Thousands of providers who slid through the system got billions in Medicaid reimbursements even though they owed the government millions in taxes, the Government Accountability Office said.

According to the GAO report released to the public yesterday, about 7,000 Medicaid providers in the selected states of Florida, New York and Texas had roughly $791 million in unpaid federal taxes, but they still received $6.6 billion from the program in 2009.

Seventy-seven percent of them owed payroll and individual and corporate taxes, and nearly three-quarters (72 percent) owed outstanding taxes for more than five years.

GAO also profiled 40 Medicaid providers, including hospitals, dentists, homecare providers, medical suppliers and other healthcare entities. The providers received $235 million in Medicaid reimbursements but didn't pay taxes of about $26 million. In one case, a provider not only owed the government money but also was caught participating in medical billing fraud.

Not surprisingly, senators, who commissioned for the GAO investigation, called the findings "outrageous," Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee on Investigations, said in a statement yesterday.

Sen. Tom Coburn (R-Okla.) of the Senate Finance Committee fired off too about the delinquent providers who still got payments. "People who cheat on their taxes show a clear disregard for the law so they might be more likely to defraud Medicaid or even harm patients," he said. "GAO's findings raise serious questions about steps that need to be taken to improve the integrity of the Medicaid program."

Although the Internal Revenue Service can levy taxes for Medicare payments, it doesn't do the same for Medicaid payments because they are not technically considered federal funds, the Associated Press noted.

If officials had the authority to impose continuous levies on Medicaid payments, the IRS could have collected between $22 million and $330 million in the selected states that year, GAO said.

GAO also noted that the amount of unpaid taxes could be much higher; it found the numbers are likely "understated" because they don't reflect providers who simply didn't file taxes or underreported income. However, it also noted the sample of three states and 40 cases don't necessarily represent all Medicaid providers.

The agency recommended the IRS figure out how to collect back taxes from Medicaid providers and improve coordination among states.

For more information:
- check out the GAO summary and report (.pdf)
- see the statement from Coburn's office
- read the AP article

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General acute care hospitals will see Medicare payment rates rise 2.3 percent in fiscal year 2013, after allowing for other payment and regulatory changes, thanks to the final rule issued yesterday by the Centers for Medicare & Medicaid Services. That's a big jump from the 0.9 percent the agency proposed in April.

Under the final rule for the 2013 Inpatient Prospective Payment System and the Long-Term Care Hospital Prospective Payment System, CMS expects total Medicare spending on inpatient hospital services will increase by about $2 billion in 2013.

Meanwhile, long-term acute care hospitals will see a 1.7 percent bump in Medicare payments with the new rule.

Provider groups already have praised the updated payment rates. For instance, the American Hospital Association "commends CMS" for its actions. "Although we remain concerned that CMS continues to implement unnecessary coding cuts for changes in 2008 and 2009, we are pleased that CMS changed course on the new 2010 proposal that would have challenged hospitals' mission of caring," AHA President and CEO Rich Umbdenstock said yesterday in a statement.

With the final rule, CMS added a new outcome measure to the value-based purchasing program set to begin in October, now rewarding hospitals for avoiding central line-associated bloodstream infections.

The rule also determined the methodology of the Hospital Readmissions Reduction Program, which will penalize hospitals for high readmissions for heart attack, heart failure and pneumonia starting in October. Hospitals should expect a 0.3 percent drop (about $280 million) in Medicare payments due to the readmissions program, according to CMS.

In a string of rate increases, CMS last week gave skilled nursing facilities a 1.8 percent Medicare payment bump for fiscal 2013.

For more:
- read the CMS announcement
- check out the final rule (.pdf)
- read the AHA statement (.pdf)

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Highmark is using "predatory" tactics to "destroy" a three-hospital health system in Pennsylvania that declined to align itself with the market-leading insurer, officials claimed during a state Senate hearing Wednesday.

After Highmark decided to acquire the West Penn Allegheny Health System and build its own care provider network, the insurer also tried to acquire Excela Health, partner in its medical complex and gain majority ownership in Excela's provider network. But after Excela declined, Highmark said it would buy or affiliate with all independent practices on Excela's staff and build nearby ambulatory centers, reported the Pittsburgh Post-Gazette.

"The threat was clear--if Excela did not enter into an acquisition or affiliation with it, Highmark would use its monopoly position to destroy Excela," James Breisinger, chairman of the board for Excela, said during the state Senate Majority Policy Committee hearing.

Highmark even held a recruitment meeting with Excela's medical staff and offered preliminary contract offers to almost 20 Excela doctors, the Pittsburgh Business Times reported.

