Colorado has emerged as a potential model for revamping health care in other states — and provided a glimpse of what a sweeping Democratic victory in November might mean for Americans.
This story was first published on Friday, February 28, 2020 in Kaiser Health News.
DENVER — With the nation’s capital mired in gridlock and the Affordable Care Act facing a dire legal challenge, the prospects of lowering health care costs for Americans this year seem unlikely.
Just don’t tell that to Coloradans.
Democratic majorities in the state House and Senate and a Democratic governor eager to push aggressive health care measures have turned Colorado into one of the foremost health policy laboratories in the country. State lawmakers have taken swift action on many of the same health issues being debated at the federal level, including a government-run health plan known as a public option, surprise medical billing, drug importation and high drug costs.
Colorado has emerged as a potential model for revamping health care in other states — and provided a glimpse of what a sweeping Democratic victory in November might mean for Americans.
“From a national perspective, this is known as one of the cool places for health care reform, where people are trying new ideas, where there is leadership, where there is community, where there are all the critical elements to get something done,” said Dr. Jay Want, executive director of the Peterson Center for Healthcare, a New York-based health policy think tank.
Full Speed Ahead
Colorado’s push started in earnest when Gov. Jared Polis took office in January 2019 with the promise of helping consumers cut health care costs. He literally created an Office of Saving People Money on Health Care in his first month on the job. What followed was a four-month legislative session in which lawmakers pushed through a decade’s worth of health care bills.
“You can argue it was the most consequential legislative session for health care since Colorado expanded Medicaid much earlier this decade,” said Joe Hanel, director of communications for the Colorado Health Institute, a nonpartisan nonprofit focused on health policy analysis.
Lawmakers passed a reinsurance bill that shielded insurance plans from the costs of their sickest patients, resulting in a 20% drop in 2020 premiums for Coloradans who buy their coverage on the individual market, not through their employers.
Surprise billing protections, which took effect Jan. 1, cap what out-of-network doctors or other medical providers can charge when patients receive services in hospitals that are not part of their insurance network. The new provision establishes an arbitration process for ongoing billing disputes.
Legislators capped copays for insulin at $100 per month and approved the importation of drugs from Canada, once federal authorities establish the process for doing so.
And the legislature authorized the Polis administration to develop a public option proposal that would provide competition to private insurance carriers selling plans on the individual market.
Hanel said state officials have taken an aggressive approach to reining in health care costs.
“They’ve really transformed their agencies in a short year or so,” he said.
For example, Colorado Insurance Commissioner Michael Conway has shifted the Division of Insurance from mainly an actuarial agency reviewing rate filings into more of an advocate for consumers. The division is developing a standard for insurance that would consider whether premiums are affordable when approving insurance rates.
A Public Option
This year, the legislature will decide whether to implement the public option plan developed by the Polis administration.
While many thought that plan would create a government-run alternative to private insurance similar to a Medicare plan open to anyone, the final draft retains a role for insurance companies in administering public option plans.
The plan would also benchmark hospital payment rates to a percentage above what Medicare pays, developing a formula to adjust those rates for each hospital. A small rural hospital would be paid differently from a large urban hospital, while independent hospitals would be paid differently from chain hospitals.
Insurance carriers would be limited to using no more than 15% of total premiums collected for administrative costs and profits, which is lower than the Affordable Care Act cap. They would also be required to use any rebates from drug companies to reduce patients’ premiums. The state is asking legislators for the authority to force hospitals and health plans to participate if they won’t do so voluntarily.
“What Colorado is doing is very innovative. There is really only one other state, Washington state, that is doing anything comparable to a public option,” said Billy Wynne, a Washington, D.C.-based health policy consultant who recently formed the Public Option Institute. “Other states have been looking at it and will pursue similar programs in the future, especially if [Colorado] can pull off the ‘triple lindy’ and make this successful.”
Industry Pushback
Hospital representatives have expressed skepticism about the public option plan, which they see as mainly targeting hospitals to achieve savings.
“The rate-setting as it is currently proposed is a 40% hit to some hospitals,” said Katherine Mulready, senior vice president and chief strategy officer of the Colorado Hospital Association, which represents more than 100 hospitals. Hospitals and other providers, she said, may not be able to maintain the same level of services and access now available.
But state officials point to recent studies suggesting prices at Colorado hospitals are among the most expensive in the country: A Rand Corp. study found that Colorado hospitals charge three to four times the Medicare rate, and an analysis of the Denver market showed the area’s 27 hospitals netted a combined $2 billion in pretax profits in 2018, with average profit margins exceeding 19%.
Hospitals say they must charge higher rates to privately insured patients to make up for the shortfall from Medicare, Medicaid and uninsured patients. But the state released a report in January showing that even when Medicaid rates went up and the need for charity care went down, hospitals still raised their prices.
“We’re getting close to the mark because some of the hospitals and pharmaceutical companies sent out a mailer against the public option,” Polis said in a Jan. 14 public forum on the proposal. “We must be getting something right if they’re that worried about it. But it also adds insult to injury for those of us who are consumers of medical services … to know they’re using some of that money from overcharging to lobby against reforms that are saving people money. That is rubbing salt in the wounds.”
Insurers are also wary of the plan.
“We are very concerned — and I would say opposed — that the government will tell us the product, the price and the place that we have to sell,” said Amanda Massey, executive director of the Colorado Association of Health Plans. “That is fundamentally opposed to private business and competition.”
The Colorado Medical Society, which represents physicians, issued a statement generally supporting the goals of the public option plan but didn’t go so far as to endorse it.
Blueprint For The Nation?
The public option would initially be available only to those consumers who buy policies on the individual market in 2022, estimated to be fewer than 7% of the state’s population. State officials said that they plan to later expand to the small-group market and that they expect the lower prices will put pressure on rates for large-group employer-sponsored plans as well.
The proposal, while not as disruptive as a “Medicare for All” or single-payer approach, represents a step toward government-run health care.
“What the state is doing is intervening, to some degree, in commercial negotiations between plans and hospitals,” Wynne said. “Let’s be honest: The state will be leaning on hospitals on their participation and reimbursement rate, and that is a tremendous benefit to health plans.”
Colorado’s approach could provide a blueprint for any moderate Democratic presidential candidates promoting a public option on the national level, much in the way Massachusetts provided the basic framework for the Affordable Care Act.
“Colorado is doing it and is ahead of the curve,” Wynne said. “If one of those people wins, they’re going to be looking to this state as a model for what to try to help other states do.”
Locally, Democrats also are betting that by addressing what Coloradans have identified as their highest priority — reducing the cost of health care — they’ll be well positioned to build on their state majority in the 2020 elections.
“I haven’t met a single voter,” Polis quipped recently, “who said, ‘I don’t pay enough for my health care.’”
For much of the 20th century, medical progress seemed limitless.
Antibiotics revolutionized the care of infections. Vaccines turned deadly childhood diseases into distant memories. Americans lived longer, healthier lives than their parents.
Even as the world struggles to control a mysterious new virus known as COVID-19, U.S. health officials are refighting battles they thought they had won, such ashalting measles outbreaks, reducing deaths from heart disease and protecting young people from tobacco. These hard-fought victories are at risk as parents avoid vaccinating children, obesity rates climb, and vaping spreads like wildfire among teens.
Things looked promising for American health in 2014, when life expectancy hit 78.9 years. Then, life expectancy declined for three straight years — the longest sustained drop since the Spanish flu of 1918, which killed about 675,000 Americans and 50 million people worldwide, said Dr. Steven Woolf, a professor of family medicine and population health at Virginia Commonwealth University.
Although life expectancy inched up slightly in 2018, it hasn't yet regained the lost ground, according to the Centers for Disease Control and Prevention.
"These trends show we're going backwards," said Dr. Sadiya Khan, an assistant professor of cardiology and epidemiology at Northwestern University Feinberg School of Medicine.
While the reasons for the backsliding are complex, many public health problems could have been avoided, experts say, through stronger action by federal regulators and more attention to prevention.
"We've had an overwhelming investment in doctors and medicine," said Dr. Sandro Galea, dean of the Boston University School of Public Health. "We need to invest in prevention — safe housing,good schools, living wages, clean air and water."
Superbugs — resistant to even the strongest antibiotics — threaten to turn back the clock on the treatment of infectious diseases. Resistance occurs when bacteria and fungi evolve in ways that let them survive and flourish, in spite of treatment with the best available drugs. Each year, resistant organisms cause more than 2.8 million infections and kill more than 35,000 people in the U.S.
With deadly new types of bacteria and fungi ever emerging, Dr. Robert Redfield, the CDC director, said the world has entered a "post-antibiotic era." Half of all new gonorrhea infections, for example, are resistant to at least one type of antibiotic, and the CDC warns that "little now stands between us and untreatable gonorrhea."
That news comes as the CDC also reports a record number of combined cases of gonorrhea, syphilis and chlamydia, which were once so easily treated that they seemed like minor threats compared with HIV.
The United States has seen a resurgence of congenital syphilis, a scourge of the 19th century, which increases the risk of miscarriage, permanent disabilities and infant death. Although women and babies can be protected with early prenatal care, 1,306 newborns were born with congenital syphilis in 2018 and 94 of them died, according to the CDC.
Those numbers illustrate the "failure of American public health," said Dr. Cornelius "Neil" Clancy, a spokesperson for the Infectious Diseases Society of America. "It should be a global embarrassment."
The proliferation of resistant microbes has been fueled by overuse, by doctors who write unnecessary prescriptionsas well as farmers who give the drugs to livestock, said Dr. William Schaffner, a professor of preventive medicine at Vanderbilt University Medical Center in Nashville, Tennessee.
Although new medications are urgently needed, drug companies are reluctant to develop antibiotics because of the financial risk, said Clancy, noting that two developers of antibiotics recently went out of business. The federal government needs to do more to make sure patients have access to effective treatments, he said. "The antibiotic market is on life support," Clancy said. "That shows the real perversion in how the health care system is set up."
A Slow Decline
A closer look at the data shows that American health was beginning to suffer 30 years ago. Increases in life expectancy slowed as manufacturing jobs moved overseas and factory towns deteriorated, Woolf said.
By the 1990s, life expectancy in the United States was falling behind that of other developed countries.
