GOP leaders are vowing to make tort reform a key part of their replacement plan for the Affordable Care Act. Critics say the political agenda isn't addressing the bigger goal of reducing overall patient harm.

This article first appeared January 3, 2017 on Kaiser Health News.

By Chad Terhune

As top Republicans see it, a medical malpractice crisis is threatening U.S. health care: Frivolous lawsuits are driving up malpractice insurance premiums and forcing physicians out of business. Doctors and hospitals live in fear of litigation, ordering excessive tests and treatments that make health care unaffordable for Americans.

That's why Republican House Speaker Paul Ryan and Rep. Tom Price, tapped to be the nation's top health official by President-elect Donald Trump, are vowing to make tort reform a key part of their replacement plan for the Affordable Care Act.

But, according to researchers and industry experts, the reality doesn't match the GOP rhetoric. They say the nation's medical malpractice insurance industry is running smoothly and the last crisis dates back more than a decade.

"It's a wonderful time for doctors looking for coverage and it's never been better for insurers," said Michael Matray, editor of Medical Liability Monitor, a trade publication.

Doctors are paying less for malpractice insurance than they did in 2001 — without any inflation adjustment, according to the Doctors Company, one of the nation's largest malpractice insurers. And the rate of claims has dropped by half since 2003.

"It's a time of relative calm and this hasn't been a front burner issue or crisis," said Nicholas Pace, a researcher who studies the civil justice system at the Rand Corp., a nonprofit think tank. "But now Republicans see an opportunity to make changes they have wanted for a long time as they replace Obamacare."

Their proposals would make it easier for doctors to defend themselves in malpractice cases and raise the burden of proof on patients claiming to have been injured. Many Republicans also back sharp limits on damage awards, often citing California's landmark law capping noneconomic damages at $250,000 as a national model.

Price, an orthopedic surgeon in the Atlanta area for more than 20 years, has long championed "lawsuit abuse reform" as a way to reduce the nation's runaway health spending.

"We waste hundreds of billions of dollars due to lawsuit abuse in this country and the practice of defensive medicine," Price said in June at a press conference to promote the House Republicans' replacement plan for the health law. "Instead of just putting a Band-Aid on it, we propose a bold and robust solution."

But any such savings are vastly overstated, experts say. They warn that Republicans risk going too far in reducing consumer access to the justice system and fair compensation for medical mistakes.

Some academics and consumer advocates say the GOP political agenda isn't addressing the bigger goal of reducing overall patient harm. This year, researchers estimated that medical errors claim more than 250,000 lives annually, which would make it the nation's third-leading cause of death behind heart disease and cancer.

"What strikes me about these current proposals is that they really represent the agenda of medical professionals, which is all about limiting liability," said Michelle Mello, a Stanford University law professor and health researcher. "To take any malpractice reform seriously, it has to offer something to improve the situation of patients and lead to safer outcomes."

Although the costs are tough to quantify, studies suggest that about 3 percent of the nation's $3.2 trillion in health care spending, nearly $100 billion, is related to malpractice cases and defensive medicine (ordering unnecessary tests and treatments to protect against litigation). That's a considerable sum, but researchers have found that stronger legal protections don't necessarily change physician behavior and produce less expensive care.

House Republicans contend the costs are far greater — more than $300 billion annually. In a 2010 interview, Price went even higher, suggesting that defensive medicine accounted for a quarter of all U.S. health care spending.

Now Price and a Republican-controlled Congress are in a position to put their ideas for tort reform into law. Limits on malpractice damages are a perennial favorite of conservatives who say the current system merely serves trial lawyers fishing for a big payday.

Price's proposed legislation for replacing the Affordable Care Act doesn't include a cap on damage awards. But he has supported Ryan's "Better Way" plan that specifically cites the pioneering financial limits imposed in California as an effective solution.

California and other states "have shown that such reforms result in an increase in doctors, increased access to specialists, and reduction in medical liability insurance premiums," Ryan's plan says.

More than 30 states already have some form of cap on damages in malpractice suits. To varying extents, both industry officials and researchers credit state efforts to rein in litigation and payouts with helping to contain costs. Insurers say they're doing well but would welcome tort reform at a national level.

Researchers caution that caps are hardly the only factor in keeping premiums down, saying economic cycles and insurers' investment returns are also important forces. And they note that courts have struck down caps in some states as ineffective or unconstitutional.

Meanwhile, plaintiffs' lawyers say damage caps make them reluctant to take on cases, given the money often required for expert witnesses and trial preparation.

The caps "have some modest effects on costs, but it comes at a price of people being able to access the civil justice system," Mello said.

