The Remedy For Surprise Medical Bills May Lie In Stitching Up Federal Law

Image result for The Remedy For Surprise Medical Bills May Lie In Stitching Up Federal Law imagesSource: Kaiser Health News

When Drew Calver had a heart attack last year, his health plan paid nearly $56,000 for the 44-year-old’s four-day emergency hospital stay at St. David’s Medical Center in Austin, Texas, a hospital that was not in his insurance network. But the hospital charged Calver another $109,000. That sum — a so-called balance bill — was the difference between what the hospital and his insurer thought his care was worth.

Though in-network hospitals must accept pre-contracted rates from health plans, out-of-network hospitals can try to bill as they like.

Calver’s bill eventually was reduced to $332 after Kaiser Health News and NPR published a story about it last month. Yet his experience shines a light on an unintended consequence of a wide-ranging federal law, which potentially blindsides millions of consumers.

The federal law — called ERISA, for the Employee Retirement Income Security Act of 1974 — regulates company and union health plans that are “self-funded,” like Calver’s. That means they pay claims out of their own funds, even though they may be administered by a major insurer such as Cigna or Aetna. And while states increasingly pass laws to protect patients from balance bills as more hospitals and doctors go after patients to collect, ERISA law does not prohibit balance billing.

Although Texas is one of nearly two dozen states that provide consumers with some degree of protection against surprise balance bills, those state laws don’t apply to self-funded plans.

It’s a fairly common problem. About 60 percent of workers who get coverage through their job have self-insured plans, and 18 percent of people with coverage through a large employer who were admitted to the hospital in 2016 received at least one bill from an out-of-network provider, according to an analysis by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

Health researchers and advocates have identified a number of potential solutions that could tackle the problem at the federal or state level. The courts are another option. Yet whether these efforts are politically feasible when health care is in play as a partisan football is another matter.

Polarized views on appropriate reimbursement levels for medical services “limit stakeholders at both the federal and state level from making progress,” said Kevin Lucia, a research professor at Georgetown’s Center on Health Insurance Reforms, who has analyzed state laws that restrict balance billing.

A look at options that experts say might address the problem:

Change Federal Law

The simplest way to stop surprise bills would be through restrictions imposed by federal legislation that would apply to both state-regulated policies sold by insurers and employer-sponsored self-funded health plans, which are federally regulated.

There’s a precedent for this. The Affordable Care Act added provisions that apply to both types of plans. That law requires plans that cover dependents to allow children to stay on their parents’ plans until they turn 26, for example, and cover preventive benefits without charging patients anything out-of-pocket.

New legislation could plug a big loophole in the ACA. The health law offered some consumer protections for out-of-network emergency care, one of the biggest trouble spots for balance billing. Not only do people sometimes wind up at out-of-network hospitals when they have an emergency, but even if they visit an in-network hospital, the emergency physicians, specialists and other providers such as pathologists and labs may not be in their health plan’s network.

The ACA limited a patient’s cost sharing for emergency services to what they would face if they were at an in-network facility. It also established standards for how much health plans have to pay the hospital or doctors for that care.

But the law didn’t prohibit out-of-network emergency doctors, hospitals and other providers, such as ambulance services, from balance billing consumers for the amounts their health plan didn’t pay.

Federal legislation could close that loophole by prohibiting balance billing for emergency services, as well as hospital admissions related to that emergency care.

Analysts at the University of Southern California-Brookings Schaeffer Initiative for Health Policy, who have suggested such a remedy, say the federal law could apply to any doctors and hospitals that participate in the Medicare program, as most do, to ensure that the effect would be widespread.

They also propose prohibiting balance billing in non-emergency situations when someone visits an in-network facility but receives care from out-of-network doctors or is referred for outpatient lab or diagnostic imaging that is outside of the person’s health plan network.

Still, the deep political scars left by the health law battles would seem to preclude any bipartisan efforts in Washington to change it.

“I’d love to see any kind of federal action,” said Loren Adler, associate director at the USC center, who co-authored the proposal. “It’s just hard to be super optimistic about anything happening in the near future.”

Revise Federal Regulations

The federal executive branch could also weigh in on fixing the problem for self-insured coverage. The Department of Labor could, for example, issue a ruling that clarifies that states can regulate provider payment, or require self-funded plans to participate in state dispute-resolution programs.

But experts say relying on regulatory changes to fix surprise bills may also be a nonstarter in this political climate.

“I don’t foresee the administration taking a hard look at the limits of its powers under the ACA,” said Sara Rosenbaum, professor of health law and policy at George Washington University.

Look To The States

More than 20 states have laws protecting consumers to some degree from surprise bills from out-of-network emergency providers or in-network hospitals if they’re covered by a state-regulated insurance policy, according to an analysis by Georgetown researchers published by the Commonwealth Fund.

State laws vary. Texas, for example, requires that consumers in HMO plans be held harmless from balance billing in out-of-network emergency and in-network situations, but consumers in PPO plans can be balance-billed.

New York’s law is more comprehensive, covering both types of plans and settings. New York protects consumers from liability for out-of-network emergency and other surprise bills, requires plans to disclose how they determine a reasonable provider payment and has a binding independent dispute-resolution process.

These laws typically don’t apply to self-funded plans, however. But that could change. A New Jersey law that went into effect last month allows self-funded plans to opt in to the state’s balance billing dispute-resolution process. If a federally regulated plan decides to participate in the state program, doctors, hospitals and labs would be prohibited from balance-billing those consumers, and any disputes will be handled through a binding arbitration process.

For self-funded employers, especially those who choose to pay their employees’ surprise bills, “this provides for a more formal structure and some relief,” said Wardell Sanders, president of the New Jersey Association of Health Plans.

