Health policy experts agree that California's failure to adopt single-payer dampens momentum across the country.

This article was published on Monday, February 28, 2022 in Kaiser Health News.

By Angela Hart  

SACRAMENTO — Single-payer healthcare didn't stand a chance in California this year.

Even in this deep-blue bastion, Democratic lawmakers shied away from legislation that would have put state government in charge of healthcare and taxed Californians heavily to do so — a massive transformation that would have forced them to take on the powerful healthcare industry.

Gov. Gavin Newsom, who had promised to spearhead single-payer when he ran for governor four years ago, dashed its chances this year when he declined to publicly support it.

Instead, the first-term Democrat, who is running for reelection this November, is pushing for "universal healthcare," which aims to provide all Californians with coverage but, unlike single-payer, would keep private health insurance intact.

Newsom's retreat devastated progressive activists and the powerful California Nurses Association union, which championed the cause. The death of single-payer in the nation's most populous state also deals a major blow to similar campaigns elsewhere in the nation — which had looked to California for inspiration and leadership — casting doubt on their ability to succeed.

"We're also fighting in New York, but just like in California, there's not 100% Democratic consensus among legislators," said Ursula Rozum, co-director of the Campaign for New York Health, which is working to pass single-payer legislation. "It feels like a constant question of 'Can we win this?'"

Health policy experts agree that California's failure to adopt single-payer dampens momentum across the country.

"California, given its size and politics, has always been a bellwether for progressive policy, so this certainly sends a signal to other states about how hard this is," said Larry Levitt, executive vice president for health policy at KFF.

But Rozum and single-payer activists in Colorado, Washington state, and elsewhere say that rather than giving up, they are taking key lessons from California's failure: It is essential to win — and keep — support from the governor. Groups pushing single-payer must unite Democrats, bringing in business-friendly moderates and broader support from organized labor. And they say they must learn how to counter intense lobbying by doctors, hospitals, and health insurance companies fighting to preserve the status quo.

"We've seen what happened in California, so we are working hard to get our governor on the record in support of single-payer so she will sign it when it gets to her desk," Rozum said. "And just like there, our union movement is divided. We know we need them to have any chance of moving forward with our bill."

So far, single-payer proponents haven't been able to broaden their movement beyond liberal activists or convince people that they should pay higher taxes in exchange for scrapping healthcare premiums, deductibles, and copays.

The only state that has passed single-payer, Vermont, didn't implement it.

Vermont adopted a single-payer plan in 2011 with unequivocal support from its then-governor, Democrat Peter Shumlin. But he abandoned the effort in 2014 amid growing concerns about tax increases and runaway healthcare costs.

"There isn't a political party in the world that's going to raise their hands every year to increase taxes on hard-working citizens," Shumlin told KHN. "That's the big mistake I made in Vermont."

But progressive dreams for single-payer didn't die when Vermont retreated. "Medicare for All" became a liberal rallying cry for Democrats nationally when Vermont Sen. Bernie Sanders stumped for it during his presidential campaigns. After President Joe Biden was elected, the movement shifted to the states, in part because Biden has opposed Medicare for All.

Activists in Colorado are mobilizing for another single-payer campaign after the overwhelming defeat of a 2016 ballot initiative that failed partly because of intense healthcare industry opposition. Organizers in Washington state are pushing legislation and trying to get a single-payer initiative on the ballot next year.

Shumlin said Democrats must be prepared to take on deep-pocketed industry groups and rein in soaring healthcare spending — or they'll be confronted with the political difficulty of constantly raising taxes.

"California is the best state to lead this because it has the fifth-biggest economy in the world. It's all about scale," Shumlin said. "And if California gets it right, other states and the federal government will follow. But this is hard stuff, so get ready to get bloodied."

Some Democratic lawmakers and the California Nurses Association had hoped California would lead the way this year and that Newsom would be their champion.

State Assembly member Ash Kalra (D-San Jose) introduced legislation sponsored by the union that would have created government-run health insurance for all state residents while significantly raising taxes on employers, employees, and businesses to pay for it. State estimates pegged the cost at roughly $360 billion a year, with a little less than half coming from tax increases and the rest from the federal government.

On Newsom's first day in office in 2019, he said, "I committed to this and I want folks to know I was serious." But since then, he has distanced himself from single-payer.

Instead, he has created a commission to study the concept and asked the Biden administration for permission to collect federal money that flows to the state via the Affordable Care Act, Medicaid, and Medicare, which California could use to help finance a single-payer system. But Biden can't simply approve the request — California would need complicated federal waivers and approval from Congress.

Newsom has shifted to a platform of "universal healthcare," which includes Medicaid coverage for all income-eligible unauthorized immigrants and state-funded subsidies for Californians who buy health insurance from Covered California, the state's Obamacare insurance exchange.

Newsom said in January that he has long believed single-payer is "inevitable" but signaled that the federal government should take the lead.

Kalra decided not to bring his bill up for a vote in the state Assembly, saying on Jan. 31 that he couldn't muster enough support.

"It makes it harder to get the votes you need when I'm trying to convince my colleagues that there's an absolute path to success," Kalra said. "We have a governor who campaigned on single-payer, and if we're going to successfully have single-payer healthcare in California, at some point we need his engagement and it needs to be genuine."

Kalra said he's considering introducing another bill next year but conceded that he must shift his strategy to bring more Democrats and unions into the campaign.

These are lessons other states are heeding.

"There's no question that had California passed a single-payer healthcare plan, we'd be in a position in the state of Washington to say, 'Look what California is doing,'" said Andre Stackhouse, campaign director for Whole Washington, an advocacy group trying to get a single-payer initiative on the ballot next year.

