Original Story: detroitnews.com
In the spring of 2010, Angela Swantek interviewed for a job with Dr. Farid Fata.
She was an oncology nurse, a spirited force who plays hockey on a travel team; he was a Sloan-Kettering-trained oncologist and hematologist who would eventually become notorious for a scheme U.S. Attorney Barbara McQuade calls "the most egregious case of Medicare fraud we have seen." An Atlanta whistleblower lawyer represents clients involved in qui tam actions and protects them against retaliation.
Swantek, who was interviewed one day and then returned a day later to shadow a nurse on her rounds, was shocked by what she observed at Fata's office: A drug that was supposed to be injected in five minutes was administered as a one-hour IV drip from a bag. Another drug, Neulasta, was given on the same day as chemotherapy, although protocol is for it to be given 24 hours later. Swantek, a registered nurse who was back in college completing a four-year nursing degree, had worked at the area's top cancer centers, from Beaumont to Karmanos, and she had never seen cancer protocols and procedures so disregarded. A Mt Clemens medical malpractice lawyer represents clients injured as a result of medical negligence.
She turned down the job, she says, and walked out of the office before lunch "in a huff."
"The assumption was that I'd stay beyond lunch, but I left before. I couldn't stand to be there one more minute. I literally was horrified."
What Swantek did next substantiates her outrage and her courage.
She filed an official complaint with state regulators on April 14, 2010, enumerating some violations and expressing the need for an investigation. "I feel this physician is doing his patients more harm than good," she wrote on the official allegation form, including her name, cellphone number, address and willingness to testify if necessary. "Patients are being harmed." A Milwaukee medical malpractice lawyer helps clients with medical malpractice claims that are often defined as the failure of a medical professional to follow the accepted standards of practice in his or her profession.
It wasn't easy for her to take this action. In her two-decade career as a nurse, she'd never filed a complaint, had never even thought about doing so. As in all professions, calling out a colleague or a superior — a doctor — is not something to be taken lightly.
Her decision-making process became the topic of an assigned college paper she wrote that spring, describing her "ethical dilemma" in a seven-page paper for the online Chamberlain College of Nursing.
"I wanted to report him but felt unsure and uneasy about turning in a physician ... no one likes to be labeled a rat," she wrote in the college paper. "I owed it to the patients to save them in some way from continuing to be harmed. ...
"I hope there is some action taken."
She took the risk — and waited for the state's next move. And waited.
A year later, on May 13, 2011, Swantek, 45, received a letter from the department of licensing and regulatory affairs saying that "violations of the public health code could not be established." The investigation was closed. Although Swantek had witnessed what she says were numerous health code and medical procedural violations within a few hours, the state had not substantiated them. A Chicago medical malpractice lawyer is following this story closely.
Other than telling her the investigation was closed, the state didn't contact her, she says.
"I would remember, I promise you," she said in an interview at her Royal Oak home. The state says an investigation was conducted, and that Swantek was interviewed on Aug. 26, 2010. In response to a Freedom of Information Act request from The Detroit News last week, the state released a document attesting to an "interview in for typing," but cited privacy rules under the public health code that prevent the release of any supporting detail about the extent of the investigation or any interview with Swantek.
Stephen Gobbo, deputy director of LARA, who was not involved with the investigation in 2010, said last week, "I can tell you unequivocally that interviews were conducted (with Swantek) and ... the licensee, Dr. Fata."
The statute protects Fata, now a convicted felon who pleaded guilty to administering unnecessary treatment and who has already lost his license. It prevents Swantek, the complainant, from seeing how the state responded to her complaint. And it shields the state Bureau of Health Professions, which was merged into the Bureau of Health Care Services in 2013, and moved from the Department of Community Health to the Department of Licensing and Regulatory Affairs (LARA), from any public scrutiny.
"It is very rare that you see a medical professional making such an accusation against another medical professional," says Donna Mackenzie, a Berkley malpractice lawyer who represents some of Fata's former patients. "The state had a responsibility to perform a meaningful investigation in response to this very serious accusation."
"According to the criminal complaint against Dr. Fata, the federal investigators uncovered more during 2 days of investigation than the state apparently did over an entire year."
Two years after Swantek filed her allegation form, in a completely separate action, the FBI raided Fata's office, an event that led to his indictment in August 2013, and his decision to plead guilty to 16 counts of fraud and conspiracy last September.
Over those two years, Fata's patients continued to receive chemotherapy treatments they imagined were helping them but were, in many cases, literally poisoning them. He used IV drips instead of injections because he could bill Medicare more for longer treatments. As he would later admit in federal court, in response to specific counts: "I knew it was medically unnecessary."
On the day his office was raided, friends of Swantek's called to tell her that Fata had been arrested. She wept.
As Fata awaits his May sentencing, in a cell somewhere in Michigan, Angela Swantek doesn't have the satisfaction of knowing that she helped lock up Michigan's medical version of stock swindler Bernie Madoff. She didn't play a role in the FBI investigation, which had no connection to her complaint or state officials. Still intensely interested in the case, she reviews records of Fata patients pro bono, as lawyers prepare civil suits against him.
Angela Swantek's handwritten complaint form attests to one nurse's gutsy effort to protect victims — vulnerable men and women with cancer — from a physician who was more interested in payment than healing. "He treated them like commodities," says Swantek. Although her effort to alert the state didn't ultimately make a difference in Fata's case, it should have.
Showing posts with label Medicare. Show all posts
Showing posts with label Medicare. Show all posts
10 February 2015
04 November 2014
RELEASE OF MEDICARE DOCTOR PAYMENTS SHOWS SOME HUGE PAYOUTS
Original Story: latimes.com
Ending decades of secrecy, Medicare is showing what the giant health care program for seniors pays individual doctors, and some physicians got as much as $10 million in 2012.
The Obama administration is releasing a detailed account Wednesday of $77 billion in payouts to more than 880,000 health care providers nationwide in 2012. The release of payment records involving doctors has been blocked legally since 1979, but recent court rulings removed those obstacles. No personal information on patients is disclosed.
The two highest-paid doctors listed in the Medicare data are already under government review for improper billing. They include an ophthalmologist in the retiree haven of West Palm Beach, Fla., who topped the list by taking in more than $26 million to treat fewer than 900 patients. That is 61 times the average Medicare payout of $430,000 for an ophthalmologist.
A Florida cardiologist received $23 million in Medicare payments in 2012, nearly 80 times the average amount for that specialty. The overwhelming majority of doctors billed the government very modest amounts. Overall, 2 percent of health care providers accounted for 23 percent of these Medicare fees, federal data show.
Medicare officials said disclosing physician payment data marks an unprecedented opportunity to make the nation's health care system more transparent for consumers and accountable to taxpayers. Consumer advocates and employers applauded the move.
"Providing consumers with this information will help them make more informed choices about the care they receive," Jonathan Blum, Medicare's principal deputy administrator, said last week.
Still, federal officials cautioned against drawing sweeping conclusions about individual doctors from the data. They have warned that high payouts are not necessarily indicative of improper billing or fraud. Payments could be driven higher because providers were treating sicker patients who sometimes require more treatment.
These new figures reflect only Medicare Part B claims, which include doctor visits, lab tests and other treatment typically provided outside a hospital. The physician payouts include what Medicare paid plus any money the providers received from patients for deductibles and coinsurance.
Spending on the Medicare program, which covers about 60 million elderly and disabled Americans, is expected to exceed $600 billion this year. There is broad agreement that fraud is rampant in Medicare and Medicaid, the government health program for the poor, but estimates of the scope vary from $20 billion annually to more than $100 billion.
The American Medical Association and other physician groups have long opposed the release of the Medicare data.
AMA President Dr. Ardis Dee Hoven said the group remains concerned that inaccuracies in the data or misinterpretation of the figures may unfairly tar some physicians as outliers.
She said some individual physicians may appear to be billing huge amounts to Medicare, when in fact it is their whole practice that bills under a single physician's name. In other cases, high-volume physicians may actually be experts in their field who will be portrayed in a bad light.
"How does a physician or a practice get their reputation back?" Hoven said. "And even more problematic, what happens to their referral base? What happens to their patients who end up going someplace else?"
For 2012, the top recipient of Medicare money in the country was a Florida ophthalmologist, Dr. Salomon Melgen. Melgen has been a heavy donor to Sen. Robert Menendez, D-N.J. Last year, federal officials said a grand jury was looking into Melgen's billing practices, and a separate investigation was examining whether Menendez had improperly intervened on his behalf.
An attorney for Melgen, Kirk Ogrosky, said the physician has billed at all times in accordance with Medicare rules. Ogrosky said that the vast majority of the money attributed to Melgen reflects the cost of drugs used in treatment and that physician reimbursement is set at 6 percent above what is paid for the medications.
"Dr. Melgen strongly supports transparency in government," said Ogrosky, a former federal prosecutor on health care fraud cases, "but engaging in speculation based on raw data is irresponsible."
Cardiologist Asad Qamar in Ocala, Fla., ranked second nationally with $22.9 million in payments for seeing Medicare patients in 2012. He said specialists like himself who provide a wide variety of services inside their own medical facility have much higher bills because they reflect both the physician's professional fee and other technical fees to cover staffing, medical devices and supplies.
Likewise, some oncologists say their payouts appear so much higher than their peers because they are covering the price of expensive cancer drugs that other doctors operating inside a hospital wouldn't bill for.
