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.
A pair of conflicting rulings regarding tax credits for those who buy health insurance on the federal marketplace is a "credit negative" for health plans and not-for-profit hospitals, Moody's Investors Service says.
Not-for-profit hospitals and health plans may feel the economic effects of the uncertainty created when two federal appellate courts last week issuedconflicting opinions on a key provision of the Patent Protection and Affordable Care Act.
In a 2–1 ruling in Halbig v. Burwell, last week, judges on the D.C. Circuit Court of Appeals last Tuesday said that specific language in PPACA does not authorize the Internal Revenue Service to extend tax credits to an estimated 4.7 million people in 34 states who bought coverage through the federally facilitated Healthcare.gov exchange.
On the same day, the Fourth Circuit Court of Appeals in Virginia issued a conflicting ruling on essentially the same case, saying that the tax credits were legal. The case is expected to be heard by the U.S. Supreme Court.
The tax subsidies are a key provision of Obamacare that keeps health insurance affordable for millions of people, and the uncertainty created by the rulings is a "credit negative" for health plans and not-for-profit hospitals, Moody's Investors Service said.
If the Supreme Court rules that the subsidies are illegal, Moody's says it would be "an unambiguous credit negative" for hospitals in states that relied on the federal exchanges.
"Of the approximately 5 million polices sold on the federal exchanges, the federal government has reported that between 80% and 90% of these policies were issued to lower or moderate income individuals with some portion of the premiums paid for with federal subsidies," Moody's said.
The new revenue that was expected from insured patients is supposed to mitigate reimbursement cuts for hospitals from all payers, and supplemental cuts to Medicare and Medicaid disproportionate share payments.
"Given the higher amount of uncompensated care that not-for-profit hospitals provide, they are at greater risk to lose revenue than for-profit hospitals should the DC Appeals Court ruling be upheld," Moody's said.
Eliminating the subsidy would also be a credit negative for health plans because it would reduce the number of policies sold on the federal exchanges, which would then skew towards a less-healthy population, Moody's says.
"These lapses could occur because policyholders may no longer be able to afford the premiums for these policies without the financial assistance provided by the premium subsidies," Moody's said.
The ruling has also prompted insurers to rethink expansion and pricing for the 2015 enrollment period, even as many insurers have already submitted plans and premium rates for 2015 to the Centers for Medicare & Medicaid Services.
"If subsidies are no longer available in the 36 states that rely on the federal exchanges, the profile of the potential insurance purchaser in these states would drastically change," Moody's said. "Under a no-subsidy scenario, insurers would expect the exchanges to attract a less healthy population because only those who most need insurance coverage would likely purchase an unsubsidized health plan. As a result, insurers have indicated that if the ruling were upheld, it would lead to higher premiums."
Unless the legal battle is resolved before the next enrollment period, which may be unlikely, Moody's anticipates that some insurers will either revise their premium submissions or withdraw from some exchanges during the enrollment period later this year.
The Obama administration last week said the subsidies that are now in effect will continue through the appeals process.
Brendan Buck, spokesman for America's Health Insurance Plans, says the health insurance industry "certainly is aware of what the impact would be in terms of what it would do to the risk pool and the effect on affordability."
"That said, it is a long way off until this is resolved and in the meantime we are remaining focused on doing our job of delivering affordable care and access to consumers," he says.
John Holahan, a fellow at the Urban Institute's Health Policy Center, says eliminating the tax subsidies would exacerbate already significant disparities in access to healthcare from state to state.
"I don't think anyone intended that this would be health reform for Blue States but that is what seems to be turning out, between the Medicaid decision and this," Holahan says. "Even though it was conservatives behind this lawsuit, the real impact of this would be on the conservative-learning states that will have more uninsured."
"It affects people. It affects state economies. Between the Medicaid expansion and this they are giving up a boatload of money and then there are already big disparities in insurance coverage and the quality of healthcare and those disparities will just expand."
A Florida law prohibiting doctors from talking with patients about gun safety is upheld by a three-judge panel in the 11th Circuit Court of Appeals, but an injunction blocking the law remains in effect.