There are other possibilities for addressing surprise bills at the state level, policy experts say. While states can’t regulate self-funded health plans, they do regulate doctors and hospitals and other providers.

States could simply cap the amount that providers can charge for out-of-network care, for example, or prohibit practitioners like radiologists and pathologists, who don’t deal directly with patients, from billing them for services, said Adler.

“As long as providers can charge whatever they please, the problem won’t go away,” said Adler.

Will The Courts Weigh In?

These billing disputes rarely end up in court, mainly because attorneys are hesitant to take them since there are no guaranteed attorney’s fees.

A recent Colorado case was a rare success for a patient. A jury in June sided with Lisa French, a clerk at a trucking company, who was stunned by a $229,000 balance bill for spinal fusion surgery. Saying the charges were unreasonable, the jury knocked down her share of that bill to just $766.74.

The hospital was paid nearly $75,000 by her health coverage, an amount her insurer felt built in a fair profit margin, but the hospital claimed fell short.

That raises the question at the heart of many disputes over balance billing: What is a fair price?

Hospitals argue they should get whatever amount they set as charges on their master list of prices. Attorneys for patients, however, argue that a fair price should be closer to those discounted rates hospitals accept in their contracts with insurers.

Hospitals generally refuse to disclose those discounted rates, leaving patients fighting surprise bills little information about what other people pay.

Several recent court cases — including state Supreme Court rulings in Georgia and Texas — required hospitals to provide those discounted rates, although the rulings did not say those discounted prices are ultimately what patients would owe.

Proposed site-neutral payment policy sets the stage for battle royale between CMS, hospitals

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Source: Modern Healthcare

As the CMS charts a path to level pay for outpatient services, it’s also leading toward a head-to-head battle with powerful hospital lobbying groups as some providers win and lose with site-neutral payments.

If the agency’s 2019 proposal to pay the same rate for services delivered at off-campus hospital outpatient departments and independent doctors’ offices is finalized, the CMS said it would save Medicare $610 million and patients about $150 million via lower co-payments. That represents about 1% of the around $75 billion hospitals receive a year from the CMS for outpatient services.

But hospitals argue that their higher reimbursement rates are needed to pay for expensive overhead costs. Without that payment flow, they contend, many hospitals would likely close as their margins thin. Providers also changed their business strategies with the current rate system in mind.

This is a continuation of the CMS’ aim to reduce payment disparities for virtually identical procedures, said Fred Bentley, a vice president at Avalere Health.

Hospital executives have seen this coming, but that doesn’t mean they won’t put up a big fight, he said.

“There has been a recognition that this disparity was not justified and that it was a matter of time until this gap would be addressed,” Bentley said. “The CMS is starting to come to terms with the task at hand in terms of keeping Medicare solvent. Admittedly, they are going against a powerful lobby.”

The CMS estimates that it was paying $75 to $85 more for the same services in hospital outpatient settings versus physician offices. Patients footed about 20% of that.

“This has a very real human impact, and it is part of the story,” said Dr. Farzad Mostashari, CEO and founder of Aledade, which helps establish physician-led ACOs. “The phenomenon of surprise billing doesn’t conform with reasonable consumer expectations.”

The CMS outlined some winners and losers among health systems if the rule is finalized. Cleveland Clinic would take the biggest hit, losing $22 million of reimbursement for outpatient services from 2018 to 2019. Mayo Clinic would receive $11.3 million less, Eisenhower Medical Center would take an $8 million hit and the University of Michigan Health System, the University of Wisconsin Hospitals & Clinics Authority and the University of Virginia Medical Center would each receive about $7 million less.

On the other hand, Cedars-Sinai Medical Center stands to receive $7.7 million more from the CMS under the proposed rule. Hartford Hospital would get a $7.6 million bump, Ronald Reagan UCLA Medical Center would receive $6.6 million more, and St. Francis Hospital and Medical Center and Lehigh Valley Hospital would each receive about an additional $4.5 million.

Large physician groups also stand to benefit if they are reimbursed at the same level as hospital-employed physicians, Bentley said.

The agency also proposes freezing higher payments for “grandfathered” outpatient sites. In 2016, the CMS passed a site-neutral rule that paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015.

Health systems responded by hiring physicians and placing them in the grandfathered facilities to capture higher reimbursement. Now, the CMS aims to limit how off-campus facilities that were billing Medicare before November 2015 can expand their clinical services.

“There are issues about whether Medicare inpatient payment rates are just getting to be too low with the years of subtractions,” said Paul Ginsburg, director of the Center for Health Policy at the Brookings Institution and director of public policy at the USC Schaeffer Center for Health Policy and Economics. “I am not saying hospitals are OK, but I think they would be much better off to pay hospitals appropriate amounts and avoid this real impediment to a competitive physician market.”

The CMS pays more for the same type of service delivered in a hospital outpatient department setting versus a physician’s office. The agency has been looking to change this dynamic for years, in part because clinic visits are the most common service billed under the outpatient pay rule.

The different payment rates were initially set to account for hospital’s higher overhead costs, since they must maintain emergency services and invest in unique, expensive equipment.

Yet, over time, that premise became distorted, critics of the payment disparities argued. Health systems bought more physicians and physician groups to take advantage of the higher reimbursement rates, which were still doled out even if the hospital-owned clinic didn’t look or operate any differently than a community-based doctor’s office.

“When hospitals started hiring all kinds of physicians who typically practiced in the community, and often did not move their office, it’s clear that that rationale did not apply,” Ginsburg said.

Outpatient care has come a long way since the site-of-service rules were implemented, said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University.

