End-Of-Life Advice: More Than 500,000 Chat On Medicare’s Dime

KFF Health News, August 14, 2017

Nearly 23,000 providers submitted about $93 million in charges in 2016. Use was much higher than expected.

This article first appeared August 14, 2017 on Kaiser Health News.

By JoNel Aleccia

The 90-year-old woman in the San Diego-area nursing home was quite clear, said Dr. Karl Steinberg. She didn’t want aggressive measures to prolong her life. If her heart stopped, she didn’t want CPR.

But when Steinberg, a palliative care physician, relayed those wishes to the woman’s daughter, the younger woman would have none of it.

“She said, ‘I don’t agree with that. My mom is confused,’” Steinberg recalled. “I said, ‘Let’s talk about it.’”

Instead of arguing, Steinberg used an increasingly popular tool to resolve the impasse last month. He brought mother and daughter together for an advance-care planning session, an end-of-life consultation that’s now being paid for by Medicare.

In 2016, the first year health care providers were allowed to bill for the service, nearly 575,000 Medicare beneficiaries took part in the conversations, new federal data obtained by Kaiser Health News show.

Nearly 23,000 providers submitted about $93 million in charges, including more than $43 million covered by the federal program for seniors and the disabled.

Use was much higher than expected, nearly double the 300,000 people the American Medical Association projected would receive the service in the first year.

That’s good news to proponents of the sessions, which focus on understanding and documenting treatment preferences for people nearing the end of their lives. Patients and, often, their families discuss with a doctor or other provider what kind of care they want if they’re unable to make decisions themselves.

“I think it’s great that half a million people talked with their doctors last year. That’s a good thing,” said Paul Malley, president of Aging with Dignity, a Florida nonprofit that promotes end-of-life discussions. “Physician practices are learning. My guess is that it will increase each year.”

Still, only a fraction of eligible Medicare providers — and patients — have used the benefit, which pays about $86 for the first 30-minute office visit and about $75 for additional sessions.

Nationwide, slightly more than 1 percent of the more than 56 million Medicare beneficiaries enrolled at the end of 2016 received advance-care planning talks, according to calculations by health policy analysts at Duke University. But use varied widely among states, from 0.2 percent of Alaska Medicare recipients to 2.49 percent of those enrolled in the program in Hawaii.

“There’s tremendous variation by state. That’s the first thing that jumps out,” said Donald Taylor Jr., a Duke professor of public policy.

In part, that’s because many providers, especially primary care doctors, aren’t aware that the Medicare reimbursement agreement, approved in 2015, has taken effect.

“Some physicians don’t know that this is a service,” said Barbie Hays, a Medicare coding and compliance strategist for the American Academy of Family Physicians. “They don’t know how to get paid for it. One of the struggles here is we’re trying to get this message out to our members.”

There also may be lingering controversy over the sessions, which were famously decried as “death panels” during the 2009 debate about the Affordable Care Act. Earlier this year, the issue resurfaced in Congress, where Rep. Steve King (R-Iowa) introduced the Protecting Life Until Natural Death Act, which would halt Medicare reimbursement for advance-care planning appointments.

King said the move was financially motivated and not in the interest of Americans “who were promised life-sustaining care in their older years.”

Proponents like Steinberg, however, contend that informed decisions, not cost savings, are the point of the new policy.

“It’s really important to say the reason for this isn’t to save money, although that may be a side benefit, but it’s really about person-centered care,” he said. “It’s about taking the time when people are ill or even when they’re not ill to talk about what their values are. To talk about what constitutes an acceptable versus an unacceptable quality of life.”

That’s just the discussion that the San Diego nursing home resident was able to have with her daughter, Steinberg said. The 90-year-old was able to say why she didn’t want CPR or to be intubated if she became seriously ill.

“I believe it brought the two of them closer,” Steinberg said. Even though the daughter didn’t necessarily hear what she wanted to hear. It was like, ‘You may not agree with your mom, but she’s your mom, and if she doesn’t want somebody beating her chest or ramming a tube down her throat, that’s her decision.”

Climbing Cost Of Decades-Old Drugs Threatens To Break Medicaid Bank

KFF Health News, August 14, 2017

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in one year, analysis shows.

This article first appeared August 14, 2017 on Kaiser Health News.

By Sydney Lupkin

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs — some generic and some still carrying brand names — proved more than two decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other non-branded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers like the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

  • Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
  • Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136 percent. Overall, the change cost the program an extra $10 million in 2016.
  • Generic metformin hydrochloride, an oral Type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra three pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer and other ailments:

  • Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347 percent vs. the year before.
  • Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
  • Potassium phosphates — on the market since the 1980s and used for renal failure patients, preemies and patients undergoing chemotherapy — cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290 percent, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, who directs the Drug Information Center at the University of Utah and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, a professor at the University of Chicago who co-authored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Conti said that about 30 percent of generic drugs had price increases of 100 percent or more the past five years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1 percent for brand-name drugs, plus supplemental rebates that vary by state, Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque … [it’s] “black-box stuff.”

Fox said drug prices could also jump when a pharmaceutical product changes ownership, gets new packaging or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anti-competitive tactics to stave off competition.

Doctors, pharmacists and patients don’t always receive warning when a price hike is about to occur, Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center. “In this case, you just need to take it on the chin, and you hope one day for competition.”

Big Employers Vow To Continue Offering Health Insurance

KFF Health News, August 9, 2017

Two surveys of large employers show companies continue to try to control costs while backing away from shrinking or dropping health benefits.

This article first appeared August 08, 2017 on Kaiser Health News.

By Jay Hancock

The shrinking unemployment rate has been a healthy turn for people with job-based benefits.

