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Medicare Catheter Scam Sparks Calls for Reform

By ISSAC SMITH

According to a recent report in the Washington Post, a $3 billion scam involving urinary catheters has brought to light serious flaws in Medicare, prompting strong calls for reform. Apparently, several companies have been accused of gaming the system by submitting fraudulent bills for millions of catheters using patient and doctor information. This isn’t the first time Medicare has faced such challenges; fraudsters often target the system, especially in cases involving unnecessary medical equipment. With a budget nearing $1 trillion, the agency has faced significant challenges in tackling fraudulent claims for durable medical equipment. Leaders at CMS have appealed to Congress for more resources to strengthen their efforts against potential scammers.

Healthcare providers and lawmakers are now pushing for tougher measures to crack down on these companies and improve fraud prevention efforts. The National Association of Accountable Care Organizations (ACOs) has praised CMS for taking steps to address suspicious billing practices related to catheters, underscoring the importance of policy changes to protect against future abuses.

“This is unlike anything we have seen before in terms of its size and scope,” said Clif Gaus from the National Association of Accountable Care Organizations, which played a crucial role in uncovering and drawing attention to the alleged fraud.

Several accountable care organizations (groups of hospitals and doctors) said they could each lose more than $1 million if the fraudulent billing issue isn’t fixed.

In a proposed rule released on Friday, CMS stated that an investigation is currently underway, and that initial steps have been taken in response.

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Matthew’s health care tidbits: Medicare Advantage is now a provider fracking contest

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Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Yes it’s time to talk Medicare Advantage (MA). It’s been a huge couple of weeks for the world of MA. On the commercial side, CVS bought the biggest pure play MA provider, Oak Street Health for $10bn. This pissed me off as if they paid $2 a share more I’d have made a profit on the stock I foolishly bought “on a dip” in 2021.

But this amazed many of us on THCB Gang, as they paid a huge premium and it works out to some $60k per patient. Now health care organizations have been overpaying for patient “lives” as long as I can remember–going at least as far back as Aetna nearly going out of business when it bought US Healthcare in 1996. So why is today’s incarnation of Aetna buying providers?

Well that’s to do with the regulatory side of MA. I have been on record since the very first post of THCB that Medicare FFS is an inefficient and expensive program–even if 80% of American hospitals say they lose money on it and have to charge commercial insurers more to make up for it. But while it’s possible to agree with George Halvorson that MA delivers better care at a lower cost than FFS Medicare, it is simultaneously possible to believe that MA costs more than it should. That’s because of aggressive RAF upcoding that’s been built both into home visits from companies like Signify and also into the EMRs doctors have been using to code MA members’ health status.

There are lots of proposals on how to fix this–including this one from Chenmed on how to change MA from paying for inputs (i.e how sick people are when they join MA) to outputs (how much better they got while in MA). But it’s clear that CMS is now officially coming after upcoding including full cross plan audits back to 2018. Even if not back to 2011. The MA plans will grumble about those past audits and tie CMS up in court but they know going forward the game is up

To make more money in MA they need to get hold and shake loose or frack some of the 85% of the premium that goes to provider organizations. Hence they are all getting into bed with them or buying them outright. UHG, Humana & now Aetna/CVS have been buying physician groups that serve MA populations at a quickening rate, and their goal is to put more of the 50% of seniors already into MA into those groups.

Will this save any money?  Well probably not, at least not yet. Humana has been reporting on the costs in its full risk capitated MA groups versus its FFS ones for a couple of years, and the difference is a rounding error. But the point is that the next war in Medicare Advantage is going to be what happens inside these plan-owned medical groups. So expect a lot more scrutiny of both costs, outcomes and patient experience within MA focused medical groups starting about now. 

Medicare Advantage UpCoding Has Been Eliminated by CMS Effective 2022

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By GEORGE HALVORSON

Medicare Advantage now enrolls almost exactly half the people enrolled in Medicare — and has both significant fans and hardline opponents in the health care policy circles who disagree about its performance.

The biggest attack point that comes from the critics deals with the issues of coding accuracy by the plans. The payment model for the program is capitation — and that capitation is based on the average cost of fee-for-service Medicare in every county. The people who designed the model believed that the country should use the average cost of fee-for-service Medicare in every county as the baseline number and should have the plans paid less than that average Medicare cost going forward every year in their capitation cash flow.

Medicare fee-for-service has a strict and consistent payment level based on a list of approved Medicare services — and they add up the cost of those services in every county and let the plans bid a lower number than that fee for service Medicare cost, if the plans believe they can offer all of the basic benefits and possibly add more benefits and additional services for that amount.

