KFF Health News

KFF Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Snooze You Can Use: California Legislates More Sleep For Better Health

KFF Health News, October 28, 2019

A new California law mandates later start times for most students: no earlier than 8 a.m. in middle school and 8:30 a.m. in high school.

By Mark Kreidler

This article was first published on Monday, October 28, 2019 in Kaiser Health News.

Teenagers don't get enough sleep, and California's effort to fix the problem may serve as a wake-up call to other states' lawmakers.

A law recently signed by Gov. Gavin Newsom that mandates later start times for most students — no earlier than 8 a.m. in middle school and 8:30 a.m. in high school — is the first statewide response in the United States to overwhelming evidence that chronic lack of sleep impairs teens.

But it is hardly the only attempt to address the issue.

Individual cities, regions and school districts across the U.S. have tried for years to afford their students the sleep benefits of later school starts.

Their efforts are just one aspect of a broader societal phenomenon so harmful that the Centers for Disease Control and Prevention declared it a public health epidemic five years ago. Simply put, a staggering number of Americans — or, better said, a number of staggering Americans — don't get enough sleep.

There is no simple way to alter that reality, a reminder of which will be heard early in the morning on Sunday, Nov. 3, as Daylight Saving Time ends, bringing with it the usual spate of sleep-related complications.

Last November, nearly 60% of California voters backed a ballot proposition to end twice-a-year clock changes, in part because of the havoc they wreak on sleep. State legislators followed with a bill to put California on permanent Daylight Saving Time.

It passed the Assembly earlier this year but is now on hold until 2020. Assemblyman Kansen Chu (D-San Jose), who introduced the legislation, said he wanted more time to explore the option of going on permanent standard time.

Only two states — Arizona and Hawaii — do not move their clocks every spring and autumn. Both abandoned the system in the late 1960s, noting that their residents receive plenty of sunlight year round.

Other states, including Minnesota, Florida and several more, have considered legislation to remain on Daylight Saving Time year-round. Oregon already passed a law to do so. But since legislators there wanted all the clocks on the West Coast showing the same time, their law is on hold until Washington and California do the same.

And to make the problem even more complicated, any state that jettisons biannual clock changing still needs approval from Congress.

The specifics of California's new school law reflect the complexity of any kind of change to the sleep patterns of Americans. The bill exempts some of the state's rural districts, makes allowances for optional "zero period" early classes, and is being phased in over three years.

A bill with similar provisions was rejected by lawmakers in 2017 and vetoed by then-Gov. Jerry Brown in 2018. Critics say local communities and school boards should be able to decide their own start times. And they argue that the law will disproportionately affect lower-income families, who cannot alter their morning work schedules to accommodate later rides to school — though some lucky parents may be able to get more sleep.

The momentum toward later starting times for students, who researchers say need close to nine hours of sleep a night, has been gathering for some time. And research in places that made the change has shown it is beneficial to students.

Many schools in the Minneapolis area moved back high school start times 20 years ago and found that students were generally more alert, less stressed and less likely to fall asleep in class.

In Kentucky's Jessamine County, a 2002 switch from 7:30 a.m. to 8:40 a.m. for high school students had several immediate effects, among them increases in attendance and standardized test scores. Seattle in 2016 moved to an 8:45 a.m. start, nearly an hour later than the previous one; it has resulted in students getting more than a half-hour of extra sleep, according to research. Portsmouth, N.H., schools also moved to later start times the same year.

And there is some momentum at statewide levels, too. Days after Newsom signed the law, a legislator in Ohio introduced a bill that no school start before 8:30 a.m. — though its author was less concerned with sleep than with early-morning safety issues. Lawmakers in Indiana, South Carolina and New Jersey are also among those studying later start times.

The movement may ultimately make economic sense: Moving the first bell to 8:30 a.m. across America's middle and high schools could add $9.3 billion to the economy in the next year and $83 billion over a decade — all because of improved sleep, health and mental acuity, according to a study by the Rand Corp., the Santa Monica., Calif.-based think tank.

Well-established scientific research draws a direct line between less sleep and health — not just for developing adolescents, but for adults, too.

"The shorter your sleep, the shorter your life," University of California-Berkeley neuroscientist and sleep expert Matthew Walker wrote in his best-selling book, "Why We Sleep."

Despite this knowledge, however, "the trend is going the other way," said Aric Prather, associate professor of psychiatry at UC-San Francisco, who studies and works with patients on sleep-related problems.

The number of Americans who say they don't get even the minimum recommended seven hours of sleep per night has increased significantly since 2013, and nearly one-third of Americans now say they sleep six hours or less.

Chronic sleep disruption has been linked to a weakened immune system, low sex drive, loss of memory, increased likelihood of Type 2 diabetes, heart disease and impaired thinking, as well as higher risks of accidents, obesity, loneliness and low-grade depression.

Put it together, and those who habitually get too little sleep are going to wind up with shorter, unhappier lives.

It's enough to keep you up at night.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

States Try A Gentler Approach To Getting Medicaid Enrollees To Work

KFF Health News, October 28, 2019

A handful of states are offering alternatives to get more enrollees into jobs to lift them out of poverty and off Medicaid.

This article was first published on Monday, October 28, 2019 in Kaiser Health News.

By Phil Galewitz

Under pressure from the Republican-controlled Pennsylvania legislature to require Medicaid recipients to work as a condition for coverage, state health officials have devised a gentler approach to getting beneficiaries into jobs.

Starting early next year, the Pennsylvania Medicaid agency under Democratic Gov. Tom Wolf will ask people when they enroll if they want job training assistance. It will then require its private Medicaid managed-care organizations to connect those who want help to local employment specialists and follow up to make sure they got it.

Teresa Miller, the state human services secretary, predicts the strategy will get better results than strict work requirements. The Trump administration has approved requiring work in nine states, with requests from nine others pending. Arkansas is the only state to implement the requirements, and more than 18,000 enrollees there lost coverage from June 2018 to March 2019 — with little sign many found jobs.

Since then, a federal judge struck down the work requirements in Arkansas, Kentucky and New Hampshire. The Trump administration and the states are appealing the decision.

"I worry that, with its reporting rules, work requirements result in fewer people covered by Medicaid, and that is not our goal," Miller said. "Our goal is to try to get people out of poverty. If you take access to health care away for people not working, I'm not sure how that helps people get a job."

A handful of states are offering alternatives to get more enrollees into jobs to lift them out of poverty and off Medicaid, the federal-state health program for low-income residents.

In Montana, about 32,000 of the 95,000 adult enrollees who gained coverage when the state expanded Medicaid in 2016 have received employment services from the state, including 4,200 who received one-on-one employment training services.