"By doing everything in your office, your numbers will be astronomical," Qamar said. "Looking at the sheer volume of payments is a gross mistake."
Qamar said Medicare put his billing on a heightened review and delayed reimbursements more than a year ago.
"I am 100 percent confident we are not doing anything wrong," he said.
Sen. Chuck Grassley, R-Iowa, an advocate for health care transparency, warned that the Obama administration should carefully explain the data. "Transparency isn't just raw data," he said. "It's also making sure the information is in context and makes sense."
Ending decades of secrecy, Medicare is showing what the giant health care program for seniors pays individual doctors, and some physicians got as much as $10 million in 2012.
The Obama administration is releasing a detailed account Wednesday of $77 billion in payouts to more than 880,000 health care providers nationwide in 2012. The release of payment records involving doctors has been blocked legally since 1979, but recent court rulings removed those obstacles. No personal information on patients is disclosed.
The two highest-paid doctors listed in the Medicare data are already under government review for improper billing. They include an ophthalmologist in the retiree haven of West Palm Beach, Fla., who topped the list by taking in more than $26 million to treat fewer than 900 patients. That is 61 times the average Medicare payout of $430,000 for an ophthalmologist.
A Florida cardiologist received $23 million in Medicare payments in 2012, nearly 80 times the average amount for that specialty. The overwhelming majority of doctors billed the government very modest amounts. Overall, 2 percent of health care providers accounted for 23 percent of these Medicare fees, federal data show.
Medicare officials said disclosing physician payment data marks an unprecedented opportunity to make the nation's health care system more transparent for consumers and accountable to taxpayers. Consumer advocates and employers applauded the move.
"Providing consumers with this information will help them make more informed choices about the care they receive," Jonathan Blum, Medicare's principal deputy administrator, said last week.
Still, federal officials cautioned against drawing sweeping conclusions about individual doctors from the data. They have warned that high payouts are not necessarily indicative of improper billing or fraud. Payments could be driven higher because providers were treating sicker patients who sometimes require more treatment.
These new figures reflect only Medicare Part B claims, which include doctor visits, lab tests and other treatment typically provided outside a hospital. The physician payouts include what Medicare paid plus any money the providers received from patients for deductibles and coinsurance.
Spending on the Medicare program, which covers about 60 million elderly and disabled Americans, is expected to exceed $600 billion this year. There is broad agreement that fraud is rampant in Medicare and Medicaid, the government health program for the poor, but estimates of the scope vary from $20 billion annually to more than $100 billion.
The American Medical Association and other physician groups have long opposed the release of the Medicare data.
AMA President Dr. Ardis Dee Hoven said the group remains concerned that inaccuracies in the data or misinterpretation of the figures may unfairly tar some physicians as outliers.
She said some individual physicians may appear to be billing huge amounts to Medicare, when in fact it is their whole practice that bills under a single physician's name. In other cases, high-volume physicians may actually be experts in their field who will be portrayed in a bad light.
"How does a physician or a practice get their reputation back?" Hoven said. "And even more problematic, what happens to their referral base? What happens to their patients who end up going someplace else?"
For 2012, the top recipient of Medicare money in the country was a Florida ophthalmologist, Dr. Salomon Melgen. Melgen has been a heavy donor to Sen. Robert Menendez, D-N.J. Last year, federal officials said a grand jury was looking into Melgen's billing practices, and a separate investigation was examining whether Menendez had improperly intervened on his behalf.
An attorney for Melgen, Kirk Ogrosky, said the physician has billed at all times in accordance with Medicare rules. Ogrosky said that the vast majority of the money attributed to Melgen reflects the cost of drugs used in treatment and that physician reimbursement is set at 6 percent above what is paid for the medications.
"Dr. Melgen strongly supports transparency in government," said Ogrosky, a former federal prosecutor on health care fraud cases, "but engaging in speculation based on raw data is irresponsible."
Cardiologist Asad Qamar in Ocala, Fla., ranked second nationally with $22.9 million in payments for seeing Medicare patients in 2012. He said specialists like himself who provide a wide variety of services inside their own medical facility have much higher bills because they reflect both the physician's professional fee and other technical fees to cover staffing, medical devices and supplies.
Likewise, some oncologists say their payouts appear so much higher than their peers because they are covering the price of expensive cancer drugs that other doctors operating inside a hospital wouldn't bill for.
"By doing everything in your office, your numbers will be astronomical," Qamar said. "Looking at the sheer volume of payments is a gross mistake."
Qamar said Medicare put his billing on a heightened review and delayed reimbursements more than a year ago.
"I am 100 percent confident we are not doing anything wrong," he said.
Sen. Chuck Grassley, R-Iowa, an advocate for health care transparency, warned that the Obama administration should carefully explain the data. "Transparency isn't just raw data," he said. "It's also making sure the information is in context and makes sense."
05 September 2014
MEDICARE STAR RATINGS ALLOW NURSING HOMES TO GAME THE SYSTEM
Original Story, NYTimes.com
CARMICHAEL, Calif. — The lobby of Rosewood Post-Acute Rehab, a nursing home in this Sacramento suburb, bears all the touches of a luxury hotel, including high ceilings, leather club chairs and paintings of bucolic landscapes. A Milwaukee Nursing Home Lawyer is familiar with these types of facilities.
What really sets Rosewood apart, however, is its five-star rating from Medicare, which has been assigning hotel-style ratings to nearly every nursing home in the country for the last five years. Rosewood’s five-star status — the best possible — places it in rarefied company: Only one-fifth of more than 15,000 nursing homes nationwide hold such a distinction.
But an examination of the rating system by The New York Times has found that Rosewood and many other top-ranked nursing homes have been given a seal of approval that is based on incomplete information and that can seriously mislead consumers, investors and others about conditions at the homes. A Nashville Nursing Home Litigation Attorney has experience representing clients in nursing home negligence cases.
The Medicare ratings, which have become the gold standard across the industry, are based in large part on self-reported data by the nursing homes that the government does not verify. Only one of the three criteria used to determine the star ratings — the results of annual health inspections — relies on assessments from independent reviewers. The other measures — staff levels and quality statistics — are reported by the nursing homes and accepted by Medicare, with limited exceptions, at face value.
The ratings also do not take into account entire sets of potentially negative information, including fines and other enforcement actions by state, rather than federal, authorities, as well as complaints filed by consumers with state agencies. Last year, the State of California, for example, fined Rosewood $100,000 — the highest penalty possible — for causing the 2006 death of a woman who was given an overdose of a powerful blood thinner.
From 2009 to 2013, California fielded 102 consumer complaints and reports of problems at Rosewood, according to a state website. California Advocates for Nursing Home Reform, which also tracks complaints, put the number even higher, at 164, which it says is twice the state average. Nursing home officials are appealing the state fine and point out that only a small fraction of the complaints at Rosewood, which has about 110 beds, have ever been substantiated. While that may be true, the sheer number could be a sign of trouble, industry experts say.
In interviews conducted during a recent visit, a half dozen current and former residents, including some who had lived in other homes, said they did not believe that the home merited a five-star rating. “If I fell down, they’d pick me up, but that’s about it,” said Michael McFadden, 76, who has lived at Rosewood for several years.
John L. Sorensen, the chief executive of North American Health Care, the chain that operates Rosewood, said the quality of the home was excellent. “I would put my parent there,” he said.
Rosewood struggles with many of the same challenges faced by other nursing homes around the country, offering a window into the rating system’s flaws, The Times found. Many residents live three to a room, and there is often a scarcity of basic supplies like washcloths, as well as a shortage of quality staff, according to interviews with current and former patients, their families and statements from former employees.
Lawsuits From Families
Rosewood has also been the subject of about a dozen lawsuits in recent years from patients and their families claiming substandard care.
“It looks nice when you walk in,” said Bonnie Nathan, who said she placed her mother in Rosewood in 2010 mainly because of its five-star rating. She is now suing the home because she claims that workers there failed to treat her mother, Janet Zagon, for a respiratory condition that led to her death. “But I really didn’t have a sense of where patients were going to be cared for,” Ms. Nathan said.
Mr. Sorensen said that his nursing home was not at fault and that even excellent homes occasionally make mistakes.
“While we have had a few problems, they’re pretty minor compared to the overall accomplishments and tremendous customer satisfaction that’s being provided,” he said. The many lawsuits against Rosewood could be attributed to a “very litigious marketplace” in the Sacramento area, he said, and not to poor quality at the nursing home.
Receiving a high star rating has never been more important to nursing homes. When nurses and doctors discharge patients from hospitals, they often use the ratings in referral decisions, and insurers consider them when setting up preferred networks. The ratings are also often a first stop for investors and lenders, who consult them to decide whether a nursing home company is a safe bet.
“This whole program has walked into parts of our industry that we never expected,” said Steven Littlehale, executive vice president and chief clinical officer at PointRight, one of a handful of consulting firms that advise nursing homes on how to improve their ratings.
Widespread acceptance of the ratings is leading to their use beyond the elder-care industry. Beginning this year, Medicare plans to introduce similar five-star ratings for hospitals, dialysis centers and home-health-care agencies.
Federal officials say that while the rating system can be improved — and that they are working to make it better — it gives nursing homes incentives to get better.
“We have seen improvements,” said Dr. Patrick Conway, the chief medical officer at the Centers for Medicare and Medicaid Services. As evidence, he pointed to a decrease in the use of physical restraints by nursing homes and in the number of homes reporting bedsores among patients at a high risk of developing them.