“Even with hospitals’ overhead costs, if they can’t do the same care as cheaply as a physician office, why should patients and the American taxpayers pay more than they need to?” Gaynor asked.

Additional facility fees are paid for a wide range of physician services that do not draw on specialized hospital overhead and are commonly provided outside of hospitals, Ginsburg, Gaynor and Mostashari pointed out in a 2017 white paper. As hospitals bought more physicians, they could also negotiate higher rates with payers.

Higher payment rates give hospitals an extra cushion to pay physicians more, which accelerates the decline of the independent practice and reduces competition, according to the paper.

Medicare’s payments shot up while beneficiaries received surprise bills for separate hospital fees.

Also, hospital-owned practices have incentives to refer patients within their network, even if it isn’t the most effective option, ultimately harming competition, Ginsburg said.

“It also undermines some of the efforts to get physician-led alternative payment arrangements such as accountable care organizations or bundled payments if there are so few independent physicians left in the market,” he said.

Also, if a hospital-owned outpatient department has inflated costs, that could hurt them on value-based arrangements like ACOs, bundled payments, reference pricing and narrow-network plans, Mostashari said.

“I am sure the hospitals will not see this as a great gift, but I would argue that as they are truly thinking of embracing the future, this will be a short-term hit that will yield long-term benefits,” he said.

The CMS also wants to expand last year’s cuts to 340B drug discountsgiven to outpatient facilities that care for a disproportionate share of low-income patients. If that proposal is finalized, the CMS estimates that Medicare and its beneficiaries would save approximately $48.5 million.

With the changes to outpatient payment rules and 340B, it could make physician practices a less attractive acquisition target. But there are still incentives to those deals, said Matt Fiedler, a fellow at the USC-Brookings Schaeffer Initiative on Health Policy.

“This is a useful step in the right direction,” he said. “But I think this proposal is only getting at a portion of the broader site-of-service payment differential problems. There are many other on-campus outpatient departments that are very similar to physician offices.”

The proposed rule didn’t address payment discrepancies related to on-campus outpatient facilities, ambulatory surgery centers, or non-clinic visits at pre-existing off-campus facilities.

The CMS indicated in its comments section that it could be interested in expanding the site-neutral policy.

“There are reasons to believe that hospital ownership of a physician practice is a less efficient way of organizing care than through independent practices,” Fiedler said. “I don’t think we should view an aggressive site-neutral payment plan as a silver bullet to consolidation, but it’s not going to hurt.”

Many rural hospitals and academic medical centers have survived through higher payment rates, experts argue.

Outside of facility fees, rural providers have reaped significant revenue through laboratory services, a practice that has drawn lawsuits and congressional inquiry.

Rural hospitals can bill Medicare for lab tests performed on patients from other facilities and by outside labs. This has helped them stay afloat because insurers pay rural hospitals much more for the tests than they would for large labs like Quest Diagnostics or LabCorp.

“It does raise the question—if there are more direct or rational ways to subsidize rural facilities or others getting hammered by this rule as opposed to using the disparity in payment models as an indirect way to subsidize health systems,” Bentley asked.

America’s Essential Hospitals, which represents safety-net providers, said the “draconian” cuts would limit healthcare access for millions of Americans.

“The CMS frames its proposals as empowering patients and providing more affordable choices and options,” Dr. Bruce Siegel, president and CEO of the trade group, said in a statement. “But we believe these proposals only would create roadblocks to care in communities across the country—communities that already struggle with care shortages and severe economic and social challenges.”

The additional cuts to 340B payments coupled with the site-neutral payment proposal would drain already stretched providers, Siegel said.

Premier, the group purchasing and consulting organization, shared America’s Essential Hospitals’ concern, arguing that provider-based outpatient services support an overall reduction in healthcare spending and improve care coordination and quality.

“The CMS’ proposal fails to recognize the substantial differences between physician practices and provider-based outpatient clinics that translate into higher overhead expenses for provider-based outpatient clinics,” Blair Childs, senior vice president of public affairs for Premier, said in a statement.

Hospitals adapted their operations based on the expectation they would receive higher reimbursement rates, and abruptly changing that dynamic isn’t fair, said Paul Hughes-Cromwick, co-director of sustainable health spending strategies at Altarum.

The CMS indicated that its legal argument lies in Section 4523 of the Balanced Budget Act of 1997, requiring a limit on unnecessary increases in the volume of covered outpatient services.

Considering the significant increase in outpatient versus inpatient costs, it may have a case, Mostashari said.

The Trump administration also proposed another change that didn’t sit well with providers—that they must share patient information when they are discharged as a condition to participate in Medicare.

Mostashari gave credit to the current administration for taking site-neutral payment, and other controversial measures, head on.

“The conventional wisdom is that the hospital lobby is too powerful, but this administration may turn that on its head,” he said.

Work in Health Care? Keep An Eye On These Five California Bills That Could Become Law

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Source: Sacramento Bee

Among the hundreds of bills on the Legislature’s agenda for August are ones that would make key changes in the lives of California health care workers. Here are five to watch.

Guaranteeing enough nurses are on the job

Backed by nurses’ unions and other health care worker labor organizations, Senate Bill 1288 would require the state Department of Public Health to conduct unannounced inspections of hospitals to make sure they are complying with minimum nurse-patient ratios.

The bill, introduced by Sen. Connie Leyva, D-Chino, sets progressive fines for each violation. It is opposed by the California Hospital Association and the Association of California Healthcare Districts. The bill passed the Senate in late May and is in the Assembly Appropriations Committee.

More duties for paramedics

Senate Bill 944 allows cities to expand paramedic services under supervision from health care workers.