In August, Louisiana began a pilot program to train Medicaid enrollees for jobs such as a nursing assistant, commercial driver and forklift operator. It expects 50 people to complete the training this year at a community college.

More states are expected to follow. "While currently only a small number of states are starting to more directly connect Medicaid with the workforce training systems, this is a trend that will soon expand to many more states," said Steve Bella, a Bend, Ore., health and workplace consultant.

Bobbi Stammers, 37, enrolled in Montana's Medicaid in 2017 and said the state's job training assistance helped her get a nursing degree this year. The program paid thousands of dollars for her education expenses and supplies, including for textbooks and lab fees, and even covered the cost of fixing her car.

Two months after getting her degree, Stammers has a job with full benefits as a registered nurse, which means her family no longer needs Medicaid.

"I am so thankful I did this program; it really helped me get through school," said Stammers, of Charlo, Mont.

She used student loans to pay tuition, but with her husband working as a self-employed truck driver, Stammers said, additional expenses were burdensome. "This program eased the way for sure," Stammers said.

Conservatives nationwide have pushed for work requirements since Medicaid expanded dramatically under the Affordable Care Act. That law allows states to use federal funds to provide coverage to all adults with incomes below 138% of the federal poverty level, or $17,230 for an individual. Before that, many states limited adult enrollment to pregnant women, parents and people with extremely low incomes.

Despite the focus on getting Medicaid enrollees into jobs, studies show most people on Medicaid already work, and many of the rest have some disability, go to school or are caring for a family member.

Connecting people with job training is part of a broader effort by some states to improve Medicaid enrollees' health beyond paying for doctor and hospital care, said Hannah Katch, a senior policy analyst with the Center on Budget and Policy Priorities, a left-leaning advocacy group. She said states are looking at other social determinants of health, including housing and food services.

Montana's effort has been successful, Katch said, because it surveys people about their job status and training needs and then uses caseworkers to get them into career programs. About 60% of Montana Medicaid enrollees surveyed said they are employed, and 70% expressed interest in learning about opportunities in part-time or full-time jobs. The top three barriers to employment were poor finances, a criminal conviction and lack of transportation, according to the surveys.

A study by the state found its job training program helped lead to a 6% increase in Medicaid expansion-eligible adults joining the workforce from 2016 to 2018.

Despite the success of Montana's voluntary program, conservative lawmakers earlier this year pushed through legislation requiring that the state apply to the Trump administration for a waiver to mandate that Medicaid enrollees find jobs to keep their coverage, as well as pay monthly premiums based on how long they are on the program.

Health policy experts in Montana fear the work requirement will unfairly punish people who fail to report their employment status.

"We are worried those who are working are going to be subject to some pretty strict reporting requirements in order to maintain their health coverage," said Heather O'Loughlin, co-director of research and development at the Montana Budget & Policy Center. "We know there will be a loss of coverage, leaving people in a worse position to take care of themselves."

Pennsylvania's effort to assess enrollees about their job training interest comes after the governor has twice vetoed legislation to enact work requirements. The legislature will take up the same bill this year.

Sen. David Argall, a Republican co-sponsor of the measure, said the state's effort on job training doesn't go far enough.

"What they are suggesting is a tiny step in the right direction, but we need to do so much more," Argall said.

"Everyone tells me we have tens of thousands of able-bodied Pennsylvania residents receiving Medicaid but not working, and we need to be more aggressive in encouraging them to reenter the workforce," he said. "We are not asking Great-Grandma to work in a coal mine. We are talking about guys in their 20s who need an extra push."

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Sen. Grassley Questions UVA Health On Findings From KHN Investigation

KFF Health News, October 18, 2019

Over six years, UVA Health filed 36,000 lawsuits against patients seeking a total of more than $106 million in unpaid bills.

This article was first published on Thursday, October 17, 2019 in Kaiser Health News.

By Elizabeth Lucas

In response to a Kaiser Health News investigation into the University of Virginia Health System's aggressive collection practices, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) sent a letter Thursday demanding answers to questions about UVA's billing practices, financial assistance policies and even its prices.

Over six years, the state institution filed 36,000 lawsuits against patients seeking a total of more than $106 million in unpaid bills, a KHN analysis finds.

The Finance Committee oversees federal tax laws, and Grassley wrote that it is "my job to make sure that entities exempt from tax are fulfilling their tax-exempt purposes."

The KHN investigation found that UVA Health System, a taxpayer-supported and state-funded entity, filed 36,000 lawsuits for more than $106 million in six years.

"Unfortunately, I have seen a variety of news reports lately discussing what appear to be relentless debt-collection efforts by tax-exempt hospitals, including UVA Health System," Grassley wrote. "I am also concerned about how patients' hospital bills get so high in the first place."

Even though the letter questions only UVA Health System, whose practices were pegged in the investigation as particularly aggressive, it sends a signal that the Senate will be paying attention to an issue that affects all state-run and nonprofit health systems. Many medical providers pursue patients for unpaid bills, sometimes forcing them into bankruptcy. Several news stories have highlighted similar collections practices at other nonprofit hospitals.

Nonprofit hospitals get big tax breaks in exchange for providing "charity care and community benefit," though there is no clear standard about what that should mean. Experts have questioned whether those breaks are deserved, given hospitals' pricing, billing and collections practices.

In the seven-page letter, Grassley asks 19 detailed questions on various topics, including the system's charity care (free or discounted care provided to low-income patients), debt collection policies, and its rationale for the litigation threshold of $1,000, enacted in 2017. Grassley asks specific questions about UVA's list of standard prices for procedures and equipment, commonly known as the "chargemaster," which is posted on its website.

The letter was addressed to CEO Pamela Sutton-Wallace, who will depart UVA Health System for NewYork-Presbyterian Hospital next month. UVA Health System has until Nov. 19 to respond.

"UVA is committed to assisting indigent and uninsured patients and making sure they receive all necessary care," UVA Health System spokesman Eric Swensen said in an email to KHN. "We will review the letter, and look forward to working with Sen. Grassley to respond to his questions and share with him the policy changes we have announced and started implementing over the past month to better serve our patients."

In response to KHN's investigation, UVA Health System swiftly vowed to change its policies to increase financial assistance, give bigger discounts to the uninsured and reduce its use of the legal system. However, KHN reported that some critics do not think the new policies go far enough.

Elizabeth Lucas: elucas@kff.org, @eklucas

Whistleblower Alleges Medicare Fraud At Iconic Seattle-Based Health Plan

KFF Health News, October 18, 2019

Suit alleges that Group Health Cooperative claimed some patients were sicker than they were, and billed for medical conditions that patients didn't have.