The fee-for-service Medicare cash flow and costs in each county tend to be very stable over time, with a continuous and steady increase in the actual functional cost for taking care of those fee-for-service patients for each year that they receive care. That total cost of fee-for-service Medicare care is a visible and clear baseline number that we can use each year with confidence and knowledge that it is what we are spending now on those Medicare members in the counties.

The direct capitation amount that is then paid to each of the plans is based on the age, gender, health status, and diagnosis profile of the Medicare Advantage members who enroll in the plans. The plans have been reporting those patient profile numbers to the government through the Risk Adjustment Processing System (RAPS) over a couple of decades to set up their payment levels and to create the monthly cash flow for each plan.

That’s where the upcoding accusations relative to the plans arise.

The plans get paid more if the patients have more expensive diagnoses — so the plans have had a strong and direct incentive to make sure that every diabetic enrollee is recorded and reported as being diabetic for their RAPS filings.

They also have a strong incentive to be sure that every congestive heart failure patient has their diagnosis recorded in their RAPS report.

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We Should Channel People Into Medicare Advantage Plans Where They Won’t Have Amputations or Go Blind (Part 2)

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By GEORGE HALVORSON

Former Kaiser Permanente CEO George Halvorson has written on THCB on and off over the years, most notably with his proposal for Medicare Advantage for All post-COVID. He wrote a piece in Health Affairs last year arguing with the stance of Medicare Advantage of Don Berwick and Rick Gilfillan (Here’s their piece pt1, pt2). We also published his criticism (Part 1. Part 2. Part 3) of Medpac’s analysis of Medicare Advantage.  Now Medpac is meeting again and George is wondering why they don’t seem to care about diabetic foot amputations. We published part one last week. This is part two– Matthew Holt

We have more amputations and we have more people going blind in our fee for service Medicare program today because we buy care so badly and because we have no quality programs or care linkages for our chronically Ill patients and our low income people in that program.

We have far better care in our Medicare Advantage programs at multiple levels today, and we should be building on that better care for everyone.

The important and invisible truth is that we have major successes in providing better care to Medicare Advantage members across the entire spectrum of that package of care. The sad truth is that MedPac actually keeps those huge differences in care performance by the plans secret from the Congress and from the American public for no discernable or legitimate reason.

We have an epidemic of amputations that are causing almost a fifth of our fee for service diabetes patients who get foot ulcers to lose limbs. The number of patients in both standard Medicare Advantage and in the Medicare Advantage Special Needs Programs who undergo amputations and who have that functional and dysfunctional care failure is a tiny fraction of that number.

MedPac pretends the program does not exist. They did a lengthy study on the overall special needs dual eligible program for Medicare a year ago without mentioning the plans or describing any of the things that the plans to do make care better for those patients.

We know that in fee for service Medicare, 20% percent of diabetes patients routinely get ulcers and 20% of those ulcers to turn into amputations. There are far fewer amputations for Medicare Advantage plan members—and we have failed our overall Medicare population badly by not sharing that information more broadly at open enrollment time.

Medicare Advantage Five Star quality plans that have created a culture of quality improvement at many care sites. Those plans compete fiercely on quality goals and take pride in attaining and celebrating the highest scores.  We started with less than 10% of plans with the highest scores for the first enrollment periods. Now more than 90% of Medicare Advantage members are able to choose between four and five star plans.

The quality measurements that are missing from the set of consumer choices are the ones that relate to the most serious issues for the consumers—and that’s where MedPac should be putting the right set of information on the table to compare the two systems of care. Large amounts of data show that amputations caused by diabetes follow very predictable patterns.  

Roughly 33% of Medicare patients will have diabetes. 20% of diabetics will have ulcers. That number goes up to 30% for some patient groups—but you can count of at least 20% overall to have ulcers.  We know that the overarching pattern in fee for service Medicare is for 20% of those ulcers to end up needing and getting amputations.

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The Primary Cares Initiative: How Value-Based Payment Models Aim to Strengthen Primary Care

By CHRIS JAEGER MD, MBA

In April 2019, the Centers for Medicare & Medicaid Services (CMS) announced the Primary Cares Initiative, which is expected to reduce administrative burdens and improve patient care while decreasing health care costs. Learn more about the Primary Cares Initiative and its proposed value-based payment models in part one of this two-part blog series. 

Introduction

While the health care landscape has never been static, rarely has it seen such radical changes as it has within recent decades. The population of the United States continues to age, and the prevalence of chronic conditions such as obesity, diabetes, heart disease, and anxiety or depression contribute to a substantially increased demand for care. These factors are pushing a shift from a provider-centric model toward more efficient outcome-based models that put the patient at the center and heavily rely on primary care as the steward of patient care.