Stackhouse worked on behalf of California's single-payer campaign this year, helping with a phone-banking campaign to pressure lawmakers. He's part of a new national coalition called Medicare for All Everywhere, a group of organizers and volunteers working to identify why single-payer efforts fail and how to overcome political and lobbying obstacles.

California was a key test, he said. "We've learned all the ways Democrats can kill a bill, but we can't spend all of our time grieving this loss and the huge setback that it is," Stackhouse said.

For instance, a major goal for the movement is to persuade more unions to join the fight. Although the nurses union is leading the battle in California, other unions are against single-payer.

"As trade unionists, we believe everybody should have healthcare, but there's a big fear that we're going to lose the benefits that we have," said Chris Snyder, political director for the local International Union of Operating Engineers in Northern California. "We have our own healthcare trust fund, and we don't want benefits that we've fought for for decades to be taken away or watered down."

Lack of union support is a major problem in New York, where Democratic Assembly member Richard Gottfried has introduced a single-payer bill in every legislative session for the past 30 years.

"What is keeping the bill from moving in the legislature is opposition from public employee unions," Gottfried said. "They feel they have negotiated excellent coverage, so we need to convince them that the New York Health Act is as good or better than what they have now."

Gottfried said he has been negotiating with teachers, sanitation workers, and other trade unions on legislative language that would provide "more explicit guarantees" that union members would receive better coverage without paying more out-of-pocket than they already do.

It's not clear if the measure will get a vote this year.

"Whichever state goes first will help build momentum for other states," he said.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Healthcare Foundation.

Angela Hart: ahart@kff.org, @ahartreports

The Washington public option is more of a public-private partnership: The plan was designed by the state but is offered by private insurance companies.

This article was published on Wednesday, February 23, 2022 in Kaiser Health News.

By Markian Hawryluk

With prospects dim for the U.S. to adopt a single-payer "Medicare for All" program, healthcare reform advocates turned instead to an insurance plan designed by the government that could compete with private insurance plans sold on the healthcare exchanges. The idea behind this "public option" is that it could ultimately expand healthcare access by making a lower-cost plan available to consumers.

But that public-option plan, though backed by Presidents Joe Biden and Barack Obama, also has gone nowhere because of political opposition in Congress.

Some states have picked up the banner and are creating their own public-option plans. But they, too, are facing formidable opposition from the healthcare establishment, which is resisting the pressure to reduce costs on the back end so that consumers can pay less.

Washington state, in its second year of offering the nation's first public-option health insurance plan, has learned an important lesson: If you want hospitals to participate, you're probably going to have to force them.

The Washington public option is more of a public-private partnership: The plan was designed by the state but is offered by private insurance companies. Anyone buying their own policy on the state's health insurance marketplace can sign up for a public-option plan and, depending on their income, may receive significant subsidies from the federal government to lower its cost. But two years in, the plans are available in only 25 of the state's 39 counties, enrollment numbers have been underwhelming, and state leaders blame hospitals.

"The plans had a hard time getting networks put together because the hospitals wouldn't play," said state Rep. Eileen Cody, the Washington legislator who introduced the public-option bill in 2019. "They're a big part of the problem."

Officials from the Washington State Hospital Association said that more hospitals than not are voluntarily participating in public-option plans. But, they noted, the public option relies on cutting payments to hospitals to control costs and ties reimbursement to Medicare rates, which don't cover hospitals' cost of providing care.

"If patients opt to join a public-option plan rather than private insurance, over time it could create financial challenges, especially for small, rural providers operating on thin margins," said Chelene Whiteaker, senior vice president of government affairs for the hospital group.

State legislators last year voted to mandate that hospitals contract with a public-option plan if public-option plans weren't available in each county in 2022. That mandate will go into effect for 2023.

Now, other states looking at a public option are learning from Washington's challenges. Colorado and Nevada, which are implementing public-option plans for 2023 and 2026, respectively, have already incorporated ways of forcing hospitals to participate. And other states considering a public option — including Connecticut, Oregon, New Jersey, and New Mexico — are likely to follow suit.

"One thing that the states have learned is you cannot make it optional for hospitals to participate," said Erin Fuse Brown, director of the Center for Law, Health & Society at Georgia State College of Law. "Otherwise, there's just no way for the public option to have a chance. It will never build a sufficient network."

Washington's public option was designed to save consumers money primarily by lowering what hospitals and doctors get paid, capping aggregate payments at 160% of what Medicare would pay for those services. By comparison, health plans had been paying providers an average of 174% of Medicare rates.

Public-option plans are available to anyone and come in the same gold, silver, and bronze tiers as private plans on the health insurance exchange. Proponents estimated the cap would result in public-option plans having premiums 5% to 10% lower than traditional plans on the exchange. But public-option premiums were, on average, 11% higher than the lowest silver plan premium available in each county on the marketplace in 2021, and a public-option plan was the silver plan with the lowest premium in just nine counties. Silver plans cover, on average, about 70% of healthcare costs. Only 1% of people buying plans on the exchange chose public-option plans in 2021.

Public-option premiums for 2022 came in about 5% lower than public-option premiums in 2021. This year's enrollment numbers have not been finalized — the state is waiting to see how many of the people who signed up complete the process by paying their premiums.

"We know premiums are what drive decision-making in terms of enrollment," said Liz Hagan, director of policy solutions for United States of Care, a nonprofit that advocates for improving healthcare access. "People often don't look at anything other than the premium. They rarely look at the out-of-pocket costs."

But exchange officials say that savvy consumers are finding that the public-option plans are less expensive in the long run. Compared with traditional exchange plans, they have lower deductibles and provide more services not subject to the deductible.

"Premium is still king," said Michael Marchand, chief marketing officer for the Washington Health Benefit Exchange. "But we have a lot of people who have gotten a lot smarter about how they're pricing out something."

