Kaiser Health News, New Jersey Gets a New Hospital?, & Kicking Medicaid Grandma to the Curb

In the wake of declining newspaper presence, the Kaiser Family Foundation, a nonprofit private operating foundation known for its health care concerns, has started Kaiser Health News. In the present issue, there are two articles of special note for New Jerseyans. The one regards the plans of Hackensack University Medical Center, a 775-bed teaching and research hospital that is one of New Jersey’s most prestigious, [which] requested state permission to open a new hospital in Pascack Valley’s empty [hospital] buildings. Although Hackensack is a nonprofit, it announced that Westwood would be getting a for-profit facility financed by a private equity firm from Texas.

Not everyone approves.

The other regards measures that New Jersey legislators are considering in response to a recent investigation of assisted living facilities. KFN reports

Associated Press/Philadelphia Inquirer reports that “lawmakers this week will consider measures to enhance protections for assisted living residents in New Jersey to ensure they aren’t discharged simply because they pay with Medicaid.” The legislation comes in response to an investigation that found a Wisconsin-based assisted living firm called Assisted Living Concepts, which has eight facilities in New Jersey and more than 200 nationwide, “wrongly showed New Jersey residents the door once they exhausted their savings and were about to go on Medicaid, despite promises to allow them to stay.”

Both stories are worth reading.

Employees, Fearing Increased Cost-Sharing and Loss of Benefits, Utilize Current Employer-Based Health Plans More

The Kaiser Family Foundation reports that a recent survey reveals that employees are utilizing employer-based health plans more in fear that their plans will increase cost-sharing or dissolve altogether.

KFF reports:

U.S. workers are making more use of their employer-sponsored health insurance benefits because of concerns that employers could cut benefits or increase costs during the economic recession, according to a survey released Friday by the International Foundation of Employee Benefit Plans, the Milwaukee Journal Sentinel’s “Dollars & Sense” blog reports. IFEBP surveyed its members between March 30 and April 6 and found that one-third reported an increase in their workers filling prescription medications or undergoing costly medical procedures before their insurance runs out, the study found. Sally Natchek, senior director of research for IFEBP, said, “Plan participants are feeling anxious about the possibility of increased cost-sharing and a reduction in benefits due to the financial crisis.”

The International Foundation reports that:

[W]hile few plan sponsors (3.6%) are cutting or considering cutting health care benefits altogether, many are ramping up their cost-sharing approaches.  Thirty-five percent of plan sponsors are increasing employee deductibles, coinsurance or copays due to the financial crisis.  Nearly the same proportion are also increasing employee premiums.  Other cost-sharing actions that plan sponsors are taking include adding consumer-driven health plans as an option (12.8%), replacing a current plan with a consumer-driven plan (9.6%) and instituting spousal charges (10.8%).

The Foundation report confirms that more employers are using consumer-directed health plans in an attempt to rein in the cost of health benefits.

Perhaps the silver lining of this survey, though, is that there was also found to be “a heightened focus on wellness programs.  Eighteen percent of the respondents have introduced or are considering introducing wellness initiatives due to the economy (Foundation).” In a recent post, we noted that Kaiser had reported that

Eighty percent of large U.S. companies this year are offering chronic disease management programs for workers in an effort to reduce health care costs, up from 51% last year, according to a new survey by Hewitt Associates, the Houston Chronicle reports.

At the confluence of unfavorable economic conditions, rising health care and insurance costs and an administration which has vowed reform, these burgeoning trends may be only the forward guard in changes to employer-based plans. Driven by economic concerns, there seems to have been generated among employers an understanding that one way of avoiding the high costs associated with acute and/or catastrophic health care, is simply to help employees to avoid becoming sick (it may be only a matter of time before employers begin handing out “an apple a day.”) Unfortunately, with increasing frequency employers also seem to be learning that another means of avoiding the costs of  health care is to simply discontinue,  decrease, or “shift” the costs of health benefits. The numbers seem to suggest that employees have read the writing on the wall, and are visiting their doctors while they still can.

Employers Adopt Chronic Disease Management Programs

Kaiser Family Foundation reports another option for employers attempting to keep health insurance programs affordable.

KFF states:

“Eighty percent of large U.S. companies this year are offering chronic disease management programs for workers in an effort to reduce health care costs, up from 51% last year, according to a new survey by Hewitt Associates, the Houston Chronicle reports. Hewitt surveyed 343 large companies and found that more employers are targeting costly chronic diseases — such as diabetes, heart disease, asthma and depression — rather than workers’ eating or exercise habits. Hewitt estimates that a company with 9,500 workers and 500 retirees younger than age 65 spends between $18 million to $22 million on health care just for those with diabetes.”

Companies are managing chronic disease “by offering employees personal health coaches, on-site health clinics and copayment waivers for needed medications.”

