As Hospitals Post Sticker Prices Online, Most Patients Will Remain Befuddled

As Hospitals Post Sticker Prices Online, Most Patients Will Remain Befuddled

KFF Health News, January 4, 2019

Knowing chargemaster rates wouldn't necessarily help a patient fight a high balance bill.

This article first appeared January 04, 2019 on Kaiser Health News.

By Julie Appleby

As of Jan. 1, in the name of transparency, the Trump administration required that all hospitals post their list prices online. But what is popping up on medical center websites is a dog's breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.

Anyone who has ever tried to find out in advance how much a hospital test, procedure or stay will cost knows the frustration: "Nope, can't tell you" or "It depends" are common replies from insurers and medical centers.

While more information is always welcome, the new data will fall short of providing most consumers with usable insight.

That's because the price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician's charge, and more.

"I don't think it's very helpful," said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. "There are about 30,000 different items on a chargemaster file. As a patient, you don't know which ones you will use."

And there's this: Other than the uninsured and people who are out-of-network, few actually pay full charges.

The requirement to post charges online in a machine-readable format, such as a Microsoft Excel file, came in a 2018 guidance from the Trump administration that builds on rules in the Affordable Care Act. Hospitals have some leeway in deciding how to present the information — and currently there is no penalty for failing to post.

"This is a small step" toward price transparency amid other ongoing efforts, Centers for Medicare & Medicaid Services Administrator Seema Verma said in a speech in July.

But finding the chargemaster information on a hospital's website takes diligence. Patients can try typing the hospital's name into a search engine, along with the keywords "billing" or "chargemaster." That might produce a link.

Even when consumers do locate the lists, they might be stymied by seemingly incomprehensible abbreviations.

The University of California San Francisco Medical Center's chargemaster, for example, includes a $378 charge for "Arthrocentesis Aspir&/Inj Small Jt/Bursa w/o Us," which is basically draining fluid from the knee.

At Sentara in Hampton Roads, Va., there's a $307 charge for something described as a LAY CLOS HND/FT=<2.5CM. What? Turns out that is the charge for a small suture in surgery.

Which services, treatments, drugs or procedures a patient will face in a hospital stay is often unknowable. And the charge listed is just one component of a total bill. Put simply, an MRI scan of the abdomen has related costs, such as the charge for the radiologist who reads the exam.

Even something as seemingly straightforward as an uncomplicated childbirth can't easily be calculated by looking at the list.

Comparisons between hospitals for the same care can also be difficult.

An uncomplicated vaginal delivery charge at the Cleveland Clinic's main campus is $3,466.

Looking for that same information on the Minnesota Mayo Clinic's online chargemaster page shows two listings, one for $3,030, described as "labor and delivery level 1 short" and the other for $5,236, described as "labor and delivery level 2 long." But, what's a short labor? What's a long one? How is a patient who didn't go to med school supposed to know the difference?

Also, those are just the charges for the actual delivery. There are also per-day room charges for mom and the newborn, not to mention additional charges for medications, physicians and other treatments.

To get at the total estimated charge, California requires hospitals to report charges for a select number of such "bundles" of care, called "diagnosis-related groups," or DRGs, in Medicare jargon.

At the University of California-San Francisco's hospital, for example, there are two chargemaster line items for vaginal childbirth: One is $5,497 and the other is $12,632. But there's no indication how these differ. Consumers might then turn to the "bundled" cost based on those DRGs, where the ancillary costs are included. That lists the total charge for an uncomplicated childbirth at an astounding $53,184.

A UCSF spokeswoman said no officials were available to comment on this figure.

Though chargemaster rates are quite different from the lower, negotiated rates that insurers pay, they do become the basis for what patients pay who are without insurance or who are treated at hospitals outside their insurer's network. Out-of-network patients are often surprised when they get what are called "balance bills" for the difference between what their insurer pays toward their care and those full charges.

Still, even knowing chargemaster rates "would be entirely unhelpful" in fighting a high balance bill, said Barak Richman, a law professor at Duke University who has written extensively about balance bills and hospital charges.

"Chargemasters are enormous spreadsheets with incredibly complicated codes that no one short of a billing expert would be able to make sense of," he said.

Nevertheless, some experts say that merely making the charges public shines a light on the often very high — and widely varying — prices set by facilities.

Even if those charges are only "what hospitals would like to receive," posting them publicly could make hospitals "totally embarrassed by the prices," said Anderson at Hopkins.

Billing expert George Nation, a finance professor at Lehigh University, said that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers. Hospitals generally would oppose that, saying negotiated rates are a trade secret.

