Regulators

Trend: Huge growth in use of CT scans troubles observers

Anne Zieger — Tue, 09 Sep 2008 09:45:38 -0400

At one point, CT scans were used now and then, when doctors had few alternatives. Today, however, CT scans have become a standard method for diagnosing ordinary problems like kidney stones, frequent headaches or appendicitis. Given this pattern, the volume of CT scans ordered has grown dramatically, hitting 68.7 million scans in 2007. That's three times more than the number ordered in 1995, according to IMB Medical Information Division. Meanwhile, the number of CT scans in the U.S. has climbed to 24,000, almost three times the number available in most industrialized countries, since the first was purchased here in 1993.

Why has the growth in CT use been so steep? Well, for one thing, their price has fallen. Though 70 percent of CT scanners are still found in hospitals, more private practices and independent imaging centers have managed to buy their own machines. They're urged along by companies like Siemens, a CT scan maker, which tells potential buyers that two scans per day can generate enough revenue to cover the machine's cost and operation over a five year period. More attractively, 10 scans executed daily can generate more than $400,000 in annual profits.

With the volume of CT scans growing so high, they've gotten a lot more attention from industry watchers. One party worried about the pattern is federal regulators, who say they're concerned about the potential for a conflict of interest between cardiologists, orthopedic surgeons and other specialists who provide their own scans and radiologists, who rely on referrals. To address this issue, CMS has slashed Medicare payments for CTs and other scans, though it hasn't made any major moves yet to block doctors from self-referring scanning business. Meanwhile, clinicians say that they worry that the scans can expose patients to excessive radiation, while exposing patients to tests that might have been avoided or replaced by technologies that don't pose this risk.

To learn more about this issue:
- read this Kaiser Daily Health Policy Report item

Related Articles:
Trend: CT scan usage climbing, raising radiation fears
New CT scanner breeds demand, controversy
MD self-referrals for imaging slipping through
PET scan rates climbing dramatically

Moody's ratings changes could raise healthcare credit ratings

Anne Zieger — Thu, 04 Sep 2008 03:55:16 -0400

Moody's Investors Services has announced that it plans to adopt a revised rating scale for municipal bonds, which could raise healthcare credit ratings by an average of one notch. The agency plans to convert healthcare and education bonds to its new global ratings scale in November, a move that should affect more than 400 not-for-profit hospitals and health systems. Not only will higher ratings improve the perception of hospitals' health, they may even give beleaguered institutions with otherwise strong credit a new ability to borrow and make new capital investments.

Since the early 1900s, Moody's has rated muni bonds separately from corporate bonds. However, the practice has brought criticism from regulators, including Connecticut's attorney general. The Connecticut AG's office announced in July that it had filed a lawsuit alleging that not only Moody's, but also major ratings firms Fitch and Standard & Poor's were issuing artificially low credit ratings for municipal bonds.

To learn more about the proposed change:
- read this Modern Healthcare article

Related Articles:
Case study: NJ hospital refinances bond debt
MA bond authorities make transactions easier
With donations, Sutter bonds get final approval

Health plan HealthMarkets pays $20M to settle violations nationally

Anne Zieger — Tue, 22 Jul 2008 13:28:01 -0400

HealthMarkets, a health insurer focused on individual policies, agreed this week to pay $20 million to settle violations of insurance rules in 36 states. The fine, one of the largest of its kind, follows fines already imposed by at least seven states and lawsuits from dozens of policyholders.

Between 2000 and 2005, a handful of state regulators have been investigating the company, concerned about its communications with customers. The regulators found that HealthMarkets wasn't training its sales agents properly, and the agents, in turn, weren't always fully disclosing the policies' limits to consumers. What's more, the investigators concluded that the health plan didn't always promptly pay for medical services.

Under the terms of the agreement, HealthMarkets need not review complaints or issue refunds, but it must establish a toll-free hotline for members who bought coverage before August 2005. The line will offer such consumers additional information about their coverage. If it doesn't correct its practices it could face additional fines of up to $10 million.

To learn more about the settlement:
- read this Kaiser Daily Health Policy Report item
- read the HealthMarkets press release

Related Articles:
CA Blue plans will pay $13M in fines over cancellations
WellPoint pays hospitals $11.8M to settle bills from rescissions
BC of California fined $1M for cancellations
Kaiser forced to reinstate coverage

L.A. sues Blue Shield of CA over cancellations

Anne Zieger — Thu, 17 Jul 2008 11:26:28 -0400

Engaging in yet another battle with the state's health plans, Los Angeles City Attorney Rocky Delgadillo has filed a lawsuit contending that Blue Shield of California illegally canceled the policies of hundreds of beneficiaries. This move follows a number of similar actions by state and local officials, including a similar suit Delgadillo filed earlier this year against Anthem Blue Cross and million-dollar fines against various health plans by the state Department of Managed Health Care. Regulators contend that the practice of rescinding policies for such innocent mistakes, known as rescission, is illegal under state law. Health plans, meanwhile, maintain that they're merely rooting out fraud.

In the current suit, Delgadillo argues that the plan has illegally canceled coverage of more than 850 policyholders. It asserts that the plan uses confusing applications to trick individual applicants into making innocent mistakes, then uses the mistakes to cancel policies when medical bills get high. Delgadillo is seeking fines and penalties totaling of more than $1 billion.