The obesity epidemic, which began in the 1980s, is taking a toll on Americans in midlife, leading to diabetes and other chronic illnesses that deprive them of decades of life. Although novel drugs for cancer and other serious diseases give some patients additional months or even years, Khan said, "the gains we're making at the tail end of life cannot make up for what's happening in midlife."
Progress against overall heart disease has stalled since 2010. Deaths from heart failure — which can be caused by high blood pressure and blocked arteries around the heart — are rising among middle-aged people. Deaths from high blood pressure, which can lead to kidney failure, also have increased since 1999.
"It's not that we don't have good blood pressure drugs," Khan said. "But those drugs don't do any good if people don't have access to them."
Addicting A New Generation
While the United States never declared victory over alcohol or drug addiction, the country has made enormous progress against tobacco. Just a few years ago, anti-smoking activists were optimistic enough to talk about the "tobacco endgame."
Today, vaping has largely replaced smoking among teens, said Matthew Myers, president of the Campaign for Tobacco-Free Kids. Although cigarette use among high school students fell from 36% in 1997 to 5.8% today, studies show 31% of seniors used electronic cigarettes in the previous month.
FDA officials say they've taken "vigorous enforcement actions aimed at ensuring e-cigarettes and other tobacco products aren't being marketed or sold to kids." But Myers said FDA officials were slow to recognize the threat to children.
With more than5 million teens using e-cigarettes, Myers said, "more kids are addicted to nicotine today than at any time in the past 20 years. If that trend isn't reversed rapidly and dynamically, it threatens to undermine 40 years of progress."
Ignoring Science
Where children live has long determined their risk of infectious disease. Around the world, children in the poorest countries often lack access to lifesaving vaccines.
Yet in the United States — wherea federal program provides free vaccines — some of the lowest vaccination rates are in affluent communities, where some parents disregard the medical evidence that vaccinating kids is safe.
Studies show that vaccination rates are drastically lower in some private schools and "holistic kindergartens" than in public schools.
It could be argued that vaccines have been a victim of their own success.
Before the development of a vaccine in the 1960s, measles infected an estimated 4 million Americans a year, hospitalizing 48,000, causing brain inflammation in about 1,000 and killing 500, according to the CDC.
"Now, mothers say, 'I don't see any measles. Why do we have to keep vaccinating?'" Schaffner said. "When you don't fear the disease, it becomes very hard to value the vaccine."
Last year, a measles outbreak in New York communities with low vaccination rates spread to almost 1,300 people — the most in 25 years — and nearly cost the country its measles elimination status. "Measles is still out there," Schaffner said. "It is our obligation to understand how fragile our victory is."
Health-Wealth Disparities
To be sure, some aspects of American health are getting better.
Cancer death rates have fallen 27% in the past 25 years, according to the American Cancer Society. The teen birth rate is at an all-time low; teen pregnancy rates have dropped by half since 1991, according to the Department of Health and Human Services. And HIV, which was once a death sentence, can now be controlled with a single daily pill. With treatment, people with HIV can live into old age.
Yet the health gap has grown wider in recent years. Life expectancy in some regions of the country grew by four years from 2001 to 2014, while it shrank by two years in others, according to a2016 study in JAMA.
The gap in life expectancy is strongly linked to income: The richest 1% of American men live 15 years longer than the poorest 1%; the richest women live 10 years longer than the poorest, according to the JAMA study.
"We're not going to erase that difference by telling people to eat right and exercise," said Dr. Richard Besser, CEO of the Robert Wood Johnson Foundation and former acting director of the CDC. "Personal choices are part of it. But the choices people make depend on the choices they're given. For far too many people, their choices are extremely limited."
The infant mortality rate of black babies is twice as high as that of white newborns, according to the Department of Health and Human Services. Babies born to well-educated, middle-class black mothers are more likely to die before their 1st birthday than babies born to poor white mothers with less than a high school education, according to a report from the Brookings Institution.
In trying to improve American health, policymakers in recent years have focused largely on expanding access to medical care and encouraging healthy lifestyles. Today, many advocate taking a broader approach, calling for systemic change to lift families out of the povertythat erodes mental and physical health.
Several policies have been shown to improve health.
Children who receive early childhood education, for example, have lower rates of obesity, child abuse and neglect, youth violence and emergency department visits, according to the CDC.
And earned income tax credits — which provide refunds to lower-income people — have been credited with keeping more families and children above the poverty line than any other federal, state or local program, according to the CDC. Among families who receive these tax credits, mothers have better mental health and babies have lower rates of infant mortality and weigh more at birth, a sign of health.
Improving a person's environment has the potential to help them far more than writing a prescription, said John Auerbach, president and CEO of the nonprofit Trust for America's Health.
"If we think we can treat our way out of this, we will never solve the problem," Auerbach said. "We need to look upstream at the underlying causes of poor health."
BAYONNE, N.J. — For five years, Rasha Salama has taken her two children to Dr. Inas Wassef, a pediatrician a few blocks from her home in this blue-collar town across the bay from New York City.
Salama likes the doctor because Wassef speaks her native language — Arabic — and has office hours at convenient times for children.
"She knows my kids, answers the phone, is open on Saturdays and is everything for me," she said.
But UnitedHealthcare is dropping Wassef — and hundreds of other doctors in its central and northern New Jersey Medicaid physician network. The move is forcing thousands of low-income patients such as Salama to forsake longtime physicians.
Across the nation, business and contractual disputes are separating patients from longtime doctors. This often occurs when doctors don't want to accept the rates insurers are willing to pay. It sometimes occurs when insurers' business plans require having a narrower network of doctors — doctors whose practice patterns may be easier to control.
But in this case, the cause of the exclusion goes to even deeper business connections: Wassef and other doctors say the insurer appears to be trying to shift patients to Riverside Medical Group, a 20-office physicians' practice owned by Optum, a sister company of UnitedHealthcare, both of which are subsidiaries of UnitedHealth Group. UnitedHealthcare is essentially forcing patients to transfer to doctors it controls, the doctors allege.
Indeed, several patients said the health plan directed them to Riverside when informing them their doctors were being dropped.
Lawrence Downs, CEO of the Medical Society of New Jersey, said he estimates UnitedHealthcare is trying to remove hundreds of doctors in central and northern New Jersey from its network. That is the same area where Riverside Medical operates, he noted.
"It seems like they are steering patients away from small, community-based doctors to large groups that they own," he said.
Good For Profits
That raises questions about whether this type of "vertical consolidation" — the term for a practice occurring across the country — is a strategy that is good for profits but bad for patients.
UnitedHealthcare said the changes are not part of a campaign to get as many patients as possible to the Riverside practice. It points out that it is retaining the community-based doctors, like Wassef, in its networks to treat its Medicare Advantage and commercial plan members.
But, experts say, traumatic disruptions in doctor-patient relationships are an inevitable result of ongoing shifts in the complicated business of U.S. health care.
Facing a rapid consolidation of doctors' practices and hospital systems — which have hefty negotiating power to demand high fees — insurers have limited options to control costs and maintain a positive balance sheet, said Jacob Wallace, an assistant professor of public health at Yale University. Medicaid plans are especially affected because, unlike commercial plans or even Medicare, they can't increase premiums or demand copayments.
"Plans face a challenging landscape to keep costs down," Wallace said. As a result, health plans have taken other approaches, including narrowing provider networks and buying their own physician practices, he said.
But further complicating matters, many Medicaid and Medicare managed-care programs are contracted out to private, for-profit insurers such as UnitedHealthcare. They are looking to create returns for shareholders. With surging enrollment in government programs, UnitedHealthcare has enjoyed rising profits and a stock price that has soared tenfold since 2010.
Wassef and about two dozen other physicians filed a federal lawsuit in September to get reinstated. Wassef, whose termination is scheduled in May, said the move could seriously affect her practice because 80% of her patients are insured by UnitedHealthcare.
UnitedHealthcare gained millions of new customers after the Affordable Care Act led New Jersey and 35 other states and the District of Columbia to expand Medicaid and states turned to private insurers to handle the business. Salama and some other UnitedHealthcare customers said they like their insurance plan because it offers richer benefits than other Medicaid options and covers the medications they use.
The company operates New Jersey's second-largest Medicaid health plan, with 418,000 members. (The state Department of Human Services has blocked UnitedHealthcare from enrolling any additional Medicaid members, a severe and rare penalty. That move — which is not related to the termination of doctors' contracts — stems from complaints related to care management and discharge planning, the health plan's call center and other issues.)
A company spokesperson acknowledged the health plan is dropping 2% of its Medicaid doctors, saying the move was designed to help control costs.
"As health care costs continue to rise, we are working to mitigate the impact on the customers, states and members we serve by negotiating with care providers on their behalf to keep reimbursement rates affordable," the company said in a statement. "We understand that our members have personal relationships with their doctors and that network changes can be difficult."
A Practice Destroyed
New Jersey Medicaid officials refused to comment on whether they are concerned about UnitedHealthcare's actions. But patients caught up in the standoff have reason to worry, said Linda Schwimmer, CEO of the New Jersey Health Care Quality Institute, a coalition of health plans, providers and a variety of health trade groups.
"Once you have a trusted relationship with a provider, it means a lot and it goes to the quality [of your care] because if you are seeing the same providers and you trust them, you are more likely to take your medication and adhere to whatever care plan you have," she said.
Dr. Alexander Salerno, an internist who runs a 17-doctor multispecialty practice in East Orange, New Jersey, another plaintiff in the lawsuit, is helping lead the court fight. Salerno's main office is in a three-story, 19th-century house that his father used for his medical practice in the 1960s. About 40% of his patients are on Medicaid.
Until the dispute began last year, Salerno advised his patients to sign up for UnitedHealthcare because of its broad array of benefits, including vision and dental care, and because of the ease in referring to specialists.
And UnitedHealthcare never complained about this group's skill. In fact, the group received a $130,000 bonus last year for its good care to patients. Salerno said Riverside Medical offered to buy his group practice in 2018, but he declined.
Since UnitedHealthcare announced it would drop his group from the network, more than 500 of his practices' patients have already changed doctors to stay with the UnitedHealthcare plan, Salerno said.
"It's not a bad insurance company. It just seems like they have become greedy trying to control both ends of the pendulum — wanting to be the payer and provider," Salerno said.
