The American Hospital Association and National Nurses United are criticizing the $2.4 trillion debt ceiling and deficit reduction package that they believe could mean hundreds of billions of dollars in cuts to Medicare, Medicaid, and other safety net programs.
The House passed the deficit reduction package bill by a 269-161 vote Monday evening. It is expected to clear the Senate Tuesday.
"America's hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation's seniors," AHA President Rich Umbdenstock said in a prepared statement. "Hospitals have repeatedly demonstrated a willingness to accept shared sacrifice and do what is best for our country, but our first commitment is to patients, whose access to care could be curtailed by further cuts to Medicare funding for hospital care."
The proposal Congress approved Monday is expected to slash about $2.4 trillion from the national debt from 2012 through 2021. About $917 billion in cuts would be identified in the budget process, and $1.5 trillion in reductions would be found by a special, 12-member, bicameral, bipartisan commission. That committee would meet later this year, and its recommendations would be subject to a single up-or-down vote in the House and Senate.
Medicaid and Medicare are not expected to be impacted in the first round of cuts, but they are expected to be targeted by the 12-member committee, which has yet to be named.
Rose Ann DeMoro, executive director of the 170,000-member National Nurses United, said the massive cuts to social and healthcare programs that will likely be prompted by the proposals would only make matters worse in a faltering economy, and inflict "deep pain in Main Street communities across the nation."
"What this latest deal does is make those who vote for it a full partner in the discredited theory that our economy is in freefall because of public spending on programs that help people, and kicks the can further down the road on real solutions that are needed to promote genuine recovery," DeMoro said in a media release.
"President Obama could avoid this current high wire act by invoking the 14th amendment to raise the debt ceiling, as many have proposed, and start this process over with solutions designed to address the real economic problems facing American families," she said.
Umbdenstock says the cuts would come just as more seniors are turning to hospitals for their care. "Funding reductions for hospital services translate into decreased access for our nation's seniors. That's why the total Medicare program – including caregivers – should be exempt from "sequestration." Cuts to Medicare funding for hospital care could overload emergency rooms, shut down trauma units and reduce patient access to the latest treatments."
The AHA president said hospitals recognize that Medicare needs to be modernized, but that it shouldn't be done "on the backs of providers who care for our nation's most vulnerable."
"We want to work with the new congressional committee to identify real reform that will secure Medicare for future generations rather than continued ratcheting of providers," he said.
The National Labor Relations Board is considering proposed changes to rules governing union organizing practices that some critics believe could dramatically shift the balance of power towards labor.
"It is probably the most liberal, pro-labor board in the 30 plus years I've been doing this," says James G. Trivisonno, president of Detroit-based IRI Consultants, who predicts that the board will adopt most – if not all – of the proposed changes. Those changes, he says, provide organized labor with side-door access to many of the provisions unsuccessfully sought when the Employee Free Choice Act fizzled in Congress last year.
One proposed change, Trivisonno says, would require employers to provide to union organizers before an organizing vote a list of employees, their worksite locations, the shifts they work, and their job classifications.
Another proposed change would facilitate organizing smaller "specialty" bargaining units. "For example, a group of lab techs may want to organize versus an entire group of technical employees at an acute-care facility," Trivisonno says.
The biggest proposed rule change, Trivisonno says, would reduce to a matter of days the amount of time between an announced organizing campaign and a representative election. In effect, he says, union organizers could spend months quietly laying the groundwork for a representative election, before "springing" an election notice on unwitting employers.
"The unions' approach is to surprise the employers with a petition and have the elections in a few weeks before the employer has had a chance to react," he says. "With quicker elections it is easier to get a group of employees revved up about an emotional issue and have an election in two or three weeks. The employers disadvantage is about communicating the rest of the story."
If the proposed rules are approved, Trivisonno says, employers must be even more vigilant and proactive about communicating their arguments against unionization to employees, even doing so ahead of any organizing effort. If you wait until you get a notice of election, it's probably already too late.
"The way that employers prepare for organizing drives and the way they conduct counter union organizing campaign is going to be very different under these regulations," Trivisonno says. "If you have a large acute-care facility, to get a letter drafted, approved, run through legal, operations and public relations sometimes can take a week. You may have nurses who only work once or twice a week. How do you communicate with these people? The unions can make claims that don't have to be accurate and the employer has to correct them."
