The law, which extended health insurance to more than 20 million people, also provided new streams of revenue for community health centers.

This article first appeared January 9, 2017 on Kaiser Health News.

By Shefali Luthra

For the patients and the employees of Mary's Center, a community health center that serves Washington, D.C., and its Maryland suburbs, the 2010 health law had a big impact on business. The facility has always promised care to anyone who walks through its doors. But since Obamacare's implementation, the patient population and the quality of care they receive has changed.

"The first set of patients we saw — it was like, 'Wow, I can see a doctor for the first time. I can afford to go to the doctor,'" recalled Maria Gomez, the center's president. "There were patients that knew they had tumors, or knew they hadn't had a pap smear in a long, long time."

But it wasn't just access to care, Gomez added. The law, which extended health insurance to more than 20 million people, also provided new streams of revenue. Since Mary's Center was handling fewer uninsured patients, that financial security let it hire more specialists and operate more health education programs.

Similar stories played out at many of the nation's more than 1,400 federally-backed community health centers, according to two studies published today in Health Affairs. The research offers evidence that in states that embraced the health law, community health centers — which play a key role in providing health care to low-income people, often in medically underserved areas — further extended their reach. It also quantified the types of clinic visits and health services provided that resulted from the expansion.

These findings, though, also highlight the uncertainties some of these clinics face as the incoming Trump administration and the GOP Congress advance plans to repeal and replace Obamacare.

"I'd love to think we can think of policies that will reduce harm, and make things better," said Leighton Ku, director of the Center for Health Policy Research at George Washington University and an author on one of the studies. "But my crystal ball isn't that clear."

The two studies, which appear in the journal Health Affairs, use data from the federal Health Resources and Service Administration to examine Medicaid, the federal-state insurance plan for low-income people. Under the law, states could opt into an expanded version of the program that covered more people. GOP plans to undo the 2010 law would likely include erasing that option. Many Republicans also want to change Medicaid from its current open-ended, entitlement status into a block grant, which would send a set, lump sum of funding to states and allow them more flexibility to tailor the program to address local health needs, potentially spurring innovation and more efficiency.

"There may be things that can done in the delivery of care for community health centers, which ultimately is more valuable and effective than the traditional Medicaid program," said Tom Miller, a resident fellow at the American Enterprise Institute, a conservative think tank.

It's too soon to say, Miller argued, how health care funding will play out, how money could be used and who will benefit. But other advocates of the law — including many leaders of community health centers — say that current discussions leave strong potential for funding cuts that would limit their ability to provide care. The Health Affairs findings play into that concern.

Ku's paper, which used data from 2012 to 2015 to track visits to community health centers, compared how many patients visited the centers, their insurance, and whether they sought medical, dental or mental health care. In states that opted into the expansion, health centers saw more patient visits, lower rates of uninsured patients — a financial boon for clinics that typically operate on thin margins — and an increase in patients specifically seeking mental health care.

The second study examined data from 2011 to 2014 and found that, in states that expanded Medicaid, patients were more likely to receive asthma treatment when it was needed, have their body mass index assessed, get pap smears and keep their blood pressure relatively stable.

"Achieving better quality in [these areas] requires medications — access to prescription drugs," noted Amal Trivedi, an associate professor of health services, policy and practice at Brown University and an author on the second study.

Some clinic officials noted that these statistics illustrate tangible gains.

Community health centers in Michigan, which pursued the expansion, saw a double-digit increase in the percentage of Medicaid patients — from 44 percent to 54 percent — even as the overall number of patients served grew, noted Jen Anderson, a spokeswoman for the Michigan Primary Care Association, the trade group for the state's centers. More of those patients were diabetic or asthmatic, she added, and now able to get previously unaffordable medications.

Without that coverage, Trivedi speculated, the improvements health centers made in treating these and other conditions could be reversed.

The studies found that the centers, too, benefited from the expansion, which has allowed them to staff up to do provide mental health and other types of care.