Sen. Kim Ward, who called the hearing, also challenged Highmark's recent tactics, accusing the insurer of dangling financial incentives in front of Excela physicians to lure patients to a hospital that's part of the West Penn system, reported the Pittsburgh Tribune-Review.

However, Highmark's executive vice president told lawmakers that it's committed to local hospitals. "Physicians aligning with Highmark will continue to extensively use the local facilities so that patients receive care in the local community," Deborah Rice said. She added that Highmark is still interested in "joint opportunities" with Excela and has no plans to steal doctors or steer patients to West Penn, the Post-Gazette noted.

Despite those reassurances, Ward remained skeptical. "Although I have heard repeatedly, from Highmark in particular, that they want to work with the community hospitals, their actions behind the scenes--setting up shell companies to buy up property and physicians in the counties surrounding Allegheny--tell a different story," she said.

To learn more:
- read the Pittsburgh Post-Gazette article
- see the Pittsburgh Business Times article
- check out the Pittsburgh Tribune-Review article

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Republican lawmakers are calling on Medicare to remove Social Security numbers from identification cards to prevent ID theft, but doing so could cost millions to implement.

More than 48 million Medicare beneficiaries risk having their identity stolen because their Social Security numbers are on Medicare cards, the Government Accountability Office said in a report released Wednesday.

Although most people know not to carry their Social Security cards with them to protect their identity (as advised by the Social Security Administration), beneficiaries who see doctors must pull out their Medicare cards that prominently feature their numbers in plain view, The Hill's Healthwatch reported.

GOP members accused CMS of being slow to act on revamping Medicare cards. The Defense Department and Veterans Affairs already have acted to remove Social Security numbers, the Associated Press reported.

But CMS noted that implementing that approach on a wide scale could be a completely different beast.

Medicare CIO Tony Trenkle said it requires updating IT systems, educating Medicare beneficiaries about changes and, of course, reassessing budget priorities, the AP noted.

GAO recommended using a whole new number (as opposed to truncating the number displayed). That way, providers don't have to store the Social Security numbers to provide services or to submit claims and would not need to query CMS. GAO said it's an option that offers the greatest protection and poses fewer burdens for beneficiaries and providers.

However, GAO Director of Healthcare Kathleen King also indicated that changing from a Social Security number to a new ID number would require Medicare to work with healthcare providers who might have "antiquated" systems, making for a challenging process.

CMS hasn't committed to any option yet. The agency estimates it will cost more than $800 million for whichever option it goes with, according to the GAO.

"If CMS won't do what's right for America's Medicare beneficiaries, then Congress must act," Rep. Sam Johnson (R-Texas), chairman of the House Ways and Means Social Security subcommittee, said in The Hill article.

Johnson introduced H.R. 1509 in April that would prohibit Medicare from including Social Security numbers on benefit cards, currently referred to committee.

For more information:
- check out the GAO summary and report (.pdf) on Medicare cards
- see the GAO summary and report (.pdf) on the cards of removing Social Security numbers from IDs
- read the The Hill's Healthwatch blog post
- read the AP article  
- check out the H.R. 1509 bill

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In the wake of natural disasters and possible terrorism and other public events, some of the nation's biggest nonprofits and federal agencies are calling on communities to partner in long-term planning.

In 2011 alone, natural disasters in the United States cost more than $55 billion, with 14 events costing more than a billion dollars in economic damages each, according to a National Research Council report sponsored by the Institute of Medicine, National Academy of Sciences, the Department of Homeland Security and the Army Corps of Engineers.

The report, which looked at Louisiana, Mississippi, Iowa and California, noted that the nation can reduce the impact of disasters by building what it calls "resilience"--the ability to prepare and plan for, absorb, recover from and more successfully adapt to adverse events.

"… [M]any communities do not have a baseline of a population with access to preventative healthcare, adequate treatment for existing conditions, or access to medical records in an emergency," Susan C. Scrimshaw, president of The Sage Colleges, wrote in a contribution to the Huffington Post blog.

Part of the problem, according to Scrimshaw, is that congressional members can only see as far as their election term and might ignore long-term planning, the Times Union reported.

Scrimshaw noted resilience requires preparedness exercises, better local building codes and integrated community planning.

"The bottom line is that we need to take planning and preparation for emergencies seriously, and we need to have the will to make some difficult decisions around where and how we will build, maintaining a healthy and thus resilient population," Scrimshaw said. "We cannot wait for someone to save us."

A Missouri Hospital Association report in May encouraged hospitals to have and exercise emergency disaster plans. Although it's unlikely that that an [emergency operations plan] will ever provide exact response instructions, it does offer staff the critical thinking skills to anticipate and respond to a disaster.

For more information:
- check out the report (purchase required)
- read the Times Union article
- here's the Huffington Post column

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