"So, to the extent you can, you should have those documents done in advance and your positions thought out should you receive a petition," he says.
More and more, he says, social media, including Web sites, Facebook, Twitter, blogs, and employee intranet portals are going to play a critical role in getting the message out. "The unions are well ahead of most employers on that, way ahead, because that is where the battle is going to be fought down the road," Trivisonno says. "National Nurses United and Service Employees International Union have been out front on that for years, but a lot of employers, a lot of consultants, don't get it yet."
He suggests creating an ominous sounding "dark Web site" that provides the employers counterpoints to union arguments, to be activated at the first whiff of an organizing effort. "Keep it in your back pocket should you need it, so you can drive information that way. Establish Facebook and social media channels now because they are going to help you when you need them," he says.
Of course, the best defense against a union organizing bid is to engage your employees, treat them fairly, ensure that they are safe, happy and satisfied at work, ask for their input and act on what they say, and address their concerns. If your hospital is the subject of a "surprise" notice for a representative election, it's your fault and not the union's. It's hard to sneak up on hospital leaders who – on a daily basis – sincerely engage the people they work with as professionals, colleagues, and friends.
As I have said before, employers get the unions they deserve.
The federal government issued $47.9 billion in improper payments to Medicare fee-for-service and Medicare Advantage in fiscal 2010, and Thursday officials from the Office of Inspector General, the Centers for Medicare & Medicaid Services, and the Government Accounting Office went before a House subcommittee to explain why. The House Subcommittee on Government Organization, Efficiency, and Financial Management heard testimony attributing the improper payments to a number of causes, primarily improper documentation.
"Some but not all improper payments are the result of fraud," Daniel R. Levinson, OIG's Inspector General told the subcommittee, in prepared remarks.
Levinson said improper payments can result from:
Unnecessary claims
Miscoded claims
Eligibility errors
Insufficient documentation
"Examples of improper payments include payments made to an ineligible recipient, duplicate payments, or payment for services not received," he added. "For example, my office recently identified $3.6 million in improper Medicare Part D payments on behalf of deceased beneficiaries."
Of the total $47.9 billion in improper payments identified, $34.3 billion were attributed to Medicare fee-for-service, representing a 10.5% error rate. The remaining $13.6 billion was attributed to Medicare Advantage, representing a 14% error rate, Levinson told the committee.
Overall, Medicare paid $516 billion in 2010 for medical services for 47 million Americans, according to government estimates.
Michelle Snyder, deputy COO at the Centers for Medicare & Medicaid Services, told the subcommittee that "like other large and complex Federal programs, Medicare is susceptible to payment, billing, and coding errors."
"It is important to clarify what these billing anomalies are – and are not," she said in prepared remarks.
Snyder said circumstances that lead to billing and coding errors can result from:
Services with insufficient documentation,
Provided services that are not determined to bereasonable and necessary
Incorrectly coded claims
Services with no documentation
"Further, improper payments do not mean an item or service was not needed. These payments are not necessarily fraudulent; rather, they tend to be an indication of errors made by the provider in filing a claim or inappropriately billing for a service," Snyder told the committee.
Kay L. Daly, director of Financial Management and Assurance at the Government Accountability Office told the subcommittee that the estimate for improper payments was "incomplete" because it has yet to provide an improper payment estimate for Medicare prescription drug payments, which totaled $59 billion in fiscal year 2010.
Daly said her office has identified five strategies to help reduce fraud, waste, and abuse, and halt improper Medicare payments. Not all have yet been acted upon:
1.)Strengthen provider enrollment standards and procedures. Strong standards and procedures can help reduce the risk of enrolling sham providers. CMS has implemented provisions of the Patient Protection and Affordable Care Act that screen providers by levels of risk and provide a stringent review of high-risk providers, but has yet to implement certain GAO recommendations in this area.
2.)Improve prepayment reviews. Prepayment reviews of claims help ensure that Medicare pays correctly the first time. As of July 1, 2011, CMS has begun applying predictive modeling analysis to claims and plans to expand Medicare prepayment controls. CMS has not implemented GAO's recommendation to improve prepayment reviews.
