modesto and Doctors Hospital of Manteca.
Tenet bought the hospital from Covenant Ministries of Benevolence, an affiliate of Evangelical Covenant Church ministries. Terms of the deal were not disclosed.
"We selected Tenet to be the new owner of Emanuel Medical Center because we wanted to ensure that this vital community asset continues to serve Turlock for many decades to come," David Dwight, president of Covenant Ministries of Benevolence, said in prepared remarks. "We are confident that we are leaving Emanuel Medical Center in good hands and that Tenet will be a dedicated and responsible steward of the hospital."
Tenet named Susan Micheletti the new CEO at Emanuel Medical Center, effective immediately.
Emanuel Medical Center is the 80th hospital in Tenet's national network and its 12th in California.
Lahey Health, Winchester (MA) Hospital Finalize Affiliation
Winchester Hospital is now a part of Lahey Health, following a review of the affiliation by the Massachusetts Health Policy Commission.
Under the affiliation, Winchester Hospital has joined the Lahey Health system as part of a shared governance model, the health systems announced jointly. Winchester Hospital will maintain its own board of directors and continue oversight of hospital operations and credentialing of medical staff.
"We are thrilled to officially welcome Winchester Hospital into the Lahey Health family," Howard Grant, MD, president/CEO of Lahey Health said in prepared remarks.
"Since the inception of Lahey Health, we have worked tirelessly to keep costs down and care in the local community where it belongs. Our community hospitals have never been stronger, and we expect the same excellent results for Winchester Hospital as it joins the Lahey Health network of providers. "
Lahey Health was formed in 2012 in an affiliation between Lahey Clinic, now Lahey Hospital & Medical Center, and the Northeast Health System.
Wellmont Culls List of Potential Partners
The board of directors at Kingsport, TN-based Wellmont Health System has narrowed the list of potential health system partners from six to three, including a regional system and two significant health systems beyond the region, all of which are not-for-profit organizations.
A final decision is not expected before this fall, the health system said in a media release.
Nearly half of hospitals surveyed say they expect to outsource coding work and one hospital in five is already using outside resources for this purpose, a market research firm reports.
Nearly half of the 650 hospitals in a recent survey said they will outsource ICD-10 services when the new diagnostic and coding system goes online in October 2015, market research firm Black Book Rankings says.
The Black Book survey found that 19% of hospitals are outsourcing coding already, but that the number is anticipated to grow to 47% of hospitals by the providers polled.
"Transitioning to ICD-10 is a complicated process and hospitals are leaning on the expertise and successes of outsourcing vendors," Doug Brown, managing partner of Black Book, said in prepared remarks.
"We still operate in an ICD-9 world, complicated by EHR implementations, value-based reimbursement models, compliance issues and optimizing reimbursement; a perfect storm from which outsourcers have the expertise to shield their clients."
The survey found that hospitals strongly rely on outsourcing for a broad array of coding and clinical documentation services. For example 25% of hospitals now outsource clinical documentation audit, review and programming, and that percentage is expected to increase to 71% by the third quarter of 2015, as hospitals adjust to the new codes.
In addition, transcription services are now outsourced by 63% of hospitals and are also expected to grow to more than 70% of providers as the ICD-10 deadline approaches.
Melanie Endicott, senior director of coding and CDI products development at American Health Information Management Association, says the survey raises questions. "I would like to know a little bit more of the story. I am wondering if these hospitals are thinking that they'll do some outsourcing but still keep some in-house staff," she says.
Endicott says it's acknowledged among providers that productivity is expected to decline in October 2015 as coding staff adjust to the new system. "So the likelihood that a facility would need to outsource some coding work is very high, I would say even more than half. But it may not be forever. They may need six months of additional help until their own coders get up to speed, or whatever the situation might be. And they might hire some outsourced coders to pick up the back log. There is going to be a variety of things going on."
Endicott says the one-year delay in the ICD-10 Implementation, a surprise addition to the physician sustainable growth rate bill, has already costs providers who were ready and counting on the anticipated October 2014 implementation.
"Most facilities had budgeted through 2014 to train staff and that was going to stop as soon as they were in ICD-10," she says. "Now they have to add another year to the training to make sure they don't lose what they have lost. That additional training takes away from productivity and it does increase costs."
"A lot of facilities were planning on rolling out dual coding six months prior to implementation. That would have been around April of this year. Some facilities did still go with that dual coding beginning this year, maybe less aggressively than they were planning to do. But they are rolling it out a little bit so they can get their coders trained, have them practice in the real world environment, and identify any issues that they can work out. Having this extra year helps them take their time and might provide for smoother implementation next year."
Still, Endicott says she is concerned that some laggard providers won't use the extra time to prepare.