In Pennsylvania, for instance, which has been hard hit by the opioid epidemic, more clinics have been able to develop specialized addiction treatment programs, said Cheri Rinehart, president of that state's health center association. Other clinics report that health law dollars have allowed them to hire case workers to follow up with patients to make sure they have stable housing and access to healthy food as well as transportation to doctors' appointments.

Those kinds of efforts will be much harder if Congress acts on its proposed repeal without a meaningful replacement, Gomez said.

"We'll have to cut services for everyone," she said.

At Mary's Center, she said, that would mean tamping down on dental care, cardiology or endocrinology to treat diabetes. The center would also likely downsize how many doctors and nurses it employs, making it harder to see as many patients in a timely manner.

These centers are often the only real option for care. If they can't provide a service, people will likely go without until it's an emergency, Pennsylvania's Rinehart noted.

Without the coverage expansion, community health centers "will have to re-evaluate all the services they're providing," Rinehart said. "Just like a body in crisis, you focus on the core, and lose many of the ancillary services that are critical."

Over the past decade, Tom Price has waded into issues related to specific drugs and medical devices, making 38 inquiries with the federal Food and Drug Administration, according to federal records.

This article first appeared January 9, 2017 on Kaiser Health News.

By Marisa Taylor and Christina Jewett

Rep. Tom Price, the physician and Georgia Republican tapped for the nation's leading health care job, has long criticized federal spending as excessive. Yet during his years in Congress, he's worked hard to keep federal dollars flowing to his most generous campaign donors.

Price has been a go-to congressman, a review of his records show, for medical special interests hotly sparring with regulators or facing budget cuts. Over the past decade, he has waded into issues related to specific drugs and medical devices, making 38 inquiries with the federal Food and Drug Administration, according to federal records obtained through the Freedom of Information Act. He questioned the FDA on his constituents' behalf about matters as minute as a device for fertility treatment and an ingredient in pain creams.

In other cases, he has gone to bat for companies whose executives and employees have generously contributed to his campaigns and political action committees.

"It looks like he's somebody who could throw the store open to a lot of niche special interests," said Ross Baker, a political science professor at Rutgers University who specializes in Congress. "These are things that fly under the radar. If you take a meat ax to Medicare, for example, everybody would know about it. But this kind of stuff is done in the dark of night."

Just a few weeks before Trump tapped Price to lead the Department of Health & Human Services in November, the congressman took the stage at an Atlanta conference for vendors who sell canes, hospital beds and power wheelchairs. Price was the star of the show — a conference with 5,000 attendees. He spoke to the gathered crowd about the Medicare cuts plaguing the industry and pledged to fight them. The leaders of the Medtrade conference honored Price with an award for his stalwart advocacy and convened a $100-per-person fundraiser in his honor.

Price, 62, a tea party Republican and orthopedic surgeon from the northern Atlanta suburbs, was elected to Congress in 2004 after four terms in the Georgia state Legislature. A third-generation physician, he has said he entered politics on a quest to limit government meddling in health care. He has won significant campaign support over the years from drug firms and physician groups.

Records obtained through a public records request show that Price has taken an interest in his constituents' struggles with the FDA. He hand-signed a letter of concern over the availability of heart valves used in pediatric surgeries in 2005. Four years later, he urged review of a local company's sperm-analysis device. He dubbed the company a "pillar of the community" and said it should be exempted from a clinical trial that would be "impossible to pass." Earlier this year, his staffer pressed the FDA on behalf of a constituent trying to getcapsaicin palmitate, a hot-pepper ingredient similar to one available over the counter — on a list of approved products for specialized pain creams.

A staunch opponent to President Barack Obama's Affordable Care Act, or Obamacare, which he says destroys "the sacred doctor-patient relationship," Price has offered several plans, including the Empowering Patients First Act, to repeal and replace the president's health reforms. He favors instead offering patients health savings accounts which they may tap to pay for coverage and care, and tax credits to help people buy health insurance on their own.