Family physician associations say they will challenge a federal appellate court's ruling that upholds a Florida law prohibiting physicians from speaking with patients about firearms.
The 2-1 ruling issued Friday by the 11th Circuit Court of Appeals in Atlanta overturns a June 2012 U.S. District Court ruling that struck down the state law – popularly referred to as the "physician gag law" or the "Docs v. Glocks law"—as a violation of physicians' First Amendment rights.
Mobeen Rathore, MD, president of the Florida chapter of the American Academy of Pediatrics, the Florida Pediatric Society, and a lead plaintiff in the suit, said physicians will appeal the ruling to the full appeals court.
"We strongly disagree with the 11th Circuit's decision. It is an egregious violation of the First Amendment rights of pediatricians and threatens our ability to provide our patients and their families with scientific, unbiased information," Rathore said in prepared remarks.
"This dangerous decision gives state legislatures free license to restrict physicians from asking important questions about health and safety that are vital to providing the best medical care to patients."
Doctors who break the Florida law could face discipline, including fines and loss of license. However, an injunction blocking the law remains in effect.
Writing for the majority, Judge Gerald Bard Tjoflat, appointed to the court by President Nixon, said the law takes into account a patient's "relative powerlessness" in a physician's examining room, and "simply acknowledges that the practice of good medicine does not require interrogation about irrelevant, private matters."
"As such, we find that the Act is a legitimate regulation of professional conduct. The Act simply codifies that good medical care does not require inquiry or record—keeping regarding firearms when unnecessary to a patient's care," Tjoflat wrote. "Any burden the Act places on physician speech is thus entirely incidental."
In dissent, Judge Charles R. Wilson, appointed to the court by President Clinton, said gun violence is a serious public health issue and that the Florida law "significantly infringes" upon a physician's legitimate reasons to raise gun safety concerns with patients.
"Simply put, the Act is a gag order that prevents doctors from even asking the first question in a conversation about firearms," Wilson wrote. "The Act prohibits or significantly chills doctors from expressing their views and providing information to patients about one topic and one topic only, firearms."
"Regardless of whether we agree with the message conveyed by doctors to patients about firearms, I think it is perfectly clear that doctors have a First Amendment right to convey that message."
In a statement released Monday afternoon, Robert M. Wah, M.D., President of the American Medical Association said, "We are disappointed by the court's ruling to uphold a Florida law that seeks to bar physicians from freely discussing firearm safety with their patients. This law poses real harm to patients as it interferes with physicians' ability to deliver safe care, and hinders patients' access to the most relevant information available. The AMA strongly believes the patient-physician relationship must be protected, because physicians provide appropriate treatment options based on open, honest and confidential communications with their patients.
The Institute of Medicine and the National Research Council issued a report in 2013 that stated that in 2010 more than 105,000 people were killed or injured in firearms-related incidents.
Data on firearms violence in the United States could become more difficult to obtain since Congress, at the behest of the National Rifle Association, eliminated funding for gun violence research by the Centers for Disease Control and Prevention.
The NRA, one of a long list of defendants in the case, applauded the court's ruling. The gun lobby had pressed the Florida Legislature to pass the 2011 law. The NRA said in a media release that the law is needed to protect gun owners' privacy rights "from Florida chapters of the American Academies of Pediatrics and American College of Physicians, along with a number of other groups and individuals backed by the anti-gun community…"
"Every gun owner in Florida and across the country is grateful for this common sense ruling. It is not a physician's business whether his or her patient chooses to exercise their fundamental, individual right to own a firearm," said NRA lead lobbyist Chris Cox.
Howard Simon, executive director of the American Civil Liberties Union of Florida, said he was "astounded" by the appeals court's ruling. The ACLU had filed a friend of the court brief on behalf of the physicians.
"It's a sad day when judges tell doctors what is in the best interest of their patients," Simon said in prepared remarks. "This unconstitutional law gags doctors and prevents them from talking to their patients about measures to help parents protect children from guns in the home. The only thing that makes this discussion 'bad medical practice' in the view of two federal judges is the fact that it has to do with guns."
Simon said he expects that the ruling will be overturned when the case is reheard by the full appeals court.