But some nursing homes are not truly improving. Instead, they have learned how to game the rating system, according to interviews with current and former nursing home employees, lawyers and patient advocacy groups.
Nationally, the proportion of homes with above-average ratings has risen steadily. In 2009, when the program began, 37 percent of them received four- or five-star ratings. By 2013, nearly half did.
The Times analysis shows that even nursing homes with a history of poor care rate highly in the areas that rely on self-reported data. Of more than 50 nursing homes on a federal watch list for quality, nearly two-thirds hold four- or five-star ratings for their staff levels and quality statistics. The same homes do not fare as well on the sole criterion that is based on an independent review. More than 95 percent of the homes on the watch list received one or two stars for the health inspection, which is conducted by state workers.
“These are among the very worst facilities, and yet they are self-reporting data that gives them very high staffing and very high quality measures,” said Toby S. Edelman, a senior policy lawyer with the Center for Medicare Advocacy, a nonprofit organization that helps patients. “It seems implausible.”
‘False Sense of Security’
The seed of Medicare’s five-star rating system was planted in 2007, when during a congressional hearing, Senator Ron Wyden, Democrat of Oregon, asked why it was easier to shop for washing machines than it was to select a nursing home. Medicare officials set up the rating system in 2009, a move that was applauded by consumer groups, who hoped that more transparency would lead to greater accountability.
The nursing home industry, which lobbied against the ratings, later largely embraced them. An industry trade group, the American Health Care Association, offers members a free service that helps companies track their star rating; it says the rising scores are evidence that quality is improving.
Some advocates say the rating system is the best resource available. “I think it’s imperfect, but it’s by far the most valuable tool for people,” said Richard J. Mollot, executive director of the Long Term Care Community Coalition.
Other patients’ groups consider the ratings so inflated that they no longer support their use and have found them helpful only in weeding out the worst-performing homes.
“They’ve given a false sense of security to the public,” Carole Herman, president of the Foundation Aiding the Elderly, a Sacramento patients’ rights group, said.
One of the simplest ways to inflate a score, according to interviews with academics and groups that monitor the process, is through the staffing measure. Nursing homes get an extra star on their overall rating if they score a four- or five-star rating on staff levels.
In 2009, only 39 percent of nursing homes had a four- or five-star rating for staff levels. By 2013, 52 percent did.
The staff rating is based on a form that a home completes once a year, at the time of the annual inspection. Homes often know when an inspection will occur, and many of them have learned to add workers in the period leading up to it.
The inspection period is so crucial that in 2010, an administrator at a home on Long Island described it as “our Super Bowl” and explained that staff levels would drop once the inspection was completed. “The staffing hours will be a little high for this week but will drop the following week,” David Fielding, the administrator of the home, the Medford Multicare Center for Living, wrote in an email, which was excerpted in a lawsuit filed this year against the home by the New York State attorney general.
Since 2008, more than a dozen employees at the Medford home have been convicted on charges of patient neglect and falsification of records. In June, nine more were indicted on a range of charges related to the death of a 72-year-old woman, Aurelia Rios. Medford nonetheless holds a three-star, or average, rating from Medicare and a four-star rating for its health inspection, and state health workers reported no deficiencies during the home’s most recent health inspection last August.
A provision of the Affordable Care Act of 2010 requires Medicare to use payroll data to verify the accuracy of staff levels, but the agency has not begun to follow the requirement. The agency said it was still working on the verification system and hoped to have it running soon.
The other major part of the ratings that is not checked by Medicare, the so-called quality measures, is also susceptible to manipulation. The score in this area is based on data collected by the home about every patient, such as whether bedridden or wheelchair patients are developing bedsores and how many residents experience serious falls.
Nursing homes receive an extra star on their overall rating if they get five stars in this area. The number of nursing homes with five stars in quality measures has increased significantly since the beginning of the program, to 29 percent in 2013 from 11 percent in 2009.
“They need to spot-audit those, but they haven’t done it,” said Charlene Harrington, a professor emeritus at the University of California, San Francisco, School of Nursing, who is an expert on nursing home staffing.
Federal officials acknowledged that the quality measures rating needed improvement and said they were testing an auditing program that they hoped to expand nationally. The agency also plans to consider additional metrics, such as the number of residents being given antipsychotic drugs.
Dr. David Gifford, senior vice president of quality and regulatory affairs at the American Health Care Association, the nursing home trade group, says the ratings have had a positive effect on the industry. “I think it’s helped move us all along in the right direction,” he said, adding that any suggestion that facilities were manipulating their ratings was far-fetched. “I have not seen any evidence of that or heard any evidence of it,” he said.
A Five-Star Pursuit
Few have pursued top ratings with more zeal than North American Health Care, which operates Rosewood and 34 other nursing homes scattered across California and three other Western states. Each of the chain’s nursing homes has a five-star rating, and the company maintains a team of more than 30 nurses who conduct mock inspections to ensure the homes perform well. In recent years, the chain has awarded $50,000 bonuses to nursing home administrators who achieve or maintain a five-star rating.
“It’s everything to us,” Mr. Sorensen, the chief executive of North American, said. “If you create a product that people can trust and admire, the profits that you hope for — they follow as a result of excellence.”
Despite the chain’s exemplary performance in the Medicare ratings, Rosewood is not the only one of its homes to have had problems that are not reflected in the score. State inspectors concluded that staff at another home, Chatsworth Park Health Care Center in Los Angeles, neglected in 2010 and 2011 to properly care for a man with Parkinson’s disease who developed malnutrition and extensive bedsores, which typically occur because of substandard care, and later died.
At another of the chain’s nursing homes, the Grand Terrace Care Center near San Bernardino, Calif., the staff failed in 2010 to properly care for a woman with diabetes and other conditions. The coroner ruled that her death was due in part to a urinary tract infection and bedsores that had become so bad, they had developed gangrene and were infested with maggots, according to a state report about the case.
In 2010, when both episodes took place, Chatsworth carried an overall rating of three stars, and Grand Terrace was rated four stars. Both now hold five-star ratings.
Mr. Sorensen said his staff disputed the facts in these cases, and he maintained that the residents received good care.
Neither case shows up on the Medicare website. Until recently, California often refused to cite nursing homes for federal-level violations, the only type that counts toward a star rating. State workers are responsible for enforcing both state and federal laws governing nursing homes. A spokesman for the California Department of Public Health said the state was now doing so.
Dr. Conway, of the Centers for Medicare and Medicaid Services, said his agency worked hard to make sure states were enforcing federal law but acknowledged that there had been problems. “We are aware of some issues with states,” he said, adding that the federal website warned consumers that state actions were not listed there. Still, he said, “the goal would be not to have that gap.”
North American is also under investigation by the office of the inspector general for the federal Health and Human Services Department. Mr. Sorensen declined to say what the investigation entailed, and a spokesman for the inspector general’s office would not comment. It is not publicly known whether the investigation relates to care.
Ed Dudensing, a Sacramento lawyer who has represented several clients against the chain’s homes, including Rosewood, said he had deposed more than 30 current and former employees of North American Health Care in recent years. Based on those interviews, he said, “I strongly disagree with the suggestion that its nursing homes are five-star quality.”
Mr. Sorensen said the lawsuits against Rosewood were without merit. “We’re in this business because we want to do the right thing for our patients,” he said. “That is our agenda.”
In 2012, nearly all of North American Health Care’s nursing homes held four- or five-star ratings for staff levels, an outcome that Mr. Sorensen attributed to the company’s investment in quality workers.
Nevertheless, an analysis by The Times of 2012 staffing data reported by North American’s nursing homes in California shows that the company consistently reported higher levels of staffing to Medicare than it reported to Medi-Cal, California’s health care program for the poor, which audits the data.
The chain’s 29 homes in California reported staff levels to the federal government that were on average 23 percent higher than what they reported to the state in 2012, the most recent year for which state data were available. Statewide, California nursing homes reported levels to Medicare that were 15 percent higher than what they reported to Medi-Cal.
Mr. Sorensen said the state and federal staff data could not be compared because some employees, like the director of nursing and other supervisory positions, were not counted by the state but were counted at the federal level. He said the disparity could also be a result of different reporting periods and month-to-month variations in staff and patient levels.
A spokesman for the California Office of Statewide Health Planning and Development said that supervisory positions like the director of nursing were included in state staff data and that the main reason for the disparity was probably that the federal data accounted only for the two weeks preceding the annual survey, while the state data reflected the whole year.
Ms. Harrington, who sits on the technical advisory board for Medicare’s rating system and has served as an expert witness on behalf of plaintiffs suing nursing homes, said the disparity showed that the chain’s homes were probably adding people before the annual inspection. “They’re inflating their staffing,” she said.
Even as North American’s nursing homes were reporting high levels of staffing to Medicare, executives were focusing on keeping labor costs low, according to interviews with former employees and records made available in connection with lawsuits.
In 2011, for example, the nursing home administrator at Rosewood eliminated six full-time jobs and cut back on staff hours just days after the annual inspection was completed, according to emails the chain provided to plaintiff lawyers in a pending lawsuit against Rosewood. Ms. Harrington described such cuts as “substantial.” The home received a four-star rating in staffing that year.
Kyle Dahl, Rosewood’s administrator at the time, said in an interview that the staff reductions had been made to prepare for expected cuts to Medicare and Medi-Cal. But he acknowledged that consultant nurses were often brought in before the annual inspection to prepare the home. Their presence also had the effect of keeping staff levels higher than usual. Mr. Dahl likened the annual inspection to a visit from one’s mother-in-law. “You might throw an extra vacuum over the carpet to make sure everything looks good,” he said. “People could potentially staff up during that time period.”