It's unclear that the lists will have much impact. "It's been the norm here in California for over a decade," said Jan Emerson-Shea, vice president of external affairs for the California Hospital Association. Even so, "from a practical standpoint, I'm not sure how useful this information is," she said. "What an individual pays to [the] hospital is going to be based on what their insurer covers."

That could include such things as the annual deductible, whether the facility or physicians involved in the care are in-network and other details.

"The hospital piece is just a small piece," said Ariel Levin, senior associate director for state issues at the American Hospital Association.

Still, "the biggest concern is it falls short of that end goal because it really doesn't help consumers understand what they are going to be liable for," she said.

Coverage Denied: Medicaid Patients Suffer As Layers Of Private Companies Profit

Coverage Denied: Medicaid Patients Suffer As Layers Of Private Companies Profit

KFF Health News, January 3, 2019

Government oversight fades as taxpayer money filters down through layers of companies eager to seize on Medicaid's substantial growth under the ACA. Medicaid officials say they have authority only over the health plans, not their subcontractors.

This article first appeared January 03, 2019 on Kaiser Health News.

By Chad Terhune

Marcela Villa isn't a big name in health care — but she played a crucial role in the lives of thousands of Medicaid patients in California. Her official title: denial nurse.

Each week, dozens of requests for treatment landed on her desk after preliminary rejections. Her job, with the assistance of a part-time medical director, was to conclusively determine whether the care — from doctor visits to cancer treatment — should be covered under the nation's health insurance program for low-income Americans.

She was drowning in requests, she said, and felt pressed to uphold most of the denials she saw. "If it was a high-dollar case, they tried to deny it," Villa said. "I told them you can't deny it just because it's going to cost $20,000."

Villa, 32, did not work for the government. She did not even work for an insurer under contract with the government. She worked for a company now called Agilon Health. Owned by a private equity firm, it's among the legion of private subcontractors looking to profit from Medicaid patients.

California's Medicaid program, known as Medi-Cal, has determined that the Long Beach company, which was paid to coordinate care for about 400,000 patients, improperly denied or delayed care for at least 1,400 of them, state officials confirmed. The state Department of Managed Health Care is investigating further.

The state findings, along with internal company documents and a whistleblower complaint obtained by Kaiser Health News, shine a light on the potential dangers of outsourcing care for poor people. Government oversight, not rigorous to begin with, fades as taxpayer money filters down through layers of companies eager to seize on Medicaid's substantial growth under the Affordable Care Act. Medicaid officials say they have authority only over the health plans, not their subcontractors.

In an interview, Agilon chief executive Ron Kuerbitz acknowledged that some patients experienced modest delays in care but disputed that any suffered unjustified denials. He noted that an internal investigation by the company found no evidence of "systemic" denials and that most of the problems existed before Agilon took over another firm, Primary Provider Management Co., in 2016.

"We did the right thing when it was identified," Kuerbitz said of the problems. "We disclosed it, we investigated it, and we pursued a remedial path."

Such concerns are not isolated to one company. Last year, KHN reported on similar irregularities at SynerMed, a Medicaid subcontractor that coordinated care for about 650,000 patients in California.

In response to a whistleblower complaint, the state Medicaid program said it found "widespread deficiencies" at SynerMed that put patients "in imminent danger of not receiving medically necessary healthcare services." The company's staffers had falsified documents for years to cover up improper denials of care, according to state officials.

Then SynerMed abruptly shut down, and some of its patients moved to Agilon's medical groups.

Skimping On Services?

Nearly three-quarters of the 73 million low-income Americans on Medicaid are now in managed care, in which states pay health insurers fixed monthly amounts for each enrollee to cover the range of services they need.

Under this system, keeping patients as healthy as possible is one way to make money. Another is to deny or skimp on services.

Increasingly, Medicaid plans outsource the work of managing patients' health and medical treatment to subcontractors like Agilon — passing along a share of the government money coupled with the financial risk posed by a fixed budget.

These firms can be powerful gatekeepers. They run physician groups, bear responsibility for forming doctor networks and judge whether a request for care is necessary.

Agilon is a big player in California — doing business with insurers such as Molina Healthcare and Blue Shield of California — and it's now expanding in other states like Texas and Ohio.

Primary Provider Management Co. ran several medical groups, including Vantage Medical Group with more than 5,000 physicians across Southern California. By building off PPMC's base of Medicaid enrollees in California, the New York private equity firm that owns a majority stake in Agilon — Clayton, Dubilier & Rice — sought to coordinate care in Medicaid and Medicare Advantage plans across the country. (CD&R did not respond to interview requests.)

