Executives fired some hospital administrators who opposed their illegal revenue-driving initiatives, the DOJ says.
A former hospital chain that Community Health Systems acquired in 2014 has agreed to pay more than $260 million to settle allegations it overbilled government programs and violated Stark and antikickback statutes, the Department of Justice announced Tuesday.
In addition to the civil settlement signed by Health Management Associates, which had been headquartered in Naples, Florida, an HMA subsidiary confessed to a criminal charge, the DOJ said: one count of conspiracy to commit healthcare fraud.
Carlisle HMA—which had operated Carlisle Regional Medical Center in Carlisle, Pennsylvania, until last year, when CHS sold the facility—pleaded guilty to the criminal charge, admitting that certain members of its leadership and executive teams had unlawfully pressured physicians to boost patient admissions at HMA hospital emergency departments even when medically unnecessary.
"Hospital operators that improperly influence a physician's medical decision-making in pursuit of profits do so at their own peril," U.S. Assistant Attorney General Brian A. Benczkowski of the DOJ's Criminal Division said in a statement.
Beginning about 10 years ago, HMA's executives established inpatient admission quotas of 15-20% for all patients presenting at the chain's hospital emergency departments. The quota was 50% for patients 65 and older, according to DOJ records. Executives then tracked each physician's admissions statistics using customized software and color-coded scorecards that listed in red when a physician fell short of the quota.
"At some HMA Hospitals, these scorecards were posted in the physicians' workspace and improperly used to pressure physicians with 'failing' admission grades to admit patients who did not require inpatient admission," the DOJ documents state.
Executives even fired some HMA hospital administrators who refused to challenge emergency physicians over their admission decisions.
Although CHS was aware of the investigations before finalizing its HMA acquisition in 2014, CHS Chairman and CEO Wayne Smith was quick to point out that all of the alleged wrongdoing occurred before the deal—a claim backed up by the DOJ.
"We are pleased to have reached the settlement agreements so we can move forward now without the burden or distraction of ongoing litigation," Smith said in a statement. "As an organization, we are committed to doing our very best to always comply with the law in what is a very complex regulatory environment and to operate our business with integrity, ethical practices and high standards of conduct."
The total payment will cost $262 million, which CHS said it expects to pay next month. Although CHS stock has been suffering recently, its price didn't make any major moves on news of the settlement.
The allegations that led to these settlements originated in eight whistleblower lawsuits under the False Claims Act. Two of the whistleblowers will receive major payouts of $15 million and $12.4 million, according to the DOJ. (The other whistleblowers' shares have not been determined.)
Two major hospital groups suggested separately that CMS had overstepped its legal authority in proposals for next year.
The deadline to comment on proposed changes to the Medicare outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system for next year passed Monday evening.
Hospital groups did not pass up the opportunity to make their displeasure known, and they hinted that legal action to block the proposal could be warranted.
Among the more than 2,800 comments received, there were some unsurprisingly unhappy responses from the American Hospital Association (AHA), America's Essential Hospitals (AEH), and others who had already expressed their general opposition the government's plan when it was announced in July.
Both groups added detail to their feedback Monday and accused the Centers of Medicare & Medicaid Services (CMS) of pursuing changes beyond its legal authority.
"The AHA is deeply disappointed in certain proposals that CMS has chosen to set forth in this rule, which run afoul of the law and rely on the most cursory of analyses and policy rationales," AHA Executive Vice President Thomas P. Nickels wrote. "Taken together, they would have a chilling effect on beneficiary access to care and new technologies, while also dramatically increasing regulatory burden."
The AHA objects specifically to three items in the CMS proposal:
A payment reduction for hospital outpatient clinic visits in certain off-campus provider-based departments (PBD). These visits would be reimbursed at the physician fee schedule rate, which equals 40% of the OPPS rate.
A payment reduction for "services from expanded clinical families" in certain off-campus PBDs. This would also be set at 40% of the OPPS rate.
A continuation of the policy that pays for 340B program separately payable drugs at 22.5% less than the average sales price and an expansion of that policy to certain PBDs.
The AEH comment, signed by organization President and CEO Bruce Siegel, MD, MPH, made similar points.