Price's office did not respond to interview requests or to detailed written questions about his relationships with contributors or his legislative record. His confirmation hearing could come before President-elect Trump's inauguration on Jan. 20, and Senate Minority Leader Chuck Schumer has said Price is among the top targets for Democrats — and whose nomination they are trying to derail. The Office of Government Ethics will review Price's financial disclosure report, which contains information about his assets, income and other personal financial information and then advise the Senate Finance Committee on whether Price needs to take steps to avoid conflicts of interest.

In recent weeks, Price has come under criticism for his stock trading in drug companies, including an Australian firm that plans to seek U.S. approval for a promising drug.

Phil Blando, a Trump transition spokesman, said Price has complied with the law and ethics rules. Blando said that Price "takes his obligation to uphold the public trust very seriously" and, if confirmed by the Senate, will work with ethics officials to "ensure his continued compliance and transparency."

Champion of Medical Equipment
When thousands gathered at the Medtrade meeting to learn about the latest home medical equipment in the fall, Price pledged to help them.

The industry has battled widespread changes in government payment mandated by Congress in 2003 and implemented by the Obama administration. The reforms came after a decade of Justice Department prosecutions that targeted fraudsters who bought wheelchairs at wholesale prices, allegedly gave them to seniors who didn't need or want them and billed Medicare at a premium.

The most recent reforms have included budget cuts and a competitive bidding program meant to limit medical supply profitability, including the wheelchairs. Providers of home medical equipment have ranked as key Price backers, contributing $52,600 to his campaign since 2013, according to a Kaiser Health News analysis of federal contributions.

Despite his longtime stance as a budget hawk, Price has sided with industry leaders who say the cuts harm rural medical suppliers who face higher costs delivering equipment. Price said in a press release that the cuts jeopardize seniors' access to life-saving medical equipment, including scooters and oxygen tanks. "Georgia's seniors ought to have access to quality health care," Price said in a statement in May.

Price introduced a bill that month to delay cuts in Medicare spending for durable medical equipment, like hospital beds and motorized wheelchairs. The bill passed the House in July but died in the Senate.

Medical equipment industry leaders credit Price with helping reverse or delay some cuts through the recently signed 21st Century Cures Act, according to the blog of the Iowa-based VGM Group, which describes itself as "the nation's premier purchasing organization" and a "silent partner" to thousands of independent providers of home medical equipment. The company and its executives have contributed more than $17,000 to Price. One leader aired his gratitude to the congressman in another blog post calling the delay of the cuts a "red letter day" for durable medical equipment suppliers.

Price has also helped protect companies that provide home health aides and nursing care to homebound seniors — a lucrative industry that prosecutors have identified as prone to fraud. Alarmed by a Medicare plan to review such claims prior to payment, industry leaders turned to Price and another congressman for help, according to the Partnership for Quality Home Healthcare, which lauded both men for listening to their concerns.

Home health companies also contributed more than $24,000 to Price from 2013 to earlier this year.

Criticizing the cost-saving plan as overly broad and impeding patients' access to care, in September, Price introduced a bill that would delay the claim-review project a year. The bill, cosponsored by Rep. Jim McGovern (D-Mass.), stalled in a subcommittee in October.

Support for Traveling Doctors
In Congress, Price has been a vocal critic of America's medical malpractice system — a bugaboo for many surgeons but also for a company based in his district that has provided reliable campaign donations. That firm, Jackson Healthcare, staffs hospitals and practices with temporary doctors, called locum tenens.

One of Price's largest PAC contributors is Richard L. Jackson, the company's chairman and CEO. The two spoke together in 2009 at a forum aimed at limiting malpractice lawsuits. Both men have asserted doctors' attempts to avoid such lawsuits have led to costly and excessive medical care. In a 2010 interview, Jackson mentioned that he had discussed "defensive medicine" with Price, and other Congress members. Price, for his part, has referenced Jackson Healthcare's study on the high cost of such health care.

The malpractice issue has had particular relevance to the locum tenens industry and to Jackson's company in particular. It has faced multiple lawsuits over the alleged misdeeds of temporary doctors, including care of patients in Veterans Affairs and Indian Health Service hospitals.