Firefighter paramedics could perform services such as home visits, tuberculosis therapy and transportation to mental health or sobering centers rather than to emergency rooms. Opponents of the bill, mainly nurses’ and doctors’ groups, argue that while paramedics are trained in pre-hospital care, they don’t have enough training to perform the medical exams typically performed in hospitals.

The bill, introduced by Sen. Bob Hertzberg, D-Los Angeles, is sponsored by the the California Professional Firefighters and has additional support from the American Civil Liberties Union and other firefighting groups. The Senate passed the bill late last May. It is currently awaiting action in the Assembly Committee on Appropriations.

Rules for dialysis patients

A federal lawsuit last year accused dialysis provider DaVita of directing low-income patients to apply for commercial insurance plans over Medicare or Medi-Cal to maximize profits.

Senate Bill 1156, introduced by Sen. Connie Leyva, D-Chino, would limit reimbursement rates for financially interested groups that help low-income patients pay for health care premiums.

The bill is backed by insurance companies and health care unions. It is opposed by dialysis and patient advocacy groups, who said they fear that directing recipients to use Medi-Cal or Medicaid may not provide the best coverage for individual patients and that it could force underfunded clinics to close. Under SB 1156, these financially interested groups would have to disclose their financial relationships with health care providers and help patients solely based on financial need. The bill is now in the Assembly Committee on Appropriations.

The right to know, the necessity to disclose

Senate Bill 1448, introduced by Sen. Jerry Hill, D-San Mateo, requires doctors on probation for egregious reasons to inform their patients.

Physicians and surgeons disciplined for sexual misconduct, drug abuse, criminal conviction and inappropriate prescribing that can harm patients must ask patients to sign a form that lists details about the doctor’s probation and provides information on how to find out more.

It has support from consumer and public interest organizations. Two of Sen. Hill’s bills about patient disclosure failed in previous years due to intense lobbying form physicians’ associations. The bill still faces heavy opposition from the California Medical Association, which argues the bill essentially suspends a physician without due process. It is currently in the Assembly Committee on Appropriations.

New work for medical lab techs?

About half of clinical laboratory scientists are expected to retire this decade, leaving a shortage of people who are cleared to perform their work.

Assembly Bill 2281, introduced by Assemblywoman Jacqui Irwin, D-Thousand Oaks, would let medical laboratory technicians perform procedures currently handled by clinical laboratory scientists, who have more training, such as certain blood tests and urine analysis.

The bill is supported by hospital groups and insurance companies, who argue that it would let a declining population of clinical laboratory scientists focus on tests of higher complexity. Opponents include labor organizations, who contend that the plan would let hospitals choose a cheaper option without considering patient health risks. The bill is currently in the Senate Committee on Appropriations.

Doctors, Nurses and Insurers Are Spending Big To Determine How You’ll Get Your Health Care

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Source: Sacramento Bee

Insurers, doctors and nurses are spending millions on lobbying and donations to lawmakers’ campaigns in the current legislative session, battling over costly large-scale changes as they await Gov. Jerry Brown’s successor.

Major health industry groups have spent more than $18 million on lobbying, according to an analysis by The Sacramento Bee, in an effort to kill or water down bills proposed to rein in rising health care costs and impose new regulatory requirements for insurers and health plans.

The spending, similar to levels in the prior legislative session, foreshadows a costly and thorny political debate in the years ahead. Democrats are seeking to protect coverage gains made under Obamacare, expand access to care for the low-income and undocumented, lower premium costs and blunt broader changes to the health care landscape pushed by the Trump administration that they see as a threat to their long-term goal of universal coverage.

Brown has resisted spending the money it would take to implement the changes. Assembly Democrats proposed 16 major health care bills after the leader of the Assembly shelved a bill out of the Senate that sought to create the nation’s first single-payer health care system, leading to a bruising political fight among lawmakers and health care groups. The budget Brown signed this month doesn’t include funding for the most far-reaching, high-dollar ideas.

But their agenda sets the stage for another push under a new governor, one aimed at undertaking major reductions in the overall cost of health care, imposing industry price controls, creating new government subsidies, improving the affordability of coverage and expanding access to those currently uninsured.

Lt. Gov. Gavin Newsom, the frontrunner in the governor’s race, has teed up his own prescription for what he sees as today’s most pressing problem in health care: rising costs. He has called for a new system that covers everyone regardless of immigration status or ability to pay, and for the state to begin analyzing whether a single-payer system would work to lower costs in the nation’s largest state.

“These are the makings of a big health care debate in Sacramento next year, with groups lined up on all sides of these issues, and a likely new governor who has taken a very public position,” said Larry Levitt, senior vice president of the Kaiser Family Foundation, a nonprofit health research organization not affiliated with Kaiser Permanente.

Should Newsom win, as polling suggests is likely in the heavily Democratic state, he will also contend with these forces. He has endorsements from the California Nurses Association and the California Medical Association, often on warring sides of the health care debate.

“In the last couple years, there’s been a lot of talk about dramatically remaking the health care system in California, so it certainly won’t be a surprise to see industry groups ramping up their advocacy and lobbying efforts,” Levitt said. “These are very big and powerful industries, including hospitals and providers and drug manufacturers and insurance companies.”

The six Democrats who this year put forward major proposals out of the Assembly have accepted sizable, and in some cases maxed-out, campaign contributions from health care industry groups opposed to major changes, according to a campaign finance analysis by The Bee and MapLight, a nonprofit research organization that tracks money in politics.

Assemblyman Joaquin Arambula, D-Fresno, and Assemblyman Jim Wood, D-Healdsburg, who led efforts in the Assembly to craft an alternative to the single-payer bill, accepted the largest amount in campaign contributions from health insurers, doctor and hospital groups and the pharmaceutical industry.