For some families, however, all that effort did not translate to high-quality care, and they said they wished they had better options. Elizabeth Chandler and her husband, Ken, placed his mother in Rosewood in 2011 to recover from a broken femur. Ms. Chandler said she had been impressed that Rosewood had a top rating, “like a hotel.”
Mr. Chandler’s mother died after experiencing serious falls at the home, and the family is suing Rosewood. Ms. Chandler said she felt misled by the rating system.
“You don’t know where to look to get accurate information,” she said. “I can go and find a preschool for my child better than I can find a skilled nursing facility for my loved one.”
CARMICHAEL, Calif. — The lobby of Rosewood Post-Acute Rehab, a nursing home in this Sacramento suburb, bears all the touches of a luxury hotel, including high ceilings, leather club chairs and paintings of bucolic landscapes. A Milwaukee Nursing Home Lawyer is familiar with these types of facilities.
What really sets Rosewood apart, however, is its five-star rating from Medicare, which has been assigning hotel-style ratings to nearly every nursing home in the country for the last five years. Rosewood’s five-star status — the best possible — places it in rarefied company: Only one-fifth of more than 15,000 nursing homes nationwide hold such a distinction.
But an examination of the rating system by The New York Times has found that Rosewood and many other top-ranked nursing homes have been given a seal of approval that is based on incomplete information and that can seriously mislead consumers, investors and others about conditions at the homes. A Nashville Nursing Home Litigation Attorney has experience representing clients in nursing home negligence cases.
The Medicare ratings, which have become the gold standard across the industry, are based in large part on self-reported data by the nursing homes that the government does not verify. Only one of the three criteria used to determine the star ratings — the results of annual health inspections — relies on assessments from independent reviewers. The other measures — staff levels and quality statistics — are reported by the nursing homes and accepted by Medicare, with limited exceptions, at face value.
The ratings also do not take into account entire sets of potentially negative information, including fines and other enforcement actions by state, rather than federal, authorities, as well as complaints filed by consumers with state agencies. Last year, the State of California, for example, fined Rosewood $100,000 — the highest penalty possible — for causing the 2006 death of a woman who was given an overdose of a powerful blood thinner.
From 2009 to 2013, California fielded 102 consumer complaints and reports of problems at Rosewood, according to a state website. California Advocates for Nursing Home Reform, which also tracks complaints, put the number even higher, at 164, which it says is twice the state average. Nursing home officials are appealing the state fine and point out that only a small fraction of the complaints at Rosewood, which has about 110 beds, have ever been substantiated. While that may be true, the sheer number could be a sign of trouble, industry experts say.
In interviews conducted during a recent visit, a half dozen current and former residents, including some who had lived in other homes, said they did not believe that the home merited a five-star rating. “If I fell down, they’d pick me up, but that’s about it,” said Michael McFadden, 76, who has lived at Rosewood for several years.
John L. Sorensen, the chief executive of North American Health Care, the chain that operates Rosewood, said the quality of the home was excellent. “I would put my parent there,” he said.
Rosewood struggles with many of the same challenges faced by other nursing homes around the country, offering a window into the rating system’s flaws, The Times found. Many residents live three to a room, and there is often a scarcity of basic supplies like washcloths, as well as a shortage of quality staff, according to interviews with current and former patients, their families and statements from former employees.
Lawsuits From Families
Rosewood has also been the subject of about a dozen lawsuits in recent years from patients and their families claiming substandard care.
“It looks nice when you walk in,” said Bonnie Nathan, who said she placed her mother in Rosewood in 2010 mainly because of its five-star rating. She is now suing the home because she claims that workers there failed to treat her mother, Janet Zagon, for a respiratory condition that led to her death. “But I really didn’t have a sense of where patients were going to be cared for,” Ms. Nathan said.
Mr. Sorensen said that his nursing home was not at fault and that even excellent homes occasionally make mistakes.
“While we have had a few problems, they’re pretty minor compared to the overall accomplishments and tremendous customer satisfaction that’s being provided,” he said. The many lawsuits against Rosewood could be attributed to a “very litigious marketplace” in the Sacramento area, he said, and not to poor quality at the nursing home.
Receiving a high star rating has never been more important to nursing homes. When nurses and doctors discharge patients from hospitals, they often use the ratings in referral decisions, and insurers consider them when setting up preferred networks. The ratings are also often a first stop for investors and lenders, who consult them to decide whether a nursing home company is a safe bet.
“This whole program has walked into parts of our industry that we never expected,” said Steven Littlehale, executive vice president and chief clinical officer at PointRight, one of a handful of consulting firms that advise nursing homes on how to improve their ratings.
Widespread acceptance of the ratings is leading to their use beyond the elder-care industry. Beginning this year, Medicare plans to introduce similar five-star ratings for hospitals, dialysis centers and home-health-care agencies.
Federal officials say that while the rating system can be improved — and that they are working to make it better — it gives nursing homes incentives to get better.
“We have seen improvements,” said Dr. Patrick Conway, the chief medical officer at the Centers for Medicare and Medicaid Services. As evidence, he pointed to a decrease in the use of physical restraints by nursing homes and in the number of homes reporting bedsores among patients at a high risk of developing them.
But some nursing homes are not truly improving. Instead, they have learned how to game the rating system, according to interviews with current and former nursing home employees, lawyers and patient advocacy groups.
Nationally, the proportion of homes with above-average ratings has risen steadily. In 2009, when the program began, 37 percent of them received four- or five-star ratings. By 2013, nearly half did.
The Times analysis shows that even nursing homes with a history of poor care rate highly in the areas that rely on self-reported data. Of more than 50 nursing homes on a federal watch list for quality, nearly two-thirds hold four- or five-star ratings for their staff levels and quality statistics. The same homes do not fare as well on the sole criterion that is based on an independent review. More than 95 percent of the homes on the watch list received one or two stars for the health inspection, which is conducted by state workers.
“These are among the very worst facilities, and yet they are self-reporting data that gives them very high staffing and very high quality measures,” said Toby S. Edelman, a senior policy lawyer with the Center for Medicare Advocacy, a nonprofit organization that helps patients. “It seems implausible.”
‘False Sense of Security’
The seed of Medicare’s five-star rating system was planted in 2007, when during a congressional hearing, Senator Ron Wyden, Democrat of Oregon, asked why it was easier to shop for washing machines than it was to select a nursing home. Medicare officials set up the rating system in 2009, a move that was applauded by consumer groups, who hoped that more transparency would lead to greater accountability.
The nursing home industry, which lobbied against the ratings, later largely embraced them. An industry trade group, the American Health Care Association, offers members a free service that helps companies track their star rating; it says the rising scores are evidence that quality is improving.
Some advocates say the rating system is the best resource available. “I think it’s imperfect, but it’s by far the most valuable tool for people,” said Richard J. Mollot, executive director of the Long Term Care Community Coalition.
Other patients’ groups consider the ratings so inflated that they no longer support their use and have found them helpful only in weeding out the worst-performing homes.
“They’ve given a false sense of security to the public,” Carole Herman, president of the Foundation Aiding the Elderly, a Sacramento patients’ rights group, said.
One of the simplest ways to inflate a score, according to interviews with academics and groups that monitor the process, is through the staffing measure. Nursing homes get an extra star on their overall rating if they score a four- or five-star rating on staff levels.
In 2009, only 39 percent of nursing homes had a four- or five-star rating for staff levels. By 2013, 52 percent did.
The staff rating is based on a form that a home completes once a year, at the time of the annual inspection. Homes often know when an inspection will occur, and many of them have learned to add workers in the period leading up to it.
The inspection period is so crucial that in 2010, an administrator at a home on Long Island described it as “our Super Bowl” and explained that staff levels would drop once the inspection was completed. “The staffing hours will be a little high for this week but will drop the following week,” David Fielding, the administrator of the home, the Medford Multicare Center for Living, wrote in an email, which was excerpted in a lawsuit filed this year against the home by the New York State attorney general.
Since 2008, more than a dozen employees at the Medford home have been convicted on charges of patient neglect and falsification of records. In June, nine more were indicted on a range of charges related to the death of a 72-year-old woman, Aurelia Rios. Medford nonetheless holds a three-star, or average, rating from Medicare and a four-star rating for its health inspection, and state health workers reported no deficiencies during the home’s most recent health inspection last August.
A provision of the Affordable Care Act of 2010 requires Medicare to use payroll data to verify the accuracy of staff levels, but the agency has not begun to follow the requirement. The agency said it was still working on the verification system and hoped to have it running soon.
The other major part of the ratings that is not checked by Medicare, the so-called quality measures, is also susceptible to manipulation. The score in this area is based on data collected by the home about every patient, such as whether bedridden or wheelchair patients are developing bedsores and how many residents experience serious falls.
Nursing homes receive an extra star on their overall rating if they get five stars in this area. The number of nursing homes with five stars in quality measures has increased significantly since the beginning of the program, to 29 percent in 2013 from 11 percent in 2009.
“They need to spot-audit those, but they haven’t done it,” said Charlene Harrington, a professor emeritus at the University of California, San Francisco, School of Nursing, who is an expert on nursing home staffing.