To learn more about the suit:
- read this Los Angeles Times piece

Related Articles:
WellPoint pays hospitals $11.8M to settle bills from rescissions
Kaiser forced to reinstate coverage
Blue Cross of CA settles plan-cancellation suits
Kaiser, Health Net agree to reinstate 1,200 beneficiaries

MN hospital cited after disturbed ED patient gets Tasered

Anne Zieger — Mon, 16 Jun 2008 08:55:50 -0400

When the staff at Northfield (MN) City Hospital's emergency believed that a disturbed patient was about to become violent, they called the local police, as their facility didn't have the security staff to deal with the situation. When the patient remained threatening, the police Tasered the man, after which hospital staffers were able to medicate the man and transfer him to a psych unit at a different facility. Now, federal and state health officials have cited the hospital for violating the patient's rights. The Minnesota Department of Health says the hospital failed to protect the patient safety, a charge that theoretically could cause it to lose its CMS certification unless it is addressed.

The Minnesota Hospital Association and other industry observers say that Northfield did nothing wrong. However, regulators say that the hospital should have been better prepared to deal with the man even before the police arrived, given that they see drugged and psychiatrically-disturbed patients every day. What's more, hospital staffers shouldn't have let the situation escalate for five hours, between the patient's arrival at 2 a.m. and the arrival of the police at 7 a.m., reviewers said.

To learn more about this incident:
- read this Minneapolis Star-Tribune article

SPOTLIGHT: New rules would limit Medicare marketing

Fri, 09 May 2008 06:59:52 -0400

Federal regulators have proposed new rules that would set limits on the marketing of private Medicare health plans. The rules would ban unsolicited sales visits and phone calls to beneficiaries, regulate commissions to sales agents and increase insurer fines. Article

Report: Antifraud compliance getting tougher for hospitals

Wed, 30 Apr 2008 06:59:57 -0400

A new report from the Deloitte Forensic Center argues that it's getting increasingly difficult for hospitals to comply with state and federal anti-fraud rules given the surge in new anti-fraud legislation. Laws and regulations designed to limit Medicare and Medicaid abuse have proliferated, while disclosure rules keep expanding, the consulting firm notes. Not only that, more regulation still may be in store. Regulators are paying increasingly close attention to relationships doctors have with hospitals and health systems, imaging centers, DME suppliers and other health professionals. For example, regulators recently began an information collection program that requires about 500 hospitals to file detailed reports on their contractual relationships with doctors.

To learn more about this issue:
- read this HFMA News item

Related Articles:
HHS seeks comments on model EHR anti-fraud standards
IT key to fighting Medicare, Medicaid fraud

UnitedHealth suffers financial setback

Wed, 23 Apr 2008 06:59:58 -0400

After years of allegations that management engaged in financial manipulations to feather their own nest, some might see this as a bit of karma. Having already missed its first quarter financial targets, UHG has had to cut its full-year profit outlook. The company, which expects 2008 revenue around $82 billion, lowered its profit outlook by 40 cents a share to about $3.60. While UHG faces some unique challenges, this mirrors losses posted by other health plans, many of which seem likely to kick up premiums substantially at their next opportunity.

One major factor in UHG's adjusted prediction was customer losses. The company lost 530,000 commercial members during Q1 of this year, including 250,000 from its PacifiCare unit. Meanwhile, enrollment in its Medicare Part D program fell by 290,000. To boot, medical costs went up faster than income, despite raised premiums in 2006 and 2007.

This comes just as the air has started to clear from its former CEO's departure. Less than 18 months ago, former CEO William McGuire left the company with a mindbogglingly-golden parachute, options worth $1.78 billion at the time. Since then, McGuire has been forced to give up at least $400 million in assets, after regulators concluded that the options were back-dated to give him the highest possible value.

To learn more about UHG's financial picture:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
Doctors angered by proposed UnitedHealth fines
AMA tries to block UnitedHealth acquisition
NY hospitals sue UnitedHealth, claim racketeering

GAO says gov't needs to create HAI prevention standards

Fri, 18 Apr 2008 06:59:55 -0400

A new report from the Government Accountability Office suggests that the federal government should step up to the plate and set standards for hospitals to follow in preventing hospital-acquired infections. Medicare and the CDC, in particular, should establish clear guidelines as to which infection-control practices they consider to be most important, the GAO said. The CDC, for example, strongly recommends that hospitals follow an imposing 500 practices, far more than hospitals can reasonably implement over the short term, hospital industry leaders say. The report also argues that federal regulators should do more to push hospitals to meet such standards, noting that private groups like doctors, hospitals and employers have done far more to nudge hospitals in that direction.

To learn more about the report:
- read this Baltimore Sun piece

Related Articles:
GAO: HHS agencies need to collaborate to fight HAIs
Study: Hospitals struggle with infection control
VHA program fights hospital-acquired infections
MA hospital-acquired infections cost millions

State med board disciplinary action numbers fall again

Fri, 18 Apr 2008 06:59:54 -0400

Once again, the number of disciplinary actions taken against healthcare professionals by state boards of medicine has fallen, according to a new report by the Federation of State Medical Boards. In its report, the Federation notes that the 5,319 actions taken represent a 4.6 percent decline from the 5,574 taken in 2006, and a notable 14.4 percent drop from the 2005 total of 6,213. These numbers include both "prejudicial" actions such as revocation, suspension or mandatory retirement of medical licensure, as well as administrative actions considered to be "nonprejudicial." While the Federation isn't weighing in on the meaning of these numbers, consumer group Public Citizen uses them to rate states on how often they take "serious" actions, drawing unfavorable attention to those states whose rate of serious actions is comparatively low.

To learn more about these stats:
- read this Modern Healthcare piece

Related Articles:
Study: Medical board discipline varies widely
Audit reveals problems at IL disciplinary board
NC law makes medical board info public
Virginia's medical board tightens discipline process