The bill would fix a regional calculation that forces accountable care organizations to measure their performance against themselves and disproportionately impacts rural providers.
Rural healthcare stakeholders are rallying around bipartisan legislation newly introduced in Congress that would eliminate an inadvertent methodological flaw known as the Affordable Care Act's "rural glitch."
The Accountable Care In Rural America Act, H.R. 5212, introduced by Republican Rep. Jodey Arrington of Texas and Democrat Rep. Suzan DelBene of Washington, would amend Title XVIII of the Social Security Act to improve the benchmarking process for the Medicare Shared Savings Program.
The bill's Senate sponsors are Republican Sen. Pat Roberts of Kansas and Democratic Sen. Catherine Cortez Masto of Nevada.
Since 2017, a glitch in the ACO reimbursement formula has inadvertently punished rural health care providers, even as they reduce costs, according to the bill's sponsors. That's because, under the current formula, reimbursement rates are based on a comparison of the per-patient costs of a region's ACO with the operating costs of non-ACO regional peers.
In many rural areas, an ACO may be the major provider with no peers for comparison. As a result, rural ACOs that have a lower spending benchmark often get a smaller savings bonus than do their urban counterparts that compete against more providers.
The bill would fix the glitch by excluding the ACO's beneficiaries when calculating the per-patient costs of a region.
"Fixing the rural glitch is a practical and meaningful change that will make the program fairer, especially for rural providers who can be disproportionately impacted by the current benchmark methodology," DelBene said.
"This change will also make it fairer for providers who are already delivering efficient care like those in Washington state," she said. "I believe fixing the rural glitch will encourage more providers to participate in the ACO program which will be a benefit to seniors and taxpayers alike."
Brock Slabach, senior vice president for member services at the National Rural Health Association, says the bill stands a good chance of passing because it has bipartisan support, is budget neutral, faces no organized opposition, and "it's an easy correction."
"This is commonsense legislation, so opposition would be negligible. I don't know how anyone could oppose this because all it does is make the process fair," he said.
The bill has the support of 13 stakeholder groups, including the American Hospital Association and the American Medical Association, who complained that the glitch makes it harder for rural providers to achieve savings even when they improve quality and reduce costs on par with their urban colleagues.
"No ACO should be placed in a less favorable financial position due to their geography alone, and design flaws that discourage ACOs from operating in rural areas should be eliminated," the stakeholders said in a letter to the Congressional sponsors.
"Today, the regional adjustment includes an ACO's own beneficiaries in the regional calculation," the letter said. "While this has minimal impact for ACOs in urban areas with a lot of provider competition, the impact is significant in rural areas where an ACO covers a large number of the region's fee-for-service beneficiaries."
The co-founders of the start-up allegedly enriched themselves by fraudulently inflating revenues and the extent and effect of their advertising.
Four former executives at Outcome Health have been charged with fraud in an alleged $1 billion scheme that cooked the books on revenues and lied to investors and clients about the reach of its advertising inventory, the Department of Justice said.
An indictment alleging wire fraud, bank fraud, mail fraud, and related charges was unsealed this week in a federal court in Chicago against:
Rishi Shah, 33, of Chicago, the co-founder and CEO of Outcome Health, known as ContextMedia before January 2017;
Shradha Agarwal, 34, of Chicago, co-founder and president of Outcome Health;
Brad Purdy, 30, of San Francisco, COO/CFO; and
Ashik Desai, 26, of Philadelphia, executive vice president of business operations and chief growth officer.
Also indicted were Kathryn Choi, 29, of New York, and Oliver Han, 29, of Chicago, both former analysists at the company.
The indictment alleges that, from 2011 to 2017, the alleged schemers at privately held Outcome – which provides physician waiting rooms with video screens featuring health tips and drug ads – sold tens of millions of dollars of advertising inventory that did not exist, mostly to drug companies. Despite these under-deliveries, Outcome allegedly still billed clients as if it had delivered in full.
Using the claims of the bogus inventory, the scheme allegedly inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017.
To conceal the alleged fraud, the indictment claims that the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients' contracts.
The scheme also allegedly inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets, and altered studies presented to clients to make it appear that the campaigns were more effective than they were.
The company's outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries, the indictment says.
The former executives allegedly used the inflated revenue figures to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017.
The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal. The $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.
Shah and Shradha resigned in 2018 after Outcome reached a fraud settlement with investors. In October, thecompany agreed to pay $70 million to the federal government to resolve fraud allegations.
The health system is looking for ways to address a projected $80 million net loss in 2020.
Two months after entering a joint clinical agreement with the University of Minnesota, M Health Fairview is considering layoffs that could trim 500 positions – about 2% of its staff – from the payroll.