Federal officials acknowledged that the quality measures rating needed improvement and said they were testing an auditing program that they hoped to expand nationally. The agency also plans to consider additional metrics, such as the number of residents being given antipsychotic drugs.
Dr. David Gifford, senior vice president of quality and regulatory affairs at the American Health Care Association, the nursing home trade group, says the ratings have had a positive effect on the industry. “I think it’s helped move us all along in the right direction,” he said, adding that any suggestion that facilities were manipulating their ratings was far-fetched. “I have not seen any evidence of that or heard any evidence of it,” he said.
A Five-Star Pursuit
Few have pursued top ratings with more zeal than North American Health Care, which operates Rosewood and 34 other nursing homes scattered across California and three other Western states. Each of the chain’s nursing homes has a five-star rating, and the company maintains a team of more than 30 nurses who conduct mock inspections to ensure the homes perform well. In recent years, the chain has awarded $50,000 bonuses to nursing home administrators who achieve or maintain a five-star rating.
“It’s everything to us,” Mr. Sorensen, the chief executive of North American, said. “If you create a product that people can trust and admire, the profits that you hope for — they follow as a result of excellence.”
Despite the chain’s exemplary performance in the Medicare ratings, Rosewood is not the only one of its homes to have had problems that are not reflected in the score. State inspectors concluded that staff at another home, Chatsworth Park Health Care Center in Los Angeles, neglected in 2010 and 2011 to properly care for a man with Parkinson’s disease who developed malnutrition and extensive bedsores, which typically occur because of substandard care, and later died.
At another of the chain’s nursing homes, the Grand Terrace Care Center near San Bernardino, Calif., the staff failed in 2010 to properly care for a woman with diabetes and other conditions. The coroner ruled that her death was due in part to a urinary tract infection and bedsores that had become so bad, they had developed gangrene and were infested with maggots, according to a state report about the case.
In 2010, when both episodes took place, Chatsworth carried an overall rating of three stars, and Grand Terrace was rated four stars. Both now hold five-star ratings.
Mr. Sorensen said his staff disputed the facts in these cases, and he maintained that the residents received good care.
Neither case shows up on the Medicare website. Until recently, California often refused to cite nursing homes for federal-level violations, the only type that counts toward a star rating. State workers are responsible for enforcing both state and federal laws governing nursing homes. A spokesman for the California Department of Public Health said the state was now doing so.
Dr. Conway, of the Centers for Medicare and Medicaid Services, said his agency worked hard to make sure states were enforcing federal law but acknowledged that there had been problems. “We are aware of some issues with states,” he said, adding that the federal website warned consumers that state actions were not listed there. Still, he said, “the goal would be not to have that gap.”
North American is also under investigation by the office of the inspector general for the federal Health and Human Services Department. Mr. Sorensen declined to say what the investigation entailed, and a spokesman for the inspector general’s office would not comment. It is not publicly known whether the investigation relates to care.
Ed Dudensing, a Sacramento lawyer who has represented several clients against the chain’s homes, including Rosewood, said he had deposed more than 30 current and former employees of North American Health Care in recent years. Based on those interviews, he said, “I strongly disagree with the suggestion that its nursing homes are five-star quality.”
Mr. Sorensen said the lawsuits against Rosewood were without merit. “We’re in this business because we want to do the right thing for our patients,” he said. “That is our agenda.”
In 2012, nearly all of North American Health Care’s nursing homes held four- or five-star ratings for staff levels, an outcome that Mr. Sorensen attributed to the company’s investment in quality workers.
Nevertheless, an analysis by The Times of 2012 staffing data reported by North American’s nursing homes in California shows that the company consistently reported higher levels of staffing to Medicare than it reported to Medi-Cal, California’s health care program for the poor, which audits the data.
The chain’s 29 homes in California reported staff levels to the federal government that were on average 23 percent higher than what they reported to the state in 2012, the most recent year for which state data were available. Statewide, California nursing homes reported levels to Medicare that were 15 percent higher than what they reported to Medi-Cal.
Mr. Sorensen said the state and federal staff data could not be compared because some employees, like the director of nursing and other supervisory positions, were not counted by the state but were counted at the federal level. He said the disparity could also be a result of different reporting periods and month-to-month variations in staff and patient levels.
A spokesman for the California Office of Statewide Health Planning and Development said that supervisory positions like the director of nursing were included in state staff data and that the main reason for the disparity was probably that the federal data accounted only for the two weeks preceding the annual survey, while the state data reflected the whole year.
Ms. Harrington, who sits on the technical advisory board for Medicare’s rating system and has served as an expert witness on behalf of plaintiffs suing nursing homes, said the disparity showed that the chain’s homes were probably adding people before the annual inspection. “They’re inflating their staffing,” she said.
Even as North American’s nursing homes were reporting high levels of staffing to Medicare, executives were focusing on keeping labor costs low, according to interviews with former employees and records made available in connection with lawsuits.
In 2011, for example, the nursing home administrator at Rosewood eliminated six full-time jobs and cut back on staff hours just days after the annual inspection was completed, according to emails the chain provided to plaintiff lawyers in a pending lawsuit against Rosewood. Ms. Harrington described such cuts as “substantial.” The home received a four-star rating in staffing that year.
Kyle Dahl, Rosewood’s administrator at the time, said in an interview that the staff reductions had been made to prepare for expected cuts to Medicare and Medi-Cal. But he acknowledged that consultant nurses were often brought in before the annual inspection to prepare the home. Their presence also had the effect of keeping staff levels higher than usual. Mr. Dahl likened the annual inspection to a visit from one’s mother-in-law. “You might throw an extra vacuum over the carpet to make sure everything looks good,” he said. “People could potentially staff up during that time period.”
For some families, however, all that effort did not translate to high-quality care, and they said they wished they had better options. Elizabeth Chandler and her husband, Ken, placed his mother in Rosewood in 2011 to recover from a broken femur. Ms. Chandler said she had been impressed that Rosewood had a top rating, “like a hotel.”
Mr. Chandler’s mother died after experiencing serious falls at the home, and the family is suing Rosewood. Ms. Chandler said she felt misled by the rating system.
“You don’t know where to look to get accurate information,” she said. “I can go and find a preschool for my child better than I can find a skilled nursing facility for my loved one.”
01 March 2013
Hospitals and Health Insurers Battling Over New Insurance Plan Payments
Story First Appeared on The Wall Street Journal -
Hospitals and health insurers are locking horns over how much health-care providers will get paid under new insurance plans that will be sold as the federal health law is rolled out.
The results will play a major role in determining how much insurers will ultimately charge consumers for these policies, which will be offered to individuals through so-called exchanges in each state.
The upshot is that many plans sold on the exchanges will include smaller choices of health-care providers in an effort to bring down premiums.
To keep costs low, the insurers are pressing for hospitals to grant discounts from the rates hospitals usually get in commercial plans. In return, participating hospitals would be part of smaller networks of providers. Hospitals will be paid less by the insurer, but will likely get more patients because those people will have fewer choices. The bet is that many consumers will be willing to accept these narrower networks.
Tenet Healthcare Corp., one of the biggest U.S. hospital operators with 49 hospitals, Tuesday said it had signed three contracts for exchange plans that would involve either narrow or "tiered" networks, in which people pay more to go to health-care providers that aren't in the top tier.
Tenet said that in exchange for favorable status in these plans, it granted discounts of less than 10% to the three insurers, which it said were Blue Cross & Blue Shield plans covering 15 of its hospitals, or around 30%.
"It makes strategic sense for us," said Trevor Fetter, Tenet's CEO, in an interview. "There will be a market here, and it's important for us, we believe, to participate in that market." He said that insurers around the country have approached Tenet to discuss similar plan designs.
Analysts said Tenet's disclosures, which came during an earnings call with analysts, are the most explicit from any hospital chain so far about how the negotiations are shaping up. "It's the clearest statement they've gotten about exchange products, pricing and impact," said Sheryl Skolnick, an analyst with CRT Capital Group LLC.
Exchange plans will take effect in 2014. In that first year, health plans sold on the exchanges could have 11 million to 13 million enrollee's and generate $50 billion to $60 billion in premium revenue, according to an estimate from PwC's Health Research Institute, an arm of PricewaterhouseCoopers, LLP.
Stonegate Advisors LLC, a research firm that works for health insurers, has been testing clients' plans with consumers in a mock-up version of an exchange, which is an online insurance marketplace. Marc Pierce, the firm's president, says nearly all the products have included limited provider networks.
The tests have found that premiums are the most important factor in consumers' choices, he said, with more than half typically opting for a narrow-network product if it cost them at least 10% less than an equivalent with broader choice.
Florida Blue, the Blue Cross & Blue Shield plan in the state, will offer plans with a "tighter, more select group of providers" in its exchange, said Chief Executive Patrick J. Geraghty in an interview. "We believe the exchange is going to be driven by price, and therefore we're looking for a lower-price option."
The insurer has already struck deals for narrow-network plans and will use those same terms for the exchange versions, it said. Florida Blue said it has been winning discounts of 5% to 10% off typical commercial rates from hospital systems, but getting breaks as high as 20% in some cases.
Plans with smaller choices of health-care providers are a big focus for insurers, partly because many other aspects of exchange plans, including benefits and out-of-pocket charges that consumers pay, are largely prescribed by the law, giving them few levers to push to reduce premiums.