A federal judge ordered the case to be heard by a neutral arbitrator, which in late November granted an emergency injunction that will keep Salerno from being removed from UnitedHealthcare's network until an arbitrator makes a decision on a permanent injunction, which is expected in March.
But that leaves patients in limbo.
Glorida Rivera, 68, said UnitedHealthcare's decision to drop Salerno was upsetting because she relied on him to care for her diabetes, thyroid and heart conditions. She credits Salerno for referring her to a cardiologist, who put stents in her heart to clear a blockage.
"He knows my whole story, so why do I have to change?" wondered Rivera. Nonetheless, she is sticking with UnitedHealthcare.
Velylia McIver, 83, decided in November to search for another plan so she could stay with Salerno. But it took her more than a month to get coverage for some medications.
"I feel caught in the middle of all this, and it's the pits," McIver said.
The Trump administration's top Medicaid official has been increasingly critical of the entitlement program she has overseen for three years.
Seema Verma, administrator of the Centers for Medicare & Medicaid Services, has warned that the federal government and states need to better control spending and improve care to the 70 million people on Medicaid, the state-federal health insurance program for the low-income population. She supports changes to Medicaid that would give states the option to receive capped annual federal funding for some enrollees instead of open-ended payouts based on enrollment and health costs. This would be a departure from how the program has operated since it began in 1965.
In an early February speech to the American Medical Association, Verma noted how changes are needed because Medicaid is one of the top two biggest expenses for states, and its costs are expected to increase 500% by 2050.
"Yet, for all that spending, health outcomes today on Medicaid are mediocre and many patients have difficulty accessing care," she said.
Verma's sharp comments got us wondering if Medicaid recipients were as bad off as she said. So we asked CMS what evidence it has to back up her views.
A CMS spokesperson responded by pointing us to a CMS fact sheet comparing the health status of people on Medicaid to people with private insurance and Medicare. The fact sheet, among other things, showed 43% of Medicaid enrollees report their health as excellent or very good compared with 71% of people with private insurance, 14% on Medicare and 58% who were uninsured.
The spokesperson also pointed to a 2017 report by the Medicaid and CHIP Payment and Access Commission (MACPAC), a congressional advisory board, that noted: "Medicaid enrollees have more difficulty than low-income privately insured individuals in finding a doctor who accepts their insurance and making an appointment; Medicaid enrollees also have more difficulty finding a specialist physician who will treat them."
We opted to look at those issues separately.
What About Health Status?
Several national Medicaid experts said Verma is wrong to use health status as a proxy for whether Medicaid helps improve health for people. That's because to be eligible for Medicaid, people must fall into a low-income bracket, which can impact their health in many ways. For example, they may live in substandard housing or not get proper nutrition and exercise. In addition, lack of transportation or child care responsibilities can hamper their ability to visit doctors.
Benjamin Sommers, a health economist at Harvard University, said Verma's comparison of the health status of Medicaid recipients against people with Medicare or private insurance is invalid because the populations are so different and face varied health risks. "This wouldn't pass muster in a first-year statistics class," he said.
Death rates, for example, are higher among people in the Medicare program than those in private insurance or Medicaid, he said, but that's not a knock on Medicare. It's because Medicare primarily covers people 65 and older.
By definition, Medicaid covers the most vulnerable people in the community, from newborns to the disabled and the poor, said Rachel Nuzum, a vice president with the nonpartisan Commonwealth Fund. "The Medicaid population does not look like the privately insured population."
Joe Antos, a health economist with the conservative American Enterprise Institute, also agreed, saying he is leery of any studies or statements that evaluate Medicaid without adjusting for risk.
For a better mechanism to gauge health outcomes under Medicaid, experts point to dozens of studies that track what happened in states that chose in the past six years to pursue the Affordable Care Act's Medicaid expansion. The health law gave states the option to extend Medicaid to everyone with incomes up to 138% of the federal poverty level, or about $17,600 annually for an individual. Thirty-six states and the District of Columbia have adopted the expansion.
"Most research demonstrates that Medicaid expansion has improved access to care, utilization of services, the affordability of care, and financial security among the low-income population," concluded the Kaiser Family Foundation in summarizing findings from more than 300 studies. "Studies show improved self-reported health following expansion and an association between expansion and certain positive health outcomes." (Kaiser Health News is an editorially independent program of the foundation.)
Researchers also reported that Medicaid expansion was associated with declines in the length of stay of hospitalized patients. One study found a link between expansion and declines in mechanical ventilation rates among patients hospitalized for various conditions.
Another recent study compared the health characteristics of low-income residents of Texas, which has not expanded Medicaid, and those of Arkansas and Kentucky, which did. It found that new Medicaid enrollees in the latter two states were 41 percentage points more likely to have a usual source of care and 23 percentage points more likely to say they were in excellent health than a comparable group of Texas residents.
Medicaid's benefits, though, affect far more than the millions of nondisabled adults who gained coverage as a result of the ACA. "Medicaid coverage was associated with a range of positive health behaviors and outcomes, including increased access to care; improved self-reported health status; higher rates of preventive health screenings; lower likelihood of delaying care because of costs; decreased hospital and emergency department utilization; and decreased infant, child, and adult mortality rates," according to a report issued this month by the nonpartisan Robert Wood Johnson Foundation.
Children — who make up nearly half of Medicaid enrollees — have also benefited from the coverage, studiesfind. Some studies report that Medicaid contributes to improved health outcomes, including reductions in avoidable hospitalizations and lower child mortality.
Research shows people on Medicaid are generally happy with the coverage.
A Commonwealth Fund survey found 90% of adults with Medicaid were satisfied or very satisfied with their coverage, a slightly higher percentage than those with employer coverage.
Accessible Care?
The evidence here is less emphatic.
A 2017study published in JAMA Internal Medicine found 84% of Medicaid recipients felt they were able to get all the medical care they needed in the previous six months. Only 3% said they could not get care because of long wait times or because doctors would not accept their insurance.
Verma cites a 2017 MACPAC report that noted some people on Medicaid have issues accessing care. But that report also noted: "The body of work to date by MACPAC and others shows that Medicaid beneficiaries have much better access to care, and much higher health care utilization, than individuals without insurance, particularly when controlling for socioeconomic characteristics and health status." It also notes that "Medicaid beneficiaries also fare as well as or better than individuals with private insurance on some access measures."
The report said people with Medicaid are as likely as those with private insurance to have a usual source of care, a doctor visit each year and certain services such as a Pap test to detect cervical cancer.
"Medicaid is not great coverage, but it does open the door for health access to help people deal with medical problems before they become acute," Antos said.
On the negative side, the report said Medicaid recipients are more likely than privately insured patients to experience longer waiting times to see a doctor. They also are less likely to receive mammograms, colorectal tests and dental visits than the privately insured.
"Compared to having no insurance at all, having Medicaid improves access to care and improves health," said Rachel Garfield, a vice president at the Kaiser Family Foundation. "There is pretty strong evidence that Medicaid helps patients get the care they need."
Our Ruling
Verma said that "health outcomes today on Medicaid are mediocre and many patients have difficulty accessing care."
Numerous studies show people's health improves as a result of Medicaid coverage. This includes lower mortality rates, shorter hospital stays and more people likely to get cancer screenings.
While it's hard to specify what "many patients having difficulty accessing care" means, research does show that Medicaid enrollees generally say they have no trouble accessing care most of the time.
We rate the claim as Mostly False.
Sources:
Email response from the Centers for Medicare & Medicaid Services, Feb. 12, 2020
Telephone interview with Aviva Aron-Dine, vice president for health policy, Center on Budget and Policy Priorities, Feb. 12, 2020
Telephone interview with Sara Rosenbaum, professor of health policy and law, George Washington University, Feb. 12, 2020
Telephone interview with Rachel Nuzum, a vice president with the nonpartisan Commonwealth Fund, Feb. 13, 2020
Telephone interview with Rachel Garfield, vice president, Kaiser Family Foundation, Feb. 12, 2020
Telephone interview with Benjamin Sommers, a health economist at Harvard University, Feb. 13, 2020
Telephone interview with Jay Antos, health economist, American Enterprise Institute, Feb. 18, 2020
When Carol Pak-Teng, an emergency room doctor in New Jersey, hosted a fundraiser in December for Democratic freshman Rep. Tom Malinowski, her guests, mostly doctors, were pleased when she steered the conversation to surprise medical bills.
This was a chance to send a message to Washington that any surprise billing legislation should protect doctors' incomes in their battle over payments with insurers. Lawmakers are grappling over several approaches to curtail the practice, which can leave patients on the hook for huge medical bills, even if they have insurance.
As Congress begins its 2020 legislative session, there is evidence the doctors' message has been received: The bills with the most momentum are making more and more concessions to physicians.
As surprise medical billing has emerged as a hot-button issue for voters, doctors, hospitals and insurers have been lobbying to protect their own money flows. All that lobbying meant nothing got passed last year.
Television and internet ads are the most visible manifestation of the battle. But in taking their cause to politicians, doctors like Pak-Teng have waged an extraordinary on-the-ground stealth campaign to win over members of Congress. Their professional credentials give them a kind of gravitas compared with other lobbyists, who are merely hired guns.
Ending the practice of billing patients for the amount of their treatment not covered by insurance — sometimes triggered by unwittingly seeing a doctor out of network — is ultimately a fight between doctors and insurers over rate-setting and reimbursement. But as more patients balk at surprise bills — or suffer the enormous financial strain — lawmakers are under pressure to protect patients. In turn, powerful lobbying forces have activated to protect doctors and insurers who don't want to pay the price for a fix.
The main message physicians are using to bring lawmakers into their corner? "We just want to be paid a fair amount for the services rendered," Pak-Teng said.
Her congressman, Malinowski, has not endorsed any surprise billing legislation. In congressional testimony in July, he cited the "extra $420 million" in medical debt patients in New Jersey reckon with each year.
"There are many things that Republicans and Democrats sincerely disagree about in this body," he said. "I don't think that this is one of them. I don't see any philosophical difference amongst us about whether people should be stuck with massive surprise medical bills."
Doctors say they are taking the brunt of the criticism.