This article was first published on Friday, October 18, 2019 in Kaiser Health News.

By Fred Schulte

Group Health Cooperative in Seattle, one of the nation's oldest and most respected nonprofit health insurance plans, is accused of bilking Medicare out of millions of dollars in a federal whistleblower case.

Teresa Ross, a former medical billing manager at the insurer, alleges that it sought to reverse financial losses in 2010 by claiming some patients were sicker than they were, or by billing for medical conditions that patients didn't actually have. As a result, the insurer retroactively collected an estimated $8 million from Medicare for 2010 services, according to the suit.

Ross filed suit in federal court in Buffalo, N.Y., in 2012, but it remained under a court seal until July and is in the initial stages. The suit also names as defendants two medical coding consultants, consulting firm DxID of East Rochester, N.Y., and Independent Health Association, an affiliated health plan in Buffalo, N.Y. All denied wrongdoing in separate court motions filed late Wednesday to dismiss the suit.

The Justice Department has thus far declined to take over the case, but said in a June 21 court filing that "an active investigation is ongoing."

The whistleblower suit is one of at least 18 such cases documented by KHN that accuse Medicare Advantage managed-care plans of ripping off the government by exaggerating how sick its patients were. The whistleblower cases have emerged as a primary tool for clawing back overpayments. While many of the cases are pending in courts, five have recovered a total of nearly $360 million.

"The fraudulent practices described in this complaint are a product of the belief, common among MA organizations, that the law can be violated without meaningful consequence," Ross alleges.

Medicare Advantage plans are a privately run alternative to traditional Medicare that often offer extra benefits such as dental and vision coverage, but limit choice of medical providers. They have exploded in popularity in recent years, enrolling more than 22 million people, just over 1 in 3 of those eligible for Medicare.

Word of another whistleblower alleging Medicare Advantage billing fraud comes as the White House is pushing to expand enrollment in the plans. On Oct. 3, President Donald Trump issued an executive order that permits the plans to offer a range of new benefits to attract patients. One, for instance, is partly covering the cost of Apple Watches as an inducement.

Group Health opened for business more than seven decades ago and was among the first managed-care plans to contract with Medicare. Formed by a coalition of unions, farmers and local activists, the HMO grew from just a few hundred families to more than 600,000 patients before its members agreed to join California-based Kaiser Permanente. That happened in early 2017, and the plan is now called Kaiser Foundation Health Plan of Washington. (Kaiser Health News is not affiliated with Kaiser Permanente.)

In an emailed statement, a Kaiser Permanente spokesperson said: "We believe that Group Health complied with the law by submitting its data in good faith, relying on the recommendations of the vendor as well as communications with the federal government, which has not intervened in the case at this time."

Ross nods to the plan's history, saying it has "traditionally catered to the public interest, often highlighting its efforts to support low-income patients and provide affordable, quality care."

The insurer's Medicare Advantage plans "have also traditionally been well regarded, receiving accolades from industry groups and Medicare itself," according to the suit.

But Ross, who worked at Group Health for more than 14 years in jobs involving billing and coding, said that from 2008 through 2010 GHC "went from an operating income of almost $57 million to an operating loss of $60 million. Ross said the losses were "due largely to poor business decisions by company management."

The lawsuit alleges that the insurer manipulated a Medicare billing formula known as a risk score. The formula is supposed to pay health plans higher rates for sicker patients, but Medicare estimates that overpayments triggered by inflated risk scores have cost taxpayers $30 billion over the past three years alone.

According to Ross, a GHC executive attended a meeting of the Alliance of Community Health Plans in 2011 where he heard from a colleague at Independent Health about an "exciting opportunity" to increase risk scores and revenue. The colleague said Independent Health "had made a lot of money" using its consulting company, which specializes in combing patient charts to find overlooked diseases that health plans can bill for retroactively.

In November 2011, Group Health hired the East Rochester firm DxID to review medical charts for 2010. The review resulted in $12 million in new claims, according to the suit. Under the deal, DxID took a percentage of the claims revenue it generated, which came to about $1.5 million that year, the suit says.

Ross said she and a doctor who later reviewed the charts found "systematic" problems with the firm's coding practices. In one case, the plan billed for "major depression" in a patient described by his doctor as having an "amazingly sunny disposition." Overall, about three-quarters of its claims for higher charges in 2010 were not justified, according to the suit. Ross estimated that the consultants submitted some $35 million in new claims to Medicare on behalf of GHC for 2010 and 2011.

In its motion to dismiss Ross' case, GHC called the matter a "difference of opinion between her allegedly 'conservative' method for evaluating the underlying documentation for certain medical conditions and her perception of an 'aggressive' approach taken by Defendants."

Independent Health and the DxID consultants took a similar position in their court motion, arguing that Ross "seeks to manufacture a fraud case out of an honest disagreement about the meaning and applicability of unclear, complex, and often conflicting industry-wide coding criteria."

In a statement, Independent Health spokesman Frank Sava added: "We believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately.

Whistleblowers sue on behalf of the federal government and can share in any money recovered. Typically, the cases remain under a court seal for years while the Justice Department investigates.

Fred Schulte: fschulte@kff.org, @fredschulte

'Fear Of Falling': How Hospitals Do Even More Harm By Keeping Patients In Bed

KFF Health News, October 17, 2019

Hospitals have become so overzealous in fall prevention that they are producing an 'epidemic of immobility.'

This article was first published on Thursday, October 17, 2019 in Kaiser Health News.

By Melissa Bailey

Dorothy Twigg was living on her own, cooking and walking without help until a dizzy spell landed her in the emergency room. She spent three days confined to a hospital bed, allowed to get up only to use a bedside commode. Twigg, who was in her 80s, was livid about being stuck in a bed with side rails and a motion sensor alarm, according to her cousin and caretaker, Melissa Rowley.

"They're not letting me get up out of bed," Twigg protested in phone calls, Rowley recalled.

In just a few days at the Ohio hospital, where she had no occupational or physical therapy, Twigg grew so weak that it took three months of rehab to regain the ability to walk and take care of herself, Rowley said. Twigg repeated the same pattern — three days in bed in a hospital, three months of rehab — at least five times in two years.

Falls remain the leading cause of fatal and nonfatal injuries for older Americans. Hospitals face financial penalties when they occur. Nurses and aides get blamed or reprimanded if a patient under their supervision hits the ground.

But hospitals have become so overzealous in fall prevention that they are producing an "epidemic of immobility," experts say. To ensure that patients will never fall, hospitalized patients who could benefit from activity are told not to get up on their own — their bedbound state reinforced by bed alarms and a lack of staff to help them move.