"The need for a smaller network with lower pricing was critical," said Juan Davila, an executive vice president at Blue Shield of California, which said it hopes to offer a preferred-provider-organization plan for individuals on the exchange. It would be built around a provider network around 40%-45% of its traditional PPO scope. Mr. Davila said Blue Shield had signed an exchange contract with Tenet but declined to comment on its terms.
So far, insurers and hospitals have sent differing signals on what kinds of discounts the hospitals might grant for the exchange plans, which would vary by market. Publicly traded hospital chains have said they are pressing to get paid approximately what they receive for traditional commercial health insurance.
Some insurers talk about steeper discounts from hospitals. WellPoint Inc. has said it is aiming to pay providers somewhere between Medicaid and Medicare rates, and sees talks trending toward rates close to Medicare. Medicare rates are often substantially lower than commercial prices. An Aetna Inc. official at an investor conference Monday suggested the rates might settle somewhere between Medicare and commercial.
For their part, hospitals have to weigh whether discounts they grant for exchange products pose a risk to the richer pricing they get for traditional commercial health plans, which include those now offered by employers.
Catholic Health Initiatives, a not-for-profit operator of 78 hospitals based in Englewood, Colo., said it is negotiating with insurers about exchange plans in around half of its markets, and insurers are often seeking to craft narrow-network designs.
CHI is taking a "conservative" approach and discussing "very modest discounts in exchange for a narrow-network opportunity," said Juan Serrano, a senior vice president, in an interview.
17 December 2012
Foreseeing the Issues in Medicare's Future
originally appeared in The New York Times:
The projected growth of Medicare costs is the single biggest contributor to the country’s long-term budget deficits, many estimates show. No cohort of Americans, with the possible exception of the very affluent, pays enough in Medicare taxes and premiums to cover its eventual Medicare costs.
Much of the early public discussion of the fiscal deadline has focused on taxes, and the decline of tax rates in recent decades has played a crucial role in creating the deficit. But the question of how to reduce the growth of Medicare costs will become increasingly important as the population continues to age and health costs continue to increase.
In the current fiscal talks, Republicans are pushing for significant changes to Medicare, in exchange for agreeing to tax increases. Democrats are arguing that Medicare is not the most pressing budget problem.
What follows is a primer on Medicare costs.
Q. Is Medicare really a bigger long-term problem than Social Security or military spending?
A. Yes. Over the next 25 years, the Congressional Budget Office projects that Medicare spending will rise to 6.7 percent of the gross domestic product, from 3.7 percent this year. (Other federal health care spending — like Medicaid, the insurance program principally for low-income families — is projected to rise to 3.7 percent of the G.D.P. in 2037, from 1.7 percent this year.)
In total, health care spending’s percentage of the G.D.P. is expected to rise by five points. Social Security spending is projected to rise by only 1.2 percentage points, to 6.2 percent in 2037. All other federal spending is expected to shrink by two percentage points, to 9.6 percent.
These estimates assume that some current policies continue, rather than that the various tax increases and spending cuts scheduled to take effect on Jan. 1 occur and remain in place.
Q. Why is Medicare the big problem?
A. As much attention as the aging of society receives, the rise of medical costs is a bigger budgetary problem. The faster growth of Medicare costs, relative to Social Security costs, highlights this difference.
Social Security costs will indeed grow in coming years, adding to the government’s fiscal problems. But those costs will not grow nearly as rapidly as Medicare’s, because Medicare costs are a function of both the aging society and the cost of treating any one person. Social Security’s costs stem almost entirely from the number of elderly people.
Q. Don’t most Americans pay for their Medicare benefits, through payroll taxes over their working lives?
A. No, and it is not even close. Two married 66-year-olds with roughly average earnings over their lives will end up paying about $122,000 in dedicated Medicare taxes through the payroll tax, including the part their employers pay, according to the Urban Institute. That married couple can expect to receive about three times as much — $387,000, adjusted for inflation — in benefits. The projected gap is even larger for younger people because of growing health care costs.
In short, the single biggest cause of the long-term deficit is that most people receive much more from Medicare than they give to it.
Q. Why are health costs growing so rapidly?
A. For a good reason and a bad one.
The good reason is that our medical system has made enormous progress in recent decades and can treat conditions that once would have killed people. Cancer treatment and cardiac care are two examples of areas with beneficial new treatments that are often not cheap. An American who turns 65 today can expect to live almost 20 more years on average, up from about 16 years in 1980.
The bad reason is that our health care system wastes large amounts of money. The United States spends roughly twice as much money per person on health care as many other rich countries, without getting vastly better results. Americans receive better care in some areas (some cancers) and worse in others (higher error rates).
It is hard to make the case that the American health system provides a good return on the money it spends. Life expectancy is higher and has grown over the last 30 years in Australia, Britain, Canada, France, Germany and Japan, among other countries.
Q. What are the possible solutions?
A. For starters, we could pay more in taxes. Tax revenues are near a 60-year low as a share of the G.D.P. They will rise somewhat as the economy recovers and incomes increase, but not by nearly enough to pay for growing health care costs.
Covering the future costs of Medicare and Medicaid solely through higher taxes would involve sharp increases — much greater than anything being debated now. So most budget experts believe that changes to Medicare need to be part of the deficit solution.
Among the options are raising the eligibility age, which is now 65; reducing benefits for affluent families; introducing more competition; and paying for quality of care, rather than quantity.
Q. What are the upsides and downsides of each?
A. Let’s take the options one at a time:
The main arguments for raising the eligibility age are that Americans live longer than they used to and that the 2010 health care law makes it easier for people to get insurance if they do not receive it from an employer. The main counterargument is that the longevity increase has been smallest for low-income people, who are most likely to benefit from Medicare coverage.
Reducing benefits for high-income families has some bipartisan support, given the recent increases in income inequality. But some Democrats worry that it could eventually undermine Medicare’s popularity, making it more akin to a welfare program.
Many Republicans advocate for more competition in health care, noting that competition has reduced prices and raised the quality of service in many industries. It has an uneven record of doing so in health care, though, in part because insurers can often profit by denying care.
Paying for quality rather than quantity has support from many economists. But it is not always easy. Patients and doctors often want to proceed with high-cost care even when research has not shown it to be effective.
Q. Does Medicare need to be fixed before Jan. 1?
A. Obviously not. Many potential changes would need to be phased in and would not bring savings for years. Other policy changes, like tax increases, can have a quicker effect on the deficit.
On the other hand, fixing Medicare is never going to be easy. Every budget negotiation between Congress and the president is an opportunity for them to make progress on a fiscal problem that is growing every year.
The projected growth of Medicare costs is the single biggest contributor to the country’s long-term budget deficits, many estimates show. No cohort of Americans, with the possible exception of the very affluent, pays enough in Medicare taxes and premiums to cover its eventual Medicare costs.
Much of the early public discussion of the fiscal deadline has focused on taxes, and the decline of tax rates in recent decades has played a crucial role in creating the deficit. But the question of how to reduce the growth of Medicare costs will become increasingly important as the population continues to age and health costs continue to increase.
In the current fiscal talks, Republicans are pushing for significant changes to Medicare, in exchange for agreeing to tax increases. Democrats are arguing that Medicare is not the most pressing budget problem.
What follows is a primer on Medicare costs.
Q. Is Medicare really a bigger long-term problem than Social Security or military spending?
A. Yes. Over the next 25 years, the Congressional Budget Office projects that Medicare spending will rise to 6.7 percent of the gross domestic product, from 3.7 percent this year. (Other federal health care spending — like Medicaid, the insurance program principally for low-income families — is projected to rise to 3.7 percent of the G.D.P. in 2037, from 1.7 percent this year.)
In total, health care spending’s percentage of the G.D.P. is expected to rise by five points. Social Security spending is projected to rise by only 1.2 percentage points, to 6.2 percent in 2037. All other federal spending is expected to shrink by two percentage points, to 9.6 percent.
These estimates assume that some current policies continue, rather than that the various tax increases and spending cuts scheduled to take effect on Jan. 1 occur and remain in place.
Q. Why is Medicare the big problem?
A. As much attention as the aging of society receives, the rise of medical costs is a bigger budgetary problem. The faster growth of Medicare costs, relative to Social Security costs, highlights this difference.
Social Security costs will indeed grow in coming years, adding to the government’s fiscal problems. But those costs will not grow nearly as rapidly as Medicare’s, because Medicare costs are a function of both the aging society and the cost of treating any one person. Social Security’s costs stem almost entirely from the number of elderly people.
Q. Don’t most Americans pay for their Medicare benefits, through payroll taxes over their working lives?
A. No, and it is not even close. Two married 66-year-olds with roughly average earnings over their lives will end up paying about $122,000 in dedicated Medicare taxes through the payroll tax, including the part their employers pay, according to the Urban Institute. That married couple can expect to receive about three times as much — $387,000, adjusted for inflation — in benefits. The projected gap is even larger for younger people because of growing health care costs.
In short, the single biggest cause of the long-term deficit is that most people receive much more from Medicare than they give to it.
Q. Why are health costs growing so rapidly?
A. For a good reason and a bad one.
The good reason is that our medical system has made enormous progress in recent decades and can treat conditions that once would have killed people. Cancer treatment and cardiac care are two examples of areas with beneficial new treatments that are often not cheap. An American who turns 65 today can expect to live almost 20 more years on average, up from about 16 years in 1980.
The bad reason is that our health care system wastes large amounts of money. The United States spends roughly twice as much money per person on health care as many other rich countries, without getting vastly better results. Americans receive better care in some areas (some cancers) and worse in others (higher error rates).