"I always worry that with the delay they just delay their planning as well and they still won't be ready next year," she says. "It's like anything. Most people put it off until they have to do it. The only excuse we might hear is that it's been delayed so many times we thought it would be delayed again. And when it really does happen they might be caught off guard."
The Government Accountability Office reports that states are finding ways to pay for Medicaid that involve cost-shifting schemes that leave the federal government stuck with the tab.
Have you ever wondered where your state finds the money to pay for its share of the federal Medicaid program?
You're not alone.
The Government Accountability Office told Congress this week that states are finding creative new ways to pay for the program that involve cost-shifting, back-scratching schemes with local governments and providers that leave the federal government stuck with the tab.
For example, in Illinois, a $220 million payment increase for nursing homes in 2012 was paid for with a tax on those nursing homes. GAO said the ploy brought back a $110 million increase in federal matching funds with no increase for Illinois' general fund, and a net payment increase of $105 million to the nursing homes after paying the taxes.
It would be hard to find a comparative revenue-generating tactic in the real world that doesn't involve spam emails soliciting "winning" Bulgarian lotto tickets or a dearly departed and long-lost uncle from Mombasa who's left you in his will.
In effect, GAO says states are making large supplemental payments, apart from payments made for medical services, "to providers that supplied funds to finance the nonfederal share of the payments, for purposes of obtaining billions of dollars in additional federal matching funds without a commensurate increase in state funds used to finance the nonfederal share of these Medicaid expenditures."
"Such arrangements have the effect of shifting costs to the federal government because the federal government then pays its share of the new payments," GAO said in its report. "We and others have raised concerns about these financing arrangements and whether data reported by states are sufficient for (Centers for Medicare & Medicaid Services) to determine that these arrangements are in compliance with applicable federal requirements."
Medicaid covered 58 million low-income people in 2012, at a cost of $432 billion, for which the federal government footed about 57% of the cost. In 2012, states financed 26% of the nonfederal share of expenditures, about $46 billion, with funds from providers and local governments. That number was $32 billion in 2010 and $23 billion in 2006.
"Because supplemental payments are typically not paid through states' Medicaid claims systems, the payments are not captured in federal data systems and therefore lack transparency for oversight purposes," GAO says.
It is highly likely that states are fully aware that these supplemental payments are hard to identify, quantify, and track. That would explain their growing popularity.
Keep in mind that these numbers predate the expansion of Medicaid under the Patient Protection and Affordable Care Act. Before we simply blame the Obama administration, we should note that the GAO since 2003 has considered Medicaid a "high-risk" program, both because of its explosive growth and because of the unaccountable "gaps" in federal oversight of these various funding schemes that states are using to pay for their part.
Unlike the Medicaid expansion, this cost shifting can't be attributed to Red State/Blue State politics. States that rely on cost-shifting to local governments and providers to generate up to half of their Medicaid spend include California, Florida, Vermont, Tennessee, New York, Colorado. Michigan, Mississippi, Alabama and Wisconsin. Missouri alone used cost-shifting to fund more than half of its Medicaid spend.
Matt Salo, executive director National Association of Medicaid Directors, looked through the GAO's findings and said "there's not really much to report here, as far as I can see."
"Everybody who knows Medicaid knows that financing is very complicated (labyrinthine?), and that it has been this way for a very long time," Salo said in an email exchange with me.
"States endeavor to be sure that all provider taxes, intergovernmental transfers, and other financing arrangements fully comport with federal law and regulations—CMS does approve them, after all. Sometimes members of Congress (or the Administration) find that the current state of the law and regulations are too permissive, and attempts are made to further restrict how they work."
"That of course is their prerogative, but we would just want to be sure that they don't throw the baby out with the bathwater. Medicaid never has enough money to full meet all the demands that the healthcare system places on it. Further restricting long-standing arrangements will only lead to even fewer dollars being available for patient care."
Salo raises legitimate points. Regardless of the motives, it's clear that states have been gaming the system and the feds have been on to it for a while.
The GAO report was compiled from data collected from 2008–2012 in the midst of the worst economic downturn since the Great Depression. So, we could infer that cash-strapped states were desperate for revenues and created these shadowy funding schemes in an attempt to maintain critical services for their most vulnerable citizens.
However, many of these cost-shifting schemes predate the recession, and there are indications that they are continuing today, even as many states are collecting more tax revenues. The Department of Health and Human Services' Office of the Inspector General identified an improper Medicaid payment rate of 5.8% in 2013, which represents $14.4 billion in federal matching funds.
This will not be allowed to continue, especially because the Medicaid expansion has become a toxic political issue. CMS will be under even more pressure to demonstrate the integrity and cost-effectiveness of the program. Look for federal oversight to stiffen and more audits challenging supplemental payments.
For that reason, providers need to know how their states are generating their portion of the Medicaid spend, and more importantly, who will cover the costs of the Medicaid spend if these opaque funding mechanisms are dismantled.