Primary care is a vital resource in dealing with the many factors altering the health care landscape. A 2019 study published in JAMA Internal Medicine found that for every 10 additional primary care physicians (PCPs) per 100,000 people, patients saw a 51.5-day increased life expectancy.

To promote further adoption of primary care-based models, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) recently announced a set of payment models meant to further transform primary care through value-based options under the new Primary Cares Initiative. This voluntary initiative will test financial risk and payment arrangements for primary care physicians (PCPs) based on performance and efficiency, including five new payment models under two paths: Primary Care First (PCF) and Direct Contracting (DC). These models, slated to hit 20 states in 2020, seek to address the many difficulties in paying for, and incentivizing, valuable primary care within current payment models.

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To Improve Patient Care, Think Both “Zebras” and Golf

By MICHAEL MILLENSON

Super Bowl Week ended with the San Francisco 49ers and 161 U.S. hospitals having something in common.

Both were publicly penalized, both lost money as a result and both passionately believed the process was unfair. Unfortunately, it’s not easy to decide whether their objections were sensible or sour grapes and, in the case of hospitals, the real-life consequences are not a game.

The penalty that pained the 49ers occurred shortly before halftime of Super Bowl LIV, when offensive pass interference was called on tight end George Kittle. The call negated a big gain that might have enabled the 49ers to take the lead.

Replays showed that the referees – nicknamed “zebras” for their black-and-white striped shirts – were technically correct in their decision. Nonetheless, controversy erupted over whether given other possible penalties called or overlooked, this one deserved a yellow flag.

Hospitals call that kind of context “risk adjustment.” A few days before the Super Bowl, the Medicare program blew the whistle on a group of hospitals having high rates of infection and other patient injuries. The hospitals who are outliers in what are blandly labeled “hospital-acquired conditions” (HACs) suffer a cut of one percent in their Medicare payments over next fiscal year.

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The good, the bad, and the hopeful in new interoperability plans from Washington

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Claudia Williams, Manifest MedEx, Amazon

By CLAUDIA WILLIAMS

Robust exchange of health information is absolutely critical to improving health care quality and lowering costs. In the last few months, government leaders at the US Department of Health and Human Services (HHS) have advanced ambitious policies to make interoperability a reality. Overall, this is a great thing. However, there are places where DC regulators need help from the frontlines to understand what will really work. 

As California’s largest nonprofit health data network, Manifest MedEx has submitted comments and met with policymakers several times over the last few months to discuss these policies. We’ve weighed in with Administrator Seema Verma and National Coordinator Dr. Don Rucker. We’ve shared the progress and concerns of our network of over 400 California health organizations including hospitals, health plans, nurses, physicians and public health teams. 

With the comment periods now closed, here’s a high-level look at what lies ahead: 

CMS is leading on interoperability (good). Big new proposals from the Centers for Medicare and Medicaid Services (CMS) will set tough parameters for sharing health information. With a good prognosis to roll out in final form around HIMSS 2020, we’re excited to see requirements that health plans give patients access to their claims records via a standard set of APIs, so patients can connect their data to apps of their choosing. In addition, hospitals will be required to send admit, discharge, transfer (ADT) notifications on patients to community providers, a massive move to make transitions from hospital to home safe and seamless for patients across the country. Studies show that readmissions to the hospital are reduced as much as 20% when patients are seen by a doctor within the first week after a hospitalization. Often the blocker is not knowing a patient was discharged. CMS is putting some serious muscle behind getting information moving and is using their leverage as a payer to create new economic reasons to share. We love it.

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How are hospitals supposed to reduce readmissions? Part II

By KIP SULLIVAN, JD

The notion that hospitals can reduce readmissions, and that punishing them for “excess” readmissions will get them to do that, became conventional wisdom during the 2000s on the basis of very little evidence. The Medicare Payment Advisory Commission (MedPAC) urged Congress to enact the Hospital Readmissions Reduction Program (HRRP) beginning in 2007, and in 2010 Congress did so. State Medicaid programs and private insurers quickly adopted similar programs.

The rapid adoption of readmission-penalty programs without evidence confirming they can work has created widespread concern that these programs are inducing hospitals to increase utilization of emergency rooms and observation units to reduce readmissions within 30 days of discharge (the measure adopted by the Centers for Medicare and Medicaid Services [CMS] in its final rule on the HRRP), and this in turn may be harming sicker patients. Determining whether hospitals are gaming the HRRP and other readmission-penalty schemes by diverting patients to ERs and observation units (and perhaps by other means) should be a high priority for policy-makers. [1]

In Part I of this series I proposed to address the question of whether hospitals are gaming the HRRP by asking (a) does research exist describing methods by which hospitals can reduce readmissions under the HRRP and, in the event the answer is yes, (b) does that research demonstrate that those methods cost no more than hospitals save. If the answer to the first question is no, that would lend credence to the argument that the HRRP and other readmission-penalty schemes are contributing to rising rates of emergency visits and observation stays. If the answer to second question is also no, that would lend even more credence to the argument that hospitals are gaming the HRRP.