That's especially dangerous for older patients, often weak to begin with. After just a few days of bed rest, their muscles can deteriorate enough to bring severe long-term consequences.

"Older patients face staggering rates of disability after hospitalizations," said Dr. Kenneth Covinsky, a geriatrician and researcher at the University of San Francisco-California. His research found that one-third of patients age 70 and older leave the hospital more disabled than when they arrived.

The first penalties took effect in 2008, when the Centers for Medicare & Medicaid Services declared that falls in hospitals should never happen. Those penalties are not severe: If a patient gets hurt in a hospital fall, CMS still pays for the patient's care but no longer bumps up payment to a higher tier to cover treatment of fall-related conditions.

Still, Covinsky said that policy has created "a climate of fear of falling," where nurses "feel that if somebody falls on their watch, they'll be blamed for it." The result, he said, is "patients are told not to move," and they don't get the help they need. To make matters worse, he added, when patients grow weaker, they are more likely to get hurt if they fall.

Congress introduced stiffer penalties with the Affordable Care Act, and CMS began to reduce federal payments by 1% for the quartile of hospitals with the highest rates of falls and other hospital-acquired conditions. That's substantial because nearly a third of U.S. hospitals have negative operating margins, according to the American Hospital Association.

Nancy Foster, the AHA's vice president of quality and patient safety policy, said these policy changes sent "a strong signal to the hospital field about things CMS expected us to be paying attention to." Limiting patient mobility "certainly is a potential unintended consequence," she said. "It might have happened, but it's not what I'm hearing on the front line. They're getting people up and moving."

While hospitals are required to report falls, they don't typically track how often patients get up or move. One study conducted in 2006-07 of patients 65 and older who did not have dementia or delirium and were able to walk in the two weeks before admission found they spent, on average, 83% of their hospital stay in bed.

While lying there, older patients often find themselves tracked by alarms that bleep or shriek when they try to get up or move. These alarms are designed to alert nurses so they can supervise the patient to safely walk — but research has shown that the alarms don't prevent falls. Often stretched thin, nurses are deluged by many types of alarms and can't always dash to the bedside before a patient hits the ground.

Dr. Cynthia J. Brown, a professor at the University of Alabama at Birmingham, has identified common reasons older patients stay in bed: They feel too much pain, fatigue or weakness. They have IV lines or catheters that make it more difficult to walk. There's not enough staff to help them, or they feel they're burdening nurses if they ask for help. And walking down the hallway in flimsy gowns with messy hair can be embarrassing, she added.

Yet walking even a little can pay off. Older patients who walk just 275 steps a day in the hospital show lower rates of readmission after 30 days, research has found.

Across the country, efforts are afoot to encourage hospital patients to get up and move, often inside special wings called Acute Care for Elders that aim to maintain the independence of seniors and prevent hospital-acquired disabilities.

Another initiative, called the Hospital Elder Life Program, which is designed to reduce hospital-acquired delirium, also promotes mobility and has shown an added benefit of curtailing falls. In a study of HELP sites, there were no reported falls while staff or volunteers were helping patients move or walk.

Barbara King, an associate professor at the University of Wisconsin-Madison School of Nursing, studied how nurses responded to "intense messaging" from hospitals about preventing falls after the 2008 CMS policy change. She found that pressure to have zero patient falls made some nurses fearful. After a fall happened, some nurses adjusted their behavior and wouldn't let patients move on their own. CMS declined a request for an interview and did not directly answer a written question about whether its falls policy has limited patient mobility.

In 2015, King studied a nurse-driven effort to get more patients walking on a 26-bed hospital unit in the Midwest. The initiative, in which nurses encouraged patients to get out of bed and documented how often and how far they walked, boosted ambulation.

Hospitals still face barriers, such as the shortage of staff time, walking equipment and ways to record ambulation in electronic medical records, King said.

Getting more patients out of bed will also take a significant change in mindset, she said.

"If we think that a patient walking is a patient who will fall," King said, "we have to shift that culture."

Melissa Bailey: mbailey@kff.org, @mmbaily

Surprise Settlement In Sutter Health Antitrust Case

KFF Health News, October 16, 2019

Details have not been made public, and the parties declined to talk to reporters.

This story was first published on Wednesday, October 16, 2019 in Kaiser Health News.

By Jenny Gold

SAN FRANCISCO – Sutter Health has reached a tentative settlement agreement in a closely watched antitrust case brought by self-funded employers, and later joined by the California Attorney General’s Office. The agreement was announced in the San Francisco Superior Court Wednesday morning, just before opening arguments were expected to begin.

Details have not been made public, and the parties declined to talk to reporters. Superior Court Judge Anne-Christine Massullo told the jury that details will likely be made public during the approval hearings in February or March.

There were audible cheers from the jury following the announcement that the trial, which was expected to last for three months, would not continue.

Sutter stood accused of violating California’s antitrust laws by using its market power to illegally drive up prices. Health care costs in Northern California, where Sutter is dominant, are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley cited in the complaint.

The case was a massive undertaking, representing years of work and millions of pages of documents, California Attorney General Xavier Becerra said before the trial. Sutter was expected to face damages of up to $2.7 billion. Sutter Health consistently denied the allegations and argued that it used its market power to improve care for patients and expand access to people in rural areas. The nonprofit chain has 24 hospitals, 34 surgery centers and 5,500 physicians across Northern California, and had $13 billion in operating revenue in 2018.

The case was expected to have nationwide implications on how hospital systems negotiate prices with insurers. It is not yet clear what effect, if any, a settlement agreement would have on Sutter’s tactics or those of other large systems.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

Jenny Gold: jgold@kff.org, @JennyAGold

California Governor's Bill-Signing Marathon Offers Glimpse Of 2020 Issues

KFF Health News, October 15, 2019

Some of the new healthcare-related laws put California in the forefront nationally.

This article was first published on Tuesday, October 15, 2019 in Kaiser Health News.

By Ana B. Ibarra

Gov. Gavin Newsom wrapped up his bill-signing marathon Sunday, capping the end of a legislative session that will have a big impact on Californians' health care and coverage.

Some of the most high-profile — and contentious — measures of the year were health care-related: Who hasn't heard of the bill that spawned raucous protests at the Capitol by anti-vaccine activists? After some hesitation, Newsom signed SB-276 and an accompanying measure, which will give state public health officials authority to review and, in some cases, revoke questionable medical exemptions for childhood vaccinations.

In a blow to Big Pharma, the Democratic governor also signed what health advocacy groups deem this year's biggest effort to lower prescription drug costs. AB-824 will give the state attorney general more power to go after pharmaceutical companies that engage in "pay for delay," a practice in which makers of brand-name drugs pay off generic manufacturers to keep the lower-cost generic versions of their medications off the market.