Caps on noneconomic damages for "pain and suffering" can also disproportionately hurt women and the elderly, who more often can't get significant economic damages because they aren't big wage earners.

California imposed its cap of $250,000 on noneconomic damages in 1975 and it has never been increased to keep pace with inflation.

A Rand study examined the outcomes in 257 medical malpractice trials in California during the late 1990s. The cap was triggered in nearly half of the cases that plaintiffs won, and the overall amount of damages was cut by 30 percent, from $421 million to $295 million.

That state law wiped out most of a $7 million jury award for noneconomic "pain and suffering" damages to the family of Steven Olsen in 1994. At 2 years old, Steven suffered brain damage and went blind after his doctors failed to administer a scan that would have detected an abscess on his brain, his family said.

Scott Olsen, Steven's father, said he left his job recently as a technical writer in Chula Vista, Calif., to care for his 26-year-old son, who can't feed or dress himself.

The family received $4 million in economic damages as part of the litigation. But Scott Olsen said "it's immoral that a jury doesn't get to decide the severity of the injury." He said those damage awards hold medical providers accountable and help prevent the same mistakes from hurting more patients.

A 2014 ballot measure that would have raised the California cap to more than $1.1 million failed to pass, garnering support from only a third of voters.

Another key proposal from Price calls for establishing clinical practice guidelines for physicians to follow and use to defend malpractice claims — an idea that has attracted bipartisan support in the past.

"If your doctor does the right thing for a given diagnosis or a given set of symptoms, they ought to be able to use it as an affirmative defense in a court of law," Price said in June at an event sponsored by the conservative American Enterprise Institute.

Experts say that only about 15 percent of malpractice cases would be affected by the adoption of clinical guidelines.

Price also has a more controversial proposal — to fund the creation of state-run tribunals to rule on injury claims. It would require patients to prove gross negligence by doctors, a higher legal standard than in civil court, and would create panels of medical experts to screen cases for merit.

Given all the competing assertions and proposals out there, and differing views even among Republicans, health policy experts urge a cautious approach on tort reform.

"You need solid empirical evidence before you move forward on national malpractice reform, not anecdotes or horror stories from a particular county in western New Hampshire," said Rand's Pace. "That is not how you decide to overhaul the entire system."

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

New data shows bundled payments for joint replacement surgery could save Medicare billions of dollars — without impacting patient care. Tom Price, the president elect's HHS nominee, has actively opposed the idea.

This article first appeared January 3, 2017 on Kaiser Health News.

By Rachel Bluth

A recent change in the way Medicare pays for joint replacements is saving millions of dollars annually — and could save billions — without impacting patient care, a new study has found. But the man Donald Trump has picked to be the secretary of Health and Human Services has vocally opposed the new mandatory payment program and is likely to revoke it.

Under the new program, Medicare effectively agrees to pay hospitals a set fee — a bundled payment — for all care related to hip or knee replacement surgery, from the time of the surgery until 90 days after. Traditionally hospitals collect payments for many components of care and rehabilitation individually.

Tom Price, the president elect's HHS nominee, a congressman from Georgia and an orthopedic surgeon, has actively opposed the idea of mandating bundled payments for these orthopedic operations, calling it "experimenting with Americans' health," in a letter to the Medicare agency just last September. In addition, the agency which designed and implemented the experiment, the Center for Medicare and Medicaid Innovation, was created by the Affordable Care Act to devise new methods for encouraging cost-effective care. It will disappear if the act is repealed, as President-elect Trump has promised to do.

The study appeared Tuesday in the Journal of the American Medical Association. Though one of its authors is Dr. Ezekiel Emanuel, a professor at the University of Pennsylvania who helped design the ACA, the research relies on Medicare claims data from 2008 through mid-2015, long before the presidential election.

Starting in April 2016, CMS required around 800 hospitals in 67 cities to use the bundled payment model for joint replacements and 90 days of care after the surgery as part of the Comprehensive Care for Joint Replacement program. The program had previously been road-tested on a smaller number of hospitals on a voluntary basis, which formed the focus of the research.

The study found that hospitals saved an average of 8 percent under the program, and some saved much more. Price has been skeptical that bundled payments did save money, but the researchers estimate that if every hospital used this model, it would save Medicare $2 billion annually.

The bundled payment program works like this: For some specific kinds of medical procedures, including joint replacements or some heart surgeries, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterwards. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. It's supposed to incentivize more efficient spending and better care coordination between providers, so they can lower costs.