Eager to attract help in a tight labor market and unsure of Obamacare’s future, large employers are newly committed to maintaining coverage for workers and often their families, according to new research and interviews with analysts.

Two surveys of large employers — one released Aug. 2 by consultancy Willis Towers Watson and the other out Tuesday from the National Business Group on Health, show companies continue to try to control costs while backing away from shrinking or dropping health benefits. NBGH is a coalition of large employers.

“The extent of uncertainty in Washington has made people reluctant to make changes to their benefit programs without knowing what’s happening,” said Julie Stone, a senior benefits consultant with Willis Towers Watson. “They’re taking a wait-and-see attitude.”

That’s a marked change from three years ago, when many big employers — those with 1,000 employees or more — contemplated ending medical benefits and shifting workers to the Affordable Care Act’s marketplaces.

In 2014, only 25 percent of big companies were “very confident” they would have a job-based health plan for employees in 10 years, according to the Willis Towers Watson survey.

This year, 65 percent expected to offer health benefits in a decade. And 92 percent said they were very confident a company-based health plan would exist in five years.

Many managers once eyed Obamacare marketplaces as workable coverage alternatives despite the law’s requirement that employers offer health insurance, analysts said.

But problems with marketplace plans, including fewer offerings, rising premiums and shrinking medical networks, have made employers think twice, they said.

Another big reason to maintain rich coverage is “the strength of the economy,” said Paul Fronstin, director of health research at the Employee Benefit Research Institute, an industry group. “Employers are doing what they have to do to get the right workers.”

Unemployment has fallen from 9.9 percent when Obamacare became law in 2010 to 4.3 percent last month, which equaled a 16-year low reached in May.

With such a steep decline, he added, “employers are thinking, ‘We need to offer this benefit for recruitment and retention.’”

Second Thoughts On High-Deductible Plans

Companies are even rethinking the long-standing expedient of shifting a portion of rising medical costs to employees through high-deductible plans and a greater share of the premium bill, other research shows.

“Employers are beginning to recognize that cost sharing has its limits,” said a June report from PwC, a multinational professional services network. Low unemployment and competition for workers mean “employers have less appetite for scaling back benefits and continuing with a plan design that has proven largely unpopular.”

At Fidelity Investments, a Boston-based financial firm with more than 45,000 employees, worker contributions have grown to about 30 percent of total health costs.

Jennifer Hanson, the company’s benefits chief who sits on NBGH’s board, doesn’t see that continuing.

As costs grow, “if you continue to shift more of a bigger number to employees, health care becomes unaffordable,” she said in an interview. “As employers, we really do need to pay attention less to who’s paying for what and more to how much everything costs.”

More than half of Americans with job-based insurance face deductibles — out-of-pocket costs for most care before insurance kicks in — of more than $1,000 for single-person coverage. Family deductibles can be much higher.

High On The To-Do List: Controlling Drug Costs

Big employers’ planned changes for next year focus on controlling drug costs and improving health results through telemedicine and steering patients to efficient, high-quality hospitals, noted the Willis Towers Watson report and the NBGH survey.

Employer health costs continue to rise, but not at the double-digit clip seen for many plans sold to individuals and families through the ACA marketplaces.

Employers expect health costs to increase 5.5 percent next year, up from 4.6 percent in 2017, according to the Willis Towers Watson report.

Companies in the NBGH survey predicted health costs will rise 5 percent next year, up from an average 4.1 percent increase for 2016.

That’s still far faster than inflation, which is less than 3 percent, and overall wage growth.

By many accounts, soaring costs for specialty pharmaceuticals used to treat cancer, rheumatoid arthritis, hemophilia and other complex conditions are the biggest factor.

“These are very expensive drugs,” said Brian Marcotte, NBGH’s CEO. “They cost thousands or tens of thousands per treatment.”

Often these drugs require infusion into the blood in a clinical setting, which can drive up their price tag.

For instance, hospital-based infusions have been found to cost as much as seven times more than those performed in, say, a doctor’s office.

Employers are working hard to steer patients to the least expensive, appropriate site, Marcotte said.

Big employers are also offering more on-site nurses and doctors; setting up accountable care organizations with incentives for doctors and hospitals to control costs; and striking deals with particular hospitals for high-cost operations such as transplants and joint replacements, the NBGH survey found.

Job-based insurance covers some 160 million people younger than 65, according to Census and Labor Department data, far more than the 10 million or so insured by plans sold through Obamacare marketplaces.

Government employers and companies with at least 500 workers, which historically have been more likely to offer health benefits than smaller employers, cover more than 90 million employees and dependents.

Willis Towers surveyed 555 large employers with about 12 million workers and dependents. NBGH surveyed 148 large companies with more than 15 million employees and dependents.

Health Gap Widens Between Appalachia and Rest of the U.S.

KFF Health News, August 8, 2017

A Health Affairs study finds disparities driven by higher rates of infant mortality, smoking, obesity and early deaths from motor vehicle accidents and drug overdoses.

This article first appeared August 07, 2017 on Kaiser Health News.

By Vickie Connor

Brian and Sandy Willhite (Courtesy of the Willhite family)

Sandy Willhite doesn’t mind driving 45 minutes to the nearest shopping center. But living in Hillsboro, W.Va., became problematic when she had to travel nearly six hours for proper foot treatment.

“There just aren’t any quality surgeons or specialists in our area,” Willhite said, when explaining why she went to a doctor in Laurel, Md.

Getting health care is a common problem for the residents of Hillsboro, a tiny hamlet in the middle of Appalachia with a population of just under 250 residents.

And the Appalachian region is in dire need of health care. This section of the U.S., long acknowledged to be among the most economically disadvantaged in the country, is showing a growing gap in health outcomes with the rest of the United States.