And legislation adopted as part of the state budget this year will require Californians to have health insurance next year or face a penalty. The budget also funded new state-based tax credits for Californians who purchase health insurance through Covered California, including some who earn too much to qualify for federal financial aid.

Also starting next year, young adults in the country illegally will be eligible for Medi-Cal if their incomes qualify.

"This was a landmark year in health care," said Anthony Wright, executive director of the consumer advocacy group Health Access California. "Over a million Californians will be getting help to access or afford coverage."

But many lesser-known health care measures could also have a dramatic impact on Californians' lives, including college students, dialysis patients, older adults and new moms. Some of the laws put California in the forefront nationally, such as a measure to expand access to HIV prevention drugs.

Most of these measures take effect Jan. 1:

HIV Prevention

California will be the first state to allow people to access HIV prevention drugs from pharmacies without a doctor's prescription. Pre-exposure prophylaxis (PrEP) is a once-a-day pill for HIV-negative people that may keep them from becoming infected, and post-exposure prophylaxis (PEP) is medication that can help prevent the virus from taking hold if they have been exposed to it. SB-159 by state Sen. Scott Wiener (D-San Francisco) will allow pharmacists to dispense a 60-day supply of PrEP, or a 28-day course of PEP. Patients will need to see a physician to obtain more medication. The bill prohibits insurance companies from requiring patients to obtain prior authorization before obtaining the medication.

Abortion Pill

Students at California's 34 California State University and University of California campuses will have access to medication-induced abortion — commonly known as the abortion pill — at on-campus student health centers by Jan. 1, 2023. Under SB-24 by state Sen. Connie Leyva (D-Chino), students who are up to 10 weeks pregnant will be eligible. Initial costs, such as the purchase of medical equipment, will be paid for with private, not state, dollars.

Maternal Health

Black women are three to four times more likely to die during childbirth and from other pregnancy-related causes than white women, according to the Centers for Disease Control and Prevention. SB-464 by state Sen. Holly Mitchell (D-Los Angeles) will require perinatal health care providers to undergo bias training with the goal of reducing preventable maternal deaths among black women. "The disproportionate effect of the maternal mortality rate on this community is a public health crisis and a major health equity issue," Newsom said upon signing the bill.

Some new moms returning to their jobs who want to pump milk at work will face fewer barriers. SB-142 by Wiener will require employers to provide new mothers with a private space that includes a table, chair, electric outlet and nearby access to running water and refrigeration. Businesses with fewer than 50 employees may be eligible for an exemption. "Too many new mothers are unable to express milk at work or are forced to do so in a restroom or other unsuitable space," Wiener said.

Financial Abuse Of Older Adults

Investment advisers and broker-dealers will be required to report suspected financial abuse of elder or dependent adults. SB-496 by state Sen. John Moorlach (R-Costa Mesa) allows these financial experts to temporarily delay requested transactions, such as stock trades and disbursement of funds, when they suspect potential abuse. "With growing Alzheimer's and dementia concerns, it is critical that we provide safeguards to prevent financial abuse for those in the beginning stages of a difficult life journey," Moorlach said in a statement.

Smoking In State Parks

Californians will be prohibited from smoking or vaping at state beaches and parks, except for paved roads and parking areas. Violations of SB-8 by state Sen. Steve Glazer (D-Orinda) will carry a fine of up to $25. Similar efforts were vetoed by former Gov. Jerry Brown.

Nurse Staffing

State health officials who make unannounced inspections of hospitals will start reviewing nurse staffing levels. Some California hospitals disregard the state's current nurse-to-patient ratio requirements, Leyva, the bill's author, argued. SB-227 establishes penalties for violations: $15,000 for the first offense and $30,000 for each subsequent violation.

Medical Marijuana On School Grounds

Even though medicinal cannabis has been legal for years in California, it has not been allowed on school grounds. SB-223 by state Sen. Jerry Hill (D-San Mateo), will allow school boards to adopt policies that authorize parents or guardians of students with severe medical and developmental disabilities to administer medicinal cannabis on campus, as long as it is not via smoking or vaping. This allows students to "take their dose at school and then get on with their studies," Hill said.

Dialysis Industry Profits

One new law could disrupt the dialysis industry's business model. Dialysis companies often get higher reimbursements from private insurers than they do from public coverage. One way low-income patients remain on private insurance is by getting financial assistance from the American Kidney Fund, a nonprofit that receives most of its donations from the two largest dialysis companies, Fresenius Medical Care and DaVita Inc. AB-290, by Assemblyman Jim Wood (D-Santa Rosa), will limit the private-insurance reimbursement rate that dialysis companies receive for patients who get assistance from groups such as the American Kidney Fund.

Health Care In Jails And Prisons

County jails and state prisons will be prohibited from charging inmates copays — usually $3 to $5 — for medical and dental services with the passage of AB-45, by state Assemblyman Mark Stone (D-Scotts Valley). Some states already prohibit copays in prison, but California is the first to eliminate copays in county jails.

Cancer Patients

Some Californians undergoing cancer treatment such as radiation or chemotherapy will have insurance coverage for fertility preservation treatments. Under SB-600 by state Sen. Anthony Portantino (D-La Cañada Flintridge), private health plans regulated by the state must cover procedures such as the freezing of eggs, sperm or embryos for patients who want to try to have children in the future.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Ana B. Ibarra: aibarra@kff.org, @ab_ibarra

California's New Transparency Law Reveals Steep Rise In Wholesale Drug Prices

KFF Health News, October 14, 2019

Generic drugs saw the largest median increase of 37.6% from 2017 through the first quarter of 2019.

This article was first published on Monday, October 14, 2019 in Kaiser Health News.

By Barbara Feder Ostrov and Harriet Blair Rowan

Drugmakers fought hard against California's groundbreaking drug price transparency law, passed in 2017. Now, state health officials have released their first report on the price hikes those drug companies sought to shield.

Pharmaceutical companies raised the "wholesale acquisition cost" of their drugs — the list price for wholesalers without discounts or rebates — by a median of 25.8% from 2017 through the first quarter of 2019, according to the Office of Statewide Health Planning and Development. (The median is a value at the midpoint of data distribution.)

Generic drugs saw the largest median increase of 37.6% during that time. By comparison, the annual inflation rate during the period was 2%.

Several drugs stood out for far heftier price increases: The cost of a generic liquid version of Prozac, for example, rose from $9 to $69 in just the first quarter of 2019, an increase of 667%. Guanfacine, a generic medication for attention deficit hyperactivity disorder (ADHD), on the market since 2010, rose more than 200% in the first quarter of 2019 to $87 for 100 2-milligram pills. Amneal Pharmaceuticals, which makes Guanfacine, cited "manufacturing costs" and "market conditions" as reasons for the price hike.