For several years, the problems at PPMC, and then Agilon, went undetected. Then, in early 2018, Agilon disclosed to the California Department of Managed Health Care its discovery that employees had been altering records prepared for auditors, which it said was not known to top management.

According to an internal report, completed in May and obtained by KHN, staffers had been falsifying documents since at least 2014 to pass audits by health plans. Employees were changing dates, for example, to cover up delays or withholding certain files so they couldn't be reviewed.

That same month, an anonymous whistleblower sent a letter to health plans and government officials, urging them to investigate "illegal, unethical" conduct at the firm. "Senior management delays treatments for cancer patients without any regard of patient's well-being, to save their dollars," the whistleblower wrote in a two-page letter reviewed by KHN. "They brag about how profitable we are."

In response to the allegations raised by the whistleblower and state, Agilon opened another internal investigation. That second report, finished in June, found inadequate staffing to handle the volume of work, various shortcuts and practices outside industry "norms" and improperly denied claims. Both internal reports were released to the state.

A top official Inland Empire Health Plan, one of the largest Medicaid insurers in the country, said the plan also looked into Agilon's conduct and found instances in which its patients were harmed.

In an interview, Inland Empire CEO Bradley Gilbert said Agilon denied a patient's transfusions for anemia, causing the person to be hospitalized. It also improperly denied cardiac rehabilitation to a patient recovering from a heart attack, he said. Inland Empire canceled its contract with Agilon's Vantage Medical Group in August, he said.

A 'Manager Told Me To Do It'

Agilon's June report depicts an operation that was often stretched thin: Nurses were handling 120 to 200 requests for care per day, on average, with no full-time medical director to review the findings.

From 2014 until May, the company relied on a family physician who was working 10 to 12 hours a day running his own medical practice, according to the report.

Dr. Reuel Gaskins was busy seeing his own patients at the Hampton Medical Clinic in Riverside, Calif., where a red neon sign flashes "Open" in the front window. In an interview, Gaskins said he reviewed cases during breaks throughout the day and after normal work hours. He said he left Agilon in April.

Ultimately, Agilon's internal investigation found that patient care may have been denied 439 times since 2014 without a physician's review of the medical records — a potential violation of state law. Under California law, only a licensed physician or health care professional who is "competent to evaluate the specific clinical issues involved" can determine medical necessity.

Gaskins said he was not aware of allegations that medical decisions were made without his review until he was interviewed by Agilon's lawyers.

"That's inappropriate and unacceptable," he said. "It really bothered me when I heard about it."

The June report also found that Villa helped alter 20 files at the request of a supervisor in 2014 so her employer could pass an upcoming audit by an insurer.

A "manager told me to do it," Villa said in an interview. "They were so adamant that everything look perfect for the auditors."

A few days after the company's lawyers made that discovery, Agilon sent Villa home on paid leave, the nurse said. She said that when she returned to work in August, she found she had been replaced as denial nurse, and shortly after that, she was fired.

Meanwhile, in recent months, Agilon has mended its relationships with some insurers and won new Medicaid contracts.

Consumer advocates worry that the concerns surrounding Agilon and SynerMed signal a much larger problem in the burgeoning Medicaid managed-care industry.

"These private entities get very little oversight," said Linda Nguy, a policy advocate at the Western Center on Law & Poverty in Sacramento, "and there's real harm being done to patients."

How The Government Shutdown Affects Health Programs

How The Government Shutdown Affects Health Programs

KFF Health News, January 3, 2019

Outstanding bills are putting the squeeze on some important health-related initiatives as the shutdown drags on.

This article first appeared January 03, 2019 on Kaiser Health News.

By Shefali Luthra

There seems to be no end in sight for the current partial government shutdown, the third since the beginning of the Trump administration.

For the vast majority of the federal government's public health efforts, though, it's business as usual.

That's because Congress has already passed five of its major appropriations bills, funding about three-fourths of the federal government, including the Department of Health and Human Services and the Department of Veterans Affairs.

But seven bills are outstanding — including those that fund the Interior, Agriculture and Justice departments — and that puts the squeeze on some important health-related initiatives.

The shutdown itself is not about health policies. It's the result of differences of opinion between the administration and congressional Democrats regarding Trump's so-called border wall. But it's far-reaching, nonetheless. Here's where things stand:

Funding for "big-ticket" health programs is already in place, alleviating much of the shutdown's immediate potential impact.

Since HHS funding is set through September, the flagship government health care programs — think Obamacare, Medicare and Medicaid — are insulated.