A study released Monday in the journal Health Affairs found disparities widening sharply between Appalachia and the rest of the country, driven by higher rates of infant mortality, smoking, obesity and early deaths from motor vehicle accidents and drug overdoses.

“Although life expectancy increased everywhere in the United States between 1990 and 2013, less rapid declines in mortality and slower gains in life expectancy among people in Appalachia have led to a widening health gap,” the study said.

The study focused on the 428 counties within the 13 states that constitute Appalachia. Gopal Singh, an author of the study and a senior health equity adviser at the Health Resources and Services Administration, found that counties with high rates of poverty have the highest infant mortality rate and lowest life expectancy. These areas are seen mostly in central and southern Appalachia.

Courtesy of Health Affairs

The researchers found Appalachia lagged behind the rest of the country on health measures in the early 1990s — but only slightly. Infant mortality rates were not statistically different. And life expectancy was about 75 years — just 0.6 years shorter than that outside of the region.

But when the researchers analyzed data from 2009 to 2013, they found the infant mortality rate for Appalachia to be 16 percent higher than the rest of the country and the difference in life expectancy was 2.4 years.

When researchers examined specific demographic groups, some of the disparities were much greater. For instance, they noted a 13-year gap in life expectancy between black men in high-poverty areas of Appalachia (age 70.4) and white women in low-poverty areas elsewhere in the country (83).

According to the study, the association between poverty and life expectancy was stronger in Appalachia than the rest of the country.

“You do see a more rapid improvement in the rest of the country compared to Appalachia, but there are specific reasons why Appalachia I guess continues to fall behind,” said Singh, the lead author.

The study points to specific health problems, including lack of access to doctors and other providers, high rates of preterm births and low-weight births, and high rates of smoking-related diseases, such as lung cancer, chronic obstructive pulmonary disease and heart disease.

“Smoking-related diseases accounted for more than half of the life-expectancy gap between Appalachia and the rest of the country,” the study said.

Dr. Joanna Bailey treats some of Appalachia’s patients every day as a family medicine physician in Wyoming County, W.Va. She grew up there and said the lifestyle plays a large role in health outcomes. “I treat a lot of diabetes; I see a lot of high blood pressure; I see a lot of heart disease. I see a lot of obesity, because it is a place where it has been normalized quite a bit.”

“I think that the culture is such that getting those conditions under control is difficult for many reasons,” Bailey said.

The economic issues compound the situation, she said.

“There’s the problem of poverty,” she added. “A lot of people are on disability and they rely on food stamps to get their food for the month.” Many of Bailey’s patients pay someone to drive them to the grocery store. She said it’s difficult to coach them to buy healthful groceries when the food is good only for a few days.

“By the end of the month, they are back to eating cereal and Hamburger Helper,” Bailey said.

She thinks the widening health gap in recent years has accelerated with an increasing number of young people leaving the area for job opportunities.

“We’re left with an older, sicker population who can’t work or don’t work, and those people are notoriously sicker,” Bailey said.

Both Bailey and Singh agree that addressing the health gap requires socioeconomic change. The communities need better higher-education opportunities and infrastructure improvements, such as improved roadways so patients can more easily get to larger towns and cities to access health care.

Until then, Willhite and her family will continue to drive hours for care, such as the foot doctor in Laurel, whom she had consulted when she lived in Maryland.

“There are just absolutely so many (health) issues here in this region, you can’t begin to put your finger on one,” Willhite said. “It’s like a big vicious circle.”

When Wounds Won’t Heal, Therapies Spread — To The Tune Of $5 Billion

KFF Health News, August 7, 2017

We may be paying for treatments that don’t work,” says Sean Tunis, MD, a former CMO for Medicare and now CEO of the nonprofit Center for Medical Technology Policy, which has worked with the federal government to improve research on wounds.

This article first appeared August 03, 2017 on Kaiser Health News.

By Marisa Taylor

PHILADELPHIA — Carol Emanuele beat cancer. But for the past two years, she has been fighting her toughest battle yet. She has an open wound on the bottom of her foot that leaves her unable to walk and prone to deadly infection.

In an effort to treat her diabetic wound, doctors at a Philadelphia clinic have prescribed a dizzying array of treatments. Freeze-dried placenta. Penis foreskin cells. High doses of pressurized oxygen. And those are just a few of the treatment options patients face.

“I do everything, but nothing seems to work,” said Emanuele, 59, who survived stage 4 melanoma in her 30s. “I beat cancer, but this is worse.”

The doctors who care for the 6.5 million patients with chronic wounds know the depths of their struggles. Their open, festering wounds don’t heal for months and sometimes years, leaving bare bones and tendons that evoke disgust even among their closest relatives.

Many patients end up immobilized, unable to work and dependent on Medicare and Medicaid. In their quest to heal, they turn to expensive and sometimes painful procedures, and products that often don’t work.

According to some estimates, Medicare alone spends at least $25 billion a year treating these wounds. But many widely used treatments aren’t supported by credible research. The $5 billion-a-year wound care business booms while some products might prove little more effective than the proverbial snake oil. The vast majority of the studies are funded or conducted by companies who manufacture these products. At the same time, independent academic research is scant for a growing problem.

“It’s an amazingly crappy area in terms of the quality of research,” said Sean Tunis, who as chief medical officer for Medicare from 2002 to 2005 grappled with coverage decisions on wound care. “I don’t think they have anything that involves singing to wounds, but it wouldn’t shock me.”

A 2016 review of treatment for diabetic foot ulcers found “few published studies were of high quality, and the majority were susceptible to bias.” The review team included William Jeffcoate, a professor with the Department of Diabetes and Endocrinology at Nottingham University Hospitals Trust. Jeffcoate has overseen several reviews of the same treatment since 2006 and concluded that “the evidence to support many of the therapies that are in routine use is poor.”