"Even at a time when there is a microscope on this industry, they're going ahead with drug price increases for hundreds of drugs well above the rate of inflation," said Anthony Wright, executive director of the California advocacy group Health Access.

The national debate over exorbitant prescription drug prices — and how to relieve them — was supposed to take center stage in recent weeks, as House Speaker Nancy Pelosi released a plan to negotiate prices for as many as 250 name-brand drugs, including high-priced insulin, for Medicare beneficiaries. Another plan under consideration in the Senate would set a maximum out-of-pocket cost for prescription drugs for Medicare patients and penalize drug companies if prices rose faster than inflation.

President Donald Trump has highlighted drug prices as an issue in his reelection campaign. But lawmakers' efforts to hammer out legislation are likely to be overshadowed, for now, by presidential impeachment proceedings. In Nevada, health officials in early October fined companies $17 million for failing to comply with the state's two-year-old transparency law requiring diabetes drug manufacturers to disclose detailed financial and pricing information.

California's new drug law requires companies to report drug price increases quarterly. Only companies that met certain standards — they raised the price of a drug within the first quarter and the price had risen by at least 16% since January 2017 — had to submit data. The companies that met the standards were required to provide pricing data for the previous five years. In its initial report, the state focused its analysis on drug-pricing trends for about 1,000 products from January 2017 through March 2019.

California's transparency law also requires drugmakers to state why they are raising prices. Over time, that information, in addition to cost disclosures, could create "one of the more comprehensive and official drug databases on prices that we have nationwide," Wright said. "That, in itself, is progress, so that we can get better information on the rationale for drug price increases."

But the data does not reflect discounts and rebates for insurers and pharmacy benefit managers and bears little resemblance to what consumers actually pay, said Priscilla VanderVeer, a spokeswoman for the trade group Pharmaceutical Research and Manufacturers of America. The group filed a lawsuit seeking to overturn the California legislation that has not yet been resolved.

"If transparency legislation only looks at one part of the pharmaceutical supply chain, without getting into the various middlemen like insurers and pharmacy benefit managers that ultimately determine what patients have to pay at the pharmacy counter, it won't help patients access or afford their medicines," VanderVeer said in an email.

State Sen. Richard Pan (D-Sacramento), a pediatrician who chairs the Senate health committee, agrees — up to a point.

"Transparency always has value," Pan said. But policymakers need more data on how much insurers and consumers are spending on prescription drugs, he said.

And he wonders why the price of generic drugs, including those with plenty of competition, rose at higher rates.

His concerns were echoed by University of Southern California policy researchers, who recently published a study that concluded most state-level drug-transparency laws are "insufficient" to reveal the true transaction prices for prescription drugs, or where in the distribution system excessive profits lie.

"The question is, why are these prices going up? Typically, there are competing stories for that," said Neeraj Sood, vice dean of the University of Southern California's School of Public Policy and an author of the study. "Maybe cost of production is going up," he said. "Maybe there's a drug shortage, or some competitors got eliminated. This reporting of [wholesale acquisition cost] data doesn't really tell us which of these stories is true."

For now, California's new data is not likely to be of much help to consumers, Pan said. But he said it might help state officials in their bid to overhaul the way the state purchases drugs for 13 million people served by Medi-Cal, the state's Medicaid program for low-income residents. Gov. Gavin Newsom's controversial plan to have the state, rather than individual Medi-Cal managed-care plans, negotiate directly with drugmakers would save the state an estimated $393 million a year by 2023, according to the administration.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Barbara Feder Ostrov: barbarao@kff.org, @barbfederostrov

Harriet Blair Rowan: hrowan@kff.org, @HattieRowan

Patients Eligible For Charity Care Instead Get Big Bills

KFF Health News, October 14, 2019

Nonprofit hospitals admit they sent $2.7 billion in bills over the course of a year to patients who probably qualified for free or discounted care.

This article was first published on Monday, October 14, 2019 in Kaiser Health News.

By Jordan Rau

When Ashley Pintos went to the emergency room of St. Joseph Medical Center in Tacoma, Wash., in 2016, with a sharp pain in her abdomen and no insurance, a representative demanded a $500 deposit before treating her.

"She said, 'Do you have $200?' I said no," recalled Pintos, who then earned less than $30,000 at a company that made holsters for police. "She said, 'Do you have $100?' They were not quiet about me not having money." But Pintos, a single mom with two kids who is now 29, told state officials St. Joseph never gave her a financial aid application form, even after she asked.

Pintos said she was examined and discharged with instructions to buy an over-the-counter pain medication. Then St. Joseph sent her a bill for $839. When she couldn't pay, the hospital referred the bill to a collection agency, which she said damaged her credit and resulted in a higher interest rate when she applied for a mortgage.

St. Joseph denied erecting barriers to charity care. But the hospital's owner settled a lawsuit from the state attorney general earlier this year alleging such practices and agreed to pay more than $22 million in refunds and debt forgiveness.

Under the Affordable Care Act, nonprofit hospitals like St. Joseph are required to provide free or discounted care to patients of meager incomes — or risk losing their tax-exempt status. These price breaks can help people avoid financial catastrophe.

And yet nearly half — 45% — of nonprofit hospital organizations are routinely sending medical bills to patients whose incomes are low enough to qualify for charity care, according to a Kaiser Health News analysis of reports the nonprofits submit annually to the Internal Revenue Service. Those 1,134 organizations operate 1,651 hospitals.

Together, they estimated they had given up collecting $2.7 billion in bills sent to patients who probably would have qualified for financial assistance under the hospitals' own policies if they had filled out the applications.

These written-off bills, known as bad debt, represented a tenth of all nonprofit hospital bad debt reported to the IRS in either 2017 or the most recent year for which data is available. That sum may represent an undercount because it is based on self-reported estimates from hospitals and is not independently audited. And it does not include money that financially struggling patients eventually paid.

"People, including me, had the impression that these new protections under the ACA would prevent people who should be getting help from being financially devastated," said Sayeh Nikpay, an assistant health policy professor at Vanderbilt University School of Medicine. "Clearly, this policy isn't working, and that's a major failing."

About 56% of American community hospitals have nonprofit status, which frees them of paying most taxes and allows them to float tax-exempt bonds. In return, they are supposed to provide community benefits including free or discounted care for patients who can't afford to pay.

The IRS leaves it up to each hospital to decide the qualifying criteria. A comparatively generous hospital may give free care to people earning less than twice the federal poverty level — around $25,000 for an individual and $50,000 for a family of four — and may provide discounts for people earning up to double that.