Arambula has taken more than $48,000 into his 2018 campaign account through the end of June, and Wood has accepted $45,000, according to the analysis.

The four other lawmakers — Assemblywoman Autumn Burke, D-Marina Del Rey, Assemblyman Ash Kalra, D-San Jose, Assemblyman David Chiu, D-San Francisco, and Assemblywoman Laura Friedman, D-Glendale — accepted $32,900, $18,800, $18,500 and $9,600, respectively.

The practice is common, and is one measure of the industry’s effort to influence California politicians. Health care activists complained that their proposals were too conservative and piecemeal. The lawmakers said they weren’t swayed by the money.

In fact, all six lawmakers also accepted campaign contributions from the California Nurses Association, which has denounced anything short of a government-run, taxpayer-financed single-payer system as an ineffective, incremental approach.

The nurses association, the chief sponsor of the single-payer bill, also ratcheted up its lobbying spending this session, funneling $2.5 million into efforts to shape the debate, compared to roughly $485,000 in the last legislative session.

Anger over Assembly Speaker Anthony Rendon’s decision to shelve universal health care legislation in California boiled over into aggressive protests against the Democratic leader by the California Nurses Association.

Most of the proposals are still moving through committees, but supporters question whether there is the political appetite to advance them to the governor’s desk this year — especially those that would incur ongoing costs to the state. Many are expected to be held in appropriations committees due to cost concerns. Assembly Democrats sought $1 billion to pay for their highest priorities as part of this year’s budget.

“We recognize that this is more about having policies ready for a new governor rather than the current governor,” said Anthony Wright, executive director of Health Access California, a Sacramento-based health consumer advocacy group that backed the proposals. “Anything that costs money that wasn’t included in the budget is not likely to happen this year.”

Brown did agree to spend $65 million on two measures. One requires by 2020 the state to maintain a database tracking payments to health care providers for patient treatments and procedures. Another will develop a “road-map” to a future single-payer-type system in California. It calls for a plan giving the Legislature and governor options by October 2021 for moving California toward a “unified financing system for all Californians.”

The most influential and well-funded health industry groups, among 20 that spent money lobbying on the 16 bills, are the California Medical Association and the California Hospital Association. They spent $5.7 million, according to the latest filings.

Much of their energy was aimed at fighting Assembly Bill 3087, by Kalra, which sought to control rising health care costs by giving the state more power to regulate prices. It drew out in full force the lobbying muscle of the industry, which stands to gain from higher prices.

“There is incredible resistance among those in the health care industry to give government more control over their prices…They will fight government price controls tooth-and-nail,” Levitt said. “They’re looking to protect their profits.”

In an interview at the Capitol last month, Kalra said he proposed the bill because he didn’t think the other measures put forward after Assembly Speaker Anthony Rendon shelved the single-payer bill went far enough.

“It’s critically important that we do something about cost containment,” Kalra said. “This issue is not going anywhere. Costs aren’t going down, and those that have benefited from the rise in health care costs have to come to the table to be part of the conversation, so we can achieve a sustainable system.”

Janus Norman, chief lobbyist for the California Medical Association, said killing the bill was the association’s main objective this year. He said the bill would have done little to lower overall health care costs and posed a threat to the ability of California to attract medical professionals in a state already experiencing a physician shortage.

“It would have been devastating,” Norman said. “It was our No. 1 priority this year.”

Kalra said he’ll push forward and won’t be affected by campaign money he gets from groups opposed to cost controls. He called the industry groups’ opposition a “badge of honor.”

But he also acknowledged their ability to influence decision-making in Sacramento, calling them “very powerful and very influential.”

“If they don’t want to see something happen, it’s unlikely to happen,” Kalra said. “My message to them is if we don’t create a sustainable system, it’s not going to be good for them or for Californians.”

6 Themes Driving Healthcare Leaders to Change

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Source: Health Leaders Media

A report featuring candid conversations with 24 industry leaders from a variety of healthcare subsectors shows broad agreement on six themes that should drive healthcare convergence and an improvement of the patient experience.

To win, these subsectors must learn to collaborate, says the report. Authored by by privately held real estate firm Transwestern and IMEG, a design and consulting firm, the report features collected responses from a discussion among thought leaders at 24 healthcare-related organizations.

Some broad themes emerged from the discussion, including:

  • The growing use of technology to drive down costs: “Access to care being at fingertips or down the street is significant for healthcare. Telemedicine and its adoption will continue to push the boundaries of provider and patient; moreover, it will challenge the payment schemes in healthcare,” said Spencer Seals, director of construction facilities planning at Chicago’s Cook Children’s Medical Center.
  • An intense focus on patient-centered care: “Healthcare by 2020 will be forced to be more patient-centered with an emphasis on convenience,” said Amy Waer MD, vice dean of education and academic programs at the Texas A&M College of Medicine.
  • The importance of being nimble andtransparent“Healthcare in general is becoming more and more transparent and consumers are recognizing that they have a choice. The issue is making sure consumers can make an informed choice,” says Seals.
  • The solidification of the value-based healthcare model: “Value-based care is here to stay…As we see more large-scale vertical integration, we’ll see employers, insurers, and governmental agencies demanding cost and quality outcomes, and at scale,” said Ryan Walsh, MD, chief medical information officer at the University of Texas Health Sciences Center at Houston.
  • The rise of personalized medicine, outpatient care and home healthcare: “Customers are looking for personalized support and optimal results. They expect access, convenience, and connection that companies like Amazon, Apple, CVS and others provide,” said Wayne Baswell of Robins & Morton, a construction and engineering company.
  • The significance of generational differences: “Millennials and Gen Xers expect comprehensive management of health; quantified, self-developed data; transparent understanding of the data and what to do with it; answers anytime, anywhere, etc. Personally, as a Gen Xer with children, my complaint is that these things are not happening fast enough in healthcare,” said Abigail Clary, principal and director of the health practice at CannonDesign.


