Medicaid

AHA survey: Negative profit margins for hospitals

Anne Zieger — Thu, 20 Nov 2008 10:33:36 -0500

With all the news we've been giving you of hospitals around the country struggling, it should be no surprise that the AHA's new survey results on hospital finances are not good. A quick-response survey about the third quarter of this year showed that hospitals are showing a negative profit margin of 1.6 percent; last year's result was a positive margin of 6.1 percent.

So what are hospitals considering to get their profit margin back on the positive side? More than half are at least thinking about staff reductions, and a quarter of them are trying to decide whether they should reduce their services.

Meanwhile, it could get even worse; as the unemployment rate rises, more people are likely to seek uncompensated care at emergency rooms. The AHA has no magic solution for the problem, but it is pleading with lawmakers to not decrease payments for Medicare and Medicaid. That would just be adding insult to injury.

To learn more about the survey:
- read this Modern Healthcare piece

HealthNet Medicaid plans blasted in Missouri

Anne Zieger — Thu, 13 Nov 2008 09:36:01 -0500

HealthNet just can't get a break this year. In California they have already been accused of breaking federal laws, defrauding seniors, and had to settle several times over various other accusations. Now in Missouri, HealthNet has been getting more than an earful about how bad their managed care system is. The complaints come as HealthNet bids to take over Medicaid plans in the southwest portion of the state.

In northern Missouri, many Medicaid plans have already been transitioned into managed care, and these were the people lining up to explain their problems. Healthcare providers, mental health workers and even parents lined up for hours to tell them how much it has cost them, how far they have had to travel, and how bad the medical care has been under the managed care program.

HealthNet has admitted that its transition process was far from perfect, but is sure that with their experience, they can transition southwest Missouri much more seamlessly. Too bad providers and patients aren't so sanguine about the prospects.

To learn more about the hearings:
- read this News Leader piece

Justice Department recovers $1.12 billion from fraud

Anne Zieger — Tue, 11 Nov 2008 09:16:07 -0500

Every year the Justice Department tries to recover as much as it can from healthcare organizations that have allegedly defrauded them: this year the total it recovered was $1.12 billion dollars.

This is down slightly from last year, when the Justice Department recovered a reported $1.53 billion. However, the year-to-year results are not directly comparable, since some of the settlements made in one year are actually included in the next year's total.

Of the fraud and False Claim Act actions that the department recovered this year, healthcare accounted for 84 percent of the total amount secured.

Some of the biggest cases of the year included Merck & Co's $361.5 million settlement to resolve allegations involving Medicaid rebates and Pepcid discounts for hospitals, Cephalon's $258 million to resolve alleged marketing off-label uses for three of its drugs, and Amerigroup's $225 million to end a case involving allegedly turning away or discouraging enrollment of pregnant women and other high-cost patients in Illinois.

To learn more about the recoveries:
- read this Modern Healthcare piece (reg. req.)

Insurance program expanded to childless WI adults

Dan Bowman — Mon, 03 Nov 2008 11:20:07 -0500

More than 81,000 low-income, childless adults in Wisconsin will begin receiving medical insurance through an expanded government funded children's insurance program, according to Modern Healthcare. Adults ages 19 to 64 who earn no more than 200 percent of the federal poverty level and that have not had any other health insurance for 12 months prior are eligible for the program, an expansion of BadgerCare Plus. A waiver on Medicaid coverage that initially would have gone toward uncompensated care at hospitals is expected to pump money into the new venture. It remains to be seen, however, if the state will be on the hook for continuing to fund this program, and if so, where they would get the money. At least 40,000 out the 81,000 eligible adults are expected to enroll, state officials believe.

For more:
- read this Modern Healthcare article (reg. req.)

Jury is still out on WV's patient incentives program

Anne Zieger — Tue, 28 Oct 2008 10:34:30 -0400

Traditionally, Medicaid programs have not been known as hotbeds of innovation. However, West Virginia is instituting a new initiative--possibly the first of its type in the U.S.--that offers a completely new approach to fostering preventive care and wellness among its population. While a few states are offering incentives to patients that cooperate with doctors and go to regular appointments, West Virginia may be the first to bump them to a plan with less coverage if they don't agree to do so.

Whether or not their plan is working is arguable. Only 12 percent of those eligible for the greater coverage actually signed up, with another 3 percent in the process of enrolling. On the other hand, enrollment is higher in the three pilot counties that have had longer to get used to the plan. This suggests that the plan may end up being more successful over time.

Critics, meanwhile, question if people who are being put into the basic plan actually know what they are missing by not getting the enhanced coverage. And some people may simply not see the need for the higher level of coverage, and therefore don't want to commit, they suggest. They also note that some may not have dependable transportation, which makes it difficult for them to attend regular doctor appointments as the plan requires.

Regardless, it seems likely that the plan will produce interesting results whether or not it succeeds. It should be worth watching.

