Healthcare update

Physician-owned hospital fights reform limits

Medical data protections ramp up

Feds hold execs accountable for health fraud

To the dismay of the corporate C-suite, federal enforcers are tackling healthcare fraud by targeting the top executives of healthcare enterprises, nursing homes, drug companies and medical device manufactures.
To prevent repeat offenses, the federal government, including the Food and Drug Administration and the Justice Department, is laying down the law and increasing penalties. In addition to the standard fines normally associated with settling fraud, corporate executives are facing criminal charges and exclusions from government health programs, according to the Associated Press.
"When you look at the history of healthcare enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy," said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department.
The idea of targeting select individuals for wrongs committed by an organization is based on the Park Doctrine, a 1975 Supreme Court ruling in which a company president was held accountable for corporate noncompliance.
Medicare fraud costs taxpayers $60 billion each year, according to the AP.

Many in GOP who oppose health insurance requirement used to favor it. Before Obama's healthcare law, mandating medical coverage was a mainstream Republican idea.

Administration Opposes Challenges to Medicaid Cuts

As Physicians’ Jobs Change, So Do Their Politics

Doctors were once overwhelmingly male and usually owned their own practices. They generally favored lower taxes and regularly fought lawyers to restrict patient lawsuits. Ronald Reagan came to national political prominence in part by railing against “socialized medicine” on doctors’ behalf.
But doctors are changing. They are abandoning their own practices and taking salaried jobs in hospitals, particularly in the North, but increasingly in the South as well. Half of all younger doctors are women, and that share is likely to grow.
There are no national surveys that track doctors’ political leanings, but as more doctors move from business owner to shift worker, their historic alliance with the Republican Party is weakening from Maine as well as South Dakota, Arizona and Oregon, according to doctors’ advocates in those and other states.
That change could have a profound effect on the nation’s health care debate. Indeed, after opposing almost every major health overhaul proposal for nearly a century, the American Medical Association supported President Obama’s legislation last year because the new law would provide health insurance to the vast majority of the nation’s uninsured, improve competition and choice in insurance, and promote prevention and wellness, the group said.

A lid on health insurance rate increases. California regulators should be given the power to reject unreasonable increases in health insurance premiums.

Medicare Plan for Payments Irks Hospitals

For the first time in its history, Medicare will soon track spending on millions of individual beneficiaries, reward hospitals that hold down costs and penalize those whose patients prove most expensive.
The administration plans to establish “Medicare spending per beneficiary” as a new measure of hospital performance, just like the mortality rate for heart attack patients and the infection rate for surgery patients.
Hospitals could be held accountable not only for the cost of the care they provide, but also for the cost of services performed by doctors and other health care providers in the 90 days after a Medicare patient leaves the hospital.

This plan has drawn fire from hospitals, which say they have little control over services provided after a patient’s discharge — and, in many cases, do not even know about them. More generally, they are apprehensive about Medicare’s plans to reward and penalize hospitals based on untested measures of efficiency that include spending per beneficiary.
A major goal of the new health care law, often overlooked, is to improve “the quality and efficiency of health care” by linking payments to the performance of health care providers. The new Medicare initiative, known as value-based purchasing, will redistribute money among more than 3,100 hospitals.
Medicare will begin computing performance scores in July, for monetary rewards and penalties that start in October 2012.
The desire to reward hospitals for high-quality care is not new or controversial. The idea can be traced back to a bipartisan bill introduced in Congress in 2005, when Democrats and Republicans were still working together on health care. However, adding in “efficiency” is entirely new and controversial, as no consensus exists on how to define or measure the efficiency of health care providers.
The new health care law directs the secretary of health and human services to develop “efficiency measures, including measures of Medicare spending per beneficiary.” Obama administration officials will decide how to calculate spending per beneficiary and how to use it in paying hospitals.
Administration officials hope such efforts will slow the growth of Medicare without risking the political firestorm that burned Republicans who tried to remake the program this year.
In calculating Medicare spending per beneficiary, the administration said, it wants to count costs generated during a hospital stay, the three days before it and the 90 days afterward. This, it said, will encourage hospitals to coordinate care “in an efficient manner over an extended time period.”
If, for example, an 83-year-old woman is admitted to a hospital with a broken hip, she might have hip replacement surgery and then be released to a nursing home or a rehabilitation hospital. When she recovers, she might return to her own home, but still visit doctors and physical therapists or receive care from a home health agency. If she develops a serious infection, she might go back to the hospital within 90 days.
The new measure of Medicare spending per beneficiary would include all these costs, which — federal officials say — could be reduced by better coordination of care and communication among providers.
Here, in simplified form, is an example offered by federal officials to show how the rewards might work. If Medicare spends an average of $9,125 per beneficiary at a particular hospital and if the comparable figure for all hospitals nationwide is $12,467, the hospital would receive high marks — 9 points out of a possible 10 awarded for efficiency. This measure, combined with measures of quality, would be used to compute an overall performance score for the hospital. Based on this score, Medicare would pay a higher or lower percentage of each claim filed by the hospital.
Federal officials are still working out details, including how to distribute the money.
Charles N. Kahn III, president of the Federation of American Hospitals, which represents investor-owned companies, said he supported efforts to pay hospitals according to their performance. But he said the administration was “off track” in trying to hold hospitals accountable for what Medicare spends on patients two or three months after they leave the hospital.
“That’s unrealistic, beyond the pale,” Mr. Kahn said.
Since 2004, Medicare has provided financial incentives to hospitals to report on the quality of care, using widely accepted clinical measures.
Much of the information is posted on a government Web site (hospitalcompare.hhs.gov), but it has not been used as a basis for paying hospitals.
For years, federal health officials have emphasized the importance of higher-quality care, mentioning efficiency as an afterthought. Now, alarmed at the trajectory of Medicare costs, they emphasize efficiency as an equally important goal.
Under the new health law, Medicare will reduce payments to hospitals if too many patients are readmitted after treatment for heart attacks, heart failure or pneumonia. In addition, Medicare will cut payments to hospitals if they do not replace paper files with electronic health records, and it will further reduce payments to hospitals with high rates of preventable errors, injuries and infections.
Hospital payments account for the largest share of Medicare spending, and Medicare is the single largest payer for hospital services.
Senators Max Baucus, Democrat of Montana and chairman of the Finance Committee, and Charles E. Grassley, Republican of Iowa, have led efforts to pay health care providers for their performance — for the quality of services, rather than the quantity. House members from Iowa, Minnesota, Washington and Wisconsin have pushed for measures of efficiency, saying Medicare should reward low-cost, high-quality care of the type they say is provided in their states.
Without opposing the change, lawmakers from higher-cost states like Massachusetts and New York say the payment formula needs more work.
Teaching hospitals worry that the new policy will penalize them because they treat sicker, more expensive patients. Medicare officials tried to allay this concern, saying they would adjust the data to take account of patients’ age and the severity of their illnesses, as well as geographic differences in hospital wages.
Still, Kenneth E. Raske, president of the Greater New York Hospital Association, said the formula “tends to discriminate against inner-city hospitals with large numbers of immigrant, poor and uninsured patients.”
By contrast, J. Kirk Norris, president of the Iowa Hospital Association, welcomed the new plan. “Medicare ought to pay for value,” he said.
Administration officials said they were aware of concerns that some hospitals might try to increase their performance scores by avoiding high-risk patients. The officials said they would watch closely for signs of such a problem.