StarTribune.com, citing internal memos from University of Minnesota President Joan Gabel and Fairview Health CEO James Hereford, said the staff cuts is one of several strategies contemplated over the past several weeks to address a projected $80 million net loss in 2020.
"The decision by Fairview to lay off employees is incredibly difficult," Gabel wrote. "There are sound financial reasons why this action is necessary, but it does not lessen the pain employees will feel or the concern that patients may have due to this news."
Other strategies to improve margins could include reducing operations at the health system's Bethesda rehabilitation hospital and shuttering the financially struggling St. Joseph's Hospital in downtown St. Paul, the newspaper reported.
Hereford did not dispute the newspaper's report but declined to provide further details in a statement to HealthLeaders.
"Healthcare is facing an affordability crisis and we must transform," he said. "We are rethinking everything we do to prepare for a future where we approach healthcare differently. This change requires innovation, courageous leadership and, inevitably, choices. We will do what's right for our most important constituents: our patients."
The staffing cuts would likely take effect in early 2020, and most would target unfilled positions, as opposed to layoffs. The potential closure of St. Joseph's could occur within the next three years. The money losing hospital was converted in 2017 to a mental health hospital. St. Joseph's lost $32 million in 2017 and $44 million in 2018, the newspaper reported.
"The affordability crisis that consumers are facing right now — it really does demand and give energy to the necessity of health care delivery transformation," Hereford told the paper. "Health care has played the blame game and tried to deflect and say its been somebody else's fault. We're not going to do that."
The Assistance Fund is the third foundation to settle allegations of conspiring with drug makers.
An Orlando-based foundation will pay the federal government $4 million to settle allegations that it funneled kickbacks from three drug companies to induce Medicare patients to use the companies' multiple sclerosis drugs, the Department of Justice said.
According to federal prosecutors in Boston, The Assistance Fund was supposed to be open to any Medicare patient with multiple sclerosis. Instead, a DOJ complaint alleged that TAF conspired with MS drug makers Teva, Biogen, and Novartis to use the fund as a conduit for money from those manufacturers to patients taking their MS drugs.
"The conspiracy enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their MS drugs," DOJ said. "The conspiracy also minimized the possibility that the companies’ money would go to patients taking competing MS drugs made by other companies."
The $4 million settlement was based on an analysis of TAF's ability to pay after review of its financial condition, DOJ said.
TAF is the third foundation to settle allegations of kickbacks in the last month. The other two foundations – Chronic Disease Fund, Inc. doing business as Good Days from CDF, and Patient Access Network Foundation – paid $2 million and $4 million, respectively, to resolve the alleged violations of the False Claims Act, federal prosecutors in Boston said.
Under the federal Anti-Kickback Statute, drug makers are prohibited from paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the companies’ drugs.
The statute also prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
"TAF cared more about helping its big pharma donors make money than about helping individual patients in need of life changing assistance," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
TAF, which describes itself as an independent charitable patient assistance foundation, issued a statementclaiming that the kickback allegations occurred under previous management.
"TAF will continue its normal operations, pursuing its work to help patients and families facing high medical out-of-pocket costs by providing financial assistance for their copayments, coinsurance, deductibles, and other health-related expenses," the company said.
Over the past decade, TAF said it has provided financial help to more than 78,000 people living with live-threatening and chronic diseases through its 60 disease programs.
TAF also entered a three-year Integrity Agreement with the Department of Health and Human Services Office of the Inspector General that requires, among other things, that TAF implement measures designed to ensure its independence, and that its interactions with drug maker donors are legal.
If the Senate passes the stopgap, President Trump is expected to sign it.
With a federal government shutdown looming at midnight, the Senate is expected today to vote on a continuing resolution to fund the federal government until December 20.
The stopgap measure, which passed the House 231-192 on Tuesday, includes a provision that would delay for one month the $4 billion in hospital disproportionate share cuts for hospitals.
The stopgap is expected to be signed by President Donald J. Trump.
The American Hospital Association issued a statement called the “temporary delay is a step in the right direction toward ensuring hospitals can continue to care for the most vulnerable in our communities."
"Until a more sustainable, permanent solution is reached, we continue to urge that these cuts be delayed for at least two fiscal years," AHA said.
CNN reports that the Senate had hoped to pass the resolution Wednesday, but the effort got bogged down for procedural reasons. Senate aides told the cable news network that objections had been resolved.
"Nothing is easy," Sen. John Thune, R-South Dakota, told CNN.
In September, the Centers for Medicare & Medicaid Services released its final rule for instituting $4 billion in cuts to DSHs at the start of fiscal year 2020, which is October 1. CMS first introduced these cuts in 2017 and has received significant push-back from DSH advocates since.
Bruce Siegel, MD, CEO of America's Essential Hospitals, said earlier this year that "the trajectory of the cuts — $44 billion over six years — simply would be unsustainable for essential hospitals, which already operate with no or narrow margins and high levels of uncompensated care."