Under the deal, which has entered the due diligence phase, Tenet would become majority partner responsible for all operations of Carondelet's assets and Ascension would all but leave the Arizona market.
Under the deal, which has entered the due diligence phase, Tenet would become majority partner responsible for all operations of Carondelet's assets, including St. Joseph's and St. Mary's Hospitals in Tucson; Holy Cross Hospital in Nogales, AZ; Carondelet Medical Group; Carondelet Specialist Group; and Carondelet's ancillary businesses.
The deal means that Ascension is all but leaving the Arizona market, but the St. Louis, MO-based health system would hold a minority interest and Carondelet would continue its Catholic sponsorship.
Dignity Health's role in the joint venture and its stake in the partnership were not detailed in the joint media release. Executives from the three health systems said this week they would not comment beyond praising the deal in a joint media release.
The announcement marks the second major deal with statewide implications in Arizona in the past four weeks. In late June, Banner Health, the University of Arizona, and its affiliated University of Arizona Health Network announced that they will create a statewide healthcare organization.
The affiliation is expected to generate $1 billion in new capital and academic investments, and would combine more than 37,000 employees, making it the largest private employer in Arizona.
Daniel Derksen MD, with the University of Arizona College of Public Health, says many of the forces that are changing the healthcare marketplace in other parts of the country are at work in Arizona.
For starters, the percentage of uninsured Arizonans declined by 300,000 in the first six months of 2014, largely through regained coverage through Medicaid restoration, the Medicaid expansion under the Affordable Care Act, and the private coverage bought through the health insurance marketplace.
"The music that we are all dancing to is more of our uninsured being covered and systems that have been challenged with a heavy burden of uncompensated care now have the opportunity to partner with others to provide the full array of services," Derksen says.
"It makes sense because now it is not a matter of how you keep the sick people out of your system and reduce your uncompensated care. Now, as more Arizonans get coverage, we have to compete on value and user friendliness and easy access to the services we provide," he says.
"There is going to be a lot of looking around and saying 'which partner can we arrange a union with so that we can be more responsive to the population that is coming before us?' rather than 'let's just focus on lucrative niche services and that will cross subsidize our uncompensated care some way.' Now the issue is integration and coordination of care and identifying gaps in that service or gaps in that fully integrated system and finding partners who can help strengthen those weaknesses so they can respond to these opportunities."
Federal data confirms what we know about rural hospitals and the care they deliver, and allows those of us who care about access to make a compelling case for providing good care to this population.
Many rural providers who look at this compilation from 2010, the latest available data, would likely nod their heads in recognition of the landscape. The data reviewed by the Centers for Disease Control and Prevention's National Center for Health Statistics found that:
About 60% of the 6.1 million rural residents who were hospitalized in 2010 went to rural hospitals; the remaining 40% went to urban hospitals.
About 51% of rural residents hospitalized in rural hospitals were aged 65 and over, compared with 37% of those hospitalized in urban hospitals. No significant difference was observed in the percentage of hospitalized rural residents under age 45 who were in rural hospitals compared with urban hospitals.
Twenty-four percent of rural residents hospitalized in rural hospitals were aged 45–64 compared with 32% of those hospitalized in urban hospitals.
Rural residents who remained in rural areas for their hospitalization were more likely to be older and on Medicare compared with those who went to urban areas.
Almost 75% of rural residents who traveled to urban areas received surgical or nonsurgical procedures during their hospitalization, compared with only 38% of rural residents who were hospitalized in rural hospitals.
More than 80% of rural residents who were discharged from urban hospitals had routine discharges, generally to their homes, compared with 63% of rural residents discharged from rural hospitals.
Seventy-four percent of hospitalized rural residents who were in urban hospitals received a surgical or nonsurgical procedure during their hospitalization, compared with only 38% of those hospitalized in rural hospitals.
Rural residents hospitalized in urban hospitals were more than three times as likely to have three or more procedures as rural residents hospitalized in rural hospitals.
With this data, we can flesh out what's happening with rural care delivery.