CMS: Doctors, Hospitals Received $8.4B in Payments From Drug Companies Last Year

Source: Fierce Healthcare

Doctors and teaching hospitals received $8.4 billion in payments from drug companies in 2017, according to the latest Open Payments data released by the Centers for Medicare & Medicaid Services.

Under the Sunshine Act, CMS is required to publish financial interactions between manufacturers of drugs, devices, biologicals and medical supplies and individual physicians and teaching hospitals.

The 2017 payments included nearly $4.7 billion in research related payments, $2.82 billion in non-research-related payments and more than $927 million representing ownership or investment interests held by physicians or their immediate family members, according to CMS data.

According to the latest data, 628,000 physicians received $79.1 million in research-related payments and nearly $2.1 billion in general payments in 2017.

More than 1,100 teaching hospitals received payments from drug companies including $1 billion in research payments and $751.2 million in non-research payments.

Of course, the release of the data has raised the ire of physicians groups who have questioned the quality of the data released as well as lack of context around what the payments mean. Indeed, 258 of the research-related payments and 758 of the non-research-related payments have been disputed.


California Lawmakers Want To Crack Down On Fraud At Drug Rehab Centers. Will It Work?

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Source: Capital Public Radio

Some lawmakers are aiming to cut down on corruption at addiction-recovery facilities by changing the way insurance companies reimburse providers.

There are a whole host of problems with the drug rehab industry, according to a major investigation by the Southern California News Group: No degree, medical or otherwise, is required to get a facility license; and some centers are administering subpar, and even unnecessary, care and then billing insurance companies for it in the hopes of earning high reimbursements.

That sort of profit-reaping — often called patient-brokering — usually starts with a facility representative drawing patients into the program, sometimes enticing them with money. Then, the facility enrolls the patient in a health plan in hopes of billing the insurance company for services and getting paid back.

The centers often keep patients addicted so they can keep administering services, said Mick Meagher, an independent California attorney who specializes in consumer protection. When the patient has exhausted the plan’s addiction-treatment benefit, the facility kicks the patient out and stops paying their premium.

“The abuse is so obscene, it’s mind-boggling,” Meagher said.

He noted that commercial insurance reimburses at higher rates than public plans, which is why the centers enroll addicts in private plans. “[Medi-Cal] isn’t gonna pay for a private treatment center. So the motivation is to move them onto a private plan,” he said.

Representatives from the substance-abuse industry did not respond to requests for comment.

The Department of Health Care Services, the licensing body for 24-hour residential centers for people recovering from drug and alcohol addiction, said they’re aware of the problem.

Spokesperson Carol Sloan wrote in an email that they’ve received complaints about allegations of patient-brokering. “Since the majority of licensed Substance Use Disorder programs do not receive payments from Medi-Cal, DHCS’ authority to monitor their billing and payments is limited,” she said.

A new bill from Democratic state Sen. Connie Leyva aims to make this scheme a little harder. Senate Bill 1156, which will be heard by the Assembly Health Committee on Tuesday, would require businesses to continue paying premiums for these patients for a full plan year, regardless of whether they’re still receiving treatment at the facility.

And businesses would need to tell insurance plans and DHCS that they are paying for patients’ premiums. They would also need to disclose whether or not those patients are eligible for Medi-Cal or Medi-Care.

If the patient does qualify for a public plan, the provider would be reimbursed at Medicare rates, rather than commercial ones.

“These providers have a right to make a profit, but not when those financial interests can hurt patients or even keep them from receiving the care they need,” Leyva said.

The lawmaker noted that this has become more common since the Affordable Care Act welcomed patients with pre-existing conditions into the market. It happens most often in substance abuse treatment facilities — which have been in high demand during the opioid crisis — and at dialysis centers.

Some patient advocate groups oppose the bill, citing concerns that kidney disease patients will be bumped off their plans and receive lower quality care. The American Kidney Fund wrote in a letter to Leyva that insurance companies are not acting in the best interest of the patients.

“They have a financial incentive to remove sicker and more costly patients from their plans,” the letter states. “We believe that a patient receiving premium assistance should be able to afford a plan that best fits their medical needs and should not be forcibly steered from that plan by insurers looking to save money.”

Staff from Leyva’s office said the bill would only change the rate at which the provider gets reimbursed, and should not affect the patient’s medical care. They also said the bill doesn’t block organizations from paying patient premiums.

It’s just one of a slew of bills addressing fraud in the substance abuse industry. Another would require more background checks on rehab owners and workers, one would make it harder for new treatment centers to get licensed.

Meagher, the attorney, doubts any of them will make a dent. “They’re well intended, but I think they miss the mark,” he said. “The criminals in this world will have no problems figuring this one out.”

If Leyva’s bill passes the committee on Tuesday, it heads to the Assembly appropriations committee.

The Doctor Will See You Now – Online. Virtual House Calls Offered Widely In Sacramento Region

Image result for The Doctor Will See You Now – Online. Virtual House Calls Offered Widely In Sacramento Region images

Source: Sacramento Bee

House calls are making a comeback, with a virtual twist: Three of the Sacramento region’s four major health providers – Kaiser Permanente, UC Davis Health and now Sutter Health – offer video visits with primary care providers.

Dignity Health, the region’s fourth major provider, is exploring these services.