Compared to consumer-directed health plans, chronic disease management is a relatively uncontroversial approach to lowering health care costs for employers.  As we’ve noted in a recent post, “Twenty-five percent of the U.S. community population were reported to have one or more of five major chronic conditions.” Not only does chronic disease management focus on preventative care and employees’ long-term health, employers are saving money in the short-term.  The results, although varying, are generally successful, with employers “spending 10% to 30% less per year on medical care after two to five years (Sixel, Houston Chronicle, 4/2).”  The short-term savings could lead to healthier employees, higher productivity and long-term savings.

The Houston Chronicle reports that:

According to Joseph Jasser, regional medical director for Houston for Concentra, an industrial medicine and urgent care provider, “If you can change their lifestyle — cut out smoking, eat better and exercise — then they’re healthier and companies end up spending less for medical care.”

Florida Senators Move to Pass Bill to Prevent Medicaid Fraud

Kaiser Family Foundation reports that Florida Senators will likely pass legislation aimed to prevent Medicaid fraud.

KFF states:

Florida Senate Health Regulation Committee Chair Don Gaetz (R) and state Senate Health and Human Services Appropriations Committee Chair Durell Peaden (R) at a news conference on Wednesday “expressed confidence” that lawmakers will pass legislation (SB 1986) aiming to prevent and detect Medicaid fraud, the Tallahassee Democrat reports. Medicaid fraud has become a considerable issue in Southeast Florida, where home health care clinics open quickly and operate with little to no regulation or accountability, according to Gaetz and Peaden. Miami alone has twice as many home health providers than all of California, they noted.

Florida is susceptible to heightened Medicaid abuse given its relatively large Medicaid enrollment and the concomitant funds devoted to Medicaid.  In 2005, Medicaid enrollment in Florida was almost 3 million people.  In Florida, Medicaid home health participants have increased by approximately 50% between 1999 and 2005 (from 14,793 in 1999 to 21,192 in 2005). In 2006, Florida spent approximately $12.7 Billion on Medicaid.  Approximately $1.5 billion of the $12.7 billion was spent on home health and personal care.  In 2007, Florida Medicaid expenditures increased to over $14 Billion.

In addition to other fraud prevention and detection measures, the bill would also create greater incentives for whistleblowers.  KFF states:

The bill also would increase to 25% the share of recovered money that whistleblowers would be eligible to receive. Peaden said money recovered from fraud would be redirected by his panel “into health care for the truly needy.”

Further, KFF reports:

The bill also would target companies’ recruiting of patients and the practices of filing claims for non-existent patients and ordering unneeded devices and treatments. Gaetz said Florida would work with federal and local agencies to create a database that would prevent operators of fraudulent companies from re-incorporating new clinics or home services and allow regulators to prevent fraudulent companies from renewing their operating licenses. Peaden said a companion bill is being worked out in the state House (Cotterell, Tallahassee Democrat, 3/26).

As we noted recently, a Florida case (Federal Court) which would fall rather squarely within the intended aim of the proposed legislation took 10 years to discover and prosecute.  The Florida legislation is similar in purpose to the Federal Civil False Claims Act, which members of  the U.S Senate have proposed to amend to strengthen a whistleblower’s action as well.

Home Health Area Especially Vulnerable To Medicare Fraud And Abuse

American Health Lawyers Association reports that the increased amount of federal spending on home health benefits has led to the rise of fraud and abuse issues.  AHLA reports that federal “spending on home health grew approximately 44% from 2002 through 2006 ….”

AHLA states:

Gaps in the Centers for Medicare and Medicaid Services’ (CMS’) administration of the $12.9 billion Medicare home health benefit have left the program vulnerable to improper payments, including payments for claims resulting from fraudulent and abusive practices, the Government Accountability Office (GAO) found in a recent report.

The opportunities for fraud and abuse issues concerning home health care are manifold.  AHLA states that  the “common types of upcoding and billing for unnecessary care in home health were: billing for outlier cases when that level of care was not required, billing for beneficiaries who were not homebound, and billing for therapy visits that may have been medically unnecessary. ”

The Department of Justice defines upcoding as “the practice of improperly assigning a diagnosis code to a patient discharge that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement for that hospital discharge than the hospital would otherwise receive.”

AHLA also reports that Home Health Agencies (HHAs) “are not routinely subject to revalidation and that CMS generally does not include physicians, who are in a position to detect certain types of improper billing, in the agency’s efforts to detect improper payments.”

AHLA reports that CMS is considering adopting two of the four actions recommended by GAO:

CMS stated that it would consider two of GAO’s four recommendations–to amend regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges and to provide physicians who certify or recertify plans of care with a statement of services received by beneficiaries. The agency “neither agreed nor disagreed with our other two recommendations,” GAO explained.

AHLA reports that the four recommendations for CMS are:

• Assess the feasibility of verifying the criminal history of all key officials named on an HHA enrollment application.
• Provide physicians whose identification number was used to certify or recertify a plan of care with a statement of services the HHA provided to that beneficiary based on the physician’s certification.
• Direct CMS contractors to conduct post-payment medical reviews on claims submitted by HHAs with high rates of improper billing identified through prepayment review.
• Amend current regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges.

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