In practice, it seems to be working. Baptist Health System, a network of five hospitals in San Antonio, saved an average of $5,577 on each joint replacement without sacrificing the quality of care, according to the study. Baptist was an early adopter of bundled payments; it began experimenting with them in 2008. Over seven years, the hospital system has cut Medicare's costs on knee replacements by almost 21 percent.

The savings came without impacting quality. Patients at Baptist Health System were just as likely to be readmitted to the hospital or end up in the emergency room as patients nationally. There was some indication that quality of care may be better, fewer patients under bundled payments had long, extended hospital stays.

In Price's letter from September, he said that Medicare had exceeded its powers in imposing such bundled payments, which he said took decisions out of the hands of doctors and patients.

That doesn't seem to be the case, according to Dr. Amol Navathe, an assistant professor of medicine and health policy at the University of Pennsylvania, and one of the authors of the JAMA study. Instead, Navathe and his colleagues suggest that the bundled payments actually fostered greater collaboration between surgeons, administrators and patients because programs could only succeed in saving money if physicians were engaged in creating standardized pathways for care.

For example, the Baptist Health System saved about 30 percent on implant costs, around $2,000 on each artificial joint, by using the least expensive medically equivalent implants as determined by the hospitals' surgeons.

Usually, physicians are prevented from benefitting when hospitals save money because of anti-kickback laws. Waivers under bundled payment models mean surgeons can put in the time to find the best, most cost-effective implants, and share in some of that savings.

"It takes that extra level of effort and coordination, and proactively communicate with [patients]," Navathe said. "Preplanning, setting of expectations and communicating up-front is resource intensive, when they have the incentive to do that they were willing to expend the extra resources to make that happen."

When bundles included care after a patient's hospital stay, spending on rehabilitation went down 54 percent. That's because hospitals took the time to match patients to the right level of care, Navathe said.

Patients who didn't need to stay in a nursing home or rehab center were set up with home health care or physical therapy.

Price has objected to CMS making bundled payments mandatory, calling it an instance of federal overreach. But bundled payments only work if everyone has to participate, according to Darshak Sanghavi, the former director of prevention and population health at the Center for Medicare and Medicaid Innovation.

If hospitals can choose whether or not to participate, only the ones that are already delivering care efficiently –and coming in under CMS's cost target — will use bundles and Medicare will constantly be paying out bonuses. The system needs to be mandatory, Sanghavi said, to pull in less efficient hospitals and give them incentive to change.

"Stopping the programs for ideological reasons I think impedes innovation in a way that is going to consign us to having really, really high costs of care that's going to continue in the future," Sanghavi said.

Bundled payments aren't just for hip and knee replacements. On December 20, CMS announced it would expand mandatory bundled payments to treatments for heart attacks, bypass surgery and cardiac rehab beginning in July 2017. In its waning days, the Obama Administration is effectively throwing down the gauntlet to the incoming administration on bundled payments, one of its signature reforms.

Under the new rules, physicians will be compensated for legwork involved in working in teams — including nurses, social workers and psychiatrists — to improve care for seniors with illnesses such as diabetes, heart failure and hypertension.

This article first appeared December 22, 2016 on Kaiser Health News.

By Judith Graham

Doctors have complained for years that they're not paid adequately for time-consuming work associated with managing care for seriously ill older patients: consulting with other specialists, talking to families and caregivers, interacting with pharmacists and more.

That will change on Jan. 1, as a new set of Medicare regulations go into effect.

Under the new rules, physicians will be compensated for legwork involved in working in teams — including nurses, social workers and psychiatrists — to improve care for seniors with illnesses such as diabetes, heart failure and hypertension.

Care coordination for these "high need" patients will be rewarded, as will efforts to ensure that seniors receive effective treatments for conditions such as anxiety or depression.

Comprehensive evaluations of older adults with suspected cognitive impairment will get a lift from new payments tied to the standards that physicians now will be required to follow.

The new Medicare policies reflect heightened attention to the costliest patients in the health care system — mostly older adults who have multiple chronic conditions that put them at risk of disability, hospitalization, and an earlier-than-expected death. Altogether, 10 percent of patients account for 65 percent of the nation's health spending.

It remains to be seen how many physicians will embrace the services that the government will now reimburse. Organizations that advocated for the new payment policies hope they'll make primary care and geriatrics more attractive areas of practice in the years ahead.

Here's a look at what is entailed:

Complex Chronic Care Management
Two years ago, Medicare began paying nurses, social workers and medical assistants to coordinate care for seniors with two or more serious chronic conditions. But low reimbursement and burdensome requirements discouraged most medical practices from taking this on.