“I don’t think they have [any therapy] that involves singing to wounds, but it wouldn’t shock me.”

Sean Tunis, former Medicare chief medical officer

A separate Health and Human Services review of 10,000 studies examining treatment of leg wounds known as venous ulcers found that only 60 of them met basic scientific standards. Of the 60, most were so shoddy that their results were unreliable.

While scientists struggle to come up with treatments that are more effective, patients with chronic wounds are dying.

The five-year mortality rate for patients with some types of diabetic wounds is more than 50 percent higher than breast and colon cancers, according to an analysis led by Dr. David Armstrong, a professor of surgery and director of the Southern Arizona Limb Salvage Alliance.

Open wounds are a particular problem for people with diabetes because a small cut may turn into an open crater that grows despite conservative treatment, such as removal of dead tissue to stimulate new cell growth.

More than half of diabetic ulcers become infected, 20 percent lead to amputation, and, according to Armstrong, about 40 percent of patients with diabetic foot ulcers have a recurrence within one year after healing.

Carol Emanuele of Philadelphia shows a photograph of a wound VAC (vacuum-assisted closure) procedure on her left foot after the amputation of her big toe. (Eileen Blass/for Kaiser Health News)

“It’s true that we may be paying for treatments that don’t work,” said Tunis, now CEO of the nonprofit Center for Medical Technology Policy, which has worked with the federal government to improve research. “But it’s just as tragic that we could be missing out on treatments that do work by failing to conduct adequate clinical studies.”

Although doctors and researchers have been calling on the federal government to step in for at least a decade, the National Institutes of Health and the Veterans Affairs and Defense departments haven’t responded with any significant research initiative.

“The bottom line is that there is no pink ribbon to raise awareness for festering, foul-smelling wounds that don’t heal,” said Caroline Fife, a wound care doctor in Texas. “No movie star wants to be the poster child for this, and the patients … are old, sick, paralyzed and, in many cases, malnourished.”

The NIH estimates that it invests more than $32 billion a year in medical research. But an independent review estimated it spends 0.1 percent studying wound treatment. That’s about the same amount of money NIH spends on Lyme disease, even though the tick-borne infection costs the medical system one-tenth of what wound care does, according to an analysis led by Dr. Robert Kirsner, chair and Harvey Blank professor at the University of Miami Department of Dermatology and Cutaneous Surgery.

Emma Wojtowicz, an NIH spokeswoman, said the agency supports chronic wound care, but she said she couldn’t specify how much money is spent on research because it’s not a separate funding category.

“Chronic wounds don’t fit neatly into any funding categories,” said Jonathan Zenilman, chief of the division for infectious diseases at Johns Hopkins Bayview Medical Center and a member of the team that analyzed the 10,000 studies. “The other problem is it’s completely unsexy. It’s not appreciated as a major and growing health care problem that needs immediate attention, even though it is.”

Commercial manufacturers have stepped in with products that the FDA permits to come to market without the same rigorous clinical evidence as pharmaceuticals. The companies have little incentive to perform useful comparative studies.

“There are hundreds and hundreds of these products, but no one knows which is best,” said Robert Califf, who stepped down as Food and Drug Administration commissioner for the Obama administration in January. “You can freeze it, you can warm it, you can ultrasound it, and [Medicare] pays for all of this.”

When Medicare resisted coverage for a treatment known as electrical stimulation, Medicare beneficiaries sued, and the agency changed course.

“The ruling forced Medicare to reverse its decision based on the fact that the evidence was no crappier than other stuff we were paying for,” said Tunis, the former Medicare official.

In another case, Medicare decided to cover a method called “noncontact normothermic wound therapy,” despite concerns that it wasn’t any more effective than traditional treatment, Tunis said.

“It’s basically like a Dixie cup you put over a wound so people won’t mess with it,” he said. “It was one of those ‘magically effective’ treatments in whatever studies were done at the time, but it never ended up being part of a good-quality, well-designed study.”

The companies that sell the products and academic researchers themselves disagree over the methodology and the merits of existing scientific research.

Thomas Serena, one of the most prolific researchers of wound-healing products, said he tries to pick the healthiest patients for inclusion in studies, limiting him to a pool of about 10 percent of his patient population.

“We design it so everyone in the trial has a good chance of healing,” he said.

“If it works, like, 80 or 90 percent of the time, that’s because I pick those patients,” said Serena, who has received funding from manufacturers.

But critics say the approach makes it more difficult to know what works on the sickest patients in need of the most help.

Gerald Lazarus, a dermatologist who led the HHS review as then-director of Johns Hopkins Bayview Medical Center wound care clinic, said Serena’s assertion is “misleading. That’s not a legitimate way to conduct research.” He added that singling out only healthy patients skews the results.

The emphasis on healthier patients in clinical trials also creates unrealistic expectations for insurers, said Fife.

“The expensive products … brought to market are then not covered by payers for use in sick patients, based on the irrefutable but Kafka-esque logic that we don’t know if they work in sick people,” she said.

“Among very sick patients in the real world, it may be hard to find a product that’s clearly superior to the others in terms of its effectiveness, but we will probably never find that out since we will never get the funding to analyze the data,” added Fife, who has struggled to get government funding for a nonprofit wound registry she heads. Not surprisingly, she said, the registry data demonstrate that most treatments don’t work as well on patients as shown in clinical trials.

Patients say they often feel overwhelmed when confronted with countless treatments.