It is hard to make the case that the American health system provides a good return on the money it spends. Life expectancy is higher and has grown over the last 30 years in Australia, Britain, Canada, France, Germany and Japan, among other countries.
Q. What are the possible solutions?
A. For starters, we could pay more in taxes. Tax revenues are near a 60-year low as a share of the G.D.P. They will rise somewhat as the economy recovers and incomes increase, but not by nearly enough to pay for growing health care costs.
Covering the future costs of Medicare and Medicaid solely through higher taxes would involve sharp increases — much greater than anything being debated now. So most budget experts believe that changes to Medicare need to be part of the deficit solution.
Among the options are raising the eligibility age, which is now 65; reducing benefits for affluent families; introducing more competition; and paying for quality of care, rather than quantity.
Q. What are the upsides and downsides of each?
A. Let’s take the options one at a time:
The main arguments for raising the eligibility age are that Americans live longer than they used to and that the 2010 health care law makes it easier for people to get insurance if they do not receive it from an employer. The main counterargument is that the longevity increase has been smallest for low-income people, who are most likely to benefit from Medicare coverage.
Reducing benefits for high-income families has some bipartisan support, given the recent increases in income inequality. But some Democrats worry that it could eventually undermine Medicare’s popularity, making it more akin to a welfare program.
Many Republicans advocate for more competition in health care, noting that competition has reduced prices and raised the quality of service in many industries. It has an uneven record of doing so in health care, though, in part because insurers can often profit by denying care.
Paying for quality rather than quantity has support from many economists. But it is not always easy. Patients and doctors often want to proceed with high-cost care even when research has not shown it to be effective.
Q. Does Medicare need to be fixed before Jan. 1?
A. Obviously not. Many potential changes would need to be phased in and would not bring savings for years. Other policy changes, like tax increases, can have a quicker effect on the deficit.
On the other hand, fixing Medicare is never going to be easy. Every budget negotiation between Congress and the president is an opportunity for them to make progress on a fiscal problem that is growing every year.
10 May 2012
Aging Americans Spend More on Healthcare on Less Income
Story first appeared in USA Today.
The golden years are losing their luster as health care costs continue to outpace income and many Americans are not saving for retirement.
Retiree health care costs have increased an average 6% a year since 2002, according to a study by Fidelity Investments. A 65-year-old couple would need $240,000 to cover medical expenses during their retirement years, it estimates. That amount could eat up 35% of the couple's annual Social Security benefit. And it doesn't even include any long-term care costs.
Today's workers must understand that the cost of health care is expected to continue rising significantly in future years.
Even though American workers are worried about rising health care costs, that does not mean they are preparing by saving more for retirement. Nearly half of Americans (49%) say they are not contributing to any retirement plan, according to a new survey by LIMRA, an industry-sponsored group. And 56% of Gen Yers, ages 18 to 34, are more likely to not be saving.
That's forcing many Americans to plan to work beyond age 65. A number of people have had to postpone retirement simply because of their health care cost. Continuing employment is probably their best choice, as well as staying as healthy as possible.
A quarter of middle-class Americans even say they need to work until 80 in order to live comfortably in retirement, a November 2011 survey by Wells Fargo found.
Older Americans who have lost their jobs are unemployed for longer periods of time.
Many pre-retirees wrongly assume that when they reach 65 and can apply for Medicare it will cover most of their health care expenses. But Medicare is not as generous as most employer plans. For example, Fidelity calculated how the 65-year-old couple's $240,000 health care costs would be spent:
•23% for out-of-pocket costs for prescription drugs.
•32% for Medicare supplemental insurance.
•45% for out-of-pocket expenses, such as co-pays, co-insurance and deductibles.
This sheds a lot of light, because for many Americans, Social Security is a primary source of their income in retirement and they probably don't realize what a large percentage of it could go just for their health care services.
Americans need to take a harsh look at their retirement future and their options. In addition to saving more and working longer, they also may have to spend less.
They may need to cut back expenditures in some other category. If health care went up 6% but their income only went up by 2%, they have to make up that gap somehow.
For more healthcare and medical related news, visit the Healthcare and Medical blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
The golden years are losing their luster as health care costs continue to outpace income and many Americans are not saving for retirement.
Retiree health care costs have increased an average 6% a year since 2002, according to a study by Fidelity Investments. A 65-year-old couple would need $240,000 to cover medical expenses during their retirement years, it estimates. That amount could eat up 35% of the couple's annual Social Security benefit. And it doesn't even include any long-term care costs.
Today's workers must understand that the cost of health care is expected to continue rising significantly in future years.
Even though American workers are worried about rising health care costs, that does not mean they are preparing by saving more for retirement. Nearly half of Americans (49%) say they are not contributing to any retirement plan, according to a new survey by LIMRA, an industry-sponsored group. And 56% of Gen Yers, ages 18 to 34, are more likely to not be saving.
That's forcing many Americans to plan to work beyond age 65. A number of people have had to postpone retirement simply because of their health care cost. Continuing employment is probably their best choice, as well as staying as healthy as possible.
A quarter of middle-class Americans even say they need to work until 80 in order to live comfortably in retirement, a November 2011 survey by Wells Fargo found.
Older Americans who have lost their jobs are unemployed for longer periods of time.
Many pre-retirees wrongly assume that when they reach 65 and can apply for Medicare it will cover most of their health care expenses. But Medicare is not as generous as most employer plans. For example, Fidelity calculated how the 65-year-old couple's $240,000 health care costs would be spent:
•23% for out-of-pocket costs for prescription drugs.
•32% for Medicare supplemental insurance.
•45% for out-of-pocket expenses, such as co-pays, co-insurance and deductibles.
This sheds a lot of light, because for many Americans, Social Security is a primary source of their income in retirement and they probably don't realize what a large percentage of it could go just for their health care services.
Americans need to take a harsh look at their retirement future and their options. In addition to saving more and working longer, they also may have to spend less.
They may need to cut back expenditures in some other category. If health care went up 6% but their income only went up by 2%, they have to make up that gap somehow.
For more healthcare and medical related news, visit the Healthcare and Medical blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
03 May 2012
Medicare Tries to Curb Equipment Costs
Story first appeared in The Kansas City Star.
For years, it didn’t make sense: Medicare paid sky-high prices for basic medical equipment like wheelchairs and walkers. Consider the case from Fort Lauderdale, Florida. As the South Florida Sun Sentinel reported, a man discovered that Medicare would pay $800 to rent a wheelchair he could have purchased for $350.
For years, stories like this were common. The policy didn’t make sense. Now, we’re fixing it.
Under the old rules, Medicare paid a fixed price for durable medical doctor supplies like oxygen equipment, hospital beds, and diabetic testing strips. Today, under a new competitive bidding program that is already in effect in Kansas City, suppliers must submit bids to the government, competing for business as they do with everyone else. And any supplier who wants to compete must meet strict quality and financial standards to ensure that beneficiaries receive quality equipment that is readily accessible.
The program is already working. A new report shows that in its very first year, our competitive bidding program reduced Medicare spending by $202 million in the nine areas of the country, including Kansas City, where the program launched in 2011. That represents a 42 percent reduction from the previous year, and a great example of how the Obama Administration is working to put the brakes on runaway health care costs. In the coming years, this program pioneered in Kansas City and only nine other areas in the United States, will be expanded across the country.
Over the next 10 years, as the program is expanded to many other areas of the country under the Affordable Care Act and prior legislation, Medicare will save up to $25.7 billion. And people with Medicare will save $17.1 billion because they will pay less in premiums and less for the medical equipment and supplies they need. We’ve already seen examples of how this program is working for our seniors. In the nine regions of the country where this program has been implemented, people with Medicare saw prices slashed. Last year, people with Medicare saved up to $105 on hospital beds, $168 on oxygen concentrators, and $140 on diabetic test strips.
But the competitive bidding program is more than just a prescription for curbing costs. Our goal is also to ensure better health and better health care. That’s why we monitored whether this program affected beneficiaries’ access to nursing medical supplies. Our data found no negative effects on the health of beneficiaries, with the Medicare beneficiaries in the nine areas continuing to have access to all necessary and appropriate items. Our report also shows that the competitive bidding program has reduced unnecessary services. Today, 2.3 million Medicare beneficiaries live in these 9 cities, and Medicare’s call center received only 151 complaints in 2011. And we continue to monitor the program to ensure there are no negative consequences for Medicare beneficiaries and that Medicare savings are achieved.
Fraudulent suppliers have also been attracted to the durable medical equipment benefit because of high Medicare payment rates. The competitive bidding program makes sure suppliers are in good standing with Medicare, meet quality and financial standards, and are licensed and accredited.
In its very first year of operations, the competitive bidding program has reduced overall Medicare spending and the out-of-pocket costs for many beneficiaries. It is a win for patients and their families; it is a win for taxpayers; and it is a win for the continued viability of the Medicare Trust Fund. The competitive bidding program is an excellent example of trying to do things better, smarter and safer.
For more healthcare and medical related news, visit the Healthcare and Medical blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
For years, it didn’t make sense: Medicare paid sky-high prices for basic medical equipment like wheelchairs and walkers. Consider the case from Fort Lauderdale, Florida. As the South Florida Sun Sentinel reported, a man discovered that Medicare would pay $800 to rent a wheelchair he could have purchased for $350.
For years, stories like this were common. The policy didn’t make sense. Now, we’re fixing it.