In Part I, I noted that proponents of readmission penalties, including MedPAC and the Yale New Haven Health Services Corporation (hereafter the “Yale group”), have claimed or implied that hospitals have no excuse for not reducing readmission rates because research has already revealed numerous methods of reducing readmissions without gaming. I also noted many experts disagree, and quoted a 2019 statement by the Agency for Healthcare Research and Quality that “there is no consensus” on what it is hospitals are supposed to do to reduce readmissions.

In this article, I review the research MedPAC cited in its June 2007 report to Congress, the report that the authors of the Affordable Care Act (ACA) cited in Section 3025 (the section that instructed CMS to establish the HRRP). In Part III of this series I will review the studies cited by the Yale group in their 2011 report to CMS recommending the algorithm by which CMS calculates “excess” readmissions under the HRRP. We will see that the research these two groups relied upon did not justify support for the HRRP, and did not describe interventions hospitals could use to reduce readmissions as the HRRP defines “readmission.” The few studies cited by these groups that did describe an intervention that could reduce readmissions:

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ONC & CMS Proposed Rules – Part 6: Payer Data Requirements

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Nikki Kent
Dave Levin

By DAVE LEVIN, MD and NIKKI KENT

The Office of the National Coordinator (ONC) and the Centers for Medicare and Medicaid (CMS) have proposed final rules on interoperability, data blocking, and other activities as part of implementing the 21st Century Cures Act. In this series, we will explore ideas behind the rules, why they are necessary and the expected impact. Given that these are complex and controversial topics are open to interpretation, we invite readers to respond with their own ideas, corrections and opinions.

Interventions to Address Market Failures

Many of the rules proposed by CMS and ONC are evidence-based interventions aimed at critical problems that market forces have failed to address. One example of market failure  is the long-standing inability for health care providers and insurance companies to find a way to exchange patient data. Each has critical data the other needs and would benefit from sharing. And, as CMS noted, health plans are in a “unique position to provide enrollees a complete picture of their clams and encounter data.” Despite that, technical and financial issues, as well as a general air of distrust from decades of haggling over reimbursement, have prevented robust data exchange. Remarkably, this happens in integrated delivery systems which, in theory, provide tight alignment between payers and providers in a unified organization.

With so much attention focused on requirements for health IT companies like EHR vendors and providers, it is easy to miss the huge impact that the new rules is likely to have for payers. But make no mistake, if implemented as proposed, these rules will have a profound impact on the patient’s ability to gather and direct the use of their personal health information (PHI). They will also lead to reduced fragmentation and more complete data sets for payers and providers alike.

Overview of Proposed CMS Rules on Information Sharing and Interoperability

The proposed CMS rules affect payers, providers, and patients stating that they:

  • Require payers to make patient health information available electronically through a standardized, open application programming interface (API)
  • Promote data exchange between payers and participation in health information exchange networks
  • Require payers to provide additional resources on EHR, privacy, and security
  • Require providers to comply with new electronic notification requirements
  • Require states to better coordinate care for Medicare-Medicaid dually eligible beneficiaries by submitting buy-in data to CMS daily
  • Publicly disclose when providers inappropriately restrict the flow of information to other health care providers and payers

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Patient-Directed Access for Competition to Bend the Cost Curve

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By ADRIAN GROPPER, MD

Many of you have received the email: Microsoft HealthVault is shutting down. By some accounts, Microsoft has spent over $1 Billion on a valiant attempt to create a patient-centered health information system. They were not greedy. They adopted standards that I worked on for about a decade. They generously funded non-profit Patient Privacy Rights to create an innovative privacy policy in a green field situation. They invited trusted patient surrogates like the American Heart Association to participate in the launch. They stuck with it for almost a dozen years. They failed. The broken market and promise of HITECH is to blame and now a new administration has the opportunity and the tools to avoid the rent-seekers’ trap.

The 2016 21st Century CURES Act is the law. It is built around two phrases: “information blocking” and “without special effort” that give the administration tremendous power to regulate anti-competitive behavior in the health information sector. The resulting draft regulation, February’s Notice of Proposed Rulemaking (NPRM) is a breakthrough attempt to bend the healthcare cost curve through patient empowerment and competition. It could be the last best chance to avoid a $6 Trillion, 20% of GDP future without introducing strict price controls.

This post highlights patient-directed access as the essential pro-competition aspect of the NPRM which allows the patient’s data to follow the patient to any service, any physician, any caregiver, anywhere in the country or in the world.

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