But little has been as powerful in shaping surprise billing legislation as the clout of hospitals and their doctors, many of whom are, in fact, employed by private equity-backed companies and armed with years of experience shaping surprise billing legislation at the state level.
They are throwing in a lot of money, too, funneling millions to lawmakers ahead of the 2020 elections. Four physician organizations that have heavily lobbied on surprise medical bills and have private equity ties — the American College of Emergency Physicians, Envision Healthcare, US Acute Care Solutions and U.S. Anesthesia Partners — gave roughly $1.1 million in 2019 to members of Congress, according to a Kaiser Health News analysis of Federal Election Commission records.
The biggest recipients, from all four PACs combined, were Reps. Donna Shalala and Stephanie Murphy, Florida Democrats who got $26,000 each. Sen. Thom Tillis (R-N.C.) took in $25,500, Senate Majority Leader Mitch McConnell got $25,000, and Rep. Brett Guthrie (R-Ky.) received $22,500.
That was in tandem with a ground game led by local doctors. ER doctors, anesthesiologists, radiologists and other specialists who most often charge out-of-network prices — and also are among the highest-compensated practitioners — fanned out to shape legislation in a way that maintains their pay, and to voice their concern to lawmakers that insurance companies would have too much leverage to control their compensation.
"We by necessity place a tremendous amount of trust in our physicians," said Zack Cooper, an assistant professor at Yale University who has extensively researched surprise medical bills. "Frankly, they have an easier time lobbying members [of Congress] than the folks who are affected by surprise billing."
Arguing Over The Fix
Lawmakers in both parties appear unified on the need to resolve the problem of surprise billing. But as was clear when all the air blew out of legislative proposals on the table at year's end, that is largely where the agreement ends.
Fixing the problem comes down to settling on a system for deciding how much to pay for a disputed bill. One approach is to set up an outside arbitration process, in which doctors and insurance companies would negotiate payment — this is the model preferred by doctors, who contend it puts them on better footing against insurance companies. Another option would be to resolve surprise billing disputes by having insurance companies pay doctors based on the median in-network rate for the service, an approach known as benchmarking. Large employers, labor unions and insurance companies prefer this.
The failure to get legislation through Congress set up a potentially explosive battle in an election year. Republicans and Democrats who have vowed to do something about health care costs must reckon with powerful industry groups whose influence transcends party lines.
Meanwhile, physicians and hospitals have made their case in Washington and back home through in-person meetings and phone calls with lawmakers and congressional staff. They've hosted dinners and fundraisers and organized fly-ins to swarm Capitol Hill with in-person meetings. They've even led tours of their emergency rooms.
Pak-Teng is among them, coming to Washington this month with other physicians to petition lawmakers. She is employed by Envision, a physician staffing company backed by private equity firm KKR. She's also on the board of the American Academy of Emergency Medicine, a trade organization representing ER doctors.
"There is a lot of anti-physician rhetoric out there," said Pak-Teng, who is pushing her physician colleagues to be more active in shaping public policy by sharing stories about the reality of caring for patients.
The lobbying by hospitals and physicians trying to protect their reimbursements has divided key lawmakers, compounding disagreements among senior House Democrats over the policy details of a bill and turf wars in Congress. Three House committees have now unveiled legislation to ban surprise medical bills, each with different details.
"We are not trying to stop legislation. We are trying to stop bad legislation," said Anthony Cirillo, an emergency medicine physician who describes a "bad" bill as one that favors insurance companies over doctors.
Cirillo is also a lobbyist for US Acute Care Solutions, a physician staffing company backed by private equity firm Welsh, Carson, Anderson & Stowe. WCAS, which manages $27 billion in assets and is focused on health care and technology investments, is based in New York City and co-founded US Acute Care Solutions in 2015.
In an interview, Cirillo said he met with lawmakers and their aides about "10 to 12 times" in Washington last year. Financial disclosures show he spent $340,000 between July and September lobbying on surprise billing on behalf of US Acute Care Solutions. USACS' political committee also contributed $134,500 to lawmakers in 2019, according to FEC records.
Tilt Toward Doctors
Before the private equity-fueled dark-money group Doctor Patient Unity started running ads warning of the dangers of government price controls as an argument against legislation, surprise billing legislation being drafted in one of Congress' most powerful health care committees was already tilting to be more favorable to doctors.
"People on the Hill are very sympathetic to hospitals and physicians because they're actually providing the care itself," said one Democratic aide, speaking on the condition of anonymity to candidly describe sensitive political dynamics. "Nobody wants to defend the insurers."
In May, a House Energy and Commerce Committee draft proposal included no mention of outside arbitration. The same was true for a bill the Senate Health, Education, Labor and Pensions Committee approved in June. Instead, under those proposals, surprise billing disputes would be resolved by insurance companies paying doctors based on similar rates in that area.
By mid-July, though — roughly a week before Doctor Patient Unity registered as a business in Virginia — the Energy and Commerce legislation was amended to allow doctors to appeal to an independent arbiter if their payments exceed $1,250. The revision was pushed by two physicians on the committee — Democrat Raul Ruiz of California and Republican Larry Bucshon of Indiana — and was a moment Sherif Zaafran, a Texas anesthesiologist, describes as a "turning point" in negotiations over the bill.
"It's all about fairness," said Zaafran, who works for private equity-backed U.S. Anesthesia Partners. He has been involved for a decade in surprise billing fights in Texas, which enacted a new law with an arbitration process last year. U.S. Anesthesia Partners gave $197,900 in campaign contributions to members of Congress last year.
Zaafran chaired another coalition of medical specialists, Physicians for Fair Coverage, in 2019, and pressured Congress to pursue a surprise billing approach modeled on a New York law under which insurers and providers rely on arbitration. Under that process, if there is a payment dispute between doctors and insurers, the two sides submit a proposed dollar amount to an independent mediator, who then selects one.
In New York, the mediators were told to base their decisions on the 80th percentile of the prices set by the hospital or physician. Research has suggested that the model is broadly making health care more expensive for state residents because of higher payments to doctors, according to findingsfrom the USC-Brookings Schaeffer Initiative for Health Policy.
Still, on Capitol Hill, doctors complained that many procedures would fail to cost enough to qualify for arbitration as proposed in the Energy and Commerce bill, bolstered by data ER doctors presented to lawmakers showing that prices mainly fall below $1,250.
"It's largely out of reach," said Laura Wooster, a lobbyist with the American College of Emergency Physicians, whose political action committee contributed $708,000 to lawmakers in 2019. "The problem with a threshold is, you just have one threshold. It's going to impact different specialties so differently."
By December, House Energy and Commerce Committee leaders and Sen. Lamar Alexander, a Republican who chairs the Senate HELP Committee, agreed to lower the arbitration threshold to $750 as part of a bipartisan agreement on a bill. Notably, several hospital lobbying organizations, such as the American Hospital Association and the Greater New York Hospital Association — the latter a strong financial backer of Senate Minority Leader Chuck Schumer — refused to back the deal.
Pak-Teng and other physicians also say that arbitration threshold is still too high. The House Education and Labor Committee has unveiled surprise billing legislation with a similar framework.
"I'm open to listening to all sides on this," Rep. Greg Walden of Oregon, the top Republican on the House Energy and Commerce Committee, said in an interview. "We want to make sure doctors are adequately compensated."
Walden had harsh words for private equity firms that have attacked the Energy and Commerce legislation in a series of TV and internet ads, saying they were "misleading and scaring people" and just made lawmakers dig in deeper. The ads prompted a bipartisan probe from Walden and committee Chairman Frank Pallone (D-N.J.) into how the companies have influenced surprise billing practices.
"I'm not trying to hurtle a rock at them, but they've been throwing a few my way," he said.
What's Coming
Arvind Venkat, a Pittsburgh emergency physician employed by US Acute Care Solutions, traveled to Washington multiple times last year to meet with congressional offices representing Pennsylvania. But he also made sure to bring up surprise bills on his home turf, giving his congressman, freshman Democrat Conor Lamb, a tour of the emergency room at Allegheny General Hospital last summer.
"There are two issues here," said Venkat, who leads the Pennsylvania chapter of the American College of Emergency Physicians and has practiced at Allegheny General for 12 years. "Patients need to be protected, [and] we need to avoid anything that disrupts in-network relationships between insurers and clinicians."
The call seems to have been heard: Legislation is likely to change further this year as the House Ways and Means Committee pushes an approach that is friendlier to hospitals and doctors. It builds off a one-page document committee leaders issued Dec. 11 that blunted momentum for a bipartisan deal that was to be included in a December spending bill.
The latest proposal from the committee includes an arbitration process to resolve payment disputes, with no minimum dollar amount needed to trigger it, and doesn't ban surprise billing from air ambulance companies — a win for yet another special-interest lobbying group. The patient protections would not take effect until 2022.
Richard Neal, a Massachusetts Democrat who chairs the committee, remains an ally of Massachusetts hospitals. He released the brief December surprise billing document two days after the Massachusetts Medical Society and Massachusetts Hospital Association wrote a joint op-ed in The Boston Globe arguing that benchmarking physician payments — as the Senate HELP and Energy and Commerce deal would do — would wreck the state's health care system.
"The heavy hand of government would create an unfair imbalance in the health care marketplace and insurers would have no incentive to engage physicians in building robust health care networks. The connected system of care we have all been working toward in Massachusetts would immediately become fragmented and disjointed," the two groups wrote in The Boston Globe.
"They weren't asking for favorable treatment. They were asking for fair treatment, and there's a big difference," Neal said in an interview. "I don't want to rule anything out, but I think that the momentum right now is arbitration."
"We need to get a little bit more balance," added Shalala, who endorsed the Ways and Means legislation unveiled earlier this month.
Shalala has at least two hospitals in her Miami-area district that rely on private equity-supported physician staffing companies.
"I'm worried about the hospitals," she said. "And the providers obviously include the docs."
When a human heart was left behind by mistake on aSouthwest Airlines plane in 2018, transplant officials downplayed the incident. They emphasized that the organ was used for valves and tissues, not to save the life of a waiting patient, so the delay was inconsequential.
"It got to us on time, so that was the most important thing," said Doug Wilson, an executive vice president for LifeNet Health, which runs the Seattle-area operation that processed the tissue.