Telemedicine began as a way to get specialists to patients in remote areas almost instantaneously. The technology has been adopted rapidly, and now, primary care providers can be consulted by phone for about one-third of the cost of an office visit.

There is a $40 flat rate for a video visit through UC Davis Health and a $49 flat rate for a video visit through Sutter. By comparison, a standard office visit at Sutter costs a flat rate of $129 out of pocket, with most major insurance plans accepted for the service.

Sutter patients will be charged the same co-pay for a regular office visit, but insurance is not accepted for the service at UCD Health. At Kaiser, the majority of members are not charged for video visits. Based on their coverage, some Kaiser members have a co-pay.

“The benefit of a video visit is its convenience for those common … illnesses such as a cold, flu, pinkeye, rash or sore throat, especially after hours or on weekends when regular clinics are closed and there’s no apparent need for an emergency room visit,” explained UCD Health spokesman Charles Casey.

That means video visits are largely used to consult on minor or common illnesses or injuries such as rashes, bug bites, eye problems and allergies. Patients access these virtual services through their computers or mobile device, similar to a Skype or FaceTime session.

A virtual provider might ask a patient whether they have checked their temperature, Casey said, but otherwise vitals are not checked through traditional means.

“If actual vital signs are required … the virtual clinic provider will escalate the case and refer the patient to either their primary care provider, urgent care, or the emergency department of a nearby hospital,” he said. “And if the case is because the symptoms were concerning, the virtual clinic visit fee could be waived since the visit was abbreviated for patient safety reasons.”

Sutter, which launched its video house calls in March, already has exceeded the targets it expected to reach over the last few months, said Dr. Veena Jones, the medical director for digital patient experience and a pediatrician at Sutter. The health care companies all strive to provide same-day service for patients seeking video visits, typically staffing the service with the same nurse practitioners and physician assistants who work in walk-in clinics.

Why the move to virtual visits? Health care companies are seeing a growing number of people who are not only willing but demanding to consult medical professionals online. For Kaiser, online visits have begun to surpass in-person visits in recent years, according to its national statistics. In 2017, 59 percent of all provider-patient encounters were virtual. Over the past year, there was an 18 percent increase in visits to and a 17 percent increase in prescriptions filled online.

Mei Kwong advocates for policies that expand and improve telehealth services as executive director of the Center for Connected Health Policy. She said patients don’t have to pay for things like parking if they’re doing a home visit or additional fuel costs if they’re consulting from a rural hospital. Certainly, she said, providers have to make an initial investment in equipment.

Plus, patients are taking less time from work, Kwong said, and they are likely to see a provider sooner than if they waited for a face-to-face appointment, meaning they are diagnosed earlier and can be served by less-costly treatments.

Telehealth services already have been shown to save lives at one of the region’s leading health care providers: Kaiser Permanente restructured its emergency room to ensure a telestroke neurologist was available around the clock at all 21 of its Northern California stroke centers. Because of this redesign, emergency personnel were able to administer the life-saving medication alteplase in nearly half the 60-minute time period recommended by the American Stroke Association, according to a study from the medical journal Stroke.

“Researchers found that Kaiser Permanente Northern California care teams are administering alteplase to stroke sufferers with an average ‘door-to-needle’ time of just 34 minutes,” according to Kaiser Permanente spokesman Edwin Garcia. “These impressive figures are no small feat considering the challenges of pulling together a closely coordinated team of neurologists, physicians, nurses, radiologists and rehabilitation therapists, all in the span of minutes.”

At the heart of advancements in virtual care technology is increased access, especially for residents in rural communities. A Yuba City resident who is able to connect with a Sacramento specialist while still in Yuba City through a virtual visit may need a blood transfusion. Instead of having that service done during their visit to Sacramento, the resident can go to a local clinic.

“You’re keeping that money in your community,” Kwong said.

In October 2017, when fires were rampant in Ukiah, Adventist Health employees were present to provide on-site help. When it became impossible to enter and leave the area, the health group used virtual care technologies to connect with residents and continue to offer mental health services.

Through the use of these services, Adventist Health has improved access to care for patients, said Cynthia Scheideman-Miller, the director of virtual care at Adventist Health System West.

“We’ve had people who’ve waited two years to see a rheumatologist, and we can get them in two weeks,” she said. “Yes, there’s dollars saved by the patients, but it’s more than that.”

For the past 10 years, health specialists at Dignity Health have been using mobile, remote presence robots that allow over 23 sites access to subspecialties that might not otherwise be available. At the hospital in Merced, for example, there are no inpatient neurology services, but Dr. Lucian Maidan, a neuro-endovascular surgeon at the Mercy San Juan Medical Center, said that through teleneurology services, the Merced location has gained access to neurological care.

“By evaluating patients right away, even if we don’t fly them in, …. we help them to guide the patient to the best specialist,” Maidan said.

There are 17 neurologists in Maidan’s group and he takes six shifts each month providing teleneurology services, which are offered 24/7. This specialized technology allows Dignity Health facilities “access to specialists in areas such as neurology, cardiology, neonatology, pediatrics and mental health,” according to the Dignity Health website.

“These mobile videoconferencing machines move on wheels and typically stand about 5 feet, with a large screen that projects a doctor’s face,” the website states. “They feature cameras, microphones and speakers that allow physicians and patients to see and talk to each other.”

Providers using virtual care to communicate with patients can control their designated robot’s movements and can do so outside of work, as long as they have a secure internet connection.

In addition to the video visit services that UC Davis Health provides for non-emergency situations, similar services are also used for follow-ups with patients post-surgery. Dr. Mark Avdalovic, a professor of clinical medicine who works in pulmonary, clinical care and sleep medicine for UC Davis Health, said telehealth technologies have resulted in improved access to specialists and greater convenience for patients.