New payments for "complex chronic care management" are more generous (an average $93.67 for the first hour, $47.01 for each half hour thereafter) and can be billed more often, making them more attractive.

They'll cover services such as managing seniors' transitions from the hospital back home or to a rehabilitation center, coordinating home-based services, connecting patients with resources, and educating caregivers about their conditions.

Many practices will be able to hire care managers with this new financial support, said Dr. Peter Hollmann, secretary of the American Geriatrics Society and chief medical officer of University Medicine, a medical group practice associated with Brown University's medical school.

To illustrate the benefits, he tells of a recent patient, with diabetes, hypertension and heart failure who was retaining fluid and had poorly controlled blood sugar. After a care manager began calling the 72-year-old man every few days, asking if he was checking his blood sugar or gaining weight, Hoffmann adjusted doses of insulin and diuretics.

"The patient remained at home and he's doing well, and we likely prevented a hospitalization," Hoffmann said.

Cognitive Impairment Assessment
Making a dementia diagnosis is difficult, and primary care physicians often fail to do so on a timely basis. But new Medicare policies may help change that by specifying what cognitive examinations should entail and offering enhanced payments.

Physicians who conduct these evaluations are now expected to meet 10 requirements. In addition to performing a careful physical exam and taking a detailed history, they need to assess an older adult's ability to perform activities of daily living, their safety, behavioral and neuropsychiatric symptoms, and caregivers' knowledge, needs and abilities.

All the medications the senior is taking should be evaluated, and standardized tests used to assess cognition. Efforts to elicit the patient's goals and values need to occur in the context of advance planning, and a care plan must be crafted and shared with caregivers.

Medicare will pay $238.30 for the initial assessment and additional fees for creating a care plan and performing care management.

"Hopefully, this will kick start the development of practices that provide these dementia-related services," said Dr. Robert Zorowitz, senior medical director at OptumCare CarePlus, a managed Medicare long-term care program in New York City.

Care Between Patient Visits
Until now, the rule has been: if the doctor is with a patient, he can bill for his time. But if he takes home medical records to review at night or talks by phone with a caregiver who's concerned about her elderly mother, that time goes unpaid.

That will change next year: Medicare will begin paying $113.41 for the first hour spent in these kind of activities and $54.55 for every subsequent half hour.

For the first time, "this recognizes the significant and valuable services that physicians perform in between face-to-face visits," said Dr. Phillip Rodgers, co-chair of the public policy committee at the American Academy of Hospice and Palliative Medicine.

Physicians will also get extra reimbursement for extra time they spend in person with complex patients or their caregivers.

Dr. Paul Tatum, an associate professor of clinical family and community medicine at the University of Missouri School of Medicine recently scheduled a half hour for a patient in his mid-70s with high blood pressure, kidney disease, skin issues and cognitive impairment. But the visit ran to 90 minutes when it became clear the gentleman was more confused than ever, falling, not eating well, not taking medications, and needed more help.

"Much of what we did for this patient fits in the new Medicare codes, which recognize the extent of what's needed to care for people with complex illnesses," the doctor said.

Integrating Behavior Health
Research has shown the seniors with depression — a frequent complication of serious illness — benefit when primary care physicians collaborate with psychologists or psychiatrists and care managers track their progress.

Now, Medicare will begin paying $142.84 for the first 70 minutes that physicians and behavioral health providers work together, $126.33 for the next hour, and $66.04 per half hour for a care manager who stays in touch with patients and tracks whether they're improving.

Care managers may work on site or off; psychologists and psychiatrists will be called for consultations, as needed.

"Accessing mental health services is a really big problem for my patients, and having professionals ready to work with me and compensated to do so will be extraordinarily valuable," said Rodgers of the hospice and palliative medicine academy.

KHN's coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Many health insurance plans pay for aid-in-dying drugs, but some don't, and the medications aren't covered by federal programs such as Medicare or Catholic-run health care systems. That can create a barrier for terminally ill patients who want to use the law.

This article first appeared December 1, 2016 on Kaiser Health News.

By JoNel Aleccia

As Colorado's aid-in-dying law takes effect this month, proponents say they'll make sure terminally-ill patients have access to a new, affordable drug concoction that will avoid the $3,000 cost of a common lethal sedative that has skyrocketed in price.

Officials with Compassion & Choices, an advocacy group, are reaching out to pharmacies statewide to confirm that they'll stock components of a lethal four-drug cocktail to substitute for secobarbital, known as Seconal, the pricey sleeping pill most often prescribed to induce death.