That high-profile event was dismissed as an anomaly, but a new analysis of transplant data finds that a startling number of lifesaving organs are lost or delayed after being shipped on commercial flights, the delays often rendering them unusable.
In a nation where nearly 113,000 people are waiting for transplants, scores of organs — mostly kidneys — are discarded after they don't reach their destination in time.
Between 2014 and 2019, nearly 170 organs could not be transplanted and almost 370 endured "near misses," with delays of two hours or more, after transportation problems, according to an investigation by Kaiser Health News and Reveal from the Center for Investigative Reporting. The media organizations reviewed data from more than 8,800 organ and tissue shipments collected voluntarily and shared upon request by the United Network for Organ Sharing, or UNOS, the nonprofit government contractor that oversees the nation's transplant system. Twenty-two additional organs classified as transportation "failures" were ultimately able to be transplanted elsewhere.
Surgeons themselves often go to hospitals to collect and transport hearts, which survive only four to six hours out of the body. But kidneys and pancreases — which have longer shelf lives — often travel commercial, as cargo. As such, they can end up missing connecting flights or delayed like lost luggage. Worse still, they are typically tracked with a primitive system of phone calls and paper manifests, with no GPS or other electronic tracking required.
Transplant surgeons around the country, irate and distressed, told KHN they have lost the chance to transplant otherwise usable kidneys because of logistics.
"We've had organs that are left on airplanes, organs that arrive at an airport and then can't get taken off the aircraft in a timely fashion and spend an extra two or three or four hours waiting for somebody to get them," said Dr. David Axelrod, a transplant surgeon at the University of Iowa.
One contributing factor is the lack of a national system to transfer organs from one region to another because they match a distant patient in need.
Instead, the U.S. relies on a patchwork of 58 nonprofit organizations called organ procurement organizations, or OPOs, to collect the organs from hospitals and package them. Teams from the OPOs monitor surgeries to remove organs from donors and then make sure the organs are properly boxed and labeled for shipping and delivery.
From there, however, the OPOs often rely on commercial couriers and airlines, which are not formally held accountable for any ensuing problems. If an airline forgets to put a kidney on a plane or a courier misses a flight because he got lost or stuck in traffic, there is no consequence, said Ginny McBride, executive director ofOurLegacy, an OPO in Orlando, Florida.
In an era when consumers can precisely monitor a FedEx package or a DoorDash dinner delivery, there are no requirements to track shipments of organs in real time — or to assess how many may be damaged or lost in transit.
"If Amazon can figure out when your paper towels and your dog food is going to arrive within 20 to 30 minutes, it certainly should be reasonable that we ought to track lifesaving organs, which are in chronic shortage," Axelrod said.
For years, organs were distributed locally and regionally first, a system that resulted in wide disparities in organ waiting times across the country. In recent years, UNOS officials and the transplant community, with federal urging, have been working, organ by organ, to restructure how it's done.
Amid those ongoing efforts to allocate organs more fairly — and, recently, a Trump administration effort to overhaul kidney care — the waste of some of these precious resources donated by good Samaritans has been overlooked. Last year, an average of nine people a day died while waiting for a new kidney.
Donor families and waiting patients may never know what's happened to an organ provided by a loved one or why a surgery is canceled at the last minute.
"We have been unaware of how many kidneys have been waylaid," said McBride, of the Orlando procurement agency. "That's not a number that's been transparent to us."
But, she added, she's aware of the risk: "I say a prayer and hold my breath every time a kidney leaves our office."
46 Minutes To Spare
In October, a kidney en route from McBride's OPO in Florida to a patient in North Carolina missed its connection in Atlanta. The box was prominently marked as a human organ and displayed a phone number to call. Apparently unaware of the urgency, a Delta cargo worker merely set it aside for a later flight.
The waiting transplant surgeon in Greensboro, North Carolina, "was having a fit," said Kim Young, the OurLegacy organ recovery coordinator. If the kidney didn't get to the hospital by 7 a.m., he wouldn't be able to use it. Both the risk of organ failure and the chance of death increase withevery hour a kidney is out of the body.
McBride had to decide whether to charter a plane at a cost of $15,000 — or to find a courier to drive the kidney through the night. She settled on the road trip, and the organ arrived at 6:14 a.m. — with just 46 minutes to spare.
Four months later, the transplant appears to have been a success, McBride said.
Delta Air Lines officials declined repeated requests to comment on its organ transport service or the specific incident McBride described.
Several domestic airlines, including Delta, United, American, Southwest and Alaska, provide special cargo services for organs with priority boarding, handling and monitoring. They all declined to comment on organ transportation.
The traveling public may not realize it, but thousands of transplant organs — mostly kidneys, but some pancreases — fly on commercial flights each year. Roger Brown, who runs the Organ Center at UNOS, estimates that as many as 10 organs for transplant are on the move this way every day.
UNOS handles about 1,800 of these organ and tissue shipments a year, of which 1,400 are kidneys. That's a fraction of the nearly 40,000 organs transplanted in the U.S. last year, including more than 23,000 kidneys. About 1 in every 6 transplanted kidneys is shipped nationally, UNOS figures show.
Most of the time, the organs get where they're going without incident, Brown said.
"We're never going to get rid of flight delays. We're never going to get rid of human error," he said. "We're never going to get rid of the person who's [trying to be] a little too helpful and perhaps puts it someplace special, which then maybe creates issues downstream."
Troubling Reports
Reports of trouble abound. In August, transplant officials at Medical City Dallas reported in a public forum that they'd lost three kidneys just that month because of problems with commercial flights.
"One organ was delayed due to weather and the next available flight wasn't till the next day," the report said. "Another organ made it to the airport, but was never placed on the intended flight. The third organ was mistakenly taken to the wrong airport and missed the intended flight."
In Kentucky, transplant surgeon Dr. Malay Shah said a kidney traveling on Delta from Pensacola, Florida, via Atlanta, on Oct. 1 sat in the Lexington airport for three hours before he was notified it was there. No one had noticed the box with the label that said "human organ for transplant," he said.
"It's scary," Shah said. "Organs traveling by this mechanism are treated as simply 'baggage' or 'cargo.'"
Before the 9/11 terror attacks in 2001, OPO workers could take organs through airport security and see them loaded onto the plane from the passenger gate, McBride said. Because of changes in security protocol, airline employees now load organs on the tarmac, where they fly in pressurized cargo holds.
While anecdotes like Shah's are common, there's little data to show how often these transportation problems occur. No federal agency, including the Health Resources and Services Administration, or HRSA, which contracts with UNOS, requires monitoring of transportation for transplant organs.
"Matters involving the transportation methods used by organ procurement organizations (OPOs) are arranged directly between OPOs and transplant centers," HRSA spokesperson David Bowman said in an email.
Airlines log organ shipments in internal booking systems and on cargo manifests, but those documents aren't public and no summary is available, said Katherine Estep, communications director for Airlines for America, an industry trade group.
"Live human organs receive the highest priority designation," she said in a statement.
But the agency didn't begin formally tracking transportation errors until 2016, when a new computer system came online. Before that, Organ Center staff kept track of problems informally, with pencil and paper, and the information wasn't verified, Brown said.
Calls for closer tracking from within the system have been met with defensiveness — or apathy, said Brianna Doby, an organ transplant community consultant for the Johns Hopkins School of Medicine.
"If you talk out loud about organ issues, they say it will drive down donation rates," Doby said. "It's not OK for us to say, 'Well, shipping is hard.' That's not an acceptable answer."
A National Network
UNOS was established in 1984 after Congress enacted the National Organ Transplant Act to address a critical shortage of donor organs and to improve organ matching and placement. It called for a national network to ensure that organs that couldn't be used in the area where they were donated would be transplanted to save lives elsewhere. Before that, many organs were lost simply because transplant teams couldn't find compatible recipients in time.
The act established the national Organ Procurement and Transplantation Network and called for the OPTN to be operated by a private, nonprofit organization under federal contract. UNOS, which has held the contract since the inception of OPTN, is overseen by HRSA, an agency of the U.S. Department of Health and Human Services.
Today, UNOS typically handles organs with conditions that can make them hard to place. That can include organs from older donors or those with medical or other characteristics that make them difficult to match.
Overall, about 7% of shipments handled by UNOS from July 2014 to November 2019 encountered transportation problems, the data obtained by KHN and Reveal showed. UNOS wouldn't release details about individual shipments, including dates or places shipped or causes of the transportation failures or delays.
But Brown, of the UNOS Organ Center, said an internal analysis showed that more than half of the transportation problems were related to commercial airlines or airports. Of those, two-thirds were caused by weather delays, mechanical delays and flight cancellations.
About one-third of transportation problems were related to logistics providers or ground couriers, mostly delays of package pickups. The rest were related to the sender or receiver of the shipments. The most common issue was the package not being ready for pickup at the designated time.
However, Brown said, poor outcomes can't be blamed directly on transportation problems, even when they do occur.
"The delay could be the primary reason an organ wasn't transplanted," he said. "It could be a contributing factor or it could have nothing to do with the reason that the organ is not transplanted."
Other transplant experts downplay the impact of transportation problems. Kelly Ranum, president of the Association of Organ Procurement Organizations, said she's "surprised at how low" UNOS' failure numbers are, considering the volume of kidneys shipped.
Dr. Kevin O'Connor, chief executive of LifeCenter Northwest, an OPO based in Seattle, said transportation problems are "minimal" compared with the other reasons organs — including about 3,500 donated kidneys — are discarded each year. These typically include biopsy findings, the inability to find a recipient and poor organ function.
"For over 30 years and literally tens of thousands of organs being transported," he said, "I can count on the fingers of one hand the number of times that, because of a transportation glitch, an organ was ultimately not transplanted."
Still, O'Connor acknowledged that "even one kidney being thrown away because of transportation errors is unacceptable."
"We don't have an end-to-end unified transportation system," Axelrod said. "We don't have a FedEx for transplant. We have a cobbled-together system of OPOs and couriers and private aircraft and commercial aircraft."
In recent years, several courier companies have emerged to meet the market for transplant organs. Don Jones, chief executive of the Nationwide Organ Recovery Transport Alliance, or NORA, contracts with more than 15 OPOs and oversees about 400 organs a year on commercial flights.
