Why Red Wyoming Seeks The Regulatory Approach To Air Ambulance Costs

KFF Health News, August 26, 2019

The Cowboy State hopes to undercut the free market by using Medicaid to treat air ambulances like a public utility.

This article was first published on Monday, August 26, 2019 in Kaiser Health News.

By Markian Hawryluk

Wyoming, the reddest of Republican states and a bastion of free enterprise, thinks it may have found a way to end crippling air ambulance bills that can top $100,000 per flight.

The state's unexpected solution? Undercut the free market by using Medicaid to treat air ambulances like a public utility.

The issue has come to a head in Wyoming, where rugged terrain and long distances between hospitals forces reliance on these ambulance flights. Costs for such emergency transports have been soaring, with some patients facing massive unexpected bills as the free-flying air ambulance industry expands with cash from profit-seeking private-equity investors.

Other states dealing with the same dynamic have tried to rein in the industry but have continually run up against the Airline Deregulation Act, a federal law that preempts states from regulating any part of the air industry.

So, Wyoming officials are instead seeking federal approval to funnel all medical air transportation in the state through Medicaid, a joint federal-state program for residents with lower incomes. The state officials plan to submit their proposal in late September to Medicaid's parent agency, the Centers for Medicare & Medicaid Services; the plan will still face significant hurdles there.

If successful, however, the Wyoming approach could be a model for the nation, protecting patients in need of a lifesaving service from being devastated by a life-altering debt.

"The free market has sort of broken down. It's not really working effectively to balance cost against access," said Franz Fuchs, a policy analyst for the Wyoming Department of Health. "Patients and consumers really can't make informed decisions and vote with their dollars on price and quality."

Freewheeling Free-Market System
 

The air ambulance industry has grown steadily in the U.S. from about 1,100 aircraft in 2007 to more than 1,400 in 2018. During that same time, the fleet in Wyoming has grown from three aircraft to 14. State officials said an oversupply of helicopters and planes is driving up prices because air bases have high fixed overhead costs. Fuchs said companies must pay for aircraft, staffing and technology such as night-vision goggles and flight simulators, incurring 85% of their total costs before they fly a single patient.

But with the supply of aircraft outpacing demand, each air ambulance is flying fewer patients. Nationally, air ambulances have gone from an average of 688 flights per aircraft in 1990, as reported by Bloomberg, to 352 in 2016. So, companies have raised their prices to cover their fixed costs and to seek healthy returns for their investors.

A 2017 report from the federal Government Accountability Office notes that the three largest air ambulance operators are for-profit companies with a growing private equity investment. "The presence of private equity in the air ambulance industry," the report said, "indicates that investors see profit opportunities in the industry."

While precise data on air ambulance costs is sparse, a 2017 industry report said air ambulance companies spend an average of $11,000 per flight. In Wyoming, Medicare pays an average of $6,000 per flight, and Medicaid pays even less. So air ambulance companies shift the remaining costs — and then some — to patients who have private insurance or are paying out-of-pocket.

As that cost-shifting increases, insurers and air ambulance companies haven't been able to agree on in-network rates. So the services are left out of insurance plans. When a consumer needs a flight, it's billed as an out-of-network service. Air ambulance companies then can charge whatever they want. If the insurer pays part of the bill, the air ambulance company can still bill the patient for the rest — a practice known as balance billing.

"We have a system that allows providers to set their own prices," said Dr. Kevin Schulman, a Stanford University professor of medicine and economics. "In a world where there are no price constraints, there's no reason to limit capacity, and that's exactly what we're seeing."

Nationally, the average helicopter bill has now reached $40,000, according to a 2019 GAO report, more than twice what it was in 2010. State officials say Wyoming patients have received bills as high as $130,000.

Because consumers don't know what an air ambulance flight will cost them — and because their medical condition may be an emergency — they can't choose to go with a lower-cost alternative, either another air ambulance company or a ground ambulance.

A Different Way of Doing Things
 

Wyoming officials propose to reduce the number of air ambulance bases and strategically locate them to even out access. The state would then seek bids from air ambulance companies to operate those bases at a fixed yearly cost, under a sort of Netflix model. It's a regulated monopoly approach similar to the way public utilities are run.

"You don't have local privatized fire departments springing up and putting out fires and billing people," Fuchs said. "The town plans for a few fire stations, decides where they should be strategically, and they pay for that fire coverage capacity."

Medicaid would cover all the air ambulance flights in Wyoming and then recoup those costs by billing patients' insurance plans for those flights. A patient's out-of-pocket costs would be capped at 2% of the person's income or $5,000, whichever is less, so patients could easily figure out how much they would owe. Officials estimate they could lower private insurers' average cost per flight from $36,000 to $22,000 under their plan.

State Rep. Eric Barlow, who co-sponsored the legislation, recognizes the irony of a GOP-controlled, right-leaning legislature taking steps to circumvent market forces. But the Republican said that sometimes government needs to make sure its citizens are not being abused.

"There were certainly some folks with reservations," he said. "But folks were also hearing from their constituents about these incredible bills."

Industry Pushback
 

Air ambulance companies have opposed the plan. They say the surprise-billing problem could be eliminated if Medicare and Medicaid covered the cost of flights and the companies wouldn't have to shift costs to other patients. They question whether the state truly has an oversupply of aircraft and warn that reducing the number of bases would increase response times and cut access to the lifesaving service.

Richard Mincer, an attorney who represents the for-profit Air Medical Group Holdings in Wyoming, said that while 4,000 patients are flown by air ambulance each year in the state, it's not clear how many more people have needed flights when no aircraft was available.

"How many of these 4,000 people a year are you willing to tell, 'Sorry, we decided as a legislature you're going to have to take ground ambulance?'" Mincer said during a June hearing on the proposal.

But Wyoming officials say it indeed might be more appropriate for some patients to take ground ambulances. The vast majority of air ambulance flights in the state, the state officials say, are transfers from one hospital to another, rather than on-scene trauma responses. The officials say they've also heard of patients being flown for nonemergency reasons such as a broken wrist or impending gallbladder surgery.

Air ambulance providers say such decisions are out of their control: They fly when a doctor or a first responder calls.

But those companies have ways of drumming up business. Air ambulance companies heavily market memberships that cover a patient's out-of-pocket costs, eliminating any disincentive for the patient to fly. Companies also build relationships with doctors and hospitals that can influence the decision to fly a patient. Some have been reported to deliver pizzas to hospitals by helicopter to introduce themselves.

Mincer, the Air Medical Group Holdings attorney, said the headline-grabbing large air ambulance bills don't reflect what patients end up paying directly. The average out-of-pocket cost for an air ambulance flight, he said, is about $300.

The industry also has tried to shift blame onto insurance plans, which the transporters say refuse to pay their fair share for air ambulance flights and refuse to negotiate in-network rates.

Doug Flanders, director of communications and government affairs for the medical transport company Air Methods, said the Wyoming plan "does nothing to compel Wyoming's health insurers to include emergency air medical services as part of their in-network coverage."

The Profit Model
 

Other critics of the status quo maintain that air ambulance companies don't want to change, because the industry has seen investments from Wall Street hedge funds that rely on the balance-billing business model to maximize profits.

"It's the same people who have bought out all the emergency room practices, who've bought out all the anesthesiology practices," said James Gelfand, senior vice president of health policy for the ERISA Industry Committee, a trade group representing large employers. "They have a business strategy of finding medical providers who have all the leverage, taking them out of network and essentially putting a gun to the patient's head."

The Association of Air Medical Services counters that the industry is not as lucrative as it's made out to be, pointing to the recent bankruptcy of PHI Inc., the nation's third-largest air ambulance provider.

Meanwhile, Blue Cross Blue Shield of Wyoming is supportive of the state's proposal and looks forward to further discussion about the details if approved, according to Wendy Curran, a vice president at the health insurance firm. "We are on record," Curran said, "as supporting any effort at the state level to address the tremendous financial impacts to our [Wyoming] members when air ambulance service is provided by an out-of-network provider."

The Wyoming proposal also has been well received by employers, who like the ability to buy into the program at a fixed cost for their employees, providing a predictable annual cost for air ambulance services.

"It is one of the first times we've actually seen a proposal where the cost of health care might actually go down," said Anne Ladd, CEO of the Wyoming Business Coalition on Health.

The real challenge, said Fuchs, will be convincing federal officials to go along with it.

Markian Hawryluk: MarkianH@kff.org, @MarkianHawryluk

Doctors Fight Legislation Prompted By Sex Abuse Scandals

KFF Health News, August 26, 2019

Health researchers say these measures are part of a broader national shift in the doctor-patient relationship.

This article was first published on Monday, August 26, 2019 in Kaiser Health News.

By Anna Almendrala

Daniella Mohazab didn't know what to expect from her first pelvic exam in 2016. The University of Southern California sophomore, then 19, was startled when her doctor examined her vagina for several minutes without gloves, but assumed it was standard procedure.

It wasn't until two years later, when she read about Dr. George Tyndall's alleged sexual abuse against USC students, that she realized she may have been sexually violated by him as well.

Driven by stories like Mohazab's, California Assembly members Ian Calderon (D-Whittier) and Cottie Petrie-Norris (D-Laguna Beach) have proposed a bill to require doctors to give first-time pelvic exam patients a pamphlet about how the exams are supposed to be conducted, and a phone number should they want to report misconduct to the state medical board. Doctors would face a fine if they did not collect a patient's signature confirming they received the pamphlet.