"We are deeply concerned about several provisions of the proposed rule that exceed the agency's statutory authority and would have a disproportionately negative impact on essential hospitals—those that provide stability and choice for people who face barriers to care," Siegel wrote.
CMS Administrator Seema Verma has touted the so-called "site-neutral" payment proposal as an effort to rationalize the way the federal government reimburses services, saying it doesn't make sense for taxpayer-funded healthcare programs to pay different rates depending upon the site of service.
"It's a great example of some of the bizarre things in the Medicare program that just don't make sense and that are actually having a perverse incentive on the entire healthcare delivery system," Verma said.
In a commenton behalf of about 4,000 hospitals and 165,000 other providers, Premier Senior Vice President of Public Affairs Blair Childs contended that there are key differences between PBDs and physician practices that should be taken into account in CMS reimbursement decisions.
"At a time when providers are adopting population health strategies that seek to limit inpatient care when it is safe and medically appropriate, we are concerned that CMS' over-reach is counterproductive and will have negative consequences for beneficiaries," Childs wrote. "In lieu of expansive site-neutral payment policies, CMS should focus on methods to encourage providers to adopt risk-based alternative payment models"
Less than 20% of the comments received by CMS had been released publicly as of Tuesday morning, but major industry groups released their comments publicly on their own, reflecting a variety of concerns beyond the site-neutral payment policy. The Pew Charitable Trusts, for example, focused on a request for information in the proposal pertaining to the Competitive Acquisition Program.
The nurse was placed on unpaid leave after a third alleged rape of a Cape Coral Hospital patient. Now the organization is fending off an allegation that its systems failed.
A federal judge in Florida has ordered Fort Myers–based Lee Memorial Health System to surrender records documenting any and all sexual assault allegations brought against the public hospital system's employees from 2012 through 2016.
The system, which goes by Lee Health, has until Friday to hand the records over to a patient who's suing the organization for its failure to protect her from Jeovanni Hechavarria, RN, who allegedly raped her while she was admitted overnight at Cape Coral Hospital in 2016.
The suit, which accuses Lee Health of "deliberate indifference" to the plaintiff patient's constitutional rights, serves as a reminder for health systems across the country to review their policies and procedures both in writing and in practice.
Hechavarria allegedly had unrestricted access to the plaintiff's room despite Lee Health's leaders knowing he had previously been accused of sexually assaulting a patient, according to the lawsuit. He was arrested last year and faces criminal charges stemming from three separate alleged assaults on patients in 2015 and 2016, as the Fort Myers News-Press reported. He was reportedly placed on unpaid leave after the third incident and later fired. An emergency restriction was placed on his license in January 2017.
Mary Briggs, a spokesperson for Lee Health, expressed confidence in the way the organization handles allegations against its employees.
"When a criminal allegation is made, we promptly respond, report the matter to the appropriate authorities and fully cooperate with law enforcement," Briggs said in a written response to questions from HealthLeaders. "Law enforcement was immediately contacted and performed investigations after each alleged incident that was reported to us."
Police briefly investigated the first of the three allegations when it was raised in March 2015, but they dropped the case partly because they lacked physical evidence, as the News-Press reported. Lee Health officials told the paper Hechavarria was not disciplined at the time.
An officer who investigated the initial allegation in 2015 wrote in his report that, due to a lack of evidence, inconsistencies in the victim's story, and "her poor account of what events actually took place," he found that "no crime had been committed," as FOX4's Stephanie Tinoco reported last year. The victim told Tinoco that police failed to take her complaint seriously.
Although the way healthcare organizations handle allegations made against their employees may vary from case to case depending upon the specific nature of each allegation, they should generally avoid relying solely on law enforcement to investigate, says Jo Ellen Whitney, JD, chair of the Davis Brown Law Firm employment and labor relations department in Des Moines, Iowa.
"I would always recommend that we do our own investigation as well simply because the police investigation may take a much longer time, and we're talking about a different standard, which is 'beyond a reasonable doubt,'" Whitney tells HealthLeaders.
"As a hospital or as a clinic or any other kind of care provider, there may be other issues," Whitney adds. "Maybe [any given allegation] didn't rise to criminal assault but it is not something that we will tolerate from our providers, caregivers, or staff. It could be less than what was originally alleged. It could be something that's not criminal but something we would still terminate an employee for."