"I would say 99.8% of our transports on commercial airlines go perfectly fine," Jones said based on his estimate. Jones noted that his firm ships organs only on direct flights and uses GPS tracking to monitor them.
However, GPS tracking isn't universal — or required by UNOS or HRSA. Some couriers and airlines use it; many don't. Many OPOs monitor organs through a combination of verbal handoffs, automation and label scans, Brown said.
In Ginny McBride's misadventure last fall, she contracted with a courier, Sterling Global Aviation Logistics, which used Delta Air Lines to ship the kidney.
Delta uses GPS trackers on its Dash Critical shipments, promising fast, guaranteed delivery of human organs. But on that night in October, the kidney was shipped from Orlando to Atlanta without a GPS tracker. In Atlanta, a cargo worker couldn't find a GPS device to put on the box containing the kidney, so the worker held the organ for a later flight. That would have pushed it far beyond the window of viability.
An internal Delta report, obtained by McBride, found that Delta didn't have enough GPS devices available in Atlanta that night. "Destination stations are not returning the devices in a timely manner," according to the report. "One way to mitigate this from reoccurring is to have a larger inventory of GPS devises (sic) at each station."
Delta declined to comment on the report.
The average wait time for a kidney varies widely nationwide, from less than three years to more than a decade. One proposal to put more organs to use called for eliminating the 58 donation service areas and 11 regions now used to allocate kidneys and replacing them with a zone of up to 500 nautical miles from the donor hospital.
In December, OPTN cut that range in half — to 250 nautical miles — in part because of an outcry about problems shipping kidneys via commercial air.
"There are certainly no technological barriers to doing GPS and to actually requiring it," Brown said.
A UNOS committee is considering whether to collect data on transportation methods and outcomes, but, so far, the question remains under review.
"If the community wants it, they should ask for it," Brown said. "We can help facilitate and get it done for them."
McBride, who discussed solutions with her colleagues, hopes the transplant organizations will come together to solve transportation problems, to make sure every eligible donated kidney gets transplanted.
"Any organ that's wasted, in my opinion, is a loss to the patient and to the community," said Paul Conway, of the American Association of Kidney Patients, an advocacy group, who is himself a kidney recipient. "With all of the advances going on with drugs, with medical procedures, how can you have a logistics error be the barrier?"
This investigation and a related podcast represent a collaboration between Kaiser Health News and Reveal, from TheCenter for Investigative Reporting (CIR), a nonprofit news organization. Reveal, from CIR and PRX, is a nationally broadcast public radio show and investigative reporting podcast. Kaiser Health News (KHN) is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
The more than $34,000 in medical bills that contributed to Darla and Andy Markley's bankruptcy and loss of their home in Beloit, Wisconsin, grew out of what felt like a broken promise.
Darla Markley, 53, said her insurer had sent her a letter preapproving her to have a battery of tests at the Mayo Clinic in neighboring Minnesota after she came down with transverse myelitis, a rare, paralyzing illness that had kept her hospitalized for over a month. But after the tests found she also had beriberi, a vitamin deficiency, Anthem Blue Cross and Blue Shield judged that the tests weren't needed after all and refused to pay — although Markley said she and Mayo had gotten approval.
While Darla learned to walk again, the Markleys tried to pay off the bills. Even after Mayo wrote off some of what they owed, her disability and Social Security checks barely covered her insurance premiums. By 2014, five years after her initial hospitalization, they had no choice but to declare bankruptcy.
Anthem Blue Cross and Blue Shield spokesperson Leslie Porras said company "records do not indicate that Ms. Markley had tests authorized that were later denied."
Markley said she never would have had the tests done if she had known insurance was not going to pay for them. "I feel for anyone that finds themselves in that predicament," said Markley, a nurse who was pursuing her Ph.D. in education. "You can go from an upstanding middle-class American citizen to completely under the eight ball."
The billing quagmire into which the Markleys fell is often called "retrospective denial" and is generating attention and anger from patients and providers, as insurers require preapproval — sometimes called "prior authorization" — for a widening array of procedures, drugs and tests. While prior authorization was traditionally required only for expensive, elective or new procedures, such as a hip replacement or bypass surgery, some insurers now require it for even the renewal of some prescription drugs. Those preapprovals are frequently time-limited.
While doctors and hospitals chafe at the administrative burden, insurers contend the review is necessary to ferret out waste in a system whose costs are exploding and to ensure physicians are prescribing useful treatments.
But patients face an even bigger problem: When insurers revoke their decision to pay after the service is completed, patients are legally on the hook for the bill.
Prior authorizations may now include a line or two saying something like: "This is not a guarantee of payment." This loophole allows insurers to change their minds after the fact — citing treatments as medically unnecessary upon further review, blaming how billing departments charged for the work or claiming the procedure was performed too long after approval was granted.
In other cases, a patient will be told that no prior authorization is needed for a certain intervention, only to hear afterward that the insurer wanted one in this particular case. It then refuses to pay. Oftentimes, approval conversations happen primarily between the insurer and the provider — leaving the patient further in the dark when the bill appears.
The American Medical Association drafted model legislation to combat the problem for lawmakers to introduce, but the measure has not been widely picked up.
Martha Gaines, director of the Center for Patient Partnerships at the University of Wisconsin Law School, co-authored an article in the Journal of the American Medical Association on the issue and sees firsthand the time and money patients lose fighting such retrospective denials — for coverage they thought they had.
"How broken can you get?" she asked. "How much more laid bare can it be that our health care insurance system is not about health, nor caring, but just for profit?"
Many physicians and health care providers consider the extra paperwork needed for prior authorizations a growing scourge that requires them to expand their staff to handle the back-and-forth with insurers. According to an American Medical Association survey released in 2019, 88% of providers reported that the burden of prior authorization has increased over the past five years, forcing them or their staff to spend an average of two business days a week completing them.
The process of prior authorization aims to establish medical necessity to prevent "unnecessary, costly, or inappropriate medical treatments that can harm patients," according to Cathryn Donaldson, a spokesperson for the America's Health Insurance Plans industry group.
It's unknown how many patients get stuck with bills for prior approvals gone wrong. But retrospective denials have become only more common as prior authorizations have increased, said Dr. Debra Patt, an oncologist and chair of the Texas Medical Association's legislative council.
Her practice has tripled the number of staff who deal with prior authorizations, and she said she is currently trying to get the Texas Medical Association to survey its members on the revocation topic after seeing its impact on her patients, one of whom she said recently had chemotherapy payments denied.
Donaldson said her insurance trade group realizes the process for prior authorizations could be improved and is working with tech companies to help streamline it for all involved. But she added that denials may be simple requests for more information.
"A denial usually occurs because the clinician may not have provided the documentation needed to show that the treatment is necessary," Donaldson said. "Once that documentation is received, claims may then be approved."
As insurers and providers argue over money, patients are often stuck in the middle.
After Rebecca Freeman's insurer, Moda Health Plan, approved a genetic test for the Portland, Oregon, woman's now 5-year-old daughter in 2018 to rule out a serious condition that could cause blindness, the insurer declined to pay after the test was performed.
Moda argued that the dates and billing codes didn't match up with what was authorized. It told Freeman's lab company, PreventionGenetics, it wasn't going to pay, and, eventually, PreventionGenetics billed Freeman.
"Everyone is pushing the blame on everyone else, and I'm left holding the bag — there's no recourse for the patient," Freeman said. "Worst case for them is they pay what they were supposed to. You don't get anything for all your stress and time."
When Kaiser Health News first asked about the case, Moda spokesperson Jonathan Nicholas said it was still an active claim. "As soon as the lab provides us with correct information, we anticipate prompt payment," he said.
But Freeman said Moda had denied five claims and appeals on the nearly $2,000 bill for more than a year.
Within days of KHN's questions, Moda paid the bill.
The Problem With Legalese
Pharmacist Melita Pasagic of Fenton, Missouri, was told by her provider — who had called UnitedHealthcare, her insurer — that her and her husband's genetic tests needed no prior authorization.
After the tests were performed, though, UnitedHealthcare told Pasagic it had deemed the tests medically unnecessary and would not pay for them. Later when she called, she said, the insurer cited a coding discrepancy. Although Pasagic spent hours on the phone appealing the decision, the insurer didn't budge. The genetic testing company sent the $5,000 bill to collections.
"How can you deny anything post-service for medical necessity?" she said. "If it didn't require a pre-review, why does it have a post-review?"
Pasagic said she plans to take UnitedHealthcare to court over it. The insurance company said the testing was never covered in the first place.
"While certain procedures, tests and drugs may not require prior authorization, individuals should still confirm that the services are covered under their benefit plans," UnitedHealthcare spokesperson Maria Gordon Shydlo said.
Typically, there's no penalty for insurance companies that play games with prior authorizations, Gaines said, calling denials and delays integral to their business model.
The National Association of Insurance Commissioners has formed a working group to investigate the revocations following a presentation in December by Patt, of the Texas Medical Association. The Minnesota and Pennsylvania departments of insurance both said they had seen complaints regarding retrospective denials of prior authorizations. But quick fixes are unlikely.
"There's no silver bullet for this issue, so we encourage consumers to remain vigilant," said Katie Dzurec, acting director for the Health Market Conduct Bureau in Pennsylvania. "Ask questions, review documents and contact the insurance department."
Markley hopes this doesn't happen to more people.
"I wish people would understand that they are one illness away from totally losing everything they worked for," Markley said. "I lost it all in a day."
After Zoe Friedland became pregnant with her first child, she was picky about choosing a doctor to guide her through delivery.
"With so many unpredictable things that can happen with a pregnancy, I wanted someone I could trust," Friedland said. That person also had to be in the health insurance network of Cigna, the insurer that covers Friedland through her husband's employer.
Friedland found an OB-GYN she liked, who told her that she delivered only at Sequoia Hospital in Redwood City, California, a part of San Francisco-based Dignity Health. Friedland and her husband, Bert Kaufman, live in Menlo Park, about 5 miles from the hospital, so that was not a problem for them — until Dec. 12.
That's the day Friedland and Kaufman received a letter from Cigna informing them their care at Sequoia might not be covered after Jan. 1. The insurance company had not signed a contract for 2020 with the hospital operator, which meant Sequoia and many other Dignity medical facilities around the state would no longer be in Cigna's network in the new year.