Price has repeatedly introduced legislation to curtail malpractice cases and, on another front, to protect the tax status of traveling doctor companies. In September he introduced the House version of a bill that would help change the IRS code to classify travelling doctors as contractors, not employees, so that the company providing them wouldn't be legally vulnerable for taxes in distant states. A Senate version was introduced earlier by Georgia Republican Sen. Johnny Isakson. The bills died in committee last year.

Jackson and his son, Shane, the company's president, have supported Price with donations to his campaign and joint fundraising committee, which contributes to Republican campaigns. Since 2011, Jackson and his son, have contributed at least $43,000 to Price's campaign or a joint fundraising committee with $35,000 arriving last January.

A spokeswoman for Jackson said Price's bill would not have affected his company since, in practice, it already regarded its doctors as contractors, as did the government.

But Sean Ebner, president of another major traveling doctor company, said the measure would have eliminated the possibility of a surprise tax bill.

"The designation of who's an independent contractor can change state by state," Ebner, who heads Staff Care, said in an interview. "[The bill] removes ambiguity, which would be positive."

Influence with the FDA
If confirmed as HHS secretary, Price would oversee many of the rules and regulations and bottlenecks that regularly draw howls from the medical industry. He would also have authority over the FDA, which regulates pharmaceuticals. The agency may soon have purview over a company that Price has personally invested in.

The Australian firm Innate Immunotherapeutics reported in an annual report that it plans to bring its key Multiple Sclerosis drug to the FDA for approval. Several months ago, Price purchased between $50,000 and $100,000 worth of stock in the company, according to a routine financial disclosure required of Congress members.

The FDA is also currently mulling another regulatory issue that could make or break the company of a top contributor. Parker H. "Pete" Petit, along with his family has contributed $35,900 to Price's campaign and leadership PAC since 2010. Petit also was finance chair for Trump in Georgia and, with his family, contributed $125,000 to the president-elect's PAC.

Petit is the CEO of MiMedx, a Georgia biotech firm in Price's district, which has contested a decision from the FDA on some products to aid wound healing.

In August 2013, the FDA concluded in a letter that the products, which consist of discarded placentas and amniotic fluid, should be regulated since their manufacturing constituted manipulating human tissue. The FDA letter sent MiMedx stock tumbling and spurred a securities lawsuit filed in federal court in Georgia. The case accused MiMedx of misleading investors by downplaying the gravity of the FDA's scrutiny. A nearly $3 million settlement was reached in April.

Petit has acknowledged seeking congressional help on the issue, without being specific. The FDA said it couldn't comment on the matter. MiMedx did not return calls.

Elizabeth Lucas contributed to this report.

Medicare potentially overpaid five of health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit. But officials never recovered most of that money.

This article first appeared January 6, 2017 on Kaiser Health News.

By Fred Schulte

Six years ago, federal health officials were confident they could save taxpayers hundreds of millions of dollars annually by auditing private Medicare Advantage insurance plans that allegedly overcharged the government for medical services.

An initial round of audits found that Medicare had potentially overpaid five of the health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit.

But officials never recovered most of that money. Under intense pressure from the health insurance industry, the Centers for Medicare and Medicaid Services quietly backed off their repayment demands and settled the audits in 2012 for just under $3.4 million — shortchanging taxpayers by up to $125 million in possible overcharges just for 2007.

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 17 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers of more than $150 billion a year. And while the plans generally enjoy strong support in Congress, there are critics.

"It's unclear why the Obama Administration allowed CMS to overpromise and under-deliver so badly on collecting these overpayments," Sen. Chuck Grassley, R-Iowa, told Kaiser Health News in an email response to the findings.

He said CMS "should account for why this process seems to be so broken and why it can't seem to fix it, despite recommendations to do so. The taxpayers depend on getting this process right."

The failure to collect also alarmed Steve Ellis, vice president of the budget watchdog group Taxpayers for Common Sense in Washington.

"They need to put up a bigger and stronger fight to make sure these programs are operated on the straight and narrow," Ellis said.