Navy surgeon Capt. Pat McKay examines the healing progress of skin grafts on Navy Cmdr. Peter Snyder at Walter Reed National Military Medical Center. (H. Darr Beiser/for Kaiser Health News)

“Even though I’m a doctor and my wife is a nurse, we found this to be complicated,” said Navy Cmdr. Peter Snyder, a radiologist who is recovering from necrotizing fasciitis, also known as flesh-eating bacteria. “I can’t imagine how regular patients handle this. I think it would be devastating.”

To heal wounds on his arms and foot, Snyder relied on various treatments, including skin-graft surgery, special collagen bandages and a honey-based product. His doctor who treats him at Walter Reed National Military Medical Center predicted he would fully recover.

Such treatments aren’t always successful. Although Emanuele’s wound left by an amputation (of her big toe) healed, another wound on the bottom of her foot has not.

Recently, she looked back at her calendar and marveled at the dozens of treatments she has received, many covered by Medicare and Medicaid.

To help Carol Emanuele get around her Philadelphia home, she places a walker inside the threshold of the doorway to her bathroom so she can easily transfer from wheelchair or a walker in order to stay off her feet. (Eileen Blass/for Kaiser Health News)

Some seem promising, like wound coverings made of freeze-dried placenta obtained during births by cesarean section. Others, not — including one plastic bandage that her nurse agreed made her wound worse.

Emanuele was told she needed to undergo high doses of oxygen in a hyperbaric chamber, a high-cost treatment hospitals are increasingly relying on for diabetic wounds. The total cost: about $30,000, according to a Medicare invoice.

Some research has indicated that hyperbaric therapy works, but last year a major study concluded it wasn’t any more effective than traditional treatment.

“Don’t get me wrong, I am grateful for the care I get,” Emanuele said. “It’s just that sometimes I’m not sure they know what they’re using on me works. I feel like a guinea pig.”

Confined to a wheelchair because of her wounds, she fell moving from the bathroom to her wheelchair and banged her leg, interrupting the healing process. Days later, she was hospitalized again. This time, she got a blood infection from bacteria entering through an ulcer.

She has since recovered and is now back on the wound care routine at her house.

“I don’t want to live like this forever,” she said. “Sometimes I feel like I have I no identity. I have become my wound.”

KHN’s coverage of end-of-life and serious illness issues is supported by The Gordon and Betty Moore Foundation.

Why a PA Insurer's Collapse Could Whack Insurers Across the Country

KFF Health News, August 7, 2017

Health insurers across the country are on the hook for hundreds of millions of dollars in losses stemming from the recent insolvency of Penn Treaty American Corp., of Allentown, Pa., and its two subsidiaries.

This article first appeared August 07, 2017 on Kaiser Health News.

By Chad Terhune

Among all the reasons for rising health insurance premiums, this one might be the most obscure: A long-term care insurer in Pennsylvania just went belly-up.

Health insurers across the country are on the hook for hundreds of millions of dollars in losses stemming from the recent insolvency of Penn Treaty American Corp., of Allentown, Pa., and its two subsidiaries.

Insurance company failures are rare, but when they happen, other companies are responsible to help pay off the company’s claims and protect policyholders through groups known as state guarantee associations. Those industry assessments are typically based on market share, so larger insurers pay more.

In these situations, long-term care coverage is treated as health insurance so health insurers are liable for the payments — and some are disputing that.

Penn Treaty’s liquidation poses a “potential shock to the health marketplace” as the losses pile up, according to the A.M. Best credit rating firm. Industry analysts estimate the parent company has long-term claims liabilities approaching $4 billion, but only about $700 million in assets.

This is one of the largest insurance failures in U.S. history, and “the impact of this situation on the insurance industry is huge,” said Joseph Belth, a professor emeritus of insurance at Indiana University. “Companies will try to pass it on in some fashion to policyholders.”

California may be hardest hit. Its guarantee association faces a liability of $400.6 million, according to estimates prepared by Long Term Care Group for the National Organization of Life & Health Insurance Guaranty Associations. Florida is next at $360.4 million, followed by Pennsylvania at $269.9 million, Virginia at $197 million and New Jersey, with projected liabilities of $144.6 million.

Health insurers can pass along those unforeseen costs by imposing premium surcharges on customers, or they can shift the burden to taxpayers by paying less in state premium taxes. The rules vary by state. In California, insurers can levy a surcharge on policyholders.

Insurers have recently begun revealing their initial cost estimates, often buried deep in company securities filings and financial statements.

Anthem Inc., the nation’s second-largest health insurer, estimates it will pay $253.8 million to cover its portion of Penn Treaty claims. In a securities filing last month, Anthem said, “payment of the assessments will be largely recovered through premium billing surcharges and premium tax credits over future years.”

Aetna, the industry’s third-largest insurer, expects to pay $231 million. And San Francisco-based insurer Blue Shield of California has booked a loss of nearly $41 million. Those numbers may rise as Penn Treaty’s policyholders collect on their benefits.

Most state guarantee associations will provide up to $300,000 in benefits for each Penn Treaty policyholder who files a claim, but the limits vary by state. In California, for instance, the coverage extends to about $560,000. Penn Treaty’s insurance units have about 73,000 policyholders nationwide.

The expenses related to Penn Treaty may be small compared to the underlying medical costs that continue to drive up Americans’ health insurance premiums. Still, some insurers may impose surcharges of up to 2 percent annually over several years to cover Penn Treaty assessments — one more unwelcome charge tacked onto the country’s growing health tab.

The demise of Penn Treaty is yet another black eye for the long-term care industry. For years, long-term care insurers have been hit by higher-than-expected claims, low investment returns and poor pricing. As a result, many companies left the business or began sharply raising premiums for existing customers.