Suddenly, it looked as if having their first baby at Sequoia could cost Friedland and Kaufman tens of thousands of dollars.
"I was honestly shocked that this could even happen because it hadn't entered my mind as a possibility," Friedland said.
She and her husband are among an estimated 16,600 people caught in a financial dispute between two gigantic health care companies. Cigna is one of the largest health insurance companies in the nation, and Dignity Health has 31 hospitals in California, as well as seven in Arizona and three in Nevada. The contract fight affects Dignity's California and Nevada hospitals, but not the ones in Arizona.
"The problem is price," Cigna said in a statement just before the old contract expired on Dec. 31. "Dignity thinks that Cigna customers should pay substantially more than what is normal in the region, and we think that's just wrong."
Tammy Wilcox, a senior vice president at Dignity, said, "At a time when many nonprofit community hospitals are struggling, Cigna is making billions of dollars in profits each year. Yet Cigna is demanding that it pay local hospitals even less."
In 2018, the most recent full year for which earnings data is available, Cigna generated operating income of $3.6 billion on revenue of approximately $48 billion. Dignity Health reported operating income of $529 million on revenue of $14.2 billion in its 2018 fiscal year.
It's possible Cigna and Dignity can still reach an agreement. Both sides said they will keep trying, though no talks are scheduled.
Disagreements between insurers and health systems that leave patients stranded are a perennial problem in U.S. health care. Glenn Melnick, a professor of health economics at the University of Southern California, said such disputes, which are disruptive to consumers, are often settled.
Melnick believes Dignity is using an "all or nothing" strategy in contract negotiations, meaning either all its facilities are in the insurer's network or none are.
"This allows them to increase their market power to get higher prices, which is not necessarily good for consumers," Melnick said.
Dignity replied in an emailed statement: "We do not require payers to contract with all or none of Dignity Health's providers. We do try to make sure patients have access to the full range of Dignity Health services and facilities in each of our communities."
Dignity faces a number of legal and financial challenges while it works to implement a February 2019 merger with Englewood, Colorado-based Catholic Health Initiatives that created one of the nation's largest Catholic hospital systems — known as CommonSpiritHealth.
California Attorney General Xavier Becerra approved the deal with conditions, including that Dignity's California hospitals spend $10 million in the first three years on services for people experiencing homelessness and offer free care to more low-income patients.
The requirement to treat more poor patients at no charge followed a period, from 2011 to 2016, in which Dignity's charity care declined about 35% while its net income was $3.2 billion.
Last October, CommonSpirit announced an operating loss of $582 million on revenue of nearly $29 billion for the 2019 fiscal year, its first annual financial statement after the merger took effect. Much of the loss was due to merger-related costs and special charges.
The same month, Dignity completed a five-year "corporate integrity agreement" with the U.S. Office of the Inspector General following an investigationinto how it billed the government for hospital inpatient stays. Dignity said it "fully complied" with the agreement.
Dignity is also defending itself in a class-action lawsuit alleging that it bills uninsured patients at grossly inflated rates even though it claims to provide "affordable" care at "the lowest possible cost."
More recently, an appeals court judge ruled Dignity could not charge higher prices — often a lot higher than state-set rates — for treating enrollees of L.A. Care's Medi-Cal health plan at its Northridge Hospital Medical Center.
Dignity disagreed with the court's ruling in that case, saying that although the Northridge facility did not have a contract with L.A. Care, many of the health plan's enrollees who initially sought emergency treatment there stayed in the hospital for additional care after they had been stabilized. The hospital "seeks appropriate reimbursement for providing this care," Dignity said.
If Dignity does not reach an agreement with Cigna, its hospitals, outpatient surgery centers and medical groups in most of California will soon be out-of-network for many Cigna enrollees. In-network coverage for Open Access (OAP) and Preferred Provider (PPO) ended Feb. 1, and for HMO patients it is set to end April 1.
Peter Welch, president and general manager for Cigna in Northern California and the Pacific Northwest, said Cigna can provide "adequate access" to other hospitals and doctors.
Certain Cigna enrollees can apply to continue visiting Dignity facilities and doctors under California's Continuity of Care law, enacted in 2014. Eligible enrollees include patients with chronic conditions, those already scheduled for pre-authorized services, people in need of emergency care and pregnant women in their third trimester.
Friedland and Kaufman applied, hoping she would be able to continue seeing her Dignity-affiliated OB-GYN at in-network rates.
On Jan. 22, less than a month from Friedland's Feb. 15 due date, they received written confirmation that their request had been approved. They wouldn't have to shop for a new doctor or face stiff medical bills after all.
Early Tuesday evening, Friedland gave birth to a baby girl, Eliza, who entered the world 11 days earlier than expected, weighing in at 7 pounds, 3 ounces.
"While the ordeal was stressful, and the communication fraught, we were happy to receive confirmation of continuity of care and that it ended in the best possible way — with the birth of our healthy baby daughter with the provider where we established care," Kaufman said. "For the sake of those caught in the middle and now having to start relationships with new health care providers, we hope the two sides can come to an agreement."
Clinicians wrestle with what they consider barriers to quality care: insurance preauthorization, trouble making patient referrals, endless clicking on EHRs.
This article was first published on Tuesday, February 4, 2020, in Kaiser Health News.
Dr. Keith Corl was working in a Las Vegas emergency room when a patient arrived with chest pain. The patient, wearing his street clothes, had a two-minute exam in the triage area with a doctor, who ordered an X-ray and several other tests. But later, in the treatment area, when Corl met the man and lifted his shirt, it was clear the patient had shingles. Corl didn't need any tests to diagnose the viral infection that causes a rash and searing pain.
All those tests? They turned out to be unnecessary and left the patient with over $1,000 in extra charges.
The excessive testing, Corl said, stemmed from a model of emergency care that forces doctors to practice "fast and loose medicine." Patients get a battery of tests before a doctor even has time to hear their story or give them a proper exam.
"We're just shotgunning," Corl said.
The shingles case is one of hundreds of examples that have led to his exasperation and burnout with emergency medicine. What's driving the burnout, he argued, is something deeper — a sense of "moral injury."
Corl, a 42-year-old assistant professor of medicine at Brown University, is among a growing number of physicians, nurses, social workers and other clinicians who are using the phrase "moral injury" to describe their inner struggles at work.
The term comes from war: It was first used to explain why military veterans were not responding to standard treatment for post-traumatic stress disorder. Moral injury, as defined by researchers from veterans hospitals, refers to the emotional, physical and spiritual harm people feel after "perpetrating, failing to prevent, or bearing witness to acts that transgress deeply held moral beliefs and expectations."
Drs. Wendy Dean and Simon Talbot, a psychiatrist and a surgeon, were the first to apply the term to health care. Both wrestled with symptoms of burnout themselves. They concluded that "moral injury" better described the root cause of their anguish: They knew how best to care for their patients but were blocked from doing so by systemic barriers related to the business side of health care.
That idea resonates with clinicians across the country: Since they penned an op-ed in Stat in 2018, Dean and Talbot have been flooded with emails, comments, calls and invitations to speak on the topic.
Burnout has long been identified as a major problem facing medicine: 4 in 10 physicians report feelings of burnout, according to a 2019 Medscape report. And the physician suicide rate is more than double that of the general population.
Dean said she and Talbot have given two dozen talks on moral injury. "The response from each place has been consistent and surprising: 'This is the language we've been looking for for the last 20 years.'"
Dean said that response has come from clinicians across disciplines, who wrestle with what they consider barriers to quality care: insurance preauthorization, trouble making patient referrals, endless clicking on electronic health records.
Those barriers can be particularly intense in emergency medicine.
Corl said he has been especially frustrated by a model of emergency medicine called "provider-in-triage." It aims to improve efficiency but, he said, prioritizes speed at the cost of quality care. In this system, a patient who shows up to an ER is seen by a doctor in a triage area for a rapid exam lasting less than two minutes. In theory, a doctor in triage can more quickly identify patients' ailments and get a head start on solving them. The patient is usually wearing street clothes and sitting in a chair.
These brief encounters may be good for business: They reduce the "door to doc" time — how long it takes to see a doctor — that hospitals sometimes boast about on billboards and websites. They enable hospitals to charge a facility fee much earlier, the minute a patient sees a doctor. And they reduce the number of people who leave the ER without "being seen," which is another quality measure.
But "the real priority is speed and money and not our patients' care," Corl said. "That makes it tough for doctors who know they could be doing better for their patients."
Dean said people often frame burnout as a personal failing. Doctors get the message: "If you did more yoga, if you ate more salmon salad, if you went for a longer run, it would help." But, she argued, burnout is a symptom of deeper systemic problems beyond clinicians' control.
Emergency physician Dr. Angela Jarman sees similar challenges in California, including ER overcrowding and bureaucratic hurdles to discharging patients. As a result, she said, she must treat patients in the hallways, with noise, bright lights and a lack of privacy — a recipe for hospital-acquired delirium.
"Hallway medicine is such a [big] part of emergency medicine these days," said Jarman, 35, an assistant professor of emergency medicine at UC-Davis. Patients are "literally stuck in the hallway. Everyone's walking by. I know it must be embarrassing and dehumanizing."
For example, when an older patient breaks an arm and cannot be released to their own care at home, they may stay in the ER for days as they await evaluation from a physical therapist and approval to transfer to rehab or a nursing home, she said. Meanwhile, the patient gets bumped into a bed in the hallway to make room for new patients who keep streaming in the door.
Being responsible for discharging patients who are stuck in the hallway is "so frustrating," Jarman said. "That's not what I'm good at. That's not what I'm trained to do."
Jarman said many emergency physicians she knows work part time to curtail burnout.
"I love emergency medicine, but a lot of what we do these days is not emergency medicine," she said. "I definitely don't think I'll make it 30 years."
Also at UC-Davis, Dr. Nick Sawyer, an assistant professor of emergency medicine, has been working with medical students to analyze systemic problems. Among those they've identified: patients stuck in the ER for up to 1,000 hours while awaiting transfer to a psychiatric facility; patients who are not initially suicidal, but become suicidal while awaiting mental health care; patients who rely on the ER for primary care.