The settlement resolves allegations that the hospital knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements.
Louisville's Jewish Hospital & St. Mary's Healthcare Inc. will pay the federal government $10.1 million to settle whistleblower allegations that it knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements, the Department of Justice.
The federal complaint also alleged that Jewish Hospital failed to get a treating physician's signature on prescription orders establishing medical necessity, failed to confirm that refills were reasonable and necessary, and failed to document that the medications were delivered.
The settlement also resolves allegations that Jewish Hospital submitted claims to Medicare that led to improper payments to Medicare beneficiaries in the form of free blood glucose testing supplies and waiver of co-payments and deductibles for insulin, all violations of the Anti-Kickback Statute, DOJ said.
Attempts Wednesday to contact Jewish Hospital & St. Mary's Healthcare, Inc. for comment were not successful.
"Healthcare providers will be held accountable when then knowingly submit false claims for prescription drugs that do not meet requirements to establish medical necessity," said Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division.
The settlement resolves allegations originally brought in a whistleblower lawsuit filed by Robert Stone, a pharmacist, who will receive $1.85 million of the settlement.
DOJ last month resolved related civil complaints against Sanford Health, which agreed to pay $20.2 million.
A South Dakota neurosurgeon has been named in a federal whistleblower complaint alleging that he paid himself hundreds of thousands of dollars in kickbacks by using medical devices distributed by two companies that he owns, theDepartment of Justice said.
The government’s complaint alleging violations of the False Claims Act and the Anti-kickback statute, claiming that Wilson Asfora, MD, of Sioux Falls, and his two companies – Medical Designs LLC, and Sicage LLC Medical Designs.
"Despite receiving numerous warnings that he was performing medically unnecessary procedures with the devices in which he had a financial interest, Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs and Sicage," DOJ said
"The Department of Justice will seek to hold accountable physicians and medical device companies that receive or pay illegal kickbacks in any form," said Assistant Attorney General Jody Hunt of DOJ's Civil Division. "Improper inducements have no place in our federal healthcare system where medical decisions should be based on the healthcare needs of patients and not on a physician’s personal financial interest."
DOJ filed its complaint in a whistleblower lawsuit pending in the U.S. District Court for the District of South Dakota.
After months of feedback from payers and providers unhappy with a proposal to mandate price transparency in healthcare, the Trump administration unveiled its final rule on the topic.
Declaring "a major victory" for patient choice and affordable healthcare, President Donald Trump on Friday unveiled his administration's final rule on hospital price transparency.
"I don't know if the hospitals are going to like me too much anymore with this, but that's OK," Trump said at a White House event to announce the rule.
"We're stopping American patients from just getting, pure and simple, two very simple words: ripped off. Because they've been ripped off for years, for a lot of years," he said.
The final rule—which takes effect on January 1, 2021, one year later than initially proposed—requires hospitals to provide patients with easily accessible information about standard changes for items and services offered.
This includes making all standard charges available in a single data file that can be read by other computer systems, as well as making "shoppable services" information available on their websites in a consumer-friendly manner.
Additionally, hospitals must make information about shoppable services, which can be scheduled by patients in advance, available in a "prominent location online" and describe the information in plain language.
The Centers for Medicare & Medicaid Services also issued a separate proposed rule that would impose price transparency requirements on health insurers.
"I'm sure they'll be thrilled," Trump said of insurers. "This will allow you to see your out-of-pocket costs and other vital price information before you go in for treatment, so you're going to know what it's going to be and you're going to be able to have lots of choices, both in terms of doctors, hospitals, and price."
The final rule provides CMS with additional enforcement and auditing capabilities, including the ability to issue monetary fines of $300 per day for hospitals that don't comply.
Health and Human Services Secretary Alex Azar applauded the president for implementing "revolutionary change" to the healthcare system.
"Today's transparency announcement may be a more significant change to American healthcare markets than any other single thing we've done, by shining light on the costs of our shadowy system and finally putting the American patient in control," Azar said.
Hospitals Say They'll Sue
Not surprisingly, payer and provider stakeholders responded to the new final rule with a chorus of boos and promises of litigation.
In a joint statement, the American Hospital Association, Association of American Medical Colleges, Children's Hospital Association, and Federation of American Hospitals called the proposed rule "a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care."
"Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery," the hospital groups said.
"Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration's authority," the hospitals said.
Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals, said the final rule "would unfairly advantage health plans in negotiations with providers and threaten essential hospitals' ability to participate in networks and maintain access to services."
"Information without context—for example, how and why the cost of patient care varies among hospitals—is of little practical use to consumers," she said. "Essential hospitals typically have higher costs due to their commitment to complex services vital to communities, such as trauma and behavioral health care."