Mohazab said a pamphlet would have helped her immensely.

"It would give people an answer about what's right or wrong," said the Los Angeles resident who now works at a tech startup. "I trusted my doctor, and now, years later, I'm dealing with the consequences of that."

Legislators in Michigan proposed similar legislation last year in response to the scandal involving Dr. Larry Nassar, the former Michigan State University and USA Gymnastics team physician who pleaded guilty to sexually assaulting minors and possession of child pornography. Nassar had sexually abused hundreds of young women and girls under the guise that he was performing physical therapy.

The bill, which failed, would have created a standardized consent form for guardians, outlining basics such as the use of gloves, before a minor could undergo any treatment involving vaginal or anal penetration.

Doctors have pushed back hard on the bills in both states, mostly because of the signature requirements.

Health researchers say these measures are part of a broader national shift in the doctor-patient relationship. The old-school dynamic, in which the doctor is viewed as the ultimate authority, is giving way to another perspective: Physicians can be questioned, and patients have a right to speak up if they feel uncomfortable.

In addition to Tyndall and Nassar, several high-profile sexual misconduct scandals have come to light since 2014, including cases at prestigious universities and hospitals such as UCLA, Johns Hopkins Hospital and the Ohio State University. In all of the cases, the doctors are accused of using their medical authority to victimize hundreds — and in the Johns Hopkins case, thousands — of patients.

"There are unfortunately too many times where we need to protect people from their physicians," Petrie-Norris said.

There's no evidence that informed consent laws prevent sexual assault.

However, these pamphlets might send a strong message to all clinicians — including potential predators — that patients will be on their guard, said Robin Fretwell Wilson, director of the Epstein Health Law and Policy Program at the University of Illinois College of Law.

For almost two decades, Wilson has lobbied states to pass laws banning pelvic exams on anesthetized patients without prior consent — a common practice in teaching hospitals.

"We're really sensitized to this now in the #MeToo era," Wilson said. "It's a time when we can empower patients."

In California, two powerful doctor groups, the California Medical Association and the California Academy of Family Physicians, oppose the bill's signature requirement, saying it would burden doctors with extra paperwork without preventing crime, and could cause a victim to blame herself after the fact for not having stopped the abuse.

The American Congress of Obstetricians and Gynecologists, a national organization, also weighed in on the measure, saying it is generally opposed to any proposal that mandates how doctors communicate with their patients.

The state Assembly has already approved the bill, which is now in the state Senate. Its supporters include the Consumer Attorneys of California and the Medical Board of California.

Dr. Joyce Sutedja, an OB-GYN resident at the University of California-Irvine Medical Center, said she was abused by Tyndall when she was a student. At the California Medical Association's request, she argued against the bill's signature requirement in a state Senate hearing in June, saying it might make victims feel responsible for what had happened to them.

"If I had signed a piece of paper stating that I knew the components of a normal pelvic exam — whether I had actually read the document or not — and the same thing had happened despite my signing the form, it would be near impossible to keep from blaming myself for letting it happen anyway," Sutedja wrote in a letter to lawmakers.

The signature requirement in Michigan's bill led to its demise.

Doctors were worried that minors would decide not to seek sexual health care services because they would need permission from their parents or guardian beforehand, Michigan Rep. Daire Rendon (R-Lake City) said.

But a signature can be empowering for patients, argued Christy Leach, 43, who testified at the same California Senate hearing as Sutedja.

"It forces the predatory doctor to keep his sick notions at bay," she said.

When Leach attended USC, she went to the student health center in 1998 for a sinus infection. During the appointment, Tyndall talked her into her first pelvic exam as well, during which he pushed his ungloved fingers in and out of her vagina for what seemed to her like five minutes. The experience was extremely painful, Leach said, but she had no idea to expect anything different.

When she had a gynecological appointment a few years later with a different doctor, Leach was surprised when the properly conducted pelvic exam was painless and over in seconds. Her trust in her doctors was so strong, however, that she reasoned that Tyndall must have given her a more rigorous exam.

"The human spirit is strong, and wants to believe the best in people," Leach said. "And so I just really thought that this thorough exam must be only every couple of years."

Anna Almendrala: aalmendrala@kff.org, @annaalmendrala

Dialysis Industry Spends Big To Protect Profits

KFF Health News, August 23, 2019

This year's political spending is aimed at killing a bill in the California legislature that would disrupt the industry's business model — and likely reduce its profits.

This article was first published on Friday, August 23, 2019 in Kaiser Health News.

By Harriet Blair Rowan

The dialysis industry spent about $2.5 million in California on lobbying and campaign contributions in the first half of this year in its ongoing battle to thwart regulation, according to a California Healthline analysis of campaign finance reports filed with the state.

Last year, dialysis companies poured a record-breaking $111 million into a campaign to defeat a ballot initiative that would have capped their profits.

This year's political spending, which includes an online and broadcast advertising blitz, is aimed at killing a bill in the state legislature that would disrupt the industry's business model — and likely reduce its profits. The dialysis industry counters that the bill would threaten some low-income patients' access to the lifesaving treatment.

"Nobody is spending $2.5 million out of the goodness of their hearts," said David Vance, a spokesman for Common Cause, a nonprofit group that advocates for campaign finance reform. "That kind of money is spent to get the attention of legislators and to get results."

And the spending doesn't appear to be slowing. Since the most recent campaign finance reporting deadline, which showed a total of $2.5 million spent through June, a campaign committee backed by the industry has spent at least $470,000 more since then.

Dialysis filters the blood of people whose kidneys are no longer doing the job. People on dialysis, who typically need three treatments a week, usually qualify for Medicare, the federal health insurance program for people 65 and older, and those with kidney failure and certain disabilities.

But dialysis companies can get higher reimbursements from private insurers than from Medicare. One way dialysis patients remain on private insurance is by getting financial assistance from the American Kidney Fund, which helps nearly 75,000 low-income dialysis patients, including about 3,700 in California.

The American Kidney Fund receives most of its donations from DaVita Inc. and Fresenius Medical Care, the two largest dialysis companies. The fund does not disclose its donors, but an audit of its finances reveals that 82% of its annual funding in 2018 — nearly $250 million — came from two companies.

Critics of this system, including some California lawmakers, insurance companies and a powerful nurses union, say it's a way for the dialysis industry to inflate profits by steering patients away from Medicare and other public insurance coverage to private insurance, which pays higher rates.

The measure under consideration in the legislature, AB-290 by state Assemblyman Jim Wood (D-Santa Rosa), would limit the private-insurance reimbursement rate that dialysis companies receive for patients who get assistance from groups such as the American Kidney Fund. The bill would also address a similar dynamic in drug treatment programs.

"The minute you try to close one of those loopholes, the folks involved spend millions and millions to fight you," Wood said.

The state Assembly approved the bill in May, and the state Senate is now considering it. The legislature passed a similar measure last year that former Gov. Jerry Brown vetoed, saying the language was too broad and the move would have allowed providers to refuse care to some patients.

DaVita and Fresenius declined to comment and directed questions to Kathy Fairbanks, spokeswoman for the "Dialysis is Life Support" coalition, which includes dialysis providers, industry groups, patients and caregivers. She said the dialysis industry isn't the only stakeholder trying to influence the political process.

Groups supporting the measure, including large insurance companies and labor unions, also are spending big, she said. For instance, a committee formed and funded by the Service Employees International Union-United Healthcare Workers West to support last year's initiative — and challenge the dialysis industry and its profits — spent $580,000 in the first half of this year.

The $2.5 million in political spending by the dialysis industry between January and June falls into two categories: lobbying the legislature, and campaign contributions to support candidates and influence public opinion. Campaign spending made up about $1.3 million of the total.

DaVita accounted for the biggest chunk of the campaign spending: $580,000. Fresenius spent $270,000.

These contributions went to 48 of the state's 80 Assembly members and 21 of the state's 40 senators, primarily to their prospective 2020 or 2022 campaigns.

Of the 69 legislators who received money from DaVita and Fresenius, Assemblyman James Ramos (D-Highland) got the most: $16,800 in the first half of the year. Ramos did not respond to requests for comment.

Nine other Assembly members and two senators each also received more than $10,000 in contributions from DaVita and Fresenius.

The rest of the $1.3 million in campaign spending was doled out by the campaign committee formed and funded by the industry to defeat Proposition 8 last year. The "Patients and Caregivers to protect dialysis patients" committee spent $440,000 in the first half of 2019, mostly on an advertising campaign to sway public opinion against Wood's measure.

The media campaign began by promoting the message "Dialysis is Life Support" via social media accounts and a slick website, which emphasized the importance of dialysis to people with kidney failure. But the messaging has shifted and is now urging people to contact their legislators to oppose the bill. The committee spent $33,000 on advertising with Politico and $26,000 with The Sacramento Bee, among others, according to campaign finance reports.

The coalition and the patients featured in the ads argue the measure will threaten the health care and possibly survival of the California patients who get assistance from the American Kidney Fund, which has said it would cease operations in the state if the bill is adopted.

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

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

Feds Pave The Way To Expand Home Dialysis — But Patients Hit Roadblocks

KFF Health News, August 22, 2019

While home dialysis is convenient for patients, it can also be isolating, fraught with anxiety, technologically challenging and burdensome.

This article was first published on Thursday, August 22, 2019 in Kaiser Health News.

By Judith Graham

Home dialysis for older adults will become more common in the years ahead, experts predict — but not without overcoming significant challenges.