About 17% of Americans live in rural areas, many of which are sparsely populated and medically underserved. The nearest provider could be 20 miles away, and the rural hospitals that provide the care are usually smaller, with low volumes, operating on a shoestring budget and with minimal staff and limited services.
The younger rural hospital patients, who are more likely to have greater mobility and access to commercial health insurance, likely seek care in urban settings because rural hospitals often don't have the funding or patient populations to support specialists or a particular area of specialty care, such as cardiac or oncology.
For the most part, these rural hospitals primarily serve an aging, poorer population admitted for low-acuity care of chronic diseases, and so they likely want to remain close to their homes and their personal physicians.
It would also be reasonable to conclude, however, that many elderly rural hospital patients get their care locally because of barriers to urban hospital access that younger rural residents can surmount. An elderly patient either may not have a car, or may not have a friend or family member who can drive them to the closest city for care.
Because more rural hospital patients are elderly and because specialty care options are limited, NCHS data also shows that rural hospital patients are more likely to be discharged into some sort of short-stay hospital or a long-term care facility.
Ultimately, this data confirms what we already know about rural hospitals and the care they deliver, which in many respects is significantly different that the care provided in urban settings. But telling us what we already know doesn't make the data any less valuable.
Rural providers may not be providing cutting-edge care for highly acute patients, but it's not realistic to expect that they would be, and it certainly doesn't negate the mission of rural providers.
This data allows those of us who care about access to healthcare in rural America to make a compelling case for the care provided and the people served.
Two federal appeals courts on Tuesday issued diametrically opposed politically charged rulings on the legality of tax credits for millions of Obamacare enrollees in 34 states who purchased their health insurance through the federal exchange.
In a 2–1 ruling in Halbig v. Burwell, judges on the D.C. Circuit Court of Appeals said that specific language in the Patient Protection and Affordable Care Act does not authorize the Internal Revenue Service to extend tax credits to an estimated 4.7 million people in 34 states who bought coverage through the federally facilitated Healthcare.gov exchange.
"We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly," Judges Thomas Griffith and Raymond Randolph, both Republican appointees, wrote in their majority opinion.
"But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain in the meaning of the words of the statute duly enacted through the formal legislative process. This limited role
serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges."
Senior Judge Harry T. Edwards, a Democratic appointee, dissented, and wrote that the "appellants' argument cannot be squared with the clear legislative scheme established by the statute as a whole."
Statute Upheld in 4th Circuit
About an hour later, down the road in Richmond, VA, judges in the 4th Circuit Court of Appeals in a 3–0 ruling in King, et al v. Burwell, upheld a district court ruling that the IRS had the authority to extend the tax credits.
"The plaintiffs contend that the IRS's interpretation is contrary to the language of the statute, which, they assert, authorizes tax credits only for individuals who purchase insurance on state-run Exchanges," the Richmond judges wrote.
"We find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS's determination, however, we uphold the rule as a permissible exercise of the agency's discretion."
The three Richmond judges are all Democratic appointees. Judges Stephanie D. Thacker and Andres M. Davis were appointed by President Obama, and Judge Roger L. Gregory was appointed by President Clinton.
May be Headed to SCOTUS
The tax credit issue is under challenge by Republican lawmakers and conservative activists in four separate federal lawsuits, and ultimately it is expected to be heard before the U.S. Supreme Court.
White House spokesman Josh Earnest said the D.C. Court ruling would be appealed before the full court. "It's important for people all across the country to understand that this ruling does not have any practical impact on their ability to continue to receive tax credits right now," Earnest said of the D.C. court's ruling.
"Right now there are millions of Americans all across the country who are receiving tax credits from the federal government as a result of the Affordable Care Act that is making healthcare more affordable for them. While this ruling is interesting to legal theorist it has no practical impact on their tax credits right now."
A report this month from the Robert Wood Johnson Foundation and the Urban Institute estimates that 7.3 million people, or about 62% of the 11.8 million people expected to enroll in federally facilitated marketplaces by 2016, could lose out on $36.1 billion in subsidies. Residents in Texas and Florida would lose the most, $5.6 billion and $4.8 billion in subsidies at risk in this court decision, the report said.