It's the second time in a year that right-to-die advocates have come up with a substitute for Seconal after Canadian drugmaker Valeant Pharmaceuticals International Inc. acquired the medication in February 2015 — and abruptly doubled the $1,500 retail price.

"We were looking for something more affordable and available," said Kat West, an attorney and policy expert with Compassion & Choices.

The new law, which was passed by a two-thirds majority, was signed into law on Dec. 16 by Gov. John Hickenlooper. Colorado joins five other states — Oregon, Washington, Vermont, Montana and California — in which terminally ill patients, usually those expected to live six months or less, can choose to take doctor-prescribed drugs to end their lives. In Oregon, at least 991 patients have died after taking drugs prescribed since the law took effect in 1997. In Washington state, at least 917 have died under terms of the law enacted in 2009.

Access to the medications can depend, in part, on cost. Many health insurance plans pay for aid-in-dying drugs, advocates said, but some don't, and the medications aren't covered by federal programs such as Medicare or Catholic-run health care systems. Medicaid programs for the poor and disabled in Oregon and California will pay, but not those in Washington state, Vermont or Montana. In Colorado, it's still unclear.

That can create a barrier for terminally ill patients who want to use the law, said Beth Glennon, a client-support coordinator for End of Life Washington, an advocacy group.

"The cost does affect people's decisions," Glennon said.

As of March, the latest data available, a bottle of 100 capsules of 100-milligram Seconal had a retail price of $3,082, according to data from Truven Health Analytics. Ten grams is a lethal dose.

When Oregon's law began, the cost was about $150, recalled Dr. David Grube, national medical director for Compassion & Choices and a family doctor who has practiced in the state for nearly 40 years. He calls the price hikes "an almost-evil practice of greed."

"I think it's the black side of capitalism," he said. "It really breaks my heart."

Valeant officials didn't respond to requests for comment, but in March firm officials issued a statement saying that secobarbital is approved only for treating short-term insomnia, epilepsy and for use in pre-operative anesthesia.

"If it is being prescribed for off-label uses, it is not something for which the product is manufactured or intended," the statement said.

To fight the high prices, doctors in Washington state experimented last year with a cheaper mixture that included three drugs — phenobarbital, chloral hydrate and morphine sulfate. The components are widely available and cost about $500 for a lethal dose. But the combination turned out to be too harsh, said Dr. Robert Wood, a volunteer medical adviser for End of Life Washington.

"The chloral hydrate mixture was too caustic for some folks and our volunteers didn't like using it," because some patients became distressed, Wood said.

Most doses of lethal medication are bitter, often requiring patients to take anti-nausea drugs. But the new mixture was not only bitter but also caused a burning sensation in the mouths of some patients, said Glennon. "There was some profound burning," she said. "We didn't like working with it. As a volunteer, you want to reassure people. We're about a peaceful, dignified death."

Wood and his colleagues came up with a new option this summer, a four-drug mixture that includes diazepam, digoxin, morphine and propranolol, known as DDMP. It costs between $300 and $600.

The mixture, which puts patients to sleep and then halts their heartbeat and breathing, has been used 38 times so far, Wood said.

"It is no more difficult than Seconal to ingest and it seems to work quite well," he added.

The mixture has been used "a fair amount" in California, where an aid-in-dying law took effect in June, said Grube. It's not yet known how many terminally-ill patients have died under that state's law, but dozens have requested prescriptions, officials said.

Valeant was widely criticized for raising the price of secobarbital, a popular sedative in the 1960s and 1970s that lost its patent status in the early 1990s. It has been used for aid-in-dying patients since Oregon passed the first U.S. law in 1997, which was modeled on similar action in the Netherlands, where secobarbital was the drug of choice.

Another sedative, pentobarbital, was also frequently used, but supplies in the U.S. became expensive and scarce after European drugmakers objected to its use as an execution drug in death penalty cases.

Doctors and pharmacists are not obligated to participate in aid-in-dying treatment under existing laws, including the Colorado action. In a recent poll, about 40 percent of more than 600 doctors surveyed said they would be willing to prescribe lethal medication, 42 percent said they wouldn't and 18 percent weren't sure, noted Dr. Cory Carroll, a solo practice family physician in Fort Collins, Colo., who endorsed the measure.

"The docs that are in opposition have a right to their beliefs, but they don't have the right to control others," Carroll said in a recent press conference.

West of Compassion & Choices anticipates that Colorado's law will be used immediately, as similar laws in other states have been.

"We're already getting calls from terminally ill people in Colorado who want to access this law," she said. "I fully expect people to begin requesting prescriptions."