Marchand also said it may take a few years for a new product like the public-option plan to gain traction in the marketplace. Insurance companies may have priced their plans a little high in the first year, not knowing what to expect. Now, with a year under their belt, they have lowered premiums somewhat.

Washington's stumble out of the gate reflects the difficulty of lowering healthcare costs while working within the current system. Legislators originally wanted to cut payment rates to hospitals and other providers much more, but they raised the cap in the legislation so hospitals wouldn't oppose the bill. Now, it's unclear whether the payment cap is low enough to reduce premiums.

"That's kind of the big trade-off," said Aditi Sen, a health economist with the Johns Hopkins Bloomberg School of Public Health. "You are trying to lower premiums enough that people will enroll, but not so much that providers won't participate."

That will be a challenge for any state or federal public-option plan. There are only so many ways to lower premiums. Hospitals, doctors, and other healthcare professionals have pushed back hard against any cuts in their payment rates, while insurance plans balk at plans that could eat into their profits.

Plans can reduce the size of their provider network to save money, but consumers dislike plans that limit what doctor they can see. Public-options plans could rely on existing public health programs, like Medicare and Medicaid, which already pay lower rates than commercial insurance, but government-run insurance plans carry negative connotations for many consumers.

Sen and her colleagues found that in 2021, Washington counties with public-option plans were primarily in areas where hospital and physician payment rates were lower than those in other parts of the state. That may have helped insurers build out networks and still stay under the 160% provider payment cap.

Five of the 12 private insurers that sell plans on the exchange offer public-option plans.

Insurance companies that had previously offered plans in Washington were able to cobble together networks based on existing contracts with hospitals and physician groups. But two carriers new to the Washington exchange had to start from scratch and negotiate prices with providers for their public-option plans. Some of the insurance companies tried to offer public-option plans in other counties but could not persuade hospitals, particularly those in larger hospital systems, to accept their rates.

Washington saw enrollment in public-option plans start to climb during a special enrollment period launched in mid-2021 because of the COVID-19 pandemic. The American Rescue Plan Act also provided more subsidies, which made all plans on the exchange more affordable. But those subsidies are due to expire at the end of the year unless Congress votes to extend them. An extension is included in the Biden administration's Build Back Better legislation, but it has stalled in Congress.

Washington legislators approved other moves to make the public option more affordable. They set aside $50 million in state subsidies, but officials must still determine how to allocate those funds. And lawmakers authorized the state to pursue a waiver with the federal government that could allow the state to keep more of the savings achieved through premium reductions. Currently, lower premiums also mean lower subsidies from the federal government. The state can request those savings be passed through to consumers.

Washington did not pursue such a waiver before implementing its public-option plan, but many believe the Biden administration might be more amenable to such a request than the Trump administration.

State progress on public-option plans comes amid disappointment among many progressives that Congress did not implement a federal public option under the Affordable Care Act to compete with private plans on the marketplaces.

Washington state officials realize that because they were the first to implement a public option, other states will be watching them closely to see how it all plays out. "We're not the only ones, but we're the furthest along," Cody said. "Other people can learn from our mistakes."

Markian Hawryluk: MarkianH@kff.org, @MarkianHawryluk

Lags Medical Center patients were left without ready access to their medical records or handoffs to other physicians.

This article was published on Tuesday, February 22, 2022 in Kaiser Health News.

By Anna Maria Barry-Jester and Jenny Gold   

HANFORD, Calif. — On May 13 of last year, the cellphones of thousands of California residents undergoing treatment for chronic pain lit up with a terse text message: "Due to unforeseen circumstances, Lags Medical Centers will be closing effective May 19, 2021."

In a matter of days, Lags Medical, a sprawling network of privately owned pain clinics serving more than 20,000 patients throughout the state's Central Valley and Central Coast, would shut its doors. Its patients, most of them working-class people reliant on government-funded insurance, were left without ready access to their medical records or handoffs to other physicians. Many patients were dependent on opioids to manage the pain caused by a debilitating disease or injury, according to alerts about the closures that state health officials emailed to area physicians. They were sent off with one final 30-day prescription, and no clear path for how to handle the agony — whether from their underlying conditions or the physical dependency that accompanies long-term use of painkillers — once that prescription ran out.

The closures came on the same day that the California Department of Healthcare Services suspended state Medi-Cal reimbursements to 17 of Lags Medical's 28 locations, citing without detail "potential harm to patients" and an ongoing investigation by the state Department of Justice into "credible allegations of fraud." In the months since, the state has declined to elaborate on the concerns that prompted its investigation. Patients are still in the dark about what happened with their care and to their bodies.

Even as the government remains largely silent about its investigation, interviews with former Lags Medical patients and employees, as well as KHN analyses of reams of Medicare and Medi-Cal billing data and other court and government documents, suggest the clinics operated based on a markedly high-volume and unorthodox approach to pain management. This includes regularly performing skin biopsies that industry experts describe as out of the norm for pain specialists, as well as notably high rates of other sometimes painful procedures, including nerve ablations and high-end urine tests that screen for an extensive list of drugs.

Those procedures generated millions of dollars in insurer payments in recent years for Lags Medical Centers, an affiliated network of clinics under the ownership of Dr. Francis P. Lagattuta. The clinics' patients primarily were insured by Medicare, the federally funded program for seniors and people with disabilities, or Medi-Cal, California's Medicaid program for low-income residents.

Taken individually, the fees for each procedure are not eye-popping. But when performed at high volume, they add up to millions of dollars.