By 2025, the Trump administration wants 80% of people newly diagnosed with kidney failure to receive home dialysis or kidney transplants, according to an executive order issued in July. Currently, more than 85% of such patients are treated at dialysis centers.

In a notable move, retail health giant CVS Health has said it will enter the dialysis business, while the companies that dominate this market — Fresenius Medical Care and DaVita — have confirmed plans to expand their home dialysis offerings.

"We think there's definitely an opportunity to get more of our patients home," said Dr. Dinesh Chatoth, associate chief medical officer at Fresenius, which this year bought NxStage Medical, a leading provider of home dialysis technology. (About 12% of Fresenius' 208,000 U.S. dialysis patients are on home therapies.)

"I think it's realistic to expect 40% to 50% of patients to be able to do home dialysis," said Dr. Martin Schreiber, chief medical officer for DaVita home modalities. (About 13% of DaVita's 203,000 U.S. dialysis patients now receive home therapies.)

Other experts think that's optimistic. "I think 25% to 30% of patients is more realistic," said Dr. Thomas Golper, a professor of medicine at Vanderbilt University, whose home dialysis program is among the largest in country.

Home dialysis has several advantages over dialysis in treatment centers: Patients can get therapy more frequently, which puts less stress on their bodies; it's more convenient; it's less expensive; and patients' quality of life is generally better, according to numerous studies. On the downside, doing this therapy at home can be isolating, fraught with anxiety, technologically challenging and burdensome for patients and caregivers.

What changes are needed to bring home dialysis to more patients — especially older adults, the fastest-growing group of patients with serious, irreversible kidney disease? We asked nephrologists, patient advocates and dialysis company officials for their thoughts.

Better patient education. Medicare pays for "pre-dialysis education" that informs patients about treatment options before their kidneys fail. Yet, fewer than 2% of Medicare members with advanced kidney disease receive this benefit, according to a U.S. Government Accountability Office report.

"We need to improve the education of patients regarding their [dialysis] modality choices," said Schreiber of DaVita. Patients who attend that company's Kidney Smart education classes are six times more likely to select home dialysis as a treatment option, according to materials supplied by DaVita.

Ongoing education about how to handle issues that arise during home dialysis is also needed. In a recent survey of caregivers providing complex care at home, 60% of caregivers assisting with home dialysis said they needed "more/better instruction" while 18% called for "more help from others."

"Right now, patients are educated on the mechanics of the treatment," said Nieltje Gedney, treasurer of Home Dialyzors United, a patient group that has been testing an education curriculum. "But in order to be successful at home, patients also have to learn much more about how to manage their treatment."

More personal assistance. In Canada, Australia and other countries where home dialysis is much more common than in the U.S., patients can get assistance from health workers who help them set up for a dialysis treatment and wind things down when treatment is over. On each end, tasks required can take half an hour or longer.

Medicare doesn't pay for this kind of assistance, but it should — especially for older adults, several experts suggest.

"Imagine trying to move someone 75 or older who's socioeconomically disadvantaged onto home dialysis," said Dr. Holly Mattix-Kramer, president of the National Kidney Foundation and a professor of medicine at Loyola University Medical Center in Chicago. "Maybe they feel insecure and kind of afraid. Maybe they need some extra time going over skills. Maybe they need some extra support the first few months before they feel comfortable with the routine."

Home health aides or community health workers could provide help of this kind. Dori Schatell, executive director of the Medical Education Institute, which specializes in serving people with kidney disease, called for a demonstration project of paid home dialysis helpers.

"Assisted dialysis in the home would have tremendous advantages, I believe, especially for the elderly," Schreiber said, and DaVita has been talking to the Centers for Medicare & Medicaid Services about how this might work.

New technologies. In the next several years, Chatoth of Fresenius envisions that new technologies will allow people on home dialysis to be monitored much more closely, day by day. Two-way portals would allow data to flow back and forth between patients and clinicians. Telehealth would allow physicians, nurses, social workers and dietitians to interact with patients remotely and provide more ongoing support.

This kind of connectivity is especially important for older adults with multiple medical conditions who need extra oversight and may have difficulty traveling to a dialysis center.

Fresenius is doing a telehealth pilot, and "we think by the end of the year we should have this rolled out across most of our [home dialysis] programs," Chatoth said.

Dr. Eric Wallace, an associate professor of nephrology at the University of Alabama at Birmingham and a pioneer in the use of telehealth for home dialysis, thinks telehealth has considerable potential but voiced concerns.

For instance, poor patients and patients in rural areas often don't have enough internet bandwidth to support videoconferencing. While physicians rely on laboratory tests to evaluate dialysis patients, "there aren't mechanisms in place to do labs inside a patient's home," Wallace said. And some older patients may become even more isolated without regular face-to-face visits to medical providers.

"Telehealth is going to open up new ways to connect with patients," he said. "But I don't think it's quite as easy as people want to make it sound."

Also, several companies are developing technologies that could make home dialysis safer and easier, including NxStage, CVS, Outset Medical of San Jose, Calif., Quanta Dialysis Technologies of the United Kingdom, and Physidia, out of France.

"They each have their own specific angle, but the general theme with all of them is the 'Apple-fication' of dialysis machines," said Dr. Frank Liu, director of home hemodialysis at the Rogosin Institute in New York City.

Altering physician practices. A precondition for change is educating physicians about home dialysis and persuading them to offer it to more patients, experts suggest.

Only one-third of patients who need to start dialysis are told peritoneal dialysis at home is an option, while only 12% are offered home hemodialysis, research has shown.

Dr. Matthew Rivara, a nephrologist and investigator at the University of Washington Kidney Research Institute, faults "inadequate training in home dialysis" in nephrology fellowship programs, as do several other leading nephrologists.

"There's almost nothing on board examinations that tests physicians' knowledge about home dialysis; nephrologists can pass with flying colors and know very little about these therapies," said Golper of Vanderbilt who's helped launch a training program for physicians, Home Dialysis University.

Easing transitions. When patients learn they have potentially fatal kidney disease, "you're literally blinded with fear. There's no way you can think about your options until you get past that," said Gedney of Shepherdstown, W.Va., who has relied on home hemodialysis since 2014.

Transitional programs that help people adjust to the need for dialysis and understand what it entails should become more widely available, she said.

Fresenius has nearly 40 programs of this kind across the U.S., and more are starting up. Over four to six weeks, people start receiving dialysis at a center and learn about specifics such as what they can eat, who's going to pay for dialysis, how their lives might change and how much support they'll need.

The goal is to help patients "cope with the diagnosis," Chatoth said. After going through transitional programs, he added, more than half of patients choose home dialysis.

Judith Graham: khn.navigatingaging@gmail.com, @judith_graham

The Collapse Of A Hospital Empire — And Towns Left In The Wreckage

KFF Health News, August 20, 2019

How companies like EmpowerHMS were able to drive so many hospitals into the ground so quickly is a story about the fragility of health care in rural America.

This article was first published on Tuesday, August 20, 2019 in Kaiser Health News.

By Barbara Feder Ostrov and Lauren Weber

SWEET SPRINGS, Mo. — The money was so good in the beginning, and it seemed it might gush forever, right through tiny country hospitals in Missouri, Oklahoma, Tennessee and into the coffers of companies controlled by Jorge A. Perez, his family and business partners.

It was his "secret sauce," the rotund Miami entrepreneur would smilingly tell people in their no-stoplight towns. The money-making ventures he proposed sounded complicated, sure, but he said they would bring in enough cash to save their hospital and dozens, even hundreds, of good jobs in rural towns where gainful employment is hard to come by.

And, in town after town, the people believed him. He offered what they could not resist: hope, and the promise of survival.

Then a few major health insurance companies got suspicious, as did some government officials. How could Unionville, Mo. — a town of 1,790 — generate $92 million in hospital lab fees for blood and urine samples in just six months? Why had lab billings at a 25-bed hospital in Plymouth, N.C., nearly tripled to $32 million in the year after Perez's company took control?

The lab billings, insurers alleged, were simply fraudulent. Blue Cross Blue Shield and other insurers started filing lawsuits, stopped making reimbursements and shut off the spigot.

At the height of his operation, Perez and his Miami-based management company, EmpowerHMS, helped oversee a rural empire encompassing 18 hospitals across eight states. Perez owned or co-owned 11 of those hospitals and was CEO of the companies that provided their management and billing services. He was affiliated with companies that owned or managed the rest.

Now, with funding from the lab-billing venture dried up, 12 of the hospitals have entered bankruptcy and eight have closed their doors.

The staggering collapse left hundreds of employees without jobs and many more owed months of back pay. Only in recent months did they learn that their medical coverage had been terminated because EmpowerHMS had stopped making payments, according to interviews and bankruptcy documents.

At some of the hospitals, EmpowerHMS stopped paying employee payroll taxes, Perez acknowledged in an interview. Some of the shuttered hospitals owe hundreds of thousands in property taxes, according to local officials.

How companies run by this Miami businessman and his associates were able to drive so many hospitals into the ground so quickly, devastating their communities, is a story about the fragility of health care in rural America and the types of money-making ventures that have flourished in legal gray areas of America's complicated medical system.

Perez styled himself as a savior of rural hospitals. "My only fault is I tried everything in the world to save them," he told Kaiser Health News.

But for the townspeople left in the wreckage, the reality feels more sinister.

EmpowerHMS "is like a curse word," said Tara Brewer, head of the Chamber of Commerce in Sweet Springs, Mo., where the I-70 Community Hospital closed in February, taking with it dozens of jobs and emergency care.