In addition to calling law enforcement, it's important for leaders to notify other relevant authorities as well, Whitney notes. For medical professionals, those authorities could include licensure and ethics bodies. Also, keep your insurance company in mind, she adds.
"Sometimes insurance is going to have a specific framework of how they want you to respond to these claims, so facilities would always need to be talking to the insurance provider," Whitney says.
In the Lee Health case, Briggs said the discovery request for records pertaining to these and any other sexual assault allegations—which Lee Health persuaded the judge to limit to five years, rather than the 11 years sought by the plaintiff—is a routine part of litigation.
"We have not yet completed the research necessary to respond, but will do so in a timely manner," she said last week.
"The safety and well-being of our patients is Lee Health's highest priority and we are confident Lee Health will prevail in this lawsuit," Briggs added.
By exempting large groups of labs from the data reporting requirement, the federal government has left hospital laboratories underrepresented in the market-based data set used to calculate Medicare payments, the plaintiffs alleged.
A federal judge tossed out a lawsuit Friday from the American Clinical Laboratory Association that had argued Health and Human Services, under the Obama administration, acted arbitrarily in 2016 when it implemented certain requirements for Medicare price data reporting.
The decision dealt a setback to the ACLA, which represents dozens of lab companies unhappy with the way the data collection affects their reimbursements. The lawsuit argues that the HHS final rule included too many exemptions, leaving hospital labs underrepresented in the price data set used in reimbursement calculations.
Despite acknowledging that the arguments in ACLA's suit "raise important questions," U.S. District Court Judge Amy Berman Jackson in D.C. dismissed the proceeding for lack of subject matter jurisdiction, finding that the courts lack the legal authority to review this HHS action.
In a statement, ACLA President Julie Khani said the ruling was incorrectly decided and that ACLA would review its legal options moving forward.
"This is an extremely disappointing outcome for ACLA's members and the millions of seniors they serve—including the most vulnerable Medicare beneficiaries—who rely on clinical laboratory tests for their most basic health needs," Khani said.
In its complaint filed last December, ACLA argued that the HHS final rule's price reporting requirements exempted 99.3% of the labs in the market.
"Moreover, contrary to Congress's intent, the laboratories that did report information are not representative of the market as a whole," the lawsuit added.
"For example, although approximately 7,000 hospital laboratories billed Medicare for laboratory services in 2015—accounting for 24 percent of the Medicare payments made under the Clinical Laboratory Fee Schedule—no more than 21 hospital laboratories (and probably even fewer) reported information to the Secretary, leaving hospital laboratories effectively unrepresented in the data collected by the Secretary."
Due to a variety of factors, hospital laboratories often receive significantly higher private payor rates than do other laboratories, the lawsuit argued.
The organizations pushed for two edits, in particular, in a letter to CMS Administrator Seema Verma.
Nine organizations, including the National Association of Accountable Care Organizations (NAACOS), sent a letter Thursday urging the Centers for Medicare & Medicaid Services to back off some, but not all, of the changes proposed for 2019 to the Medicare Shared Savings Program.
The letter pushed for two edits, in particular: First, the amount of time MSSP ACOs may linger in upside-only tracks shouldn't be cut from six years to two years, as proposed; second, the shared savings rate shouldn't be cut from 50% to 25%, as proposed.
The organizations argue in their letter that ACOs have been an important part of the shift toward value-based care through clinical and operational transformations alike but that such initiatives need time to mature into their full potential.
"These transformations are significant and, as such, require time for implementation and to produce measurable results," the letter states.
What's more, a majority of the ACOs currently in the program indicated they would be at least somewhat likely to leave MSSP if they were required to take on downside risk, according to a NAACOS survey. In that context, the proposal to cut shared savings—which is the amount MSSP ACOs receive when they hit their targets—is especially disconcerting, the letter argues.
"The MSSP remains a voluntary program, and it's essential to have the right balance of risk and reward to continue program growth and success," the letter states. "Program changes that deter new entrants would shut off a pipeline of beginner ACOs that should be encouraged to embark on the journey to value, which is a long-standing bipartisan goal of the Administration and Congress and important aspect of the Quality Payment Program."