Take, for example, the punch biopsy, a medical procedure in which a circular blade is used to extract a sample of deep skin tissue the size of a pencil eraser. The technique is commonly used in dermatology to diagnose skin cancer but has limited use in pain management medicine, usually involving a referral to a neurologist, according to multiple experts interviewed. These experts said it would be unusual to use the procedure as part of routine pain management.

In Lagattuta's specialty — physical medicine and rehabilitation, a common pain management field — just six of the nearly 8,000 U.S. physicians treating Medicare patients billed for punch biopsies on more than 10 patients in 2019, the most recent year for which data was available. Four, including Lagattuta, were affiliated with Lags Medical.

Medicare and Medi-Cal data are organized differently, and each provides distinct insights into Lags Medical's billing practices. For Medicare, KHN's findings reflect the number of procedures and actual reimbursements billed through Lagattuta's provider number. But the Medicare figures do not encompass services and billing amounts for other providers across the chain, nor reimbursements for patients enrolled in private Medicare Advantage plans.

KHN used Medi-Cal records to assess the volume of services performed across the entire chain. But the state could not provide totals for how much Lags Medical was reimbursed because of California's extensive use of managed-care plans, which do not make their reimbursement rates public. Where possible, KHN estimated the worth of Medi-Cal procedures based on the set rates Medi-Cal pays traditional fee-for-service plans, which are public.

Lags Medical clinics performed more than 22,000 punch biopsies on Medi-Cal patients from 2016 through 2019, according to state data. Medi-Cal reimbursement rates for punch biopsies changed over time. In 2019 the state's reimbursement rate was more than $200 for a set of three biopsies performed on patients in fee-for-service plans.

Laboratory analysis of punch biopsies was worth far more. Lags Medical clinics sent biopsies to a Lags-affiliated lab co-located at a clinic in Santa Maria, according to medical records and employee interviews. From 2016 through 2019, Lags Medical clinics and providers performed tens of thousands of pathology services associated with the preparation and examination of tissue samples from Medi-Cal patients, according to state records. The services would have been worth an estimated $3.9 million using Medi-Cal's average fee-for-service rates during that period.

In that same period, Medicare reimbursed Lagattuta at least $5.7 million for pathology activities using those same billing codes, federal data shows.

Much of the work at Lags Medical was performed by a relatively small number of nurse practitioners and physician assistants, each juggling dozens of patients a day with sporadic, often remote supervision by the medical doctors affiliated with the clinics, according to interviews with former employees. Lagattuta himself lived in Florida for more than a year while serving as medical director, according to testimony he provided as part of an ongoing malpractice lawsuit that names Lagattuta, Lags Medical, and a former employee as defendants.

Former employees said they were given bonuses if they treated more than 32 patients in a day, a strategy Lagattuta confirmed in his deposition in the malpractice lawsuit. "If they saw over, like, 32 patients, they would get, like, $10 a patient," Lagattuta testified.

The lawsuit, filed in Fresno County Superior Court, accuses a Lags Medical provider in Fresno of puncturing a patient's lung during a botched injection for back pain. Lagattuta and the other named defendants have denied the incident was due to negligent treatment, saying, in part, the patient consented to the procedure knowing it carried risks.

Hector Sanchez, the nurse practitioner who performed the injection and is named in the lawsuit, testified in his own deposition that providers at the Lags Medical clinic in Fresno each treated from 30 to 40 patients on a typical workday.

According to Sanchez's testimony and interviews with two additional former employees, Lags Medical clinics also offered financial bonuses to encourage providers to perform certain medical procedures, including punch biopsies and various injections. "We were incentivized initially to do these things with cash bonuses," said one former employee, who asked not to be named for fear of retribution. "There was a lot of pressure to get those done, to talk patients into getting these done."

In his own deposition in the Fresno case, Lagattuta denied paying bonuses for specific medical procedures.

Interviews with 17 former patients revealed common observations at Lags Medical clinics, such as crowded waiting rooms and an assembly-line environment. Many reported feeling pressure to consent to injections and other procedures or risk having their opioid supplies cut off.

Audrey Audelo Ramirez said she had worried for years that the care she was receiving at a Lags Medical clinic in Fresno was subpar. In the past couple of years, she said, there were sometimes so many patients waiting that the line wrapped around the building.

Ramirez, 52, suffers from trigeminal neuralgia, a rare nerve disease that sends shocks of pain across the face so severe it's known as the "suicide disease." Over the years, Lags Medical had taken over prescribing almost all her medications. This included not only the opioids and gabapentin she relies on to endure excruciating pain, but also drugs to treat depression, anxiety, and sleep issues.

Ramirez said she often felt pressured to get procedures she didn't want. "They were always just pushing injections, injections, injections," she said. She said staffers performed painful punch biopsies on her that resulted in an additional diagnosis of small fiber neuropathy, a nerve disorder that can cause stabbing pain.

She was among numerous patients who said they felt they needed to undergo the recommended procedures if they wanted continued prescriptions for their pain medications. "If you refuse any treatment they say they're going to give you, you're considered noncompliant and they stop your medication," Ramirez said.

She said she eventually agreed to an injection in her face, which she said was administered without adequate sedation. "It was horrible, horrible," she said. Still, she said, she kept going to the office because there weren't many other options in her town.

Lagattuta, through his lawyer, declined a request from KHN to respond to questions about the care provided at his clinics, citing the state investigation. "Since there is an active investigation, Dr. Lagattuta cannot comment on it until it is completed," attorney Matthew Brinegar wrote in an email. Lagattuta's license remains in good standing, and he said in his deposition in the Fresno lawsuit that he is still seeing patients in California.