The town's mayor, Francis Vaught, put it more simply: "We were robbed."

Building An Empire On Promises
 

Jorge Perez's company jet never seemed to take off on time.

Whether he was headed to Kansas, Missouri or Arkansas, Perez always was running late, said Scottie Collins, who joined the Empower team in 2017 with the expectation his Florida-based drug rehab program would be integrated into the burgeoning hospital group. It struck Collins as a luxury, given the flight crew charged by the hour, but neither Perez nor his entourage seemed concerned.

In September 2017, Perez and his team swooped into Fulton, Mo., days before the town's nearly 100-year-old hospital was set to close. Fulton Medical Center, with 140 staffers, was a major employer and the only hospital in Callaway County. The hospital had struggled for a quarter-century, escaping closure at least three times as the economic forces battering rural hospitals across America took their toll.

At what was supposed to have been a farewell potluck for the facility's staff, Perez appeared, announcing that he'd just bought the hospital and was keeping it open, according to media reports. From the podium, he delivered what had become his standard pitch in small towns across the Midwest: He saw a community desperately fighting to keep its hospital, and he would help them win.

"He seemed to be a nice enough guy," said LeRoy Benton, Fulton's mayor at the time, "and seemed to say the right things."

If the communities he wooed had the time or capacity to look deeper, they might have seen a red flag: Perez had no experience managing hospitals. Trained as an electrical engineer, Perez helped his father run a medical billing company in Miami that served doctors and hospitals. He repeatedly saw rural hospitals closing, he said, and felt moved to save them.

In 2015, Perez partnered with a company run by a Chicago-based emergency room physician, Dr. Seth Guterman, to take over the Campbellton-Graceville Hospital in Graceville, a town of 2,200 people in the Florida Panhandle.

Perez told the local paper the new ownership group would invest $2 million and reduce costs by 30%. "Consider Campbellton-Graceville Hospital SAVED," enthused the Jackson County Times.

A year later, he invested in a struggling hospital in Williston, Fla., and with partner David Byrns landed a management contract for Putnam County Memorial in Unionville, Mo. In 2017, Perez formed a partnership with Paul Nusbaum, a former secretary of health and human resources in West Virginia, and acquired controlling interest in 10 hospitals in Oklahoma, Kansas, Missouri, Tennessee and North Carolina, swallowing them whole.

"When you rescue a hospital, you rescue a community" was his mantra on social media.

People describe Perez as genial and courteous — "Everybody that knows me says I have a big heart," he said of himself. But his inner circle included some people with questionable backgrounds.

One of Empower's top executives, J.T. Lander, had done time in federal prison after being convicted in 2009 of mail fraud and money laundering while serving as county attorney for Florida's Dixie County. Byrns' criminal record includes an arrest for check forgery at a Louisiana hospital he managed. (Byrns returned the money, and criminal charges were dropped.)

Neither Byrns nor Lander responded to a request for comment; a woman who answered Nusbaum's phone said he was unavailable for comment.

Fernando Barroso, who worked as an assistant controller for EmpowerHMS in 2018, said the company's financial systems were a mess, even as it wrestled with massive debt accumulated through rapid-fire hospital acquisitions.

"I've been an accountant for a long time and I thought I'd seen everything, but I'd never seen anything like this," Barroso said. "It was total disorder."

A Lucrative Venture
 

To generate income for foundering hospitals, Jorge Perez took advantage of federal health care regulations that allow some rural hospitals to bill for laboratory tests at substantially higher rates than other providers. The goal is to keep hospitals that provide vital care in remote areas afloat, by paying generously for the relatively small number of tests needed in such locations.

But several of the Perez-affiliated hospitals established lab programs that reached well beyond the hospital doors. They contracted with outside labs, in other cities and states, to draw and process blood and urine tests for thousands of people who never set foot in the hospital. Insurers were billed using the higher rates afforded the rural hospitals, and the contractors got a portion of the proceeds.

In recent years, Perez and a handful of other rural hospital owners who have established similar operations have defended the billing setup as in alignment with federal regulations. But among some medical finance experts, it's considered legally murky and has resulted in allegations of fraud involving owners in several states.

What is not in dispute is that the strategy can be lucrative. At 14-bed Putnam County Memorial alone, the lab-billing operation generated nearly $120 million in payments to outside vendors in the first six months of 2017, according to internal documents obtained by Kaiser Health News. And a chunk of those payments — nearly $80 million in lab-related charges — went to Perez-affiliated companies, according to the documents.

In interviews, multiple employees said they had no idea what Empower did with the money their hospitals earned, since the facilities seemed perpetually starved for cash.

Melva Price Lilley, an X-ray technician at Washington County Hospital in Plymouth, N.C., recalled regularly being short of supplies. "Sometimes we wouldn't have soap to bathe patients," Lilley said. "We didn't have any crackers, orange juice. We didn't have enough staff at night to run a code."

"They never invested any money in our hospital," she said. "You have to go on top of the roof to adjust the heat or air conditioning with a broomstick."

Perez had taken control of the regional hospital in Drumright, Okla., in 2017 promising brighter days, said Tracy Byers, hospital CEO at the time. Instead, he said, the bills quickly piled up.

"I would dread Mondays as that's when all the certified letters would start showing up in the mail," Byers said. "Typically, by Thursday and Friday, you'd have an idea of what bills you could pay, if any."

Even as the hospitals struggled, Perez, on his own and through Empower-affiliated companies, was investing in real estate in 2016 and 2017, buying up nine South Florida properties that totaled more than $3.7 million, including three condos on Key Largo, according to property records.

In an interview, Perez maintained that the Florida properties were bought with earnings from unrelated software companies. He declined to get into details about his finances. "The little I have left I need to preserve and protect," he said. "I'm as broke today as anybody out there."

A Damning Report
 

In August 2017, Missouri State Auditor Nicole Galloway delivered a stunning blow.

A routine audit of Putnam County Memorial had uncovered questionable financial dealings. From December 2016 to May 2017, Perez and Byrns' company, Hospital Partners, had managed to generate $92 million from lab tests run through Putnam. By comparison, hospital revenue totaled $7.5 million in fiscal year 2016, according to the audit.

The analysis found 80% of that money was flowing to laboratory companies, including some in which Byrns had a financial stake; another 6% to a Perez-controlled billing company; and a major portion to 33 out-of-state phlebotomists — blood draw specialists — they had put on the hospital payroll.

"What was astounding to me was that the hospital was not better off during and after this lab activity," Galloway told KHN.

The reaction was explosive. Dozens of major insurers banded together to file lawsuits against Perez-affiliated hospitals in Missouri and other states, demanding hundreds of millions in restitution. The lawsuits, still ongoing, describe the lab-billing operation as a "widespread fraudulent scheme" that aimed to enrich Perez, some of his associates and affiliated companies, as well as participating labs.

In court documents, Perez has denied wrongdoing and asked for dismissal based on questions of jurisdiction, among other issues. In an interview, he said his billing setup was "done according to Medicare and state guidelines." He added: "I'm still waiting [to see] where we've done anything wrong."

Legal or not, as public scrutiny intensified, the revenue generated by lab tests slowed to a trickle. Blue Cross Blue Shield of Oklahoma dropped four Perez-affiliated hospitals from its network, cutting off a crucial source of funding. Lenders took Perez and his partners to court to force them out of other hospitals.

Across the Midwest, employees were living the fallout. In hospital after hospital, paychecks came late — and then not at all, according to employee interviews and bankruptcy court documents. Doctors quit. Vendors stopped delivering vital supplies.

At Haskell County Community Hospital in Stigler, Okla., former laboratory supervisor Shawna Smith recalled an alarming shortage of antibiotics and IV catheters as early as October 2018. By January 2019, she said, employees weren't getting paid. The Ladies Auxiliary set up a fund for employees who couldn't pay their utility bills. One resident brought packages of hamburger and bison for every employee.

About two hours west, the local middle school in Prague, Okla., held a drive to collect toilet paper and cleaning supplies for Prague Community Hospital. A veterinary clinic delivered medical essentials. Still, supplies fell so low, said City Manager Jim Greff, that the hospital had to stop admitting patients.

At Drumright Regional Hospital, Human Resources Director Allyson Lunsford said they ran out of oxygen and blood. By December, she said, they were so far behind on bills that the company that rented them hospital beds came to repossess them — despite patients still using them.

A Sense of Betrayal
 

By March 2019, seven Perez-affiliated hospitals had closed. And as bankruptcy proceedings unfolded at those and others, employees got more devastating news, according to interviews and trustee reports: Along with missing paychecks, the company had stopped funding their health insurance; their medical and dental policies had been discontinued.

Perez said in an interview that the hospitals were not making enough money to cover their expenses and debt. He said he faced constant pressure about which bills to pay.

"I had a whole executive team of experts, and they made decisions — we all made decisions — of what needed to be paid so we can live another day," Perez said. "Do we pay the medication? Do we pay the pharmacy stuff? Do we pay the doctors? Do we pay the nurse?"

"We felt at that moment we were going to be able to pull out of it in a month or two," he said of the missed payroll taxes. "Hindsight on that looks bad."

In February, the I-70 Community Hospital in Sweet Springs became one of the latest Empower hospitals to shut its doors, leaving its red-lettered "Emergency" sign shrouded in a white sheet. It marks a searing loss for a town where the last dentist recently closed shop and multiple storefronts sit abandoned.