Yet outside of public view, federal officials have been losing a high-stakes battle to curb widespread billing errors by Medicare Advantage plans, according to the records obtained through a Freedom of Information Act lawsuit filed by the Center for Public Integrity.

The Center for Public Integrity first disclosed in 2014 that billions of tax dollars are wasted annually partly because some health plans appear to exaggerate how sick their patients are, a practice known in health care circles as "upcoding."

Last August, the investigative journalism group reported that 35 of 37 health plans CMS has audited overcharged Medicare, often by overstating the severity of medical conditions such as diabetes and depression.

The newly released CMS records identify the companies chosen for the initial 2007 audits as a Florida Humana plan, a Washington state subsidiary of United Healthcare called PacifiCare, an Aetna plan in New Jersey and an Independence Blue Cross plan in the Philadelphia area.

The fifth one focused on a Lovelace Medicare plan in New Mexico, which has since been acquired by Blue Cross.

Each of the five audits, which took more than two years to complete, unearthed significant — and costly — billing mistakes, though the plans disputed them.

For example, auditors couldn't confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked "sufficient documentation of a diagnosis."

Overall, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For 1 in 5 patients, the overcharges were $5,000 or more for the year, according to the audits. None of the plans would discuss the findings.

As preliminary results of the audits started to roll in, CMS officials outlined steps to recover more than $128 million from the five plans at a confidential agency briefing in August 2010, according to a policy memo prepared for the meeting. The records don't indicate who attended.

That day, CMS set Humana's payment error at $33.5 million, PacifiCare at $20.2 million, Aetna at $27.6 million, Independence Blue Cross at nearly $34 million and Lovelace at just under $13 million. Those estimates were based on extrapolation of a sample of cases examined at each plan.

CMS "has developed a process for moving forward with payment recovery," according to a briefing paper from the 2010 meeting.

But that process fizzled after two years of haggling with the plans and insurance industry representatives, who argued the audits were flawed and the results unreliable. In August 2012, CMS gave in and notified the plans it would settle for a few cents on the dollar.

"Given this was a new process, the decision was made at the time to tie repayments to the actual claims reviewed as part of the 2007 pilot audit," said CMS spokesman Aaron Albright. "For subsequent audits, we said we intended to determine repayments by extrapolating the error rate of the sample of claims reviewed to all claims under the contract." Albright said more of the audits are underway. Allowing the insurers to dodge liability dealt a serious blow to the government's efforts to crack down on billing abuses — a setback one taxpayer advocate called alarming.

"That's a very bad way to operate the system." said Patrick Burns, acting executive director and president of Taxpayers Against Fraud in Washington, on hearing of the outcome. "Nobody is held accountable."

Indeed, CMS kept the settlement terms under wraps until 2015, after an inquiry by Grassley. The senator had requested details about Medicare Advantage fraud controls in response to articles published by the Center for cmcmsublic Integrity.

In a July 31, 2015 letter to Grassley, CMS Acting Administrator Andy Slavitt attached a table that showed the five plans repaid just under $3.4 million. The letter didn't mention the earlier estimate that the government was due $128 million. Grassley said it should not have taken the FOIA lawsuit to make that information available to the public.

Perhaps adding insult to injury, these numbers might never have seen the light of day without a lengthy lawsuit," Grassley said this week.

Paying based on risk scores
When Congress created the current Medicare Advantage program in 2003, it devised a new way to pay the health plans.

The method, phased in starting in 2004, seemed simple enough: pay higher rates for sicker patients and less for people in good health using a formula called a risk score.

But CMS officials soon realized that risk scores rose much faster at some plans than others, a possible sign of upcoding, or other billing irregularities, records show. These overcharges topped $4 billion in 2005, one CMS study found.

The special audits, called Risk Adjustment Data Validation, or RADV, were designed to identify, and hold accountable, health plans that couldn't justify their fees with supporting medical evidence.

Until these audits, CMS "pretty much went on the honor system with the plans," an unnamed agency official wrote in an undated presentation.