Experts interviewed by KHN noted that medical procedures such as injections can have a legitimate role in comprehensive pain management. But they also spoke in general terms about the emergence of a troubling pattern at U.S. pain clinics involving the overuse of procedures. In the 1990s and early 2000s, problematic pain clinics hooked patients on opioids, then demanded cash to continue prescriptions, said Dr. Theodore Parran, who is a professor of medicine at Case Western Reserve University and has served as an expert witness in federal investigations into pain clinics.

"What has replaced them are troubled pain clinics that hook patients with the meds and accept insurance, but overuse procedures which really pay well," he said. For patients, he added, the consequences are not benign.

"I mean they are painful," he said. "You're putting needles into people."

'Knee Injections, Hip Injections, Foot Injections'

Before moving to California in 1998, Dr. Francis Lagattuta lived in Illinois and worked as a team doctor for the Chicago Bulls during its 1995-96 championship season. Out West, he opened a clinic in Santa Maria, a Latino-majority city along California's Central Coast known for its strawberry fields, vineyards, and barbecue. From 2015 to 2020, the chain grew from a couple of clinics in Santa Barbara County to dozens throughout California, largely in rural areas, as well as far-flung locations in Washington state, Delaware, and Florida.

The California portion of the chain is organized as more than two dozen corporations and limited liability corporations owned by Lagattuta. His son, Francis P. Lagattuta II, was a manager for the company.

On the Lags Medical website and in conversation with employees, the elder Lagattuta claimed he was on the vanguard of diagnosing and treating small fiber neuropathy. Much of the website has now been taken down. But pages available via an archival site claim he had pioneered a three-pronged approach to pain management that made minimal use of opioids and surgeries, instead emphasizing testing, injections, mental health, diet, and exercise. "In keeping with his social justice values, Dr. Lagattuta plans to share these findings to the rest of the world, hopefully to help solve the opioid crisis, and end suffering for millions of people struggling with pain," touted a biography once highlighted on the website.

Numerous Lags Medical patients interviewed by KHN said that even when they were given punch biopsies and a subsequent diagnosis of neuropathy, their treatment plan continued to involve high doses of opioid medications.

Dr. Victor C. Wang, chief of the division of pain neurology at Brigham and Women's Hospital in Boston, said punch biopsies are occasionally used in research but are not a standard part of pain medicine. Instead, small fiber neuropathy is usually diagnosed with a simple clinical exam.

"The treatment is going to be the same whether you have a biopsy or not," said Wang. "I always tell the fellows, you can do this test or that one, but is it really going to change the management of the patient?"

Ruby Avila, a mother of three in Visalia, remembers having the punch biopsies done at least three times during her four years as a Lags Medical patient. "I have scars down my leg," she said. Each time, she said, providers removed a set of three skin specimens that were used to diagnose her with small fiber neuropathy.

Avila, 37, who has lived with pain since childhood, had found it validating to finally have a diagnosis. But after learning more about how common the biopsies were at Lags Medical, she was shaken. "It's overwhelming to hear that they were doing it on a lot of people," she said.

Sanchez, the nurse practitioner named in the Fresno lawsuit, spoke of other procedures that garnered bonuses: "Trigger point injections, knee injections, hip injections, foot injections for plantar fasciitis and elbow injections" all qualified for $10 bonuses, he said in his testimony.

Two former employees, who asked not to be named, echoed Sanchez, saying they were incentivized to do certain procedures, including injections and punch biopsies.

In his testimony in the Fresno case, Lagattuta denied paying bonuses for procedures. "It was only for the patients," he said. "We never did it based on procedures."

Incentive systems for a specific procedure are "completely unethical," said Dr. Michael Barnett, an assistant professor of health policy at Harvard. "It's like giving police officers a quota for speeding tickets. What do you think they're going to do? I can't think of any justification."

Dr. Carl Johnson, 77, is a pathologist who directed Lags Medical's Santa Maria lab from 2018 to 2021. Johnson said the only specimens he looked at came from punch biopsies, the first time in his long career as a pathologist that he had been asked to run such an analysis. On an average day, he said, he examined the slides of about 40 patients, searching for signs of small fiber neuropathy. Lagattuta gave him papers to read on peripheral neuropathy and assured him they were on the cutting edge of care for pain patients. Johnson said he "never thought there was anything untoward going on" until he arrived on his last day and was told to pack up his belongings because the entire operation was shutting down.

Lags Medical performed other procedures at rates that also set them apart. From 2015 through 2020 — the span for which KHN had state data — Lags Medical performed more than 24,000 nerve ablations, a procedure in which part of a nerve is destroyed to reduce pain, on Medi-Cal patients. That's more than 1 in 6 of all nerve ablations billed through Medi-Cal during that period.

An analysis of federal data also shows Lagattuta was an outlier. For example, in 2018 he billed Medicare for nerve ablations more often than 88% of the doctors in his field who performed the procedure.

Lags Medical also used the in-house lab to run drug tests on patients' urine samples. From 2017 through 2019, Lags Medical facilities often ordered the most extensive — and expensive — set of drug tests, which check for the presence of at least 22 drugs, according to state and federal data.

For perspective, in 2019, more than 23,000 of the most extensive drug tests were ordered on Medi-Cal patients under Lagattuta's provider number, more than double the number tied to the next highest biller. The next five top billers were all lab companies.

Overall, from 2017 through 2019, nearly 60,000 of the most extensive drug tests were billed to Medicare and Medi-Cal under Lagattuta's provider number. Medicare reimbursed Lagattuta $5.4 million for these tests during that period. Using state fee-for-service rates, the testing billed to Medi-Cal would have been worth an estimated $6.3 million. That doesn't include less extensive drug screens or those billed under other providers' numbers.

Pain management experts described the use of extensive screening as unnecessary in routine pain treatment; the overuse of such tests has been the subject of numerous Medicare investigations in recent years.