The closure left $300,000 in unpaid property taxes that could have been spent on schools, according to the county assessor. Mayor Vaught said the town lost dozens of jobs. Medical equipment bought with money raised at hot dog fundraisers sits unused.

Brewer, the Chamber of Commerce head, worries Sweet Springs won't survive the hit. "What is it that we're going to have for our kids?" she asked.

It's not clear what recourse the towns have. Bankruptcy court documents indicate the Department of Justice is investigating Perez's companies, though DOJ officials would not comment. Perez has not been criminally charged, but federal prosecutors recently indicted one of his associates.

On July 9, Kyle Marcotte, owner of a Jacksonville Beach, Fla., addiction treatment center pleaded guilty for his part in a $57 million lab-billing scheme involving two Perez-affiliated hospitals, including Campbellton-Graceville. Marcotte admitted cooperating with unnamed hospital managers to provide urine samples from his patients for lab testing that was billed through the rural hospitals and, in exchange, getting a cut of the proceeds. His sentencing has yet to be scheduled.

Perez, who still lives in Miami, said the company jet has been sold and he is turning his attention to software development. He told KHN he is losing sleep over the possibility he could go to jail but was adamant he has operated in the best interests of the communities he sought to serve. If anything, he said, the townspeople should thank him, because he gave their dying hospitals "two to three years of life."

"I wanted to see if I could save these rural hospitals in America," Perez said. "I'm that kind of person."

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

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

Lauren Weber: LaurenW@kff.org, @LaurenWeberHP

ER Redo: As Rural Hospital Closes, Emergency Care Is On The Blink With Fate Uncertain

KFF Health News, August 19, 2019

The loss of the longtime hospital in Fort Scott, Kan., forces trauma patients to deal with changing services and expectations.

This article was first published on Monday, August 19, 2019 in Kaiser Health News.

By Sarah Jane Tribble

FORT SCOTT, Kan. — For more than 30 minutes, Robert Findley lay unconscious in the back of an ambulance next to Mercy Hospital Fort Scott on a frigid February morning with paramedics hand-pumping oxygen into his lungs. A helipad sat just across the icy parking lot from the hospital's emergency department, which had recently shuttered its doors, like hundreds of rural hospitals nationwide.

Suspecting an intracerebral hemorrhage and knowing the ER was no longer functioning, the paramedics who had arrived at Findley's home called for air transport before leaving. For definitive treatment, Findley would need to go to a neurology center located 90 miles north in Kansas City, Mo. The ambulance crew stabilized him as they waited.

But the dispatcher for Air Methods, a private air ambulance company, checked with at least four bases before finding a pilot to accept the flight, according to a 911 tape obtained by Kaiser Health News through a Kansas Open Records Act request.

"My Nevada crew is not available and my Parsons crew has declined," the operator tells Fort Scott's emergency line about a minute after taking the call. Then she says she will be "reaching out to" another crew.

Nearly seven minutes passed before one was en route.

When Linda Findley sat at her kitchen counter in late May and listened to the 911 tape, she blinked hard: "I didn't know that they could just refuse. … I don't know what to say about that."

Both Mercy and Air Methods declined to comment on Findley's case.

When Mercy Hospital Fort Scott closed at the end of 2018, hospital president Reta Baker had been "absolutely terrified" about the possibility of not having emergency care for a community where she had raised her children and grandchildren and served as chair of the local Chamber of Commerce. Now, just a week after the ER's closure, her fears were being tested.

Nationwide, more than 110 rural hospitals have closed since 2010, and in each instance a community struggles to survive in its own way. In Fort Scott, home to 7,800, the loss of its 132-year-old hospital opened by nuns in the 19th century has wrought profound social, emotional and medical consequences. Kaiser Health News and NPR are following Fort Scott for a year to explore deeper national questions about whether small communities need a traditional hospital at all. If not, what would take its place?

Delays in emergency care present some of the thorniest dilemmas for nurses, physicians and emergency workers. Minutes can make the difference between life and death — and seconds can be crucial when it comes to surviving a heart attack, a stroke, an anaphylactic allergic reaction or a complicated birth.

Though air ambulances can transport patients quickly, the dispatch system is not coordinated in many states and regions across the country. And many air ambulance companies do not participate in insurance networks, which leads to bills of tens of thousands of dollars.

Knowing that emergency care was crucial, the hospital's owner, St. Louis-based Mercy, agreed to keep Fort Scott's emergency doors open an extra month past the hospital's Dec. 31 closure, to give Baker time to find a temporary operator. A last-minute deal was struck with a hospital about 30 miles away, but the ER still needed to be remodeled and the new operator had to meet regulatory requirements. So, it closed for 18 days — a period that proved perilous.

A Risky Experiment
 

During that time, Fort Scott's publicly funded ambulances responded to more than 80 calls for service and drove more than 1,300 miles for patients to get care in other communities.

Across America, rural patients spend "statistically significant" more time in an ambulance than urban patients after a hospital closes, said Alison Davis, a professor at the University of Kentucky's department of agricultural economics. Davis and research associate SuZanne Troske analyzed thousands of ambulance calls and found the average transport time for a rural patient was 14.2 minutes before a hospital closed; afterward, it increased nearly 77% to 25.1 minutes. For patients over 64, the increase was steeper, nearly doubling.

In Fort Scott this February, the hospital's closure meant people didn't "know what to expect if we come pick them up," or where they might end up, said Fort Scott paramedic Chris Rosenblad.

Barbara Woodward, 70, slipped on ice outside a downtown Fort Scott business during the early February storm. The former X-ray technician said she knew something was broken. That meant a "bumpy" and painful 30-mile drive to a nearby town, where she had emergency surgery for a shattered femur, a bone in her thigh.

During the 18 days Fort Scott's residents lived without an emergency department, Barbara Woodward slipped on ice outside a downtown Fort Scott business. The ambulance that arrived for her had to drive 30 miles out of town. "I thought to myself that the back of the ambulance isn't as comfortable as I thought it would be," Woodward says.(Christopher Smith for KHN)

About 60% of calls to the Fort Scott's ambulances in early February were transported out of town, according to the log, which KHN requested through the Kansas Open Records Act. The calls include a 41-year-old with chest pain who was taken more than 30 miles to Pittsburg, an unconscious 11-year-old driven 20 miles to Nevada, Mo., and a 19-year-old with a seizure and bleeding eyes escorted nearly 30 miles to Girard, Kan.

Those miles can harm a patient's health when they are experiencing a traumatic event, Davis said. They also prompt other, less obvious, problems for a community. The travel time keeps the crews absent from serving local needs. Plus, those miles cause expensive emergency vehicles to wear out faster.

Mercy donated its ambulances to the joint city and county emergency operations department. Bourbon County Commissioner Lynne Oharah said he's not sure how they will pay for upkeep and the buying of future vehicles. Mercy had previously owned and maintained the fleet, but now it falls to the taxpayers to support the crew and ambulances. "This was dropped on us," said LeRoy "Nick" Ruhl, also a county commissioner.

Even local law enforcement feel extra pressure when an ER closes down, said Bourbon County Sheriff Bill Martin. Suspects who overdose or suffer split lips and black eyes after a fight need medical attention before getting locked up — that often forces officers to escort them to another community for emergency treatment.

And Bourbon County, with its 14,600 residents, faces the same dwindling tax base as most of rural America. According to the U.S. Census Bureau, about 3.4% fewer people live in the county compared with nearly a decade ago. Before the hospital closed, Bourbon County paid Mercy $316,000 annually for emergency medical services. In April, commissioners approved an annual $1 million budget item to oversee ambulances and staffing, which the city of Fort Scott agreed to operate.

In order to make up the nearly $700,000 difference in the budget, Oharah said, the county is counting on the ambulances to transport patients to hospitals. The transports are essential because ambulance services get better reimbursement from Medicare and private insurers when they take patients to a hospital as compared with treating patients at home or at an accident scene.

Added Response Times
 

For time-sensitive emergencies, Fort Scott's 911 dispatch calls go to Air Methods, one of the largest for-profit air ambulance providers in the U.S. It has a base 20 miles away in Nevada, Mo., and another base in Parsons, Kan., about 60 miles away.

The company's central communications hub, known as AirCom, in Omaha, Neb., gathers initial details of an incident before contacting the pilot at the nearest base to confirm response, said Megan Smith, a spokeswoman for the company. The entire process happens in less than five minutes, Smith said in an emailed statement.

When asked how quickly the helicopter arrived for Robert Findley, Bourbon County EMS Director Robert Leisure said he was "unsure of the time the crew waited at the pad." But, he added, "the wait time was very minimal."

Rural communities nationwide are increasingly dependent on air ambulances as local hospitals close, said Rick Sherlock, president of the Association of Air Medical Services, an industry group that represents the air ambulance industry. AAMS estimates that nearly 85 million Americans rely on the mostly hospital-based and private industry to reach a high-level trauma center within 60 minutes, or what the industry calls the "golden hour."

In June, when Sherlock testified to Congress about high-priced air ambulance billing, he pointed to Fort Scott as a devastated rural community where air service "helped fill the gap in rural health care."

But, as Findley's case shows, the gap is often difficult to fill. After Air Methods' two bases failed to accept the flight, the AirCom operator called at least two more before finding a ride for the patient.

The 1978 Airline Deregulation Act states that airline companies cannot be regulated on "rates, routes, or services," a provision originally meant to ensure that commercial flights could move efficiently between states. Today, in practice, that means air ambulances have no mandated response times, there are no requirements that the closest aircraft will come, and they aren't legally obligated to say why a flight was declined.