That's also true of public health surveillance, like tracking the flu virus, a responsibility of the Centers for Disease Control and Prevention. The National Institutes of Health, which oversees major biomedical research, is also fine. It's a stark contrast to last January's shutdown, which sent home about half of HHS's staff.

But some other public health operations are vulnerable because of complicated funding streams.

Although the Food and Drug Administration falls under the HHS umbrella, it receives significant funding for its food safety operations through the Department of Agriculture, which is entirely caught up in the shutdown.

The USDA provided an estimated $2.9 billion last year to the FDA for these oversight efforts, which involve everything from food recalls to routine facility inspections and cosmetics regulation. Not having those dollars now means, according to the FDA contingency plan, that about 40 percent of the agency — thousands of government workers — is furloughed.

The FDA's responsibilities for drug approval and oversight are funded by user fees and are not affected. Regulation of tobacco products is also continuing.

Health services for Native Americans are also on hold.

Because Congress has yet to approve funding for the Indian Health Service, which is run by HHS but gets its money through the Department of the Interior, IHS feels the full weight of the shutdown. The only services that can continue are those that meet "immediate needs of the patients, medical staff, and medical facilities," according to the shutdown contingency plan.

That includes IHS-run clinics, which provide direct health care to tribes around the country. These facilities are open, and many staffers are reporting to work because they are deemed "excepted," said Jennifer Buschik, an agency spokeswoman. But they will not be paid until Congress and the administration reach a deal.

Other IHS programs are taking a more direct hit. For example, the agency has suspended grants that support tribal health programs, as well as preventive health clinics run by the Office of Urban Indian Health Programs.

Public health efforts by Homeland Security and the EPA face serious constraints.

The Department of Homeland Security's Office of Health Affairs assesses threats posed by infectious diseases, pandemics and biological and chemical attacks. It is supposed to be scaling back, according to the department's shutdown contingency plan. This office is just one component of the 204-person Countering Weapons of Mass Destruction Office, which is retaining about 65 employees during the funding gap.

Other DHS health workers are likely to work without pay — for instance, health inspectors at the border, said Peter Boogaard, who was an agency spokesman under the Obama administration. According to DHS's plan, the vast majority of border patrol employees will continue working through the shutdown.

The Environmental Protection Agency has also run out of funding. According to its contingency plan, it's keeping on more than 700 employees without pay, including those who work on Superfund sites or other activities where the "threat to life or property is imminent." (More than 13,000 EPA workers have been furloughed.)

That limits the agency's capacity for activities including inspecting water that people drink and regulating pesticides.

But it's not just regulation. The public health stakes are visceral — and sometimes, frankly, pretty gross.

Just look at the National Park Service, which has halted restroom maintenance and trash service for lack of funding. On Sunday, Yosemite National Park in California closed its campgrounds. On Wednesday, Joshua Tree National Park, also in California, did the same.

Why? Per a park service press release: "The park is being forced to take this action for health and safety concerns as vault toilets reach capacity."

How Sen. Orrin Hatch Changed America's Health Care

How Sen. Orrin Hatch Changed America's Health Care

KFF Health News, January 2, 2019

Utah's Orrin Hatch is leaving the Senate, after 42 years. The Republican led bipartisan efforts to provide health care to more kids and AIDS patients. He also thrived on donations from the drug industry.

This article first appeared January 02, 2019 on Kaiser Health News.

By Erik Neumann, KUER

Sen. Orrin Hatch, the Utah Republican retiring from 42 years in the Senate as a new generation is sworn in, leaves a long list of achievements in health care. Some were more controversial than others.

Hatch played key roles in shepherding the 1983 Orphan Drug Act to promote drug development for rare diseases, and the 1984 National Organ Transplant Act, which helped create a national transplant registry. And in 1995, when many people with AIDS were still feeling marginalized by society and elected leaders, he testified before the Senate about reauthorizing funding for his Ryan White CARE Act to treat uninsured people who have HIV.

"AIDS does not play favorites," Hatch told other senators. "It affects rich and poor, adults and children, men and women, rural communities and the inner cities. We know much, but the fear remains."

Hatch, now 84, co-sponsored a number of bills with Democrats over the years, often with Sen. Ted Kennedy of Massachusetts. The two men were sometimes called "the odd couple," for their politically mismatched friendship.

In 1997, the two proposed a broad new health safety net for kids — the Children's Health Insurance Program.

"This is an area the country has made enormous progress on, and it's something we should all feel proud of — and Senator Hatch should too," said Joan Alker, executive director of Georgetown University's Center for Children and Families.