Private pain clinics like Lags Medical are only loosely regulated and generally are not required to hold a special license from the state. But the physicians who work there are regulated by the Medical Board of California.

In December 2019, a patient who'd visited clinics in both Visalia and the Central Coast filed a complaint against Lagattuta with the medical board claiming, among other things, that she received biopsies that were not properly performed, that she underwent excessive testing, and that positive drug tests had been falsified. The medical board had another pain management doctor review more than 300 pages of documents and found "no deviations from the standard of care" and "did not find any over testing, or improperly performed biopsies."

He did, however, find some record-keeping problems, including numerous procedures in which patient consent was not documented. He also found instances in which procedures were performed and repeated without documentation that they were effective. The patient who filed the complaint was given a medial branch nerve block in November 2014, followed by a radiofrequency ablation in December, and another in February. No improvements for the patient were ever noted in the charts, the investigating doctor found.

The medical board chalked it up to a record-keeping error and fined Lagattuta $350.

A Halfway-Normal Life

On a warm evening in late July, Leah Munoz drove her power wheelchair around the long plastic tables at the Veterans Memorial Building in Hanford, a dusty farm town in California's Central Valley. Senior bingo night was crowded with gray-haired players waiting for the game to begin. She found an empty spot and carefully set out $50 worth of bingo cards, alongside her collection of 14 brightly colored daubers.

Munoz, 55 and a mother of six, said she has suffered from a litany of illnesses — thyroid cancer, breast cancer, lupus, osteoarthritis — that leave her in near-constant pain. She's been playing bingo since she was a little girl, and said it helps distract from the pain and calm her mind. She looks forward to this event all week.

Munoz was a Lags Medical patient for about four years and, while her pain never disappeared, the opioids prescribed provided enough relief for her to continue doing the things she loved. "There's a difference between addiction and dependence. I need it to live a halfway-normal life," Munoz said.

After Lags Medical closed in May, her primary care doctor initially refused to refill her opioid prescriptions. She said she called the Lags Medical offices to try to get a copy of her medical records to prove her need, and even showed up in person. But she said she was unable to get them. As the pills dwindled and the pain surged, Munoz said, it became hard to leave her home. "I missed a lot of bingo, a lot of grocery shopping, a lot of going to my grandkids' birthday parties. You miss out on life," she said. Ultimately, she said, her primary care doctor referred her to another pain clinic, and she was able to resume her prescription.

Even with pain medications, Munoz said, she never received true relief during her time as a patient at Lags Medical. She said she felt coerced to get several injections, none of which seemed to help. "If I didn't get the procedures, I didn't get the pain medication," she said. Her husband, Ramon, a landscaper who was also a patient, received an injection there that he said left him with permanent stiffness in his neck.

Munoz knows at least five other people at bingo night who were former patients at Lags Medical. One of them, Rick Freeman, came over to her table to chat. He swayed back and forth as he walked, his knees, he explained, swollen after 35 years living with HIV. At Lags Medical, Freeman said, he felt pressured by staff to receive injections if he wanted to continue receiving his opioid prescriptions. "If you don't cooperate with them, they would reduce your meds down," he said.

At the front of the room, Gail Soto, who ran the event, sold bingo cards to the latecomers. Soto, 72, said she injured her back while working an administrative job at a construction company years ago and suffers from spinal stenosis, rheumatoid arthritis, and fibromyalgia. She, too, was a patient at Lags Medical for years. In addition to her opioid prescription, Soto said, she received repeated injections and three nerve ablations. At first, the ablations helped, but what staff members didn't tell her, she said, was that the nerves they destroyed could grow back. Ultimately, she said, the procedures left her in worse pain.

Soto's biggest concern is the spinal stimulator that she said Lags Medical surgically inserted into her back five years ago. She said the doctors told her the device would work so well that she would no longer need her pain pills. She said they didn't explain that the device would work only two hours a day, and on one side of her body. She remained in too much pain to give up her meds, she said, and, five years later, the battery is failing.

Soto sleeps in a recliner chair in her three-bedroom mobile home in Lemoore, another small city near Hanford. It's well kept but humble, and she and her husband keep a collection of wind chimes on the front porch that create a wave of gentle music when a breeze passes by. The couple take good care of each other and their two beloved Chihuahuas, but life has become increasingly difficult for Soto.

As the battery on her spinal stimulator has started to fail, she said, she has sudden electrical pulses that shoot up her body. "My husband says sometimes when I sleep that my body will just jump up in the air," she said. But now that Lags Medical is closed, she said, she can't find a doctor willing to remove the device. "Most doctors are telling me right now, 'We can't, because we didn't [put it in]. We don't want nothing to do with that.'"

Ramon Soto and his wife, Gail, are devoted to their two beloved Chihuahuas. Their mobile home in Lemoore, California, is well kept but humble. (Anna Maria Barry-Jester / KHN)

Waitlists and Withdrawal

Audrey Audelo Ramirez said she picked up her final refill from Lags Medical on June 4 and by July 4 had no meds left to treat her pain. Ramirez said she called every pain management clinic in Fresno, but none were taking new patients.

"They left us all high and dry," she said. "Everybody."

In the weeks that followed the closures, county officials throughout the Central Valley saw a flood of patients on high doses of opioids in search of new providers, they said. Patients couldn't access their medical records, so other providers had no idea what their treatments had been.

"We had to create a crisis response to it because there was no organized response at that time," said Dr. Rais Vohra, the interim health officer for Fresno County.

Fresno County's health system is already lean, Vohra said. Toss in this abrupt closure and you end up in the kind of crisis rarely seen in other fields of medicine: "You'd never do this with a cancer clinic," he said. "You'd never abruptly stop chemo."