The air ambulance industry has faced years of scrutiny over accidents, including investigations by the National Transportation Safety Board and stricter rules from the Federal Aviation Administration. And Air Methods' Smith said the company does not publicly report on why flights are turned down because "we don't want pilots to feel pressured to fly in unsafe conditions."

Yet a lack of accountability can lead to mostly for-profit providers sometimes putting profits first, Scott Winston, Virginia's assistant director of emergency medical services, wrote in an email. Air ambulances can be delayed because of bad weather or crew fatigue from previous runs.

Or sometimes companies accept a call knowing their closest aircraft is unavailable, rather than lose the business. "This could result in added response time," he wrote.

Air ambulances don't face the detailed reporting requirements imposed on ground ambulances. The National Emergency Medical Services Information System collects only about 50% of air ambulance events because the industry's private operators voluntarily provide the information.

Saving Lives
 

It took months, but Baker persuaded Ascension Via Christi's Pittsburg hospital, which sits 30 miles south of Fort Scott, to reopen the ER. "They kind of were at a point of desperation," said Randy Cason, president of Pittsburg's hospital. The two Catholic health systems signed a two-year agreement, leaving Fort Scott relieved but nervous about the long term.

As Fort Scott deals with the trauma of losing a beloved institution, deeper national questions underlie the struggle: Do small, rural communities need a traditional hospital at all? And if not, how will they get the health care they need?

Ascension has said it is looking at potential facilities in the area, but it's unclear what that means. Fort Scott Economic Development Director Rachel Pruitt said in a July 23 email, "No decisions have been made." Fort Scott City Manager Dave Martin said the city has entered into a "nondisclosure agreement" with Ascension to look into the health system's ability to continue offering health care to Fort Scott, though Martin could not confirm whether that included an emergency department.

Nancy Dickey, executive director of the Texas A&M Rural & Community Health Institute, said every community prioritizes emergency services. That's because the "first hour appears to be vitally important in terms of outcomes," she said.

And the Fort Scott ER, which reopened under Ascension on Feb. 18, has proved its value. So far, in the past six months, Ascension's Fort Scott emergency department has taken care of more than 2,500 patients, including delivering three babies. In May, a city ambulance crew had resuscitated a heart attack patient at his home and Ascension's emergency department staff treated the patient until an air ambulance arrived.

In July, Fort Scott's Deputy Fire Chief Dave Bruner read a note from that patient's grateful wife at a city commission meeting: "They gave my husband the chance to fight long enough to get to Freeman ICU. As a nurse, I know the odds of Kevin surviving the 'widow maker' were very poor. You all made the difference."

By contrast, Linda Findley believes the local paramedics did everything possible to save her husband but wonders how the lack of an ER and the air ambulance delays might have changed her husband's outcome. After being flown to Kansas City, Robert Findley died.

This is the third installment in KHN's year-long series, No Mercy, which follows how the closure of one beloved rural hospital disrupts a community's health care, economy and equilibrium.

Sarah Jane Tribble: sjtribble@kff.org, @SJTribble

What The Trump Home Dialysis Plan Would Really Look Like

KFF Health News, August 16, 2019

If policymakers have their way, older adults with serious, irreversible kidney disease will increasingly turn to home dialysis.

This article was first published on Friday August 16, 2019 in Kaiser Health News.

By Judith Graham

Mary Epp awoke from a deep sleep to the "high, shrill" sound of her dialysis machine's alarm. Something was wrong.

It was 1 a.m. and Epp, 89, was alone at home in Marion Junction, Ala. No matter. Epp has been on home dialysis since 2012, and she knew what to do: Check the machine, then call the 24/7 help line at her dialysis provider in Birmingham, Ala. to talk to a nurse.

The issue Epp identified: Hours before, a woman she hired to help her out had put up two small bags of dialysis solution instead of the large ones, and the solution had run out.

The nurse reassured Epp that she'd had enough dialysis. Epp tried to detach herself from the machine, but she couldn't remove a cassette, a key part. A man on another 24/7 help line run by the machine's manufacturer helped with that problem.

Was it difficult troubleshooting these issues? "Not really: I'm used to it," Epp said, although she didn't sleep soundly again that night.

If policymakers have their way, older adults with serious, irreversible kidney disease will increasingly turn to home dialysis. In July, the Trump administration made that clear in an executive order meant to fundamentally alter how patients with kidney disease are managed in the U.S.

Changing care for the sickest patients — about 726,000 people with end-stage kidney disease — is a top priority. Of these patients, 88% receive treatment in dialysis centers and 12% get home dialysis.

By 2025, administration officials say, 80% of patients newly diagnosed with end-stage kidney disease patients should receive home dialysis or kidney transplants. Older adults are sure to be affected: Half of the 125,000 people who learn they have kidney failure each year are 65 or older.

Home dialysis has potential benefits: It's more convenient than traveling to a dialysis center; recovery times after treatment are shorter; therapy can be delivered more often and more readily individualized, putting less strain on a person's body; and "patients' quality of life tends to be much better," said Dr. Frank Liu, director of home hemodialysis at the Rogosin Institute in New York City.

But home dialysis isn't right for everyone. Seniors with bad eyesight, poor fine-motor coordination, depression or cognitive impairment generally can't undertake this therapy, specialists note. Similarly, frail older adults with multiple conditions such as diabetes, arthritis and cardiovascular disease may need significant assistance from family members or friends.

The burden of providing this care shouldn't be underestimated. In a recent survey of caregivers providing complex care to family members, friends or neighbors, 64% identified operating home dialysis equipment as hard — putting this at the top of the list of difficult tasks.

What experiences do older adults have with home dialysis? Several seniors doing well on home-based therapies were willing to discuss this, but they're a select group. Up to a third of patients who try home dialysis end up switching to dialysis centers because they suffer complications or lose motivation, among other reasons.

Bottom of Form

It takes determination. Jack Reynolds, 89, prides himself on being disciplined, which has helped him do peritoneal dialysis at home in Dublin, Ohio, seven days a week for 3½ years.

With peritoneal dialysis, the therapy that Epp also gets, a fluid called dialysate (a mix of water, electrolytes and salts) is flushed into a patient's abdomen through a surgically implanted catheter. There, it absorbs waste products and excess fluids over several hours before being drained away. This type of dialysis can be done with or without a machine, several times a day or at night.

About 10% of patients on dialysis choose peritoneal therapy, including 18,500 older adults, according to federal data.

Reynolds prefers to administer peritoneal dialysis while he sleeps — a popular option. His routine: After dinner, Reynolds sets out two bags of dialysate, ointments, sterile solutions, gauze bandages and a fresh cassette for his dialysis machine with four tubes attached: two for the dialysate bags, one for his catheter and one to expel dialysate at the end.

Altogether, it takes him 23 minutes to gather everything, clean the area around his catheter and sterilize equipment; it takes about as much time to take things down in the morning. (Yes, he has timed it.) Just before going to sleep, Reynolds hooks up to his dialysis machine, which runs for 7.5 hours. (The amount and frequency of therapy varies according to an individual's needs.)

"I live a normal, productive life, and I'm determined to make this work," Reynolds said.

It took five surgeries to successfully implant a catheter on Reynolds' left side because of scarring from previous abdominal surgeries. He has had to replace three malfunctioning dialysis machines and learn how to sleep on his right side, so the tube connected to his catheter isn't compressed.

In the morning, his wife, Norma, cleans the area around his catheter, applies a gauze bandage and tapes an 18-inch extender attached to the catheter to his chest. He could do this himself, Reynolds said, but "I wanted her to have some part in all this."

Training is demanding. In December 2003, when Letisha Wadsworth started home hemodialysis in Brooklyn, N.Y., she was working as an administrator at a social service agency and wanted to keep her job. Doing dialysis in the evening made that possible.

Home hemodialysis requires one to two months of education and training for both the patient and, usually, a care partner. With each treatment, two needles are stuck into an access point, usually in a vein in a patient's arm. Through lines connected to the needles, blood is pumped out of the patient and through a machine, where it's cleansed and waste products are removed, before being pumped back into the body.

Only 2% of dialysis patients chose this option in 2016, including 2,800 older adults.

The training was "rigorous" and "pretty scary for both of us," said Wadsworth, now 70, whose husband, Damon, accompanied her. "We learned a lot about dialysis, but we still didn't know about issues that could arise when we got home."

Issues that Wadsworth has had to deal with: learning what to do if air got into one of the lines. Adjusting the rate at which her blood was pumped and flowed through the machine. And, recently, getting a medical procedure to fix the access site for her needles, which had clotted with blood.

Another issue: finding space for 30 large boxes of supplies (fluids, filters, needles, syringes and more) that Wadsworth orders each month. They're stored in two rooms in her house.

Over the years, Wadsworth has talked a lot to family members and friends about kidney failure and dialysis. "I wish I'd known about the relationship between blood pressure and kidney failure a lot earlier," she said. "I guess I thought all black people have high blood pressure: It just comes with the territory as opposed to what we can do to prevent it."  (High blood pressure puts people at risk of kidney failure.)

In 2013, Wadsworth had a stroke, which temporarily paralyzed her left side. "I used to set up the [dialysis] machine, but now I use a walker and I can't really stand and set everything up the way I used to." Damon, 73, does this for her.