3.)Focus post-payment reviews on vulnerable areas. Post-payment reviews are critical to identifying payment errors and recouping overpayments. In March 2009, CMS began instituting a national recovery audit contractor program to help the agency supplement its post-payment reviews. CMS has also developed information technology to help it better identify claims paid in error, but GAO recently reported that the systems are not being used to the extent originally planned and made several recommendations to address the issues.
4.)Improve oversight of contractors. CMS has taken action to improve oversight of prescription drug plan sponsors' fraud and abuse programs, which addresses GAO's recommendation, but is still developing specific performance statistics.
5.)Develop process to address identified vulnerabilities. CMS has not developed a robust corrective action process for vulnerabilities identified by Medicare RACs as GAO recommended.
Community Health Systems, Inc. said late Thursday that it will buy "substantially all of the assets" of Tomball Regional Medical Center, in Tomball, TX.
CHS did not provide the financial terms of the deal, which is the second hospital acquisition for the Franklin, TN-based for-profit hospital chain in 10 days.
The 358-bed TRMC is located 30 miles northwest of Houston and sits on a 155-acre campus, with services that include a cancer center, heart center, women's health center, outpatient surgery centers, and sports medicine center.
Calls Thursday evening to TRMC officials were not immediately returned.
However, Wayne T. Smith, CEO/president/chairman of CHS, said he was "delighted" with the acquisition, which remains subject to regulatory approvals.
"The hospital has earned numerous clinical distinctions and we believe it will complement our ongoing commitment to deliver quality healthcare to Texas communities," Smith said in a media release. "We look forward to deploying our resources and operating strategies as we join with the hospital's medical staff and employees to serve the future healthcare needs of this growing region."
When the acquisition is complete, TRMC will become the 19th CHS-affiliated hospital in Texas. On July 19, CHS bought a majority stake in Moses Taylor Health Care System, the Scranton, PA-based health system that includes 217-bed Moses Taylor Hospital in Scranton and 25-bed Mid-Valley Hospital in Peckville.
CHS is one of the largest publicly-traded hospital companies in the nation and operates general acute care hospitals in non-urban and mid-size markets throughout the country. CHS owns, leases or operates 133 hospitals in 29 states.
A Maryland cardiologist was convicted of fraud after federal prosecutors showed that he inserted unnecessary cardiac stents into more than 100 patients as part of a scheme to defraud government and private insurers of more than $700,000.
A U.S. District Court jury in Baltimore on Tuesday also convicted John R. McLean, MD, of Salisbury of ordering needless tests and falsifying medical records as part of the six-count fraud scheme, the U.S. Attorneys' Office in Maryland said.
McLean, 59, could receive up to 35 years in prison when he is sentenced on Nov. 10. Prosecutors want to recover $711,583 that they believe McLean garnered in the scheme, but U.S. District Judge William D. Quarles, Jr. will determine the exact amount of forfeiture at the sentencing.
The evidence presented at the two-week trial showed that from at least 2003 to May 2007 McLean performed cardiac catheterizations and implanted unnecessary cardiac stents in more than 100 patients at Peninsula Regional Medical Center in Salisbury, MD.
McLean, federal prosecutors said, falsely recorded in the patients' medical records the existence or extent of coronary artery blockage to justify the stents and the claims to health insurers, including Medicare and Medicaid.
"The evidence shows that Dr. McLean egregiously violated the trust of his patients and made false entries in their medical records to justify implanting unneeded cardiac stents and billing for the surgery and follow-up care," U.S. Attorney Rod J. Rosenstein said in prepared remarks. "We do not bring federal prosecutions based on discretionary judgments that might be disputed by reasonable medical professionals."
Evidence also showed that McLean ordered his cardiac patients to undergo medically unnecessary follow-up tests such as Cardiolite stress tests, echocardiograms, and EKGs. He then submitted claims for the unnecessary tests and stents to insurers, including Medicare and Medicaid, prosecutors said.
McLean resigned his medical privileges at PRMC in March, 2007 after a hospital internal investigation uncovered the irregularities.
Earlier this month, in an unrelated case, the Maryland Board of Physicians stripped the medical license of Towson, MD cardiologist Mark G. Medei after determining that he falsified patients' records to validate unnecessary stent insertions in five patients.