When the proposed changes were announced last month, CMS Administrator Seema Verma explained the rationale in a Health Affairs blog post.
"The results show that ACOs that take on greater levels of risk show better results for cost and quality over time," Verma wrote. "Our approach generally is to reward providers with more flexibilities as they take on increasing accountability for spending; to engage and incentivize beneficiaries to achieve and maintain good health; and to reduce gaming. As providers assume greater levels of risk, CMS aims to provide them with greater flexibility to innovate and deliver high-quality care."
The eight additional organizations that signed onto the letter with NAACOS were the Association of American Medical Colleges, the American College of Physicians, America's Essential Hospitals, America's Health Insurance Plans, the American Medical Association, the Health Care Transformation Task Force, the Medical Group Management Association, and Premier.
The circumstances in which a provider may lawfully disclose a patient's protected health information to the media without the patient's prior approval are quite limited.
Three hospitals in Boston have agreed to pay nearly $1 million total to settle allegations they violated patient privacy rights by allowing TV crews with ABC's "Save My Life: Boston Trauma"* to film patients without first securing their permission.
The separate settlements were announced Thursday by the Health and Human Services Office for Civil Rights (OCR), which enforces the Health Insurance Portability and Accountability Act (HIPAA) privacy rule. OCR Director Roger Severino took the opportunity to remind hospitals of their duty under the law.
"Patients in hospitals expect to encounter doctors and nurses when getting treatment, not film crews recording them at their most private and vulnerable moments," Severino said in a statement. "Hospitals must get authorization from patients before allowing strangers to have access to patients and their medical information."
An OCR fact sheet notes that the circumstances in which a healthcare provider may lawfully disclose a patient's protected health information (PHI) to members of the media without the patient's prior approval are quite limited:
A provider could, for example, ask the media for help identifying or locating family members of a patient who is either incapacitated or unidentified; or
If anyone asks about a patient by name, a provider may share the patient's general condition and location within the facility without the patient's prior permission, as long as the patient has not objected.
These limited circumstances, alongside a few others outlined in the law, do not provide for the sort of access granted to documentary crews.
"It is not sufficientfor a health care provider to request or require media personnel to mask the identities of patients (using techniques such as blurring, pixelation, or voice alteration software) for whom an authorization was not obtained, because the HIPAA Privacy Rule does not allow media access to the patients' PHI, absent an authorization, in the first place," the OCR fact sheet states.
Boston Medical Center paid $100,000, Brigham and Women's Hospital paid $384,000, and Massachusetts General Hospital paid $515,000 for the filming that took place in late 2014 and early 2015, according to agreements OCR reached with each organization. That's a total of $999,000.
This isn't the first settlement of its kind. In 2016, NewYork-Presbyterian Hospital settled similar allegations for $2.2 million related to the filming of "NY Med," HHS OCR said.
*Correction: Citing incorrect information from HHS, a previous version of this story misstated the title of the ABC series involved in this investigation. The correct ABC series is "Save My Life: Boston Trauma," released in 2015, not "Boston Med," released in 2010. A correction was added to the HHS press release. This story has been corrected accordingly, and the "Boston Med" promotional video that had been embedded in this story has been removed.
A professor's opinion piece prompted a formal rebuke from the AHA and CHA this week, as rising healthcare costs lead to more finger-pointing.
The steep year-over-year incline in healthcare spending may be spurring calls for action to curb out-of-control costs, but it isn't delivering a consensus on what should be done.
Glenn Melnick, PhD, a professor of public policyat the University of Southern California, penned an op-ed for The New York Times this month placing much of the blame on hospital emergency departments.
"The problem," Melnick wrote, "is that the rules give hospitals tremendous pricing power when they're negotiating with health insurance companies."
Higher hospital prices cost insurers more, ultimately leading to higher premiums for patients, so states should move to limit hospital prices for out-of-network emergency care, Melnick argued, suggesting that billed charges be capped at 125% of contracted prices.
"This change alone would result in immediate price reductions and savings to consumers exceeding many billions of dollars. And it would begin to restore some competition that would help keep prices down in the long run," Melnick wrote.
That piece drew a response Wednesday from the American Hospital Association and California Hospital Association, which noted that Melnick's academic position is funded by Blue Cross of California.