Wadsworth's current routine: Dialysis starts around 8 p.m. and goes for five hours, four days a week, in a dedicated room in her house. She passes the time eating dinner, watching TV, reading on her Kindle, talking on the phone, visiting with friends or playing Scrabble with Damon.

Like most patients on home dialysis, she gets blood tests once a month and visits her nephrologist two weeks later to review how she's doing. A nurse, dietitian and social worker are also part of her team at the Rogosin Institute.

Damon, a psychotherapist, admits it isn't easy to stick his wife with needles. "A lot of times, it hurts her, and it's not fun for me to be the person doing that," he said. "But it's just part of my life now. We're thankful that home dialysis exists and we're lucky enough to be able to do it."

It can be overwhelming. Sharon Sanders, 76, thought she had the flu last year when she had trouble breathing and keeping food down. But when she landed in the hospital, doctors told her that her kidneys were shutting down.

About half of the time, this is what happens to people who end up on dialysis: They learn suddenly that their kidneys aren't working reliably anymore.

Like many people, Sanders was shocked. After going to classes and talking to a niece who's a registered nurse, she decided on peritoneal dialysis. "I liked that I can do it at home, by myself, and I don't have to stick myself with needles," she said.

Training took about a week at a clinic in Mesa, Ariz. "It came very easy for me," said Sanders, who lives in Gold Canyon, Ariz., and who began her nightly routine of six hours of peritoneal dialysis, five days a week, last August.

She doesn't pay anything for the therapy, which is covered for her by Medicare and Tricare insurance, a benefit Sanders has because of her husband's military service. (He died in 2017). Medicare Part B pays 80% of the cost of dialysis at home, and supplemental coverage (including, for instance, a Medigap policy, a retiree policy from an employer or Medicaid) generally picks up the remainder.

Sanders is a frequent visitor to Home Dialyzors United Facebook support group and another site, Home Dialysis Central. Another site, My Dialysis Choice, is a useful resource for people deciding whether home dialysis is right for them.

Even though Sanders, who has arthritis of the spine, doesn't find her dialysis routine especially burdensome, she sometimes gets overwhelmed. "I don't have any energy too much of the time," she said. "I find myself thinking, 'What's my purpose for doing this? Is it worth it if we're all going to die anyway?'"

Finding needed help. Until last November, when her husband of 68 years died, Mary Epp relied on him to get her ready for peritoneal dialysis, which she receives every night while she sleeps for nine hours.

Now, an aide comes in a 7 p.m. to help Epp take a bath and set things up before dialysis begins an hour later. Another woman comes in at 5 a.m. to take her off dialysis, clean everything up and fix her breakfast.

"I've gotten a lot more feeble than I was" when home dialysis began in 2012, said Epp, who admitted she was "terrified" when a physician diagnosed her with kidney failure.

But the benefits of home therapy, which is overseen by a team at a dialysis clinic 90 miles away in Birmingham, remain worth it, she said. "You just go to bed and wake up the next morning and you're ready to go and meet the day."

Judith Graham: khn.navigatingaging@gmail.com, @judith_graham

Doctors Can Change Opioid Prescribing Habits, But Progress Comes In Small Doses

KFF Health News, August 15, 2019

After guidelines for operations were issued in October 2017, surgeons in Michigan reduced by nearly one-third the number of pills they prescribed, with no reported drop in patient satisfaction.

This article was first published on Wednesday, August 14, 2019 in Kaiser Health News.

By Julie Appleby and Elizabeth Lucas

When they started practicing medicine, most surgeons say, there was little or no information about just how many pain pills patients needed after specific procedures.

As a result, patients often were sent home with the equivalent of handfuls of powerful and addictive medications. Then the opioid crisis hit, along with studies showing one possible side effect of surgery is long-term dependence on pain pills. These findings prompted some medical centers and groups of physicians to establish surgery-specific guidelines.

But questions remained: Would anyone pay attention to the guidelines and would smaller amounts be sufficient to control patients' pain?

Yes, appears to be the answer to both — in some measure — according to a study that encompassed nearly 12,000 patients in 43 hospitals across Michigan. The researchers published details of their work in a letter Wednesday in the New England Journal of Medicine.

Seven months after specific guidelines for certain operations were issued in October 2017, surgeons reduced by nearly one-third the number of pills they prescribed patients, with no reported drop in patient satisfaction or increase in reported pain, according to the research.

"We're not trying to deny patients narcotics," said Dr. Joceline Vu, one of the paper's authors and a general surgery resident at the University of Michigan. "But there's an acceptable level where people are still happy and still have their pain under control, but we have dropped the number to a minimum."

Overall, doctors prescribed eight fewer pills per patient — from 26 to 18 — across nine common surgical procedures, including hernia repair, appendectomy and hysterectomy, based on guidelines from the Michigan Opioid Prescribing Engagement Network (Michigan OPEN), a collaboration of hospitals, doctors and insurers.

Patients also reported taking fewer pills, dropping from 12 to nine on average across those procedures, possibly because they were prescribed fewer in the first place.

Still, while researchers say the study offers considerable reason for encouragement, it illustrates how hard it is to change prescribing habits. In May 2018, at the study's conclusion, the average number of pills prescribed exceeded the most up-to-date recommendations for all nine procedures.

And that's in Michigan, where there has been a concerted push to change prescribing habits. Most states don't have such a broad effort ongoing.

"There is a misconception that this is all fixed," said Dr. Chad Brummett, co-director of Michigan OPEN and one of the researchers on this study. "I do think people are still overprescribing. Definitely."

The guidelines come amid ongoing concern about the opioid crisis and a continued examination of the role prescription drugs played in its escalation.

The likelihood of persistent opioid use rises with the number of pills and the length of time opioids are taken during recuperation from surgery. But there's another avenue of concern. When doctors write scripts with a generous number of pills, the chance that patients won't take them all increases, along with the potential for the unused pills to make their way from medicine cabinets to the street, or to fall into the hands of other family members.

"That can be a bigger concern for many of us," said Vu. "It seems that in surgery, for whatever reason, we wrote prescriptions for a lot more opioids than people actually needed."

The Michigan OPEN guidelines recommended amounts based on how much pain medication patients actually took following surgery.

Other institutions developed their own surgery-specific prescribing principles, including Johns Hopkins Medicine in Baltimore and the Mayo Clinic in Minnesota. Although they use different methods to determine the number of pills, most ended up with similar parameters, often in the range of zero to 20 pills, depending on the procedure.

All the prescribing directives apply to patients with acute pain, such as those who had surgery, not people with chronic pain, Vu and other researchers emphasized. Even so, chronic-pain patients argue that the focus on setting postsurgical prescribing levels has made it far more difficult for them to get treatment.

"These patients feel besieged … and say, 'I need these pills to get out of bed in the morning'," said Vu. "This project and study is not about chronic pain. It's about preventing harm to healthy people coming in for surgery."

What are some of the guidelines? Michigan, in its initial recommendation, called for no more than 10 pills equivalent to 5 milligrams of oxycodone for a minor hernia repair, and no more than 20 for a minimally invasive hysterectomy.

The resulting changes offer important context.

Before the guidelines, for instance, patients with minor hernia repair operations were being prescribed 29 pills, according to the study. That fell to 14 by May 2018, which is still four more pills than the guidelines suggest.

For a hysterectomy, though, patients received 31 pills before the guidelines and 19 after, just below the "no more than 20" recommended. And following their initial guidelines, Michigan OPEN revised its recommendations, further lowering the range amounts to zero to 10 for hernia repair and 0 to 15 for a hysterectomy.

In sheer numbers, opioid prescribing rates in the U.S. peaked in 2010, but remain among the highest in the world, according to studies and other data. The postsurgical prescribing falloff seen in Michigan does not likely reflect a broader trend, especially where there is less emphasis on such guidelines.

An analysis of national Medicare data by Kaiser Health News and Johns Hopkins Bloomberg School of Public Health, for example, found only a small drop — one to two pills on average, per patient — in postsurgical prescribing across seven different procedures from 2016 to 2017.

The KHN/Hopkins analysis originally found that prescribing from 2011 to 2016 was well above levels now recommended by organizations like Michigan OPEN and the Hopkins medical center. For example, Medicare patients took home 48 pills in the week following coronary artery bypass; 31 following laparoscopic gallbladder removal; 28 after a lumpectomy; and 34 after minimally invasive hysterectomies.

According to postsurgical guidelines spearheaded by Hopkins last year, those surgeries should require at most 30 pills for a bypass; 10 pills for minimally invasive gallbladder removal, lumpectomy and minimally invasive hysterectomy.

In July, when 2017 Medicare data became available, KHN and Hopkins did an additional analysis, which showed, on average, small decreases in the number of pills taken home from the pharmacy by patients in the first week after leaving the hospital. But the drop was smaller than the reductions seen in Michigan.

For example, nationwide prescribing following bypass surgery averaged 45 pills, a drop of three; after a hysterectomy, the drop was four pills from the six-year average, to 30; and lumpectomy patients took home five fewer pills, for an average of 23.

"Those reductions are not sufficient," said Dr. Marty Makary, the surgeon who spearheaded the development of guidelines at Johns Hopkins Bloomberg School and whose staff helped perform the Medicare analysis for KHN. "The data represents prescriptions as recent as a year and a half ago, and we're three years into the opioid crisis. We're talking about mopping up the floor while the spigot is still on."