National healthcare spending is expected to grow by an average of 5.8% a year through 2020 as the economic recovery spurs higher utilization, the population grows, and an estimated 30 million people receive health insurance coverage under the Affordable Care Act, according to a study in Health Affairs.
Under that rate of growth, the percentage of gross domestic product spent on health expenditures is projected to increase from 17.6% in 2010, to 19.8% in 2020. The Health Affairs study also projects that the average annual per capita national healthcare expenditure will increase from $8,327 in 2010 to $13,708 by 2020, representing an annual average growth of 4.9%.
In 2014, healthcare cost growth is expected to surge by 8.3% because of implementation of major components of the ACA, according to the study: National Health Spending Projections Through 2020: Economic Recovery And Reform Drive Faster Spending Growth.
If the ACA were not in place, however, the study projected that the pace of healthcare cost growth would decrease by only .1% from the projected 5.8% rate of growth. Basically, the ACA's cost savings and expenditures would balance out, the study projected.
Hospitals that spend more money on emergency department care for cardiac patients have lower mortality rates for those patients, a Massachusetts Institute of Technology study has found.
"More intensive and expensive treatment leads to better outcomes," Joseph Doyle, the Alfred Henry and Jean Morrison Hayes Career Development Associate Professor of Applied Economics at the MIT Sloan School of Management, said in a statement.
In a paper published in the July issue of the American Economic Journal: Applied Economics, Doyle examined tens of thousands of cases in which out-of-state visitors were admitted to emergency rooms in Florida hospitals from 1996-2003. He discovered that an increase of about $4,000 per patient in hospital expenditures led to a 1.4 percentage-point decrease in the mortality rate. Overall, a 50% increase in what Doyle calls a hospital's "spending intensity" allows it to reduce mortality rates due to heart problems to about 26% below the mean, the study found.
The findings are sure to prompt more debate about the linkage between cost and quality care.
Some previous studies have shown that patients who receive more-expensive care do not necessarily have a lower mortality rates. Other studies, however, have shown that additional spending makes a difference, or that hospitals that spend more money with similar outcomes may be treating sicker patients.
In an attempt to reduce the impact of local patient variations on medical spending, Doyle's study examined nearly 37,000 hospitalizations in Florida from 1996 to 2003, using patient-discharge data available through the Florida Agency for Healthcare Administration.
Doyle analyzed the patient data by ZIP code, age, and even season of the year to make sure that he was studying demographically similar tourists being treated throughout Florida.
Doyle said Florida is a microcosm of the nation, because the state has significant variations from place to place in how patients are treated for heart attacks, and per capita income for a particular area does not correlate with hospital spending.
As a result, the variations Doyle found do not stem from the prior health of patients, but from the level of care itself. Specifically, the greater expenses — and benefits — in heart treatment seem to come from a broader application of ICU tools and having more medical personnel on hand. "The higher-spending hospitals use more ICU services, and they have higher staff-to-patient ratios, so they use more labor. And that's expensive," Doyle said.
Doyle said he has yet to identify the precise medical technologies that provide the greatest additional benefit per dollar spent. "There are smart ways to spend money and ineffective ways to spend money, and we're still trying to figure out which are which, as much as possible," he said.
An Orange County, CA oncologist was sentenced to 18 months in federal prison Monday for bilking Medicare and other public and private health insurance providers for up to $1 million for injectable cancer medications that were never provided, the Department of Justice said.
Glen R. Justice, MD, who ran Pacific Coast Hematology/Oncology Medical Group in Fountain Valley, CA, pleaded guilty in May 2010 to five counts of healthcare fraud, DOJ said in a media release.
When patients did receive medications, Justice "upcoded" claims made to health insurance providers by falsely claiming that he administered more expensive injectable medications than were actually given to patients, DOJ said.
The medications involved in the scheme included Neulasta, Neupogen, Procrit/Epogen/Aranesp, and Neumega. Justice's scheme ran from at least 2004 through October 2009, despite being told by staff about the improper billing and the execution of a search warrant at his practice in 2006, DOJ said.