For those who do not qualify, hospitals often offer payment plans. But they can turn to aggressive tactics if bills are not resolved. Patients can be pestered by debt collectors, and some hospitals sue them or try to garnish their wages. Medical debt can damage credit ratings — one study calculated Americans had $81 billion in collections in 2016 — and forces some people into bankruptcy.

When hospitals give up on collecting a bill, they categorize it as bad debt and absorb the cost of the care, which is indirectly subsidized by the rates they charge private insurers.

It became this moneymaking system. People would be crying at registration desks, people would be upset, people would walk out.

Rachael Murphy, a former St. Joseph's Medical Center employee

Charity Options Often Thwarted

In 2017, BJC HealthCare, a large St. Louis-based system, estimated $77 million of its $134 million in bad debt was owed by patients who probably would have qualified for free or discounted care.

Hospitals now owned by Ballad Health, in Tennessee, estimated that $60 million of bad debt in 2016, or 70%, came from patients who might have been eligible for help.

The Hospital of the University of Pennsylvania said $43 million of its bad debt, or 52%, might have involved patients who could have been excused in 2016 from being billed.

While some hospitals say they write off the debt of poor patients without ever resorting to collection measures, several hospitals whose practices were highlighted in news reports this year for aggressively suing patients admitted to the IRS they knew many unpaid bills might have been averted through their financial assistance policies.

A quarter of bad debt at Mary Washington Healthcare, which sued so many patients that a Virginia court convened special sessions to hear the cases, involved candidates for free or discounted care, according to its IRS filing.

So did half of the bad debt at Methodist Le Bonheur Healthcare in Memphis, called out by news organizations for frequently garnishing wages, its filing said.

CHI Franciscan, which owns St. Joseph, said in multiple IRS filings that none of its bad debt arose from billing indigent patients. While Franciscan admitted no wrongdoing in its settlement with the Washington attorney general, the agreement bars the practice of discouraging charity care in the ways alleged in the lawsuit.

"We are exceeding the requirements of state law and providing charity care compensation to patients who may be in most need, even if they never applied for charity care or did not actually qualify at the time of service," Cary Evans, a Franciscan spokesman, said in a statement. Franciscan declined to discuss individual patients.

According to the lawsuit and interviews with former employees, St. Joseph's workers were told never to voluntarily offer patients a charity care application. If asked for one, they were instructed to insist on a deposit at least three times. Even when submitted, applications required so much documentation that half of the requests were rejected, the lawsuit alleged.

Internal hospital training documents the attorney general submitted as part of the case showed that St. Joseph workers were advised on how to best collect money from patients before they left the hospital. Instead of saying, "Can you pay today?" employees were told to use phrases like "How would you like to pay for that today? Cash, check or credit card?" according to the documents.

"It became this moneymaking system," Rachael Murphy, a former employee, recalled in an interview. "People would be crying at registration desks, people would be upset, people would walk out."

Pintos, who signed a written statement for the attorney general and was listed as a potential witness in the case, said the hospital never gave her an application even though she had qualified for charity care the previous year. "They made me feel like I wasn't good enough to be there," she said.

St. Joseph recently erased the $839 debt from her credit, but Pintos still owes $1,611 for care from the ER doctors, who have their own practice group and do not have to follow the hospital's charity care policies, according to Franciscan. That bill remains in collections.

'A Gap In Trust'

Nonprofit hospitals provide roughly $14 billion worth of charity care a year, about 2% of their operating costs. But their policies can have notable exemptions, such as excluding bills from doctors who are not on the hospital payrolls.

However, information about hospital charity care, often included in the reams of admissions documents or posted on hospital walls, can easily get overlooked by patients and families focused on medical emergencies.

"The signage might be a little hard to find, applications are complicated, documentation is complicated," said Keith Hearle, a consultant who advised the IRS on collecting hospitals' charity care data. "You could probably come up with 15 reasons people didn't apply."

In their IRS filings explaining the bad debt and in interviews, hospitals said that even when they give applications to patients, some fail to submit them or do not provide complete records of their finances, which can include tax returns and bank statements.

"There is a gap in trust where our patients must not believe that if they are willing to share information, that it will be to their benefit," said June McAllister Fowler, a spokeswoman for BJC HealthCare.

Shana Tate, senior vice president of revenue cycle at Ballad Health, said Ballad is looking to be more proactive.

"We made the assumption that, 'We give you the information. What more do you need?' But we realize a lot of patients don't read it, don't pay attention," Tate said. "They need someone to hold their hand through this process."

Methodist Le Bonheur, which erased more than 6,000 unpaid bills last month, said it is "increasing access to financial assistance information upfront and throughout the patient care journey" and "enhancing the screening process."

Penn Medicine said that, as a safety-net hospital system, it has many patients who are poor or coping with other problems. These people, Penn said, face "barriers to completing the process for aid" and their bills are typically "left unpaid."

Mary Washington did not respond to requests for comment, but after critical news reports last June it announced that it was suspending its lawsuits over unpaid bills and reevaluating its practices.

Laurie Jinkins, a state representative from Tacoma and author of legislation to strengthen Washington's charity care laws, said, "The drive for dollars in the health care system, and the drive for dollars to expand, causes our nonprofit health systems to lose sight of why they're actually here." She said St. Joseph had "really gone off the deep end" in its focus on money.

St. Joseph's practices hark back years, according to the attorney general's lawsuit and interviews with employees and patients.

After Alisha Colyer's husband went to the St. Joseph emergency room with pneumonia in 2007, she said, she tried to apply for help, but the charity care application "was like a book you had to fill out."

"I remember them asking me what make and model my car was, and I was like, 'You want me to sell my car to pay my hospital bill?' " recalled Colyer, who now works at the hospital as a dietary aide.

In a statement, Franciscan noted that St. Joseph and its other hospitals now use a simplified two-page application designed by the state hospital association and have agreed to make charity care easier to obtain. It also offers free care for medically necessary services to patients earning up to three times the poverty level, which is more than most hospitals do.

It is too early to assess how the policy changes translate into results. The most recent Washington state analysis, for 2017, found St. Joseph lagged behind the regional average in the amount of charity care it provided.

KHN data editor Elizabeth Lucas contributed to this report.

METHODOLOGY

Bad debt figures were derived from the IRS 990 tax returns filed electronically by nonprofit hospital organizations. That information was downloaded in data form from the IRS website on May 7, 2019, by Jacob Fenton, an independent consultant, and analyzed by Kaiser Health News. Returns that included Schedule H, which only hospital-owning nonprofits must file, were analyzed.