(Use our interactive tool
Search individual prescribing habits by doctor name or associated hospitals based on data analysis by Kaiser Health News and Johns Hopkins Bloomberg School of Public Health. Read our methodology)

Julie Appleby: jappleby@kff.org, @Julie_Appleby

Elizabeth Lucas: elucas@kff.org, @eklucas

Trump Administration Hits Brakes On Law To Curb Unneeded Medicare CT Scans, MRIs

KFF Health News, August 14, 2019

Critics worry the delays come at a steep cost: Medicare paying for millions of unnecessary exams and patients subject to radiation for no medical benefit.

This article was first published on Wednesday, August 14, 2019 in Kaiser Health News.

By Phil Galewitz

Five years after Congress passed a law to reduce unnecessary MRIs, CT scans and other expensive diagnostic imaging tests that could harm patients and waste money, federal officials have yet to implement it.

The law requires that doctors consult clinical guidelines set by the medical industry before Medicare will pay for many common exams for enrollees. Health care providers who go way beyond clinical guidelines in ordering these scans (the 5% who order the most tests that are inappropriate) will, under the law, be required after that to get prior approval from Medicare for their diagnostic imaging.

But after physicians argued the provision would interfere with their practices, the Trump administration delayed putting the 2014 law in place until January 2020, two years later than originally planned.

Even then, the Centers for Medicare & Medicaid Services (CMS) slated next year as a "testing" period, which means even if physicians don't check the guidelines, Medicare will still pay for an exam. CMS also said it won't decide until 2022 or 2023 when physician penalties will begin.

Critics worry the delays come at a steep cost: Medicare paying for millions of unnecessary exams and patients subject to radiation for no medical benefit.

A Harvard study published in 2011 in the Journal of Urology found "widespread overuse" of imaging tests for men on Medicare who were at low risk for prostate cancer. And a University of Washington study in the Journal of the American College of Radiology that reviewed 459 CT and MRI exams at a large academic medical center found 26% of the tests were inappropriate.

"These delays mean that many more inappropriate imaging procedures will be performed, wasting financial resources and subjecting patients to services they do not need," said Gary Young, director of the Northeastern University Center for Health Policy and Healthcare Research in Boston. "If this program were implemented stringently, you would certainly reduce inappropriate imaging to some degree."

Doctors order unnecessary tests for a variety of reasons: to seize a potential financial advantage for them or their health system, to ease fears of malpractice suits or to appease patients who insist on them.

The law applies to doctors treating patients enrolled in the traditional fee-for-service Medicare system. Health insurers, including those that operate the private Medicare Advantage plans, have for many years refused to pay for the exams unless doctors get authorization from them beforehand. That process can take days or weeks, which irks physicians and patients.

CMS Administrator Seema Verma has sought to reduce administrative burdens on doctors with her "patients over paperwork" initiative.

CMS would not make Verma or other officials available and answered questions only by email.

A spokeswoman said CMS has no idea how many unnecessary imaging tests are ordered for Medicare beneficiaries.

"CMS expects to learn more about the prevalence of imaging orders identified as 'not appropriate' under this program when we begin to identify outlier ordering professionals," she said.

'It Takes Four Clicks On A Computer'

 

An influential congressional advisory board in 2011 cited the rapid growth of MRIs, CT scans and other imaging and recommended requiring doctors who order more tests than their peers to be forced to get authorization from Medicare before sending patients for such exams. In the 2014 law, Congress tried to soften the effect by asking doctors billing Medicare to follow protocols to confirm that imaging would be appropriate for the patient.

A growing number of health systems have used clinical guidelines to better manage imaging services, studies show. The University of Virginia Health System found that unnecessary testing fell by between 5% and 11% after implementing such recommendations.

Virginia Mason Health System in Seattle in 2011 set up a system requiring its physicians — most of whom are on salary — to consult imaging guidelines. It would deny claims for any tests that did not meet appropriate criteria, except in rare circumstances. A study found the intervention led to a 23% drop in MRIs for lower back issues and headaches.

Dr. Craig Blackmore, a radiologist at Virginia Mason, said he worries that, unlike the efforts at his hospital, many doctors could be confused by the Medicare program because they have not received the proper training about the guidelines.

"My fear is that it will be a huge disruption in workflow and show no benefit," he said.

In 2014, AtlantiCare, a large New Jersey hospital system, began grading physicians on whether they consult its guidelines.

"Some doctors see this tool as additional work, but it takes four clicks on a computer or less than a minute," said Ernesto Cerdena, director of radiology services at AtlantiCare.

Not all Medicare imaging tests will be subject to the requirements. Emergency patients are exempt, as well as patients admitted to hospitals. CMS has identified some of the most common conditions for which doctors will have to consult guidelines. Those include heart disease, headache and pain in the lower back, neck or shoulders.

Robert Tennant, director of health information technology for the Medical Group Management Association, which represents large physician groups, said the law will unfairly affect all doctors merely to identify the few who order inappropriately.

"For the most part, doctors are well trained and know exactly what tests to perform," Tennant said.

The association is one of several medical groups pushing Congress to repeal the provision.

American College Of Radiology's Role

 

The law required the federal government to designate health societies or health systems to develop guidelines and companies that would sell software to embed that information into doctors' electronic health record systems.

Among the leaders in that effort is the American College of Radiology, which lobbied for the 2014 law and has been issuing imaging guidelines since the 1990s. It is one of about 20 medical organizations and health systems certified by CMS to publish separate guidelines for doctors.

The college wanted "to get ahead of the train and come up with a policy that was preferable to prior authorization," said Cynthia Moran, an executive vice president of the radiology group. About 2,000 hospitals use the college's licensed guidelines, more than any others, she said. And the college profits from that.

Moran said the licensing money helps the college defer the costs of developing the guidelines, which must be updated regularly based on new research. She said the college gives away the guidelines to individual doctors upon request and sells them only to large institutions, although she notes they are not as easy to access that way compared with being embedded in a doctor's medical records.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Charity Care Spending By Hospitals Plunges

KFF Health News, August 13, 2019

The decline was true of for-profit hospitals, so-called nonprofit hospitals and those designated as city, county, district or state hospitals.

This article was first published on Tuesday, August 13, 2019 in Kaiser Health News.

By Harriet Blair Rowan

alifornia hospitals are providing significantly less free and discounted care to low-income patients since the Affordable Care Act took effect.

As a proportion of their operating expenses, the state's general acute-care hospitals spent less than half on these patients in 2017 than they did in 2013, according to data the hospitals reported to California's Office of Statewide Health Planning and Development.

The biggest decline in charity care spending occurred from 2013 to 2015, when it dropped from just over 2% to just under 1%. The spending has continued to decline, though less dramatically, since then.

The decline was true of for-profit hospitals, so-called nonprofit hospitals and those designated as city, county, district or state hospitals.

Health experts attribute the drop in charity care spending largely to the implementation of the federal Affordable Care Act, popularly known as Obamacare. The law expanded insurance coverage to millions of Californians, starting in 2014, and hospitals are now treating far fewer uninsured patients who cannot pay for the care they receive.

With fewer uninsured patients, fewer patients seek financial assistance through the charity care programs, according to the California Hospital Association.

Cori Racela, deputy director at the Western Center on Law & Poverty, countered that many people still need financial assistance because — even with insurance — they struggle to pay their premiums, copays and deductibles.

"The need for charity care has changed," she said, "but it still exists."

The data on charity care comes from most of the state's general acute-care hospitals but does not include Kaiser Permanente hospitals, which are not required by the state to report their charity care totals. (Kaiser Health News, which produces California Healthline, has no affiliation with Kaiser Permanente.)

For 2017, California Healthline used data from 177 nonprofit hospitals, 80 for-profit hospitals and 54 city, county, district or state hospitals. The breakdown was similar for the other years, with slight fluctuations.

Nonprofit hospitals, whose charity care spending dropped from 2.02% of operating expenses to 0.91% over the five-year period, are required by state and federal law to provide "community benefits" in exchange for their tax-exempt status.

They can meet that requirement beyond providing free and discounted care in a variety of ways: They can offer community public health programs, write off uncollected patient debt and claim the difference between what it costs to provide care and the amount that they are reimbursed by government insurance programs.

Nonprofit "hospitals get tax-exempt status, but they don't get it for free," said Ge Bai, associate professor of accounting and health policy at Johns Hopkins University. Charity care "is part of the implicit contract between hospital and taxpayers."

Bai sees the reduced spending on charity care as part of a trend of nonprofit hospitals acting more like their for-profit counterparts.

Many nonprofit hospitals "no longer consider charity care their primary mission," she said. "They are making more and more money but they are dropping their charity care."

The state and federal governments set no minimum requirements for charity spending by hospitals, although the California Attorney General has created standards for a few nonprofit hospitals that have changed ownership in recent years.

Jan Emerson-Shea, a spokeswoman for the California Hospital Association, said hospitals are giving back to their communities in ways beyond charity care.

"You see charity care declining, but Medi-Cal losses are increasing," Emerson-Shea said. She pointed to the growing shortfalls many hospitals report from caring for more patients covered by the public insurance program. "Every Medi-Cal patient we treat we lose money on."

Medi-Cal, the state's Medicaid program for low-income residents, increased its rolls by 5.6 million — or about 70% — from 2013 to 2017.

Racela, of the Western Center on Law & Poverty, would like to see changes in California's charity care rules to address high out-of-pocket costs.

And she wants hospitals to abide by the state law that requires them to inform patients that they may be eligible for charity care based on their income.

"There is still a big unmet need for charity care across the state," Racela said.

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

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

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