In California, more than 130,000 people who bought long-term care policies from the state workers’ retirement system received 85 percent rate hikes in recent years. A consumer lawsuit against the California Public Employees’ Retirement System over the legality of those rate increases won class-action status last year.

The state agency has defended the rate hikes as necessary and proper.

Penn Treaty’s financial troubles date to 2009. Years of legal wrangling culminated in a Pennsylvania judge’s ruling in March that the company was insolvent. She ordered the insurance commissioner there to liquidate the firm.

“After a long and difficult eight-year legal process, the court’s decision to approve the liquidation recognizes the companies’ financial difficulties are too great to be remedied,” Pennsylvania Insurance Commissioner Teresa Miller said following the judge’s ruling.

Some health insurers, such as UnitedHealth and Aetna, have challenged the assessment process, arguing that long-term care is more like life insurance. Looking beyond Penn Treaty, Belth said, health insurers are concerned about other long-term care companies going under and saddling them with even more losses.

“Virtually all of the health insurance companies, especially the big ones, have never sold long-term care insurance,” Belth said, “so they are not appreciative of being assessed.”

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

In Strong-Arm Tactic, Trump Puts Congressional Health Benefits Into Play

KFF Health News, August 1, 2017

President Trump has upped the political ante by taking aim at a new target: health coverage for members of Congress and some of their staffers.

This article first appeared August 01, 2017 on Kaiser Health News.

By Julie Rovner

President Donald Trump, who appears increasingly frustrated by congressional Republicans’ inability to “repeal and replace” the Affordable Care Act, has led — since before he took office — the ballyhoo to let the law fail.

Over the weekend, he upped the political ante by taking aim at a new target: health coverage for members of Congress and some of their staffers.

“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” he tweeted Saturday.

The administration has been threatening for months to stop payments to health insurers for reimbursement of discounts they are required to provide to lower-income customers to offset deductibles and other cost-sharing. Now the president appears ready to take up an old fight over the payments provided to Congress and its staff.

The threat is rooted in a change in congressional health coverage that was ordered during the initial consideration of the ACA in 2010.

In an effort to embarrass Democrats — then in the majority — Republicans successfully pushed an amendment to the ACA bill that required members of Congress and their staffs to drop out of the federal employee health insurance program that has traditionally provided coverage to the denizens of Capitol Hill. Instead, under this GOP revision, lawmakers and some staffers would have to buy — and now do — their insurance through the measure’s health exchanges.

This is where things get messy.

Federal workers, like most people who work for large employers, get a substantial portion of their insurance premium paid as part of their overall compensation — about 72 percent under Federal Employee Health Benefits Program. Taking this employer contribution away from Hill staffers would be tantamount to a pay cut of thousands of dollars. Members of Congress from both parties feared it would result in a “brain drain” because making employees pay the full cost of insurance would make Capitol Hill a less desirable place to work.

“It could be disastrous,” said Norman Ornstein, a scholar at the conservative-leaning American Enterprise Institute who specializes in Congress. “Most staff are underpaid already,” he said.

And, while Congress could make it easier for members to give staffers raises and help make up the difference, “that is both cumbersome and controversial, and would be taxable,” he said. Employer-provided health insurance is not taxed as income.

When it came time to implement this part of the law, the Obama administration took steps to avoid problems.

First, it was determined that while the requirement applied to individual members of the Senate, House and their personal staffs, employees working for the congressional leadership or for committees were not required to drop their federal insurance.

Second, the Office of Personnel Management, essentially the federal government’s human resources department, ruled that members and staffers who did have to purchase coverage on the health exchanges could collect their employer contribution as long as they purchased plans through the District of Columbia’s health exchange, via its small-business program.

The amounts vary by the age of the beneficiary but they max out at just over $480 per month for a single employee, and just under $1,100 per month for family coverage.

While that satisfied Democrats and, behind closed doors, many Republicans, it angered many conservatives, who called it an illegal exemption from what should have been the rule.

“Until members of Congress are put in the exact same position” as everyone else in the exchanges, “we are not going to fix this problem,” said Sen. Ron Johnson (R-Wis.) on a conference call Monday.

Johnson has been fighting to undo the compromise since it was first announced, not just pushing legislation but also filing a federal lawsuit, which was ultimately dismissed. He said he told Senate leaders last week he would not vote for any final health bill unless he got a vote on his amendment to torpedo the congressional subsidies.

Trump, however, has the power as president to order the OPM to change its rules. While such an action would have to follow the federal rule-making process, it could happen in fairly short order.

“The policy was established by rule-making,” said Phil Kerpen, president of the American Commitment, a conservative organization, who has been fighting what he and conservatives call the “congressional bailout” for years. It can be undone “by the same mechanism,” he said.

Even Without Congress, Trump Can Still Cut Medicaid Enrollment

KFF Health News, July 31, 2017

President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

This article first appeared July 28, 2017 on Kaiser Health News.

By Phil Galewitz

After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.

President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.

Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.

Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said absent congressional action on the health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”

The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy,” such as children and the disabled, he added.

To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth the past four years and now covers 75 million people.

Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.

But critics of the new requests, which could be approved within weeks, said they could hurt those who are most in need.

The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.

The administration has already said it favors work requirements and in March invited states to suggest new ideas.

Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.

Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many states, particularly in the Northeast and West.

Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.

This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.

Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.

“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health policy expert at George Washington University who chairs a Medicaid group that advises Congress.

Rosenbaum noted that states received waivers for different purposes under the Obama administration.

In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.

“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.

Three states seeking waivers today are home to three key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).

If states add premiums, as well as work and drug testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.

“How does that serve the purpose of the Medicaid program and what are the limits of CMS waiver authority?” he asked.