In a plea agreement Justice, 66, acknowledged that the public and private health insurance providers – including Medicare, Tricare, carriers contracted with the federal government through the Federal Employee Health Benefit Program, and Blue Cross and Blue Shield of California – suffered losses of between $400,000 and $1 million, DOJ said.
At Monday's sentencing hearing, Justice did not contest government claims that he violated his plea agreement by continuing to submit fraudulent bills after he signed the agreement in March 2010.
In addition to the prison term, Justice was ordered to pay $1,004,689 in restitution.
Median compensation for practice administrators in 2010 showed little change from 2009, according to the Medical Group Management Association's Management Compensation Survey: 2011 Report Based on 2010 Data.
Administrators in practices with six or fewer full-time-equivalent physicians earned median compensation of $86,459, a slight decrease from 2009. Administrators in practices with seven to 25 FTE physicians reported median compensation of $115,000—an increase of only 0.28% from 2009. In groups with 26 or more FTE physicians, administrators reported median compensation of $150,756, the MGMA report said.
Some medical practice management professionals reported slight increases in compensation, likely in recognition of expanded responsibilities. Business service directors, for example, reported a 5.7% increase in median compensation to $88,540. Branch/satellite clinic managers also saw a modest increase in median compensation to $57,510, up 2.57%. Marketing/communications specialists earned median compensation of $49,262, up 0.74 percent since last year, the report said.
"The generally static compensation of practice management professionals reflects the difficult economic environment faced by medical practices," MGMA President/CEO William F. Jessee, MD, said in a media release detailing the report. "Flat or declining revenues in the face of continuing increases in operating costs are forcing many practices to sell or close. For those that are able to survive, compensation levels are generally flat or declining."
MGMA's Management Compensation Survey: 2011 Report Based on 2010 Data includes data on 7,240 managers in 1,287 medical practices.
Duke LifePoint Healthcare and the board of directors at Maria Parham Medical Center on Monday signed a joint operating agreement for the 102-bed community hospital in Henderson, NC.
The deal, first announced Jan. 31, is expected to close within the next three months pending regulatory approval.
Duke LifePoint will own 80% of the hospital, while the retained assets and the proceeds from the deal will eliminate MPMC's debt. The remaining assets, approximately $30 million, will be used to create a locally governed charitable foundation that will fund new programs and services in the community. Duke LifePoint also will invest $45 million in capital improvements at the hospital over the next 10 years, the partners said.
David Ruggles, a spokesman for the private, nonprofit Maria Parham, said specific financial terms of the deal would not be made public until it is approved by the North Carolina Attorney General's Office.
"The MPMC board of directors evaluated potential partnerships for a year before selecting Duke LifePoint as our partner of choice," said Bev Tucker, MD, chairman of the MPMC Board of Directors. "Throughout our due diligence process, we have grown even more enthusiastic about this collaboration. Duke LifePoint brings unparalleled clinical and operational support to this community and can give MPMC the resources and expertise it needs to transform healthcare in Henderson and strengthen and grow our hospital."
To retain community control of the hospital, a 10-member board will be equally represented by Duke LifePoint and MPMC appointees. A separate hospital advisory board of physicians, community leaders, MPMC President/CEO Robert Singletary, and a representative from Duke LifePoint also will be established.
The deal marks the second affiliation with North Carolina hospitals for Duke Life Point. In June, the 110-bedPerson Memorial Hospital in Roxboro announced a similar affiliation agreement.
Duke LifePoint said the collaboration provides the affiliated community hospitals with LifePoint's operational resources and experience in managing community-based hospitals, and Duke's clinical services and quality leadership.
"We are delighted about the opportunity to welcome Maria Parham Medical Center as the first hospital in the Duke LifePoint system," said William J. Fulkerson, Jr., MD, executive vice president of Duke University Health System. "As part of Duke LifePoint, the hospital will have access to the support it needs to better serve its community and prosper in the future."
Located 50 miles north of Raleigh, MPMC serves north central North Carolina and parts of southern Virginia.
Brentwood, TN-based LifePoint Hospitals operates 52 hospitals in 17 states, and specializes in community hospitals in non-urban markets where the hospital is the sole provider in most of the communities it serves.
Duke University Health System has inpatient and ambulatory locations across North Carolina and surrounding areas, and has partnered with hospitals in its region to establish specialized medical services in their communities.