To learn more about the program:
- read this AMNews piece

Leapfrog's never events policy has higher participation in 2008

Anne Zieger — Tue, 28 Oct 2008 10:04:46 -0400

As healthcare industry attention shifts to medical errors--particularly "never events" that increasingly aren't reimbursable by health insurers--healthcare organizations are adopting new, more structured ways of addressing these problems when they occur. One approach comes from the Leapfrog Group, whose policy for dealing with never events includes apologizing to families, publicly announcing errors, and trying to discover root causes, as well as not billing for anything related to such events.

Apparently, more and more hospitals are pledging to follow the Leapfrog Group's policy, based on this year's annual survey. Of the hospitals surveyed in 2008, 63 percent pledged to follow the policy, up from 52 percent in 2007. Hospitals that implemented the policy were also more likely to get a higher safe-practices score from Leapfrog, as well. Of course, it's hard to tell whether the policy caused the improvement, but safe practices are always a good thing, right?

To learn more about Leapfrog's survey:
- Read this Modern Healthcare piece (reg. req.)

Medicaid spending to increase substantially in the next decade

Dan Bowman — Mon, 20 Oct 2008 15:39:31 -0400

According to a report released last Friday, Medicaid spending will grow at an average rate of 7.9 percent annually over the next 10 years, ultimately reaching a cost of $674 billion per year by 2017. Consequently, spending on Medicaid benefits will reach $4.9 trillion in the next decade.

What does all of this mean? Health and Human Services Secretary Mike Leavitt believes the increased spending trend will become "unsustainable for both federal and state governments," adding that the nation's "most vulnerable citizens" could be at risk. The report shows that the areas where spending has increased the most--and the fastest--are nursing home care and community-based care.

For more:
- read this Wall Street Journal article
- read the report (.pdf)

Budget cuts affect two MA safety-net hospitals

Dan Bowman — Mon, 20 Oct 2008 14:38:29 -0400

According to an article published in last Friday's Boston Globe, Boston Medical Center and Cambridge Health Alliance will lose more than $100 million combined due to budget cuts by the state of Massachusetts. Boston Medical, which won't be reimbursed for care to low-income Medicaid patients from the last fiscal year, loses out on $64 million. Cambridge Health Alliance was expecting $40 million in state funding.

What does this mean for the two hospitals? In the case of Boston Medical, it means they will cut services. Among services currently on the chopping block are interpreters, transportation to the facility, and asthma, diabetes or primary care--all for low-income patients. As for Cambridge Health Alliance, it already was reported that for the fiscal year that ended June 30, the hospital was on it's way to losses of $26 million.

Juan Martinez, a spokesman for Governor Deval Patrick (who, with the cuts, is attempting to close a $1.1 billion budget gap), said that the cuts "allowed us to preserve all currently funded MassHealth populations and services. We understand the important role these hospitals play and remain committed to supporting them as best we can through this difficult economic time for everyone."

For more on the budget cuts in MA:
- here's the Boston Globe article

Health Net may have broken federal laws, defrauded seniors

Anne Zieger — Thu, 16 Oct 2008 09:25:28 -0400

When it comes to legal issues, Health Net is having a very bad year. First, it spent several long, tense months wrangling with state investigators over the way it handled policy cancellations. Now it's being investigated on charges that it violated federal laws regarding Medicare and Medicaid, and attempted to defraud the Medicaid system.

Health Net is accused of making automated calls to senior citizens that would connect them to sales agents. The sales agents allegedly then gave the seniors false or misleading information about the plan restrictions, enrollment deadlines, and even whether or not they would be eligible for Medicaid or lose Medicare drug benefits.

Furthermore, the company may have broken a federal law preventing anyone from being enrolled during an outbound call. And the report also cites instances in which Health Net agents apparently posed as beneficiaries in order to retrieve Medicaid identification numbers.

These accusations come in a year in which Health Net has already had a temporary marketing suspension placed on it by CMS. It also comes after executives were caught rescinding members' policies when they made expensive claims. Health Net was eventually forced to restore the coverage for affected members.

To read more about this case:
- Read this Modern Healthcare piece (reg. req.)

Big bad Medicare audits, or, being put on the RAC

Anne Zieger — Thu, 16 Oct 2008 00:15:46 -0400

By this point, pretty much everyone in the industry is aware that Medicare is stepping up the Recovery Audit Contractor program, under which contractors visit with providers and do a deep, hard audit of their Medicare claims. Without a doubt, this is going to be a hot topic at the show this year. After all, not only are doctors vulnerable, small practices are as well--in a particularly bad way--as few can afford to mount a vigorous fight if they're accused of owing big bucks.

Not only is Medicare expanding the RAC program, it's likely to increase the number of providers from which it wants money. After all, in 96 percent of RAC decisions, the contractor decides that the provider owes the government money. Worse, only a tiny percentage of RAC decisions were overturned on appeal. Scary stuff.

If you're among the worried, one option is to attend "Provider Beware: Protecting Your Company from Government Audits and Investigations," (CON 713), a concurrent session given by two attorneys. It is designed to help healthcare leaders identify the issues that typically trigger a Medicare/Medicaid audit or investigation, familiarize themselves with the legal risks a provider faces and demonstrate how a health care organization can defend itself during an audit or investigation. Folks, I think this one is going to be popular, so come early.