Wisconsin, where Republican Gov. Scott Walker wants his state to become the first to require some Medicaid enrollees to undergo drug testing, is a prime waiver candidate.

State officials stress the effort is not to deter drug users from the program but to help provide treatment for drug users.

Wisconsin is also one of five states seeking a waiver to add a work requirement. People could meet the mandate through volunteering, job training or caring for an elderly relative.

In addition, Wisconsin wants to limit enrollees’ Medicaid benefits to 48 consecutive months, unless the beneficiary is working.

Enrollees with incomes from 50 percent to 100 percent of the federal poverty level, or between $6,030 and$12,060, would have to pay an $8 monthly premium.

All of these rules would apply to about 12 percent of people currently enrolled in Medicaid — adults who are not disabled and don’t have dependent children.

Wisconsin Medicaid Director Michael Heifetz said the main goal of the proposed changes is not to shrink the size of Medicaid but to get people into the workforce.

“The proposal is not designed to have folks leave the program except for positive reasons,” he said.

If the waiver is approved, the state anticipates annual savings of nearly $50 million and a drop in enrollment of 5,102 over five years.

Wisconsin now spends $7 billion on Medicaid and has 1.2 million recipients.

Asked why childless adults — not parents — are the focus of the waivers, Heifetz said Wisconsin wanted to test the provisions on a smaller population first and focus on adults who should be able to find work.

But the Wisconsin effort has sparked broad outrage from hospitals, doctors and advocates for people with disabilities.

The Wisconsin Council of Churches said the state would be punishing the poor with its waivers — and undermining the vitality of communities.

“We are concerned the proposed changes to the program will be detrimental for the health of our most vulnerable neighbors … and undermine the social fabric and vitality of our state,” said Peter Bakken, public policy coordinator for the group in Sun Prairie, a suburb of Madison.

Sen. McCain votes 'no.'

McCain Votes No, Derails ‘Skinny Repeal’ In Marathon Session

KFF Health News, July 28, 2017

Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) cast the two other Republican “no” votes in a cliffhanger drama that ended just before 2:00 a.m. Friday.

This article first appeared July 28, 2017 on Kaiser Health News.

By Michael McAuliff

WASHINGTON — Sen. John McCain (R-Ariz.), who interrupted brain cancer treatment to return to Capitol Hill and advance the health law repeal efforts, cast the dramatic and decisive "no" vote in the early morning hours that upended the Republican effort to repeal the Affordable Care Act.

The Senate struggled late into the night to craft and then vote on a so-called "skinny repeal" of the health law, but came up empty as the bill was defeated in a 51-49 vote that prompted gasps in the chamber. McCain's vote was unexpected and ends — for now — the Republican party's effort to kill Obamacare.

Related: Inside the the Senate's Health Care Freedom Act

Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) cast the two other Republican "no" votes in a cliffhanger drama that ended just before 2:00 a.m. Friday.

Earlier, a group of Republican senators trashed the new measure, widely dubbed a “skinny repeal,” saying it would only worsen the health care system, and they demanded unprecedented promises from their House colleagues to change it.

“The skinny bill in the Senate doesn’t even come close to honoring our promises of repealing Obamacare,” said Sen. Ron Johnson (R-Wis.). “Virtually nothing we're doing in any of these bills and proposals are addressing the challenges, the problems, the damage done [by the Affordable Care Act].”

Staff of Senate Majority Leader Mitch McConnell (R-Ky.) crafted the new bill, which was under discussion all afternoon and posted publicly late Thursday evening.

Senate Majority Leader Mitch McConnell goes on and off the Senate floor during an all-night session to consider the Republican healthcare bill. (Photo by Melina Mara/The Washington Post via Getty Images)

The slimmed-down version of the Senate bill — The Health Care Freedom Act, which the White House refers to as the "freedom bill" — included an end to key elements of the health law. Among them were rollbacks of the mandates for individuals and employers to buy health insurance, changes to waivers available under Section 1332 of the ACA that would give states more leeway to alter essential benefits in insurance plans, and a repeal of the medical-device tax.

It was not immediately clear how the bill achieved savings similar to $133 billion in the House’s version of repeal legislation. An equal or better level of savings is required under the arcane budgetary process that is being used to advance the bill, known as reconciliation.

Budget reconciliation allows the measure to pass the Senate on a simple majority vote, but requires that all of its provisions pass muster with the Senate parliamentarian as budget-related. The text of the bill posted publicly at 10 p.m. The CBO report on it began circulating on Twitter around midnight and the vote finally closed around 1:45 a.m. Friday.

One provision that had been restored after the parliamentarian initially struck it was an attempt to defund Planned Parenthood for a year. The new provision took in at least one additional abortion provider, and was expected to survive. The funding for Planned Parenthood was to be shifted to community health centers.

Keeping the attack on Planned Parenthood solidified Murkowski and Collins' opposition to the vote.

This new iteration of the repeal comes after two versions failed to win over the 50 GOP senators needed. But even with all the rewriting and behind-the-scenes negotiation, four senators called a press conference to declare they will not vote for this "skinny repeal" unless House Speaker Paul Ryan (R-Wis.) promises not to merely pass the measure but send it to a conference committee between the two chambers, where it can be substantively altered.

The four senators slammed the trimmed-down compromise.

“I am not going to vote for a piece of legislation that I believe is not a replacement, that politically would be the dumbest thing in history to throw this out there,” said Sen. Lindsey Graham (R-S.C.).

Left to right, Sens. Lindsey Graham (R-S.C.), Bill Cassidy (R-La.), Ron Johnson (R-Wis.) and John McCain (R-Ariz.) hold a news conference Thursday to say they would not support the "skinny repeal" legislation unless it was guaranteed to go to conference with the House. (Photo by Chip Somodevilla/Getty Images)

He said that he, Johnson and McCain and Sen. Bill Cassidy (R-La.) would not vote for the skinny repeal until Ryan pledges to "go to conference," where Graham can include a measure to shift current Obamacare funding into a block-grant program for states.