Before CHIP was enacted, the number of uninsured children in America was around 10 million. Today, it's under half that.

Hatch's influence on American health care partly came from the sheer number of bills he sponsored — more than any other living lawmaker — and because he was chairman of several powerful Senate committees.

"History was on his side because the Republicans were in charge," said Dr. David Sundwall, an emeritus professor in public health at the University of Utah and Hatch's health director in the 1980s.

When Ronald Reagan was elected president in 1981, the Senate became Republican-controlled for the first time in decades. Hatch was appointed chairman of what is now known as the Health, Education, Labor and Pensions Committee. The powerful legislative group has oversight of the Food and Drug Administration, Centers for Disease Control and Prevention and the National Institutes of Health.

"He was virtually catapulted into this chairmanship role," Sundwall said. "This is astonishing that he had chairmanship of an umbrella committee in his first term in the Senate."

In 2011, Hatch was appointed to the influential Senate Finance Committee, where he later became chairman. There he helped oversee the national health programs Medicare, Medicaid and CHIP.

Hatch's growing influence in Congress did not go unnoticed by health care lobbyists. According to the watchdog organization Center for Responsive Politics, in the past 25 years of political campaign funding, Hatch ranks third of all members of Congress for contributions from the pharmaceutical and health sector. (That's behind Democratic senators who ran for higher office — President Barack Obama and presidential nominee Hillary Clinton).

"Clearly, he was PhRMA's man on the Hill," said Dr. Jeremy Greene, referring to the trade group that represents pharmaceutical companies. Green is a professor of the history of medicine at Johns Hopkins University School of Medicine. Though Hatch did work to lower drug prices, Greene said, the senator's record was mixed on the regulation of drug companies.

For example, an important piece of Hatch's legislative legacy is the 1984 Hatch-Waxman Act, drafted with then-Rep. Henry Waxman, an influential Democrat from California. While the law promoted the development of cheaper, generic drugs, it also rewarded brand-name drug companies by extending their patents on valuable medicines.

The law did spur sales of cheaper generics, Greene said. But drugmakers soon learned how to exploit the law's weaknesses.

"The makers of brand-name drugs began to craft larger and larger webs of multiple patents around their drugs," aiming to preserve their monopolies after the initial patent expired, Greene said.

Other brand-name drugmakers preserved their monopolies by paying makers of generics not to compete.

"These pay-for-delay deals effectively hinged on a part of the Hatch-Waxman Act," Greene said.

Hatch also worked closely with the dietary supplement industry. The multibillion-dollar industry specializing in vitamins, minerals, herbs and other "natural" health products, is concentrated in his home state of Utah.

"There was really no place for these natural health products," said Loren Israelsen, president of the United Natural Products Alliance and a Hatch staffer in the late 1970s.

As the industry grew, there was a debate over how to regulate it: Should it be more like food or like drugs? In 1994, Hatch sponsored the Dietary Supplement Health and Education Act, known as DSHEA, which treats supplements more like food.

"It was necessary to have someone who was a champion who would say, 'All right, if we need to change the law, what does it look like,' and 'Let's go,'" Israelsen said.

Some legislators and consumer advocacy groups wanted vitamins and other supplements to go through a tight approval process, akin to the testing the Food and Drug Administration requires of drugs. But DSHEA reined in the FDA, determining that supplements do not have to meet the same safety and efficacy standards as prescription drugs.

That legislative clamp on regulation has led to ongoing questions about whether dietary supplements actually work and concerns about how they interact with other medications patients may be taking.

DSHEA was co-sponsored by Democrat Tom Harkin, then a senator from Iowa.

While that kind of bipartisanship defined much of Hatch's career, it has been less evident in recent years. He was strongly opposed to the Affordable Care Act, and in 2018 called supporters of the heath law among the "stupidest, dumb-ass people" he had ever met. (Hatch later characterized the remark as "a poorly worded joke.")

In his farewell speech on the Senate floor in December, Hatch lamented the polarization that has overtaken Congress.

"Gridlock is the new norm," he said. "Like the humidity here, partisanship permeates everything we do."

Judge Who Invalidated Obamacare Has Been A 'Go-To Judge' For Republicans, Critics Say

Judge Who Invalidated Obamacare Has Been A 'Go-To Judge' For Republicans, Critics Say

KFF Health News, December 21, 2018

Because Judge Reed O'Connor is getting a lot of ideological lawsuits brought to him, it's making his voting record more controversial.

This article first appeared December 20, 2018 on Kaiser Health News.

By Ashley Lopez, KUT