"Millions of people already get their private health insurance through federally facilitated marketplaces, and millions more will do so in the coming years. For most of these individuals, federal subsidies make the difference in being able to afford health insurance," John Lumpkin, MD, senior vice president at the Robert Wood Johnson Foundation, said in prepared remarks.
"If financial help is available to people living in some states but not others, it will widen the substantial health insurance disparities in our nation, making it harder for millions to access the care they need."
Reaction
Nina Owcharenko, director of health policy studies at The Heritage Foundation, said that 27states have not set up a state exchange and another seven entered into a federal-state partnership on an exchange.
"Even with federal incentives, states are struggling to keep their state exchanges afloat—especially as they prepare to take on full financial responsibility for them," Owcharenko said in prepared remarks.
"Only 17 states have set up Obamacare exchanges and some already are looking at abandoning their exchanges and using the federal exchange. This is more bad news for Obamacare's future as enrollees in the federal exchange could face higher costs of coverage."
A new report catalogs state laws that attempt to regulate or encourage competition within healthcare markets in the face of industry consolidations.
States are taking a number of measures to regulate hospital and provider competition within their borders as healthcare sector consolidation accelerates, a new study has found.
The joint report,State Policies on Provider Market Power, from the National Academy of Social Insurance and Catalyst for Payment Reform catalogs state laws that attempt to regulate or encourage competition within healthcare markets in the face of this wave of consolidations.
"Really, it's not a best-practices type of study. It just shows what exists," says Shaudi Bazzaz, Program Manager at CPR, and a coauthor of the report. "It is difficult to say what works because so much of healthcare is market specific. What works in one market might not work in another."
"There are a lot of dynamics that go into healthcare pricing, hospital costs, and all that. The paper is not saying what is the best thing to and that would be a very difficult thing to do as a generalization."
Among the findings:
Forty-two states have laws on price transparency, requiring hospitals and other providers to make pubic price information. However, the information is frequently not easily accessible to consumers.
Eighteen states have banned anti-competitive favored nation clauses that can prevent new health plans from entering local markets.
States are forming regulatory bodies to monitor healthcare prices. Delaware, Maryland, Massachusetts, and others have passed legislation establishing healthcare commissions to monitor and review prices.
Texas is the only state that has passed legislation that supports market competition during the development and implementation of ACOs. Other states that have passed legislation supporting the development of ACOs, such as Alabama, have provisions to grant provider groups exemptions from state antitrust laws and immunity from federal antitrust laws through the state action doctrine.
Five states have Certificate of Public Advantage statutes that permit exemption from antitrust provisions for providers merging or consolidating for the purposes of cooperation and healthcare delivery improvements.
"Some of the regulations out there that are providing safe harbors for providers to consolidate outside of antitrust scrutiny, I didn't realize existed, so that was a little bit scary to find out about," Bazzaz says.
"Especially given the environment where we are looking at trying to promote coordination, and to let providers bypass antitrust scrutiny in order to get that coordination is a little bit concerning."
Bazzaz says there is tension in the healthcare sector right now between antitrust concerns of some states and federal regulators, and the move toward consolidation, which is tacitly encouraged with the adoption of capitated payments for population health and narrow networks to contain costs.
"I don't know how this is going to turn out, but I definitely can identify that the friction exists," Bazzaz says. "The idea that coordination of care can only happen though consolidation feels faulty to me. If we had a history where consolidation had resulted in improved efficiencies and quality and coordination I don't think we would be having this discussion right now. "
"But the fact is we have had negative outcomes due to consolidation. We don't have a strong body of evidence that says 'consolidate and we are going to get you improved coordination of care.'"
Bazzaz says many in the healthcare sector lump together the distinctly separate ideas of coordinated care and consolidated care.
Bazzaz says many in the healthcare sector lump together the distinctly separate ideas of coordinated care and consolidated care.
"The issue is not that care should be coordinated," she says. "The issue is will consolidation get us there and is that the primary motivator of consolidation? If you can show coordinated care is the best way to achieve it through consolidation I don't think anybody would have a problem with that. That is not what we have seen in the past. Consolidation shouldn't be our first avenue we are going down to try to coordinate care."