The state asked Dr. Phillip Coffin, director of substance abuse research for the San Francisco Department of Public Health, to run provider training and persuade doctors to take on new patients. Many practices have rules against taking new patients on opioids, or will refuse to prescribe doses above certain thresholds.

"We know that when you stop prescribing opioids, some people end up with death from suicide, overdose, increased illicit opioid use, pain exacerbations. It's really important to have a continuity, and that is not really possible in the current opioid-prescribing culture," Coffin said. The threat to patients is so severe that the FDA issued a warning in 2019 against cutting patients off from prescription opioids.

Gina, a retired nurse who asked to be identified by only her first name for fear she'd be discriminated against by other doctors, had been a Lags Medical patient for six years. She said she called every practice she could find in her Central Coast town, and was put on a waiting list at one. Suffering from a severe case of scoliosis, she started rationing the pain pills she had come to rely on.

When she finally secured an appointment, she said, she was told by the doctor she was on "some very strong meds" and he would fill only one of her two prescriptions. "You're like a criminal," she said. "You're branded as 'we don't trust you.'"

She started experiencing withdrawal symptoms — sweating, lost appetite, sleeplessness, anxiety. Worst of all, her pain "came back with a vengeance," she said.

"I think about this, what I'd have been like if I'd never gone through pain management. I sometimes wonder if I'd be better off."

As for Ramirez, her primary care doctor finally secured an appointment for her at another pain clinic, she said. It was in the same space as the old Lags Medical clinic, and she said she recognized many of the staff members. But now there was a new name: Central California Pain Management. From her perspective, it was as if nothing had changed. And she still doesn't know whether she needs to worry about the care she received during more than four years at Lags Medical.

The new clinic's owner, Dr. Ashok Parmar, said that he is leasing the space and that Lagattuta is his landlord. Parmar said he doesn't do punch biopsies, nor does he diagnose small fiber neuropathy. After all, he said, he would treat the pain the same way, with or without the diagnosis.

How We Did This

KHN evaluated the billing practices of physicians and clinics associated with Lags Medical Centers using data from both Medicare and Medi-Cal.

KHN did multiple analyses using Medicare Part B records that show, for each medical practitioner or lab, every procedure or service billed to the federal government, along with the number of times a procedure was performed, the number of Medicare beneficiaries who received specific services, and how much Medicare reimbursed. The Part B records include billings from 2015 through 2019, the most recent years available. The records are limited to beneficiaries who have traditional fee-for-service Medicare rather than private Medicare Advantage plans. Medicare suppressed data in cases in which a provider performed a procedure on 10 or fewer beneficiaries in a year.

KHN analyzed Medicare billing records for a range of specific procedures, comparing Dr. Francis P. Lagattuta's billings with those of other practitioners who also identified themselves in the records as Physical Medicine and Rehabilitation specialists.

Through a public records request, KHN also obtained data from the California Department of Healthcare Services for a range of specific medical procedures performed on state Medi-Cal recipients by all California providers from 2015 through 2020, as well as every service rendered through Medi-Cal under Lagattuta's provider number during that time. The Medi-Cal data is organized to show both the rendering and billing provider for a procedure, allowing KHN to look across the network of Lags Medical clinics. To calculate services provided at Lags Medical Centers, KHN included services performed under Lagattuta's provider number, as well as active provider numbers of organizations with a mailing address associated with Lags Medical clinics that listed Dr. Francis P. Lagattuta or another Lags employee as their authorized official. DHCS suppressed data for instances in which a provider performed a procedure fewer than 11 times on Medi-Cal patients in a year.

The Medi-Cal data did not include reimbursement amounts for procedures, so KHN obtained historical reimbursement amounts from DHCS to calculate the value of the services based on the fee-for-service reimbursement rate in July of each year. Care received by patients with Medi-Cal is generally reimbursed by the state in one of two ways: a fee-for-service model, in which physicians are reimbursed for services according to a set fee schedule that is public; or a managed-care model, in which the state pays insurers a monthly fee per patient, and the insurers reimburse providers amounts that are not public. Only a small percentage of Lags Medical services were reimbursed through fee-for-service plans during the years reviewed. As a result, the values of procedures calculated by KHN are meant to convey a general estimate of their worth. All estimates are calculated using the Basic Rate.

KHN senior correspondent Jordan Rau and Phillip Reese, an assistant professor of journalism at California State University-Sacramento, contributed to this report.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Healthcare Foundation.

Anna Maria Barry-Jester: annab@kff.org, @annabarryjester

Jenny Gold: jgold@kff.org, @JennyAGold

Many older adults are struggling with persistent malaise, heightened by the spread of the highly contagious omicron variant.

This article was published on Friday, February 18, 2022 in Kaiser Health News.

By Judith Graham

Late one night in January, Jonathan Coffino, 78, turned to his wife as they sat in bed. "I don't know how much longer I can do this," he said, glumly.

Navigating Aging focuses on medical issues and advice associated with aging and end-of-life care, helping America's 45 million seniors and their families navigate the healthcare system.

Coffino was referring to the caution that's come to define his life during the COVID-19 pandemic. After two years of mostly staying at home and avoiding people, his patience is frayed and his distress is growing.

"There's a terrible fear that I'll never get back my normal life," Coffino told me, describing feelings he tries to keep at bay. "And there's an awful sense of purposelessness."

Despite recent signals that COVID's grip on the country may be easing, many older adults are struggling with persistent malaise, heightened by the spread of the highly contagious omicron variant. Even those who adapted well initially are saying their fortitude is waning or wearing thin.

Like younger people, they're beset by uncertainty about what the future may bring. But added to that is an especially painful feeling that opportunities that will never come again are being squandered, time is running out, and death is drawing ever nearer.