Avdalovic specifically mentioned the benefit to patients who come to UC Davis as a destination health facility, who may have traveled from upward of three or four hours away, who can communicate with their provider online instead of traveling back to the Sacramento facility. On top of improved access, because follow-up visits are bundled into the cost of the procedure, there is no additional cost to use the virtual service.

Avdalovic said he has seen the value of the service for local patients as well. At work, for example, instead of taking the time to leave the office for a simple medical question, patients can instead take 15-20 minutes and have an appointment in the privacy of their offices.

As telehealth services become more of the norm, health care providers are adjusting to providing care through a screen. And, likewise, patients are adjusting to receiving care virtually. Even though nurses at Dignity Health prepare patients for the experience of communicating with their doctor through a moving screen, Maidan said, some patients start laughing once they see a specialist’s projected face.

Where Do Premium Dollars Go? Mainly to Drugs and Doctors.

Image result for images Where Do Premium Dollars Go? Mainly to Drugs and Doctors.

Source: Fierce Healthcare

Prescription drugs make up nearly a quarter of health insurance premium costs, with doctor visits not far behind, according to new research.

report (PDF) released on Tuesday by America’s Health Insurance Plans (AHIP) found that a hefty 23.3% of premium spending goes towards prescription drugs, an amount that even astonished researchers.

“What’s quite surprising is that the prescription drug piece has really started to separate from the rest of the healthcare expenditures,” Craig Burns, vice president at AHIP’s Center for Policy and Research, told FierceHealthcare.

The issue of ever-increasing drug prices has been in the national spotlight for some time, and it’s currently a major target of the Trump administration, which is seeking to control spending at the insurer and pharmacy benefit manager level.

The study also found that about 22.2% of premium dollars go to physicians and doctors. An additional 20.2% goes towards other office or clinic costs, including nurses’ salaries and equipment and supplies, while hospital stays make up 16.1%.

The research was conducted using data between 2014 and 2016 from five for-profit and 25 nonprofit insurer plans, which Burns said is representative of the sector as a whole.

A separate report by Altarum pointed to hospital spending and drugs as some of the main drivers of healthcare price growth, which is currently at a record high 2.2% compared to last year.

Comparing service costs between private premiums and Medicaid and Medicare is apples to oranges due to differences in billing and how spending is classified. However, it appears government payers score significantly better on operating costs.

Operating costs and taxes make up 15.9% of premium costs, the AHIP research found. Meanwhile, MACPAC has pinned operational spending under Medicaid to less than a third that, at about 5%.

Insurance Commissioner Candidate Statements

Source: Voters Guide CA Gov

Editor’s Comment: Senator Richard Lara, Democrat, is also on the ballot but did not submit a Candidate Statement for the Official Voter Information Guide. Lara is the author of SB 562, the Single Payer bill.

Steve Poizner


From 2007–2011, I served as the California Insurance Commissioner, and am seeking your support for a 2nd term of public service. My Background: I have a proven track record of success in the private sector starting and leading pioneering technology companies for over 35 years in California (e.g. my company SnapTrack invented GPS for mobile phones), and now as the founder of a nonprofit focused on expanding the innovation economy in Southern California. Why run for another term now? Californians face urgent issues: under-insured homeowners exposed to an increasing number of wildfires and floods, ongoing premium increases in health insurance markets, and the growing economic threat of cyber-crime. My record as Insurance Commissioner: We saved drivers and homeowners almost $2 billion in lower insurance rates; recovered $30 million for wildfire victims who were shortchanged by insurance companies; saved taxpayers $17 million by permanently cutting 13% of the budget (that’s a first and without layoffs!); arrested over 2500 people for insurance fraud (a record!); and restored insurance for thousands of innocent consumers after health insurance companies illegally canceled policies. Why I am running as an Independent: The California Insurance Commissioner is a regulator requiring fierce independence from insurance companies and partisan party politics. I pledge to press the Legislature to make this office officially non-partisan, and I will refuse insurance industry contributions to my campaign like I did during my first term. For a report card of my first term in office by the San Jose Mercury News, please see:


Nathalie Hrizi

Nathalie Hrizi | PEACE AND FREEDOM

Healthcare is a right! Abolish health insurance companies. State must create non-profit provider for all required insurance. Vote Hrizi 2018!


Asif Mahmood

Asif Mahmood | DEMOCRATIC

I’ve based my life’s work on a single principle taught to me by my parents: helping others is our highest calling. That’s why I became a doctor, and why I’m running for Insurance Commissioner. I was born and raised in rural Pakistan, where I attended a school that didn’t have a roof let alone chairs or desks. With my teachers’ help, I was the first person in my town to earn the grades to attend medical school and move to the United States. Now as a doctor of internal medicine, I’ve seen my patients’ struggles—ranging from insurance coverage issues, prescription drug issues, in- and out-of-network issues, follow-up issues, and support beyond medical care. I’m proud to say I’ve never asked for reimbursement from any patient who didn’t have insurance. Because of my years of experience, I’m the best person to serve Californians as Insurance Commissioner. In fact, I’ll be the first doctor to ever hold the seat. My first priority will be fixing the state of health insurance. I’ll take on Pharmaceutical companies that are putting profits before people and support Medicare for All. That’s why I refuse to take contributions from insurance companies or pharmaceuticals—because Californians are my constituents, not Big Pharma. As a Muslim immigrant from the state of California—I’m a triple threat to Donald Trump. I’ll be the first Muslim ever elected to statewide office in the country. Let’s send a clear message—it’s time to get tough on hate.

Last Updated 09/12/2018

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