In the five 2007 pilot audits, two sets of auditors inspected medical records for a random sample of 201 patients at each plan. If the medical chart didn't properly document that a patient had the illnesses the plan had reported, Medicare wanted a refund. Auditors gave the plans the benefit of the doubt when auditors couldn't agree, according to the CMS briefing paper.

Finally, CMS applied a standard technique used in fraud investigations in which the payment error rate is extrapolated across the entire health plan, which greatly multiplies the amount due. CMS said it was conservative in assessing the penalties and allowed the plans to appeal.

Appeals or no, the health plans recoiled at the prospect they could be on the hook for millions of dollars they hadn't budgeted for and didn't believe they owed. The actual 2007 overage for the 201 Humana patients, for example, was $477,235. Once extrapolated, it soared to $33.5 million.

Michael S. Adelberg, a former CMS official who is now an industry consultant in Washington, said that in retrospect the audit process was "probably rushed."

Adelberg said the audits "raised strong industry concerns" on a variety of fronts, from whether CMS had the legal authority to conduct them to the soundness of their methods. CMS stands by its audit techniques and has defended RADV as the only way it can assure plans bill honestly.

Yet agency records released through the FOIA case suggest CMS lacked the will to press ahead with extrapolated audits for Medicare Advantage plans given the fierce industry backlash — even though they do so in overpayment cases targeting other types of medical providers.

One confidential CMS presentation dated March 30, 2011, notes that officials had received more than 500 comments expressing "significant resistance" to the RADV audits.

The presentation goes on to say the audit program's success depended on its "ability to address the challenges raised."

CMS didn't overcome those challenges. Instead, it agreed to settle the five initial audits for $3.4 million, just what it found in the patient files it reviewed — without the extrapolations. And the center did the same for 32 additional 2007 audits, which officials had predicted would refund up to $800 million to the federal treasury. In the end, CMS wound up with $10.3 million from the 32 plans.

The RADV program's shortcomings, though little known to the public, haven't gone totally unnoticed. The program was the target of a sharply critical May 2016 report by the Government Accountability Office, which noted that Medicare Advantage plans have overbilled the government by billions of dollars, but rarely been forced to repay the money or face other consequences.

The GAO, the watchdog arm of Congress, called for "fundamental improvements." The watchdogs also found that CMS has spent about $117 million on the audits, but recouped just under $14 million.

Government officials didn't dispute that the RADV process had taken far too long and yielded way too little. But while CMS has resumed extrapolated audits, there's little evidence it is speeding things up.

CMS expected to complete extrapolated audits for payments made in 2011 and finish the job in early 2014, agency records show.

But it has yet to do so. In late December, an agency spokesman said he had no new information about when the 2011 audits would be finished or how much the government would collect.

While the industry awaits the results, it has hardly warmed to the process.

America's Health Insurance Plans, an industry trade group, argued in a June 2016 position paper that RADV was "not yet stable and reliable," adding that the audits "could disrupt the care being provided by plans that are working hard to meet the needs of their enrollees."

John Gorman, a former government health care official and current industry consultant, said he expects RADV to forge ahead under the incoming administration. But he predicted efforts to collect overpayments will "slow down" because the Trump team will prove to be "more sympathetic" to business interests than the Obama administration. The Trump transition office did not respond to a request for comment.

Gorman said that while career civil servants at CMS decide which plans get audited, how much to assess the health plans as a result rests with "political appointees" who are susceptible to industry lobbying, which he termed "the old Potomac two-step."

But Grassley said he is determined to keep a close eye on the audit program. "I intend to press the incoming administration on holding CMS accountable for overpayments that harm taxpayers," he said.

Taxpayer advocate Ellis said with so much public money at stake, the government needs to step up its game.

"You can presume that the more people get away with overpayments the more they are going to take," he said. "As the program gets bigger the problem get bigger."

This story is a collaboration between Kaiser Health News and the Center for Public Integrity. Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation. The Center for Public Integrity is a nonpartisan, nonprofit investigative news organization. Schulte, formerly of the Center for Public Integrity, is now a senior correspondent at Kaiser Health News.

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