"Folks are becoming more anxious and angry and stressed and agitated because this has gone on for so long," said Katherine Cook, chief operating officer of Monadnock Family Services in Keene, New Hampshire, which operates a community mental health center that serves older adults.

"I've never seen so many people who say they're hopeless and have nothing to look forward to," said Henry Kimmel, a clinical psychologist in Sherman Oaks, California, who focuses on older adults.

Older adults have suffered more illness and death from COVID-19 than any other group. How are they faring as the pandemic enters its third year? KHN and The John A. Hartford Foundation will explore that question in depth in a 90-minute interactive web event beginning at Noon ET on Wednesday, Feb. 23.

To be sure, older adults have cause for concern. Throughout the pandemic, they've been at much higher risk of becoming seriously ill and dying than other age groups. Even seniors who are fully vaccinated and boosted remain vulnerable: More than two-thirds of vaccinated people hospitalized from June through September with breakthrough infections were 65 or older.

The constant stress of wondering "Am I going to be OK?" and "What's the future going to look like?" has been hard for Kathleen Tate, 74, a retired nurse in Mount Vernon, Washington. She has late-onset post-polio syndrome and severe osteoarthritis.

"I guess I had the expectation that once we were vaccinated the world would open up again," said Tate, who lives alone. Although that happened for a while last summer, she largely stopped going out as first the delta and then the omicron variants swept through her area. Now, she said she feels "a quiet desperation."

This isn't something that Tate talks about with friends, though she's hungry for human connection. "I see everybody dealing with extraordinary stresses in their lives, and I don't want to add to that by complaining or asking to be comforted," she said.

Tate described a feeling of "flatness" and "being worn out" that saps her motivation. "It's almost too much effort to reach out to people and try to pull myself out of that place," she said, admitting she's watching too much TV and drinking too much alcohol. "It's just like I want to mellow out and go numb, instead of bucking up and trying to pull myself together."

Beth Spencer, 73, a recently retired social worker who lives in Ann Arbor, Michigan, with her 90-year-old husband, is grappling with similar feelings during this typically challenging Midwestern winter. "The weather here is gray, the sky is gray, and my psyche is gray," she told me. "I typically am an upbeat person, but I'm struggling to stay motivated."

"I can't sort out whether what I'm going through is due to retirement or caregiver stress or COVID," Spencer said, explaining that her husband was recently diagnosed with congestive heart failure. "I find myself asking 'What's the meaning of my life right now?' and I don't have an answer."

Bonnie Olsen, a clinical psychologist at the University of Southern California's Keck School of Medicine, works extensively with older adults. "At the beginning of the pandemic, many older adults hunkered down and used a lifetime of coping skills to get through this," she said. "Now, as people face this current surge, it's as if their well of emotional reserves is being depleted."

Most at risk are older adults who are isolated and frail, who were vulnerable to depression and anxiety even before the pandemic, or who have suffered serious losses and acute grief. Watch for signs that they are withdrawing from social contact or shutting down emotionally, Olsen said. "When people start to avoid being in touch, then I become more worried," she said.

Fred Axelrod, 66, of Los Angeles, who's disabled by ankylosing spondylitis, a serious form of arthritis, lost three close friends during the pandemic: Two died of cancer and one of complications related to diabetes. "You can't go out and replace friends like that at my age," he told me.

Now, the only person Axelrod talks to on a regular basis is Kimmel, his therapist. "I don't do anything. There's nothing to do, nowhere to go," he complained. "There's a lot of times I feel I'm just letting the clock run out. You start thinking, 'How much more time do I have left?'"

"Older adults are thinking about mortality more than ever and asking, 'How will we ever get out of this nightmare,'" Kimmel said. "I tell them we all have to stay in the present moment and do our best to keep ourselves occupied and connect with other people."

Loss has also been a defining feature of the pandemic for Bud Carraway, 79, of Midvale, Utah, whose wife, Virginia, died a year ago. She was a stroke survivor who had chronic obstructive pulmonary disease and atrial fibrillation, an abnormal heartbeat. The couple, who met in the Marines, had been married 55 years.

"I became depressed. Anxiety kept me awake at night. I couldn't turn my mind off," Carraway told me. Those feelings and a sense of being trapped throughout the pandemic "brought me pretty far down," he said.

Help came from an eight-week grief support program offered online through the University of Utah. One of the assignments was to come up with a list of strategies for cultivating well-being, which Carraway keeps on his front door. Among the items listed: "Walk the mall. Eat with friends. Do some volunteer work. Join a bowling league. Go to a movie. Check out senior centers."

"I'd circle them as I accomplished each one of them. I knew I had to get up and get out and live again," Carraway said. "This program, it just made a world of difference."

Kathie Supiano, an associate professor at the University of Utah College of Nursing who oversees the COVID grief groups, said older adults' ability to bounce back from setbacks shouldn't be discounted. "This isn't their first rodeo. Many people remember polio and the AIDs epidemic. They've been through a lot and know how to put things in perspective."

Alissa Ballot, 66, realized recently she can trust herself to find a way forward. After becoming extremely isolated early in the pandemic, Ballot moved last November from Chicago to New York City. There, she found a community of new friends online at Central Synagogue in Manhattan and her loneliness evaporated as she began attending events in person.

With omicron's rise in December, Ballot briefly became fearful that she'd end up alone again. But, this time, something clicked as she pondered some of her rabbi's spiritual teachings.

"I felt paused on a precipice looking into the unknown and suddenly I thought, 'So, we don't know what's going to happen next, stop worrying.' And I relaxed. Now I'm like, this is a blip, and I'll get through it."

We're eager to hear from readers about questions you'd like answered, problems you've been having with your care and advice you need in dealing with the healthcare system. Visit khn.org/columnists to submit your requests or tips.

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