His fear, Graham said, is that the House might simply take up and pass the skinny repeal in order to be done with it and notch a win in their seven-year battle against Obamacare.

Graham referred to estimates that said the repeal of the ACA mandates would “collapse the individual market” and leave the GOP to “own the problem at a time when Obamacare is collapsing.”

Ryan did release a statement with a conditional promise to take the bill to conference. Initially, it did not satisfy Graham or McCain. Graham and Johnson were persuaded, however, after a phone conversation with Ryan. McCain was not.

For their part, Democrats uniformly panned the GOP's efforts.

“We’ve had one bad bill after another. There is no bill that is a good bill,” said Sen. Dianne Feinstein (D-Calif.). “Every bill takes people off health care. Every bill makes you pay more for less. There’s a race to the bottom, so to speak.”

Sen. Chris Murphy (D-Conn.), hammered the entire process: "This is nuclear grade bonkers."

Die Whistleblower

Whistleblowers: United Healthcare Hid Complaints About Medicare Advantage

KFF Health News, July 28, 2017

The suit, filed by United Healthcare sales agents accuses the giant insurer of keeping a “dual set of books” to hide serious complaints about its services.

This article first appeared July 28, 2017 on Kaiser Health News.

By Fred Schulte

United Healthcare Services Inc., which runs the nation’s largest private Medicare Advantage insurance plan, concealed hundreds of complaints of enrollment fraud and other misconduct from federal officials as part of a scheme to collect bonus payments it didn’t deserve, a newly unsealed whistleblower lawsuit alleges.

The suit, filed by United Healthcare sales agents in Wisconsin, accuses the giant insurer of keeping a “dual set of books” to hide serious complaints about its services and of being “intentionally ineffective” at investigating misconduct by its sales staff. A federal judge unsealed the lawsuit, first filed in October 2016, on Tuesday.

The company knew of accusations that at least one sales agent forged signatures on enrollment forms and had been the subject of dozens of other misconduct complaints, according to the suit. In another case, a sales agent allegedly engaged in a “brazen kickback scheme” in which she promised iPads to people who agreed to sign up and stay with the health plan for six months, according to the suit.

Though it fired the female sales agent, United Healthcare concluded the kickback allegations against her were “inconclusive” and did not report the incident to the Centers for Medicare & Medicaid Services, according to the suit.

Asked for comment on the allegations in the suit, United Healthcare spokesman Matt Burns said: “We reject them.”

Medicare serves about 56 million people, both people with disabilities and those 65 and older. About 19 million have chosen to enroll in Medicare Advantage plans as an alternative to standard Medicare. United Healthcare is the nation’s biggest operator, covering about 3.6 million patients last year.

The whistleblowers accuse United Healthcare of hiding misconduct complaints from federal officials to avoid jeopardizing its high rankings on government quality scales. These rankings are used both as a marketing tool to entice members and as a way for the government to pay bonuses to high-quality plans.

Medicare paid United Healthcare $1.4 billion in bonuses in fiscal 2016 based upon their high quality ratings, compared with $564 million in 2015, according to the suit. CMS relies on the health plans to report problems and does not verify the accuracy of these reports before issuing any bonus payments.

The suit alleges the bonuses were “fraudulently obtained” because the company concealed the true extent of complaints. In March 2016, for instance, the company advised CMS only of 257 serious complaints, or about a third of the 771 actually logged, according to the suit.

The suit was filed by James Mlaker, of Milwaukee, a sales agent with the insurance plan in Wisconsin, and David Jurczyk, a resident of Waterford, Wis., a sales manager with the company.

The suit says Jurczyk had access to “dual” complaint databases, described as “the accurate one with a complete list of complaints and more details of the offenses and the fraudulent, truncated one provided to CMS.”

Jurczyk “has direct, personal knowledge of dozens of cases in Wisconsin alone in which customer complaints raising serious issues were routinely determined and falsely documented as either “inconclusive” or “unsubstantiated” by the company, according to the suit. Overall, about 84 percent of complaints alleging major infractions, such as forging signatures on enrollment forms, were determined to be inconclusive or unsubstantiated, according to the suit.

According to Mlaker, one sales agent faced little disciplinary action even after allegedly forging a customer’s signature on an enrollment form. The customer was “shocked” to learn that the agent had enrolled him because he had told the agent he was “not interested and did not want to enroll,” according to the complaint.

As a result, according to the suit, CMS officials never learned of these customer complaints.

The two men said that in early 2013 they began noticing that investigations of serious customer complaints that previously would have been completed “swiftly” instead “were drawn out; little actual inquiry was made, or even worse, known facts were ignored and discounted to falsify findings,” according to the suit.

Complaints also brought “much fewer and less serious corrective or disciplinary actions,” according to the suit. According to the suit, United Healthcare took steps to encourage any members with complaints to report them directly to the company rather than to complain to CMS.

The unsealing of the Wisconsin cases comes as United Healthcare and other Medicare Advantage plans are facing numerous cases brought under the Federal False Claims Act. At least a half-dozen of the whistleblower suits have surfaced since 2014.

The law allows private citizens to bring actions to recover damages on behalf of the federal government and retain a share. The Justice Department elected not to take over the Wisconsin case, which could limit the amount of money, if any, recovered. United Healthcare spokesman Burns said the company agreed with that decision.

In May, the Justice Department accused United Healthcare of overcharging the federal government by more than $1 billion by improperly jacking up risk scores over the course of a decade.

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