In addition, Feldpush said the final rule would create an administrative nightmare for hospitals that would hurt patient care and drive up costs.
"These policies undermine hospital'’ ability to negotiate equitable payments while giving consumers little actionable information with which to make informed care decisions," she said.
On the payer side, Matt Eyles, president and CEO of America's Health Insurance Plans, said price transparency "should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs, and should put downward pressure on premiums for consumers and employers."
"Neither of these rules—together or separately—satisfies these principles," he said.
Study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk.
When it comes to frail patients, there's no such thing as low-risk surgery.
A Vanderbilt University Medical Center-led study has determined that even a laparoscopic gallbladder removal can prove to be a high-risk and even fatal procedure for frail patients.
"It's been established that frailty is a strong predictor of complications and death related to surgery, but what we learned in this study is that frail patients have alarmingly high rates of postoperative death, no matter how minor the surgical procedure," lead author Myrick "Ricky" Shinall Jr., MD, said in a media release. "Our data indicate that there are no 'low-risk' procedures among frail patients."
"A laparoscopic cholecystectomy is one of the most common operations I do as a general surgeon, and this has really given me pause to think that for frail to very frail patients — about 10% of our sample — this is a big deal," said Shinall, an assistant professor and general surgeon at Vanderbilt University Medical Center.
The study, published this week in JAMA Surgery, looked at 432,828 patients who underwent a non-cardiac surgical procedure, and found that patients who were frail or very frail had up to 43% higher mortality rates after surgeries with low and moderate operative stress, such as minimally invasive gallbladder removal.
Patient frailty is measured before surgery by a Risk Analysis Index that assesses symptoms such as unintentional weight loss, shortness of breath, weakness, and difficulties with daily activities like walking, eating or bathing.
The study looked at patient medical records over four-years from the VA Surgical Quality Improvement Program database, a representative sample of all surgeries conducted across the country in the Veterans Health Administration. The data included patient information for a minimum of one year following surgery, and the patients' postoperative mortality was noted at 30, 90 and 180 days.
Shinall and his colleagues created an Operative Stress Score and put patients into five categories of physiologic stress, ranging from the lowest (OSS1) to the highest (OSS5). Of the study's patient sample, 8.5% were classified as frail, and 2.1% were very frail.
The 30-day mortality rates for frail patients undergoing the lowest stress operations and moderate stress operations were 1.55% and 5.13%, both exceeding the 1% mortality rate often used to define high-risk surgery.
For very frail patients, 30-day mortality rates after the lowest and moderate-stress procedures was 10.34% and 18.74%.
For frail and very frail patients, mortality continued to rise at 90 days and 180 days after surgery, reaching 43% for very frail patients 180 days after moderate-stress operations.
With such a high risk, the study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk, with patients and their families made aware of the heightened risk.
"The greatest volume of surgeries performed at hospitals are those that cause moderate operative stress, and it is expected that all procedures at ambulatory surgical centers are considered to be those with a low mortality risk, but clinicians spend little time considering whether or not their patients can actually endure the stress of surgery," Shinall said.
"It is worth pausing to assess every patient to determine whether they are frail, and if they are, taking steps to mitigate the factors contributing to their frailty before a procedure is ever scheduled or re-evaluating whether they should even undergo a procedure at all," he said.
The joint venture will use telemedicine, in-home providers, and care management oversight to provide 'all essential elements of inpatient care in the home.'
Highmark Health and Contessa are partnering to provide patients with "hospital-quality care in the comfort and convenience of their homes," the two companies said in a joint press release.
The joint venture, Home Recovery Care LLC, will use telemedicine, in-home providers, and care management oversight that the two companies claim will provide "all essential elements of inpatient care in the home."
The model is available now for some Highmark commercial plans in western Pennsylvania, and will be made available to all plan members and Medicare Advantage members in that region starting on January 1, 2020. The model may soon expand into West Virginia and Delaware.
"Creating a value-based experience that enables patients and families to heal in the home is a priority for Highmark Health," said Monique Reese, senior vice president, Home and Community Care for Pittsburgh-based Highmark Health.
"Through the Home Recovery Care Model, Allegheny Health Network will provide high-quality in-home services such as home care, home infusion, and durable medical equipment," she said.
Under the Home Recovery Care model, patients are monitored for 30 days to ensure they are sticking with physician-devised care plans, and attending follow-up appointments with primary care physicians and other specialists.
"This new collaboration with Contessa enables us to deliver on Highmark Health's mission to create a remarkable customer experience," said Highmark's Tony Farah, MD, chief medical and clinical transformation officer.
"We are laser focused on achieving the quadruple aim — to transform health care through proactively improving clinical outcomes and driving better patient and clinician experiences, thereby lowering total cost of care," he said.