Sawyer, 38, said he has suffered moral injury from treating patients like this one: A Latina had a large kidney stone and a "huge amount of pain" but could not get surgery because the stone was not infected and therefore her case wasn't deemed an "emergency" by her insurance plan.
"The health system is not set up to help patients. It's set up to make money," he said.
The best way to approach this problem, he said, is to help future generations of doctors understand "how decisions made at the systems level impact how we care about patients" — so they can "stand up for what's right."
Whether these experiences amount to moral injury is open for discussion.
Cynda Rushton, a nurse and professor of clinical ethics at Johns Hopkins University, who has studied the related notion of "moral distress" for 25 years, said there isn't a base of research, as there is for moral distress, to measure moral injury among clinicians.
But "what both of these terms signify," Rushton said, "is a sense of suffering that clinicians are experiencing in their roles now, in ways that they haven't in the past."
Dean grew interested in moral injury from personal experience: After a decade of treating patients as a psychiatrist, she stopped because of financial pressures. She said she wanted to treat her patients in longer visits, offering both psychotherapy and medication management, but that became more difficult. Insurers would rather pay her for only a 15-minute session to manage medications and let a lower-paid therapist handle the therapy.
Dean and Talbot created a nonprofit advocacy group called Moral Injury of Healthcare, which promotes public awareness and aims to bring clinicians together to discuss the topic.
Their work is attracting praise from a range of clinicians:
In Cumberland County, Pennsylvania, Mary Franco, who is now 65, retired early from her job as a nurse practitioner after a large corporation bought out the private practice she worked in. She said she saw "a dramatic shift" in the culture there, where "revenue became all-important." The company cut in half the time for each patient's annual exam, she said, down to 20 minutes. She spent much of that time clicking through electronic health records, she said, instead of looking the patient in the face. "I felt I short-shrifted them."
In southern Maine, social worker Jamie Leavitt said moral injury led her to take a mental health break from work last year. She said she loves social work, but "I couldn't offer the care I wanted to because of time restrictions." One of her tasks was to connect patients with mental health services, but because of insurance restrictions and a lack of quality care providers, she said, "often my job was impossible to do."
In Chambersburg, Pennsylvania, Dr. Tate Kauffman left primary care for urgent care because he found himself spending half of each visit doing administrative tasks unrelated to a patient's ailment — and spending nights and weekends slogging through paperwork required by insurers.
"There was a grieving process, leaving primary care," he said. "It's not that I don't like the job. I don't like what the job has become today."
Corl said he was so fed up with the provider-in-triage model of emergency medicine that he moved his ER clinical work to smaller, community hospitals that don't use that method.
He said many people frame burnout as a character weakness, sending doctors messages like, "Gee, Keith, you've just got to try harder and soldier on." But Corl said the term "moral injury" correctly identifies that the problem lies with the system.
"The system is flawed," he said. "It's grinding us. It's grinding good docs and providers out of existence."
The decision came out of the blue. "Your husband isn't going to get any better, so we can't continue services," an occupational therapist told Deloise "Del" Holloway in early November. "Medicare isn't going to pay for it."
The therapist handed Del a notice explaining why the home health agency she represented was terminating care within 48 hours. "All teaching complete," it concluded. "No further hands on skilled care. Wife states she knows how to perform exercises."
That came as a shock. In May 2017, at age 57, Anthony Holloway was diagnosed with ALS (amyotrophic lateral sclerosis): The Frederick, Maryland, man can't walk, get out of bed or breathe on his own (he's on a ventilator). He can't use the toilet, bathe or dress himself. Therapists had been helping Anthony maintain his strength, to the extent possible, for two years.
"It's totally inhumane to do something like this," Del said. "I can't verbalize how angry it makes you."
Why the abrupt termination? SpiriTrust Lutheran, which provides senior services in Pennsylvania and Maryland, said it could not comment on the situation because of privacy laws. "In every client situation SpiriTrust Lutheran is committed to insuring the safety and well-being of the individual," wrote Crystal Hull, vice president of communications, in an email.
But its decision comes as home health agencies across the country are grappling with a significant change as of Jan. 1 in how Medicare pays for services. (Managed-care-style Medicare Advantage plans have their own rules and are not affected.)
Agencies are responding aggressively, according to multiple interviews. They are cutting physical, occupational and speech therapy for patients. They are firing therapists. And they are suggesting that Medicare no longer covers certain services and terminating services altogether for some longtime, severely ill patients.
Altogether, about 12,000 home care agencies (most of them for-profit) provided care to 3.4 million Medicare beneficiaries in 2017, the most recent year for which data is available.
To qualify for services, a person must be homebound and in need of intermittent skilled care (less than eight hours a day) from nurses or therapists.
Previously, Medicare's home health rates reflected the amount of therapy delivered: More visits meant higher payments. Now, therapy isn't explicitly factored into Medicare's reimbursement system, known as the Patient-Driven Groupings Model (PDGM).
Instead, payments are based on a patient's underlying diagnosis, the presence of other complicating medical conditions, the extent to which the patient is impaired, whether he or she is referred for services after a hospitalization or a stay in a rehabilitation center (payments are higher for people discharged from institutions) and the timing of services (payments are higher for the first 30 days and lower thereafter).
Agencies now have a stronger financial incentive to serve patients who need short-term therapy after a stay in the hospital or a rehabilitation facility, said Kathleen Holt, associate director of the Center for Medicare Advocacy. Also attractive will be patients who need nursing care for complex conditions such as post-surgical wounds.
At the same time, there are fewer incentives to serve patients who need extensive physical, occupational and speech therapy.
The new system encourages a "holistic" assessment of patients' needs, and there's convincing evidence that home health agencies sometimes provided too much therapy under Medicare's previous system, said Jason Falvey, a postdoctoral research fellow in the geriatrics division at Yale School of Medicine. Between 2000 and 2016, Medicare home health therapy services soared 112%, according to the most recent data published by the Medicare Payment Advisory Commission.
But the risk now is that too little therapy will be offered, Falvey said.
"We are very concerned about that potential," said Kara Gainer, director of regulatory affairs for the American Physical Therapy Association.
Early reports from the field substantiate reason for concern.
Last fall, the National Association for Home Care and Hospice asked 1,500 agencies how practices would change under PDGM. One-third said "categorically, across the board, we're going to reduce our therapy services," said William Dombi, the association's president.
Dombi said his group has advised agencies that these cuts "may not be a good move" medically (patients might deteriorate without therapy and end up in the emergency room or the hospital) or "from a business perspective." (If more patients end up worse off and going to emergency rooms or are hospitalized, that will reflect poorly on agencies and may affect referrals.)
The American Occupational Therapy Association is also surveying members. Based on 135 responses to date, occupational therapists and assistants are being laid off, asked to decrease the number of visits to clients and directed to provide services for less than 30 days, said Sharmila Sandhu, vice president of regulatory affairs.
In an email, a spokesman for the Centers for Medicare & Medicaid Services said the federal agency is "monitoring the implementation of the PDGM, including therapy service provision, at the national, regional, state, and agency level." (A similar system for skilled nursing facilities that provide rehabilitation was implemented in October.)
"We do not expect home health agencies to under-supply care or services; reduce the number of visits in response to payment; or inappropriately discharge a patient receiving Medicare home health services as these would be violations of [Medicare] conditions of participation," the spokesman wrote.
Yet that appears to be happening.
Carrie Madigan, an occupational therapist who worked for Kindred at Home in Omaha, Nebraska, said she was laid off in November as the company — the largest U.S. home health provider — cut therapy positions nationwide. Her agency lost four occupational therapists and three physical therapists last year as it implemented layoffs and cut back on therapy visits in anticipation of PDGM, she said.
A company spokesperson wrote in an email that Kindred at Home doesn't discuss staffing decisions. The person maintained that its "focus always has been, and will remain, on providing the right care at the right time for our patients."
Several large agencies said they had prepared extensively for PDGM. The Visiting Nurse Service of New York has trained coaches to work with Medicare home health patients and is bringing remote monitoring equipment into people's homes to track their progress, said Susan Northover, senior vice president of patient care services. The agency provided home health services to more than 30,000 Medicare beneficiaries in and around New York City last year.
Under PDGM, there are 432 ways of classifying patients. For each, the group is recommending "the amount of time we think a patient should be receiving care," based on extensive analysis of historical data, Northover said. "I absolutely see no change in how we will provide therapy going forward."
Encompass Health of Dallas serves about 45,000 home health patients in 33 states, most of them covered by Medicare. It's using an artificial intelligence tool to predict what kind of services, and how many, patients will need. "We've been able to eliminate some wasted visits" and become more efficient, said Bud Langham, chief strategy and innovation officer.
Langham said he was disturbed by reports he was hearing that "agencies are taking a very draconian approach to PDGM."
"That's dangerous, and it's going to lead to worse outcomes," he said.
In Frederick, Maryland, the Holloways have struggled since SpiriTrust terminated Anthony's services Nov. 11. Four other agencies rejected Anthony as a patient. Without help stretching his limbs and strengthening his core muscles, he's in more pain and has four new bedsores on his backside.
"He's developing scoliosis, and he's slumping in his wheelchair," Del said. "And he can't get comfortable at night. We spend hours trying to reposition him so he's able to sleep."
Before his services were cut off, Anthony had been getting three hours of physical therapy, two hours of occupational therapy, one hour of speech therapy per week, plus a visit every other week from a registered nurse.
In an email, Hull of SpiriTrust wrote that "individualized plans of care are developed specific to the needs of each client" and that "PDGM did not influence any decision made specific to this particular client's plan of care."
Before retiring in 2016 because of ill health, Anthony was chief of police for the U.S. Bureau of Engraving and Printing. "It seems to me nobody cares about what's happening to me," he told me. "It makes me feel terrible — awful, less than human."
Several times, health care providers have suggested that Anthony move to a nursing home, Del said.
"He'd have to go to a ventilator facility, and there's only one in my area, and everyone in it was really old and drugged when I visited," she said. "How can he live in a place like that when he can't use his arms or hands or operate a call button?"
There is a glimmer of hope. A few days before I spoke with the couple, a fifth home care agency said it would initiate services: two hours each of physical and occupational therapy, one hour of speech therapy and one hour for a home health aide every week.
"I'm relieved, but I also feel I'm walking on eggshells," Del said, "since they can terminate you at any time."