For each organization identification number, we selected the return with the most recent tax period end date. In case of duplicates such as amended returns, only the return with the most recent end date and the most recent signature filing date was selected. Because there were still a few duplicates, the one with the largest unique return identifier was selected. The most recent tax returns for 2,508 nonprofits were identified.

Organizations must report their bad debt — bills they have given up on collecting — and, separately, estimate the bad debt "that reasonably is attributable to patients who likely would qualify for financial assistance under the hospital's financial assistance policy … but for whom insufficient information was obtained to determine their eligibility." Generally, both figures are greater than the actual cost of providing the services: They are the amount the hospital expected to be paid. For our analysis, we calculated the percentage of bad debt that the organization attributed to patients who might qualify for financial assistance.

A handful of bad debt figures were reported as negative numbers. Those were converted to positives. The amounts were not significant enough to substantially affect aggregates or the analysis's conclusions.

Jordan Rau: jrau@kff.org, @JordanRau

VCU Health Will Halt Patient Lawsuits, Boost Aid In Wake Of KHN Investigation

KFF Health News, October 10, 2019

VCU Health, the major Richmond medical system that includes the state’s largest teaching hospital, said it will no longer file lawsuits against its patients.

This article was first published on Wednesday, October 9, 2019 in Kaiser Health News.

By Jay Hancock and Elizabeth Lucas

VCU Health, the major Richmond medical system that includes the state's largest teaching hospital, said it will no longer file lawsuits against its patients, ending a practice that has affected tens of thousands of people over the years.

VCU's in-house physician group filed more than 56,000 lawsuits against patients for $81 million over the seven years ending in 2018, according to a Kaiser Health News analysis of district court data. Those suits will end and VCU will increase financial assistance for lower-income families treated at the $2.16 billion system, according to Melinda Hancock, VCU's chief administrative and financial officer.

Kaiser Health News recently reported that UVA Health, the University of Virginia system, had filed more than 36,000 suits over six years against patients who could not pay their bills. That revelation, published last month in The Washington Post, led UVA to pledge to "positively, drastically" reduce patient lawsuits.

VCU's new stance on lawsuits goes beyond UVA's, which promised to stop suing only patients whose income is below 400% of poverty guidelines. UVA officials did not respond to requests for comment.

VCU's flagship hospital, VCU Medical Center, hasn't filed patient suits in at least seven years, Hancock said in an interview this week. But its in-house physician group continued to sue patients and families for overdue bills.

That approach stopped as of last month, she said. VCU Health, a state-operated system including Richmond's VCU School of Medicine and Community Memorial Hospital in South Hill, Va., will stop suing patients "as part of normal debt collection," she said. It is also ending garnishment of patient wages and attaching liens to patient homes, she said.

Hancock said VCU has been considering changing its policies since last year but recent revelations about UVA "expedited" the decision. Starting in June, KHN had requested comment from VCU officials about the health system's financial assistance and lawsuits.

"We don't want to be part of that," she said about patient lawsuits, which are a standard tool for many hospitals seeking to maximize revenue. "We feel that taking care of the patient's financial health is taking care of their holistic health."

The system, affiliated with Virginia Commonwealth University, is also considering "how we should address pending lawsuits and retrospective cases," said spokeswoman Laura Rossacher.

VCU Health will continue to send unpaid debts to collections and report patients with overdue bills to credit agencies.

"We still need to get our bills paid," Hancock said. "We do need to deploy reasonable collection efforts."

Policy scholars said the new guidelines, which would make VCU's collection and billing practices among the most liberal for Virginia hospitals, would still leave many patients vulnerable to credit downgrades, financial hardship and bankruptcy.

"This certainly seems like progress," said Sara Rosenbaum, a health law professor at George Washington University. But even if no lawsuit is filed, "being an apparent deadbeat on a bill written off as bad debt has terrible and enduring consequences on folks."

Negative credit reports from a hospital, even without a court case, can send families into a downward spiral, said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management.

"If they send you to a collection agency, you're not able to borrow any money because that's going to put you in such a poor credit rating," he said. "You cannot expect somebody to pay a $10,000 or $20,000 bill if they don't have insurance."

Analysts also criticized as inadequate VCU's new discounts to the uninsured. Last year, the system started reducing list prices by 45% for those lacking coverage. The previous discount was 25%. Almost nobody pays list charges, which hospitals typically use as a starting point for negotiations with insurers.

But VCU's average cost of care is 77% below list charges, according to 2017 government filings. That means the uninsured are still paying a big markup under the new policy.

"Most uninsured have very little income, and asking them to pay twice as much as it costs to deliver care is not appropriate," Anderson said. "It is no wonder why so many cannot pay the bills."

Uninsured patients paying promptly can receive discounts of up to 55%, Rossacher said. But few are able to do that.

Like UVA, VCU is raising the income threshold for patients seeking financial assistance ― in its case, awarding aid to families with income up to 300% above the federal poverty level, or $77,000 for a family of four. For most patients, the previous cutoff was 200%, or $52,000, for a family of four.

That aid threshold takes effect in November. VCU officials declined to give an estimate of what the new policies would cost the system.

KHN analyzed lawsuits filed by VCU and other hospitals using civil court data collected by Code for Hampton Roads, a nonprofit focusing on improving government technology.

"VCU Health System and its affiliated physicians are making important policy changes that are long overdue," said Jill Hanken, a health care attorney for the Virginia Poverty Law Center. She urged "further and ongoing oversight" from lawmakers to ensure appropriate indigent care policies.

Virginia Gov. Ralph Northam, a physician, has said little publicly about the state hospitals and doctors under his leadership that often pursue patients for all they are worth.

"No one should go bankrupt because they get sick," said Northam spokeswoman Alena Yarmosky. "Gov. Northam is glad to see health systems taking real steps to put Virginians first and address aggressive bill collection practices."

VCU will continue reviewing its collections and assistance policies, Hancock said. "This is an ongoing process," she said. "It doesn't' stop here."

One impetus to dropping lawsuits was an increasing number of patients with health insurance who still have trouble paying, she said.

"With the rise of high-deductible plans," in which patients pay thousands before insurance kicks in, she said, "we just felt that there are other collection efforts that were more suitable now."

Methodology
KHN analyzed civil case records from the Virginia district courts from 2012 to 2018, based on the date the case was filed. The case records were part of a dataset KHN acquired from Ben Schoenfeld, a volunteer for Code for Hampton Roads, a nonprofit focused on improving government technology. Schoenfeld compiled court records available directly from Virginia's court system (from both circuit and district courts) and posted them on the website VirginiaCourtData.org. The analysis included all "warrant in debt" cases where the plaintiff was listed as MCV Physicians.

Jay Hancock: jhancock@kff.org, @JayHancock1