"Government payers, Medicare and Medicaid, set how much hospitals are paid for emergency care—there is no negotiation. And the rates paid by governments are far below the actual cost of care," AHA President and CEO Rick Pollack and CHA President and CEO Carmela Coyle wrote in a joint response. "Private health insurance companies, however, negotiate whether they will contract with hospitals and the rates to be paid. And those rates typically take those government underpayments into account."
Melnick's op-ed "grossly misrepresents the balance of power among hospitals and health insurance companies in negotiations," Pollack and Coyle wrote.
A lawmaker behind the 'prudent layperson' standard has been pressing HHS, DOL, and CMS for progress reports on what he deems to be the insurer's 'likely' violations of federal law.
U.S. Sen. Ben Cardin, D-Maryland, isn't entirely satisfied with the response he received late last month from Health and Human Services Secretary Alex Azar regarding Anthem's controversial policy denying payment for emergency department (ED) visits in situations later determined not to be emergencies.
Cardin, who helped enshrine the "prudent layperson" standard into federal law more than two decades ago, cowrote a letter last March with Sen. Claire McCaskill, D-Missouri, alleging that Anthem's policy "likely" violated the statute.
"While we appreciate Anthem on their effort to encourage patients to seek medical care in lower-cost settings, we remain concerned that Anthem's ED policy still forces patients to determine, before they leave their home, if their symptoms are serious enough to go to the emergency room," Cardin and McCaskill wrote.
The letter asked HHS and the Department of Labor to provide a list of documents and answers to questions about Anthem's controversial policy, whether and how HHS and DOL would take enforcement action against the insurer, and any similar complaints against other insurers.
Azar responded with a letter dated August 20 that addressed some, but not all, of the issues Cardin and McCaskill raised.
"The letter is appreciated but does not fully respond to the senators' concerns," a Cardin spokesperson tells HealthLeaders, adding that Cardin's staff members will monitor the lawsuits pending against Anthem and continue reaching out to the Centers for Medicare & Medicaid Services.
In his response on behalf of both departments last month, Azar cited a closed case involving MagnaCare Administrative Services in New York to demonstrate the departments' enforcement activity. A consent judgment against MagnaCare was reached after DOL determined the company had failed to tell participants, before emergency claims were denied, that they could supply additional medical records to demonstrate that the prudent layperson standard had been met, Azar wrote.
"While we cannot comment on any open investigations, HHS has been monitoring State actions on this issue and will work with the States to ensure that appropriate action is taken if necessary," Azar wrote.
Both HHS and DOL agree that Current Procedural Terminology (CPT) codes should not be used as the sole basis to determine whether emergency services were justified, Azar wrote.
Anthem, based in Indianapolis, had already announced last February that it would change its policy by having its staff request additional patient records before denying coverage. But the change hasn't stopped legal challenges this year.
Piedmont Hospital and five of its sibling organizations sued Anthem's Blue Cross Blue Shield of Georgia over the policy in February, as The Atlanta Journal-Constitutionreported. Then two physician groups, the American College of Emergency Physicians (ACEP) and the Medical Association of Georgia (MAG) filed their own lawsuit against Anthem in July.
In a filing last week, Anthem asked a federal judge to dismiss ACEP and MAG's lawsuit, arguing that the groups had failed to assert a legal basis for their challenge. Anthem's filing also argued that the insurer's controversial approach is part of a reasonable effort to tamp down costs.
"The use of hospital emergency departments for non-emergency medical conditions has been a growing problem," attorneys for Anthem wrote, offering a few numbers as context:
Up to 24% of ED patients are there for "plainly non-emergency conditions," the Anthem attorneys wrote, citing research by Truven Health Analytics.
Hospitals have increased charges for ED visits by 113% in the past seven years, increasing costs for private payers, Anthem added, citing the Health Care Cost Institute.
The "inflated ED charges" have cost American taxpayers at least $11 billion over a decade through the Medicare program, the Anthem attorneys wrote, citing the Center for Public Integrity.
Anthem's BCBS of Georgia is among several public and private payers exploring ways to cut unnecessary ED spending, the Anthem attorneys argued.
But just because Anthem determines an ED visit was unnecessary doesn't mean the determination will stick. A report released in July by McCaskill found that, on appeal, Anthem overturned 60% of the ED claims it had denied in Missouri from July through November last year.
Considering the possibility that a federal judge in Texas could side with the DOJ or plaintiffs, Maryland filed a separate lawsuit of its own.
Any day now, the federal judge presiding over a lawsuit questioning the constitutionality of the Affordable Care Act, is expected to issue a ruling that could wreak havoc on the U.S. healthcare system. Maryland isn't sitting around waiting for that to happen.
Observers noted that U.S. District Judge Reed O'Connor seemed sympathetic to the plaintiffs' argument that Congress rendered at least part of the law unconstitutional when it zeroed out the tax penalty tied to its individual mandate. The Texas-led coalition of 20 conservative states that filed the suit urged O'Connor during a hearing last week to issue a preliminary injunction blocking enforcement of the entire ACA while the law proceeds.
The federal government defendants disagreed with the plaintiffs' position, but only partially. Having announced in June that it would not defend key provisions of the ACA, the Department of Justice argued that the individual mandate and two other pieces—including protections for those with preexisting conditions—were rendered unconstitutional by the change in tax law. If an injunction is issued, though, it should be delayed until January 1, when the individual mandate's penalty drops to zero, the DOJ argued.
All of this prompted a rush from a California-led contingent of liberal states seeking to defend the ACA in its entirety or to the maximum extent possible. Given the perception that O'Connor could side with the DOJ or the plaintiffs, however, Maryland took things a step further and filed a separate lawsuit Thursday in a different federal court.
"We cannot allow President Trump and Attorney General Sessions to destroy the ACA," Maryland Attorney General Brian E. Frosh said in a statement. "Their attempts to sabotage this life-saving law and jeopardize the health of Marylanders who rely on it cannot stand. We are taking action to protect and ensure health care coverage for every Marylander and all Americans."
Maryland is seeking an injunction that would require the government to continue enforcing the ACA. That has the potential of directly contradicting a possible injunction in the Texas case.
"That's an unholy mess just waiting to happen," University of Michigan law professor Nicholas Bagley wrote for The Incidental Economist.
Then again, Bagley added, the threat of dueling injunctions could prove empty.
"My best guess is that the Texas lawsuit will fizzle: any injunction will likely be stayed pending appeal, either by the Fifth Circuit or the Supreme Court, and the case is going nowhere on the merits," he wrote. "The Maryland lawsuit will likely prove unnecessary."
Grant funding has been cut in each of the past two years. Now recipients are encouraged to offer information on skimpier options.
After slashing funding by more than 84% over two years, the Centers of Medicare & Medicaid Services announced Wednesday which recipients would share $10 million in grant funding for so-called "Navigators," who help consumers sign up for health insurance through the Affordable Care Act exchanges.
But there's a new wrinkle, beyond the smaller funding pool, for the program's 39 recipients this year. In addition to partnering with public and private community organizations and pursuing virtual assistance, the recipients will be expected to provide information about association health plans (AHP) and short-term limited duration (STLD) insurance, which are cheaper than ACA-compliant plans because they offer less coverage than ACA-compliant plans.
"The grants announced today mark a new direction for the Navigator program aimed at providing a more cost-effective approach that takes better advantage of volunteers and other community partners," CMS Administrator Seema Verma said in a statementWednesday.
"This new direction will increase accountability and ensure the grants are effective in helping consumers find health coverage that meets their needs," Verma added. "We will continue to monitor the impact of these changes with the primary goal of ensuring consumers have the resources to select a health plan that best fits their needs."
Unsurprisingly, in light of the overall funding reduction, many of the awardees will receive much less this year than they did last year. The Arizona Alliance for Community Health Centers, for example, which received more than $700,000 last year, was granted only $300,000 this year, according to CMS' list of grant recipients for 2018and 2017.
That wasn't the case, however, for all recipients. The Georgia Refugee Health and Mental Health, for example, which received less than $154,000 last year, will receive nearly $500,000 this year.
The most marked decrease came in the form of fewer recipients. There were about 90 last year, only 34 this year—with none in Iowa, Montana, or New Hampshire, where no one applied.