Under the old rules, Medicare paid a fixed price for durable medical doctor supplies like oxygen equipment, hospital beds, and diabetic testing strips. Today, under a new competitive bidding program that is already in effect in Kansas City, suppliers must submit bids to the government, competing for business as they do with everyone else. And any supplier who wants to compete must meet strict quality and financial standards to ensure that beneficiaries receive quality equipment that is readily accessible.
The program is already working. A new report shows that in its very first year, our competitive bidding program reduced Medicare spending by $202 million in the nine areas of the country, including Kansas City, where the program launched in 2011. That represents a 42 percent reduction from the previous year, and a great example of how the Obama Administration is working to put the brakes on runaway health care costs. In the coming years, this program pioneered in Kansas City and only nine other areas in the United States, will be expanded across the country.
Over the next 10 years, as the program is expanded to many other areas of the country under the Affordable Care Act and prior legislation, Medicare will save up to $25.7 billion. And people with Medicare will save $17.1 billion because they will pay less in premiums and less for the medical equipment and supplies they need. We’ve already seen examples of how this program is working for our seniors. In the nine regions of the country where this program has been implemented, people with Medicare saw prices slashed. Last year, people with Medicare saved up to $105 on hospital beds, $168 on oxygen concentrators, and $140 on diabetic test strips.
But the competitive bidding program is more than just a prescription for curbing costs. Our goal is also to ensure better health and better health care. That’s why we monitored whether this program affected beneficiaries’ access to nursing medical supplies. Our data found no negative effects on the health of beneficiaries, with the Medicare beneficiaries in the nine areas continuing to have access to all necessary and appropriate items. Our report also shows that the competitive bidding program has reduced unnecessary services. Today, 2.3 million Medicare beneficiaries live in these 9 cities, and Medicare’s call center received only 151 complaints in 2011. And we continue to monitor the program to ensure there are no negative consequences for Medicare beneficiaries and that Medicare savings are achieved.
Fraudulent suppliers have also been attracted to the durable medical equipment benefit because of high Medicare payment rates. The competitive bidding program makes sure suppliers are in good standing with Medicare, meet quality and financial standards, and are licensed and accredited.
In its very first year of operations, the competitive bidding program has reduced overall Medicare spending and the out-of-pocket costs for many beneficiaries. It is a win for patients and their families; it is a win for taxpayers; and it is a win for the continued viability of the Medicare Trust Fund. The competitive bidding program is an excellent example of trying to do things better, smarter and safer.
For more healthcare and medical related news, visit the Healthcare and Medical blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
09 February 2012
“Out-of-Network” Prices Up Being Blamed on Medicare
First appeared in USA Today
When Sharon Smith chose an out-of-network specialist to
perform a complicated jaw surgery on her teenage son last May, she knew it
would cost her more. But she was not expecting $15,000.
Consumers have long complained about the cost of going outside
their health plan's network, but Smith encountered a new twist: A growing
number of insurers have changed the way they calculate reimbursements to shift
more of the expense to patients.
Now, instead of paying a percentage of the "usual and
customary" charges from physicians and other providers, insurers are
basing reimbursements on a percentage of what Medicare pays, which can be much
less. "Every carrier is moving to this," says Ken Sperling, global
health care practice leader at the benefit consulting firm Aon Hewitt.
Many employers welcome the change as a way to slow rising
premiums, but some "employees are going to get stuck shouldering a
significant portion of the bill because they don't understand how it's
done," Sperling says.
Consumers are responsible for the difference between what
the out-of-network doctor charges and what their insurer pays. But few
understand the basis on which plans reimburse, let alone the widely varying
prices doctors and hospitals charge. As a result, they may be blindsided by big
bills, says Lynn Quincy, senior health policy analyst at Consumers Union.
Insurers that use the Medicare-based method — including
Oxford, a subsidiary of the nation's largest insurer UnitedHealthcare, Cigna
and Empire Blue Cross Blue Shield — say the new approach offers greater
consistency and thwarts efforts to game the system.
"Usual and customary became abused by a minority of
physicians," says Mark Wagar, CEO of Empire in New York, which is
switching most policies to the new method. "It was not infrequent to see
an emergency case where 98% of the physicians would charge $5,000, but some
outlier would decide to charge $50,000," which would drive up the average.
Read the fine print
There are no good estimates of how many consumers are
affected by the switch, but tens of millions have the type of health plan that
allows them to seek care outside the insurer's network.
Some say they discover the change only after they rack up
big bills. Smith, a certified public accountant in Syosset, N.Y., says she
thought her Oxford plan would cover as much as 80% of the total and was shocked
when it paid $2,500 toward the surgeon's $18,000 fee. That $2,500 is 150% of
the Medicare rate. Smith owed the rest.
Had the usual and customary standard been used, her policy
would have paid at least $12,000, said Oxford spokesman Tyler Mason.
"If I had set out knowing all these costs ahead of me,
I could have negotiated, or I could have said, 'Wow, I can't afford this,'
" says Smith, 53, who is not currently working because of a medical
disability.
To be sure, the information about how the insurer would
calculate the payment was included on page 108 of a 126-page booklet outlining
the Oxford plan offered by her husband's employer. The two-page explanation
says the employer purchased a rider from Oxford that changed out-of-network
payments from a percentage of usual and customary charges to Medicare rates
plus 50%.
"It was so buried I never saw it," says Smith, adding
that even if she had, there was no easy way to find out what Medicare pays for
a procedure.
Mason says Smith should have asked her surgeon how much he
would charge, and then called the insurer to see how much it would pay toward
that charge. He also notes Smith received a letter from Oxford a month before
the surgery saying her costs would likely be higher if she went out of network.
However, it did not spell out the Medicare-based method or her exact liability.
Her cost would have been only about $500, on top of her
deductible of about $2,000, if she had chosen from among several dozen
in-network oral surgeons in nearby New York City, he says.
About negotiated rates
Insurer networks are designed to slow rising health care
costs, in part by getting doctors and hospitals who join to agree to negotiated
rates, which are generally lower than their usual fees.
Out-of-network hospitals and doctors can set their own fees
and "balance bill" patients for the portion insurers don't cover.
Medicare strictly limits how much patients can be balance billed by doctors who
don't participate in the program.
"One of the most expensive decisions that a customer
could make is going out of network," says Alan Muney, chief medical
officer at Cigna.
Smith says she went outside her network because she wanted a
surgeon with experience in the type of complicated jaw surgery needed by
then-18-year-old Thomas. "This is my son's face," she said.
Benefit consultants, insurers, patient advocates and
actuaries say the shift to Medicare rates began after a national database
tracking usual and customary charges — run by UnitedHealthcare subsidiary
Ingenix — was shuttered in 2009 following an investigation by the New York
Attorney General, who questioned whether the data were skewed in favor of
insurers.
While the closure was touted as a consumer win,
"Unfortunately, it's worse now," says Jennifer Jaff, executive
director of Advocacy for Patients with Chronic Illness, a group that helps file
insurance appeals for consumers. "Once New York said you can't use those
(Ingenix figures) anymore, the insurers looked at it as an opportunity to pay
even less."
After the closure, some insurers turned to basing payments
on Medicare rates, says Rob Parke, an actuary at the consulting firm Milliman.
While an office visit for a primary care doctor paid at 170%
of Medicare might be similar to payments made under usual and customary
calculations, Parke says, specialist visits and other types of care often don't
come close.
Stepping into the data gap left by Ingenix is a new
non-profit created by settlements paid by insurers involved with the
investigation. Called Fair Health, the New York-based group began selling data
a year ago that tracks doctors' usual and customary charges and includes a
website calculator for consumers to figure their costs. It now contracts with
medical and dental plans covering more than 170 million people, says Robin
Gelburd, president of Fair Health. "Employers can choose to use Medicare
rates, that's totally fine," but it needs to be put in context, Gelburd
says.
Cigna's Muney says the insurer has decided to use Fair
Health's usual and customary calculations, but will continue to offer the
Medicare rate method as an option because it was well received by employers.
Like several insurers, Cigna also has an online calculator that shows
policyholders how much they would pay for services in and out of their
networks.
Muney and other insurers say that consumers should be asking
why some hospitals and doctors charge so much. A 2009 survey of doctor charges
in 30 states by the industry's lobby group, America's Health Insurance Plans,
found prices for some common procedures ranged to up to 10 times what Medicare
sets as payment.
Some out-of-network hip surgeons, Muney says, charge 30
times what Medicare pays: "Does the patient think that's OK?"
Complex surgery for $2,500?
Smith, for one, is not angry that her son's surgeon, Stephen
Sachs, charged $18,000. "We're talking about a five-hour surgery, a very,
very, complex surgery," she says. "For all that the doctor is paid is
$2,500? The doctor would have to shut down his office if that's all he could
get."
Sachs says the $18,000 covered not just the surgery, but
pre-op care and two years of follow-up visits. "We do a very complicated,
very exact and demanding treatment plan," Sachs says.
He says his rates haven't gone up in five years, and he
takes on many charity cases, especially involving children. But payment rates
for in-network care are so low, he says, that he would have to make sharp
changes, maybe even close, were he to sign on with insurers.
Sachs says he won't pursue Smith for the remaining money she
owes because "you can't get water out of a rock," but he will begin
to charge higher up-front fees for patients with insurance similar to hers.
Kaiser Health News is an editorially independent program of
the Henry J. Kaiser Family Foundation, a non-profit, non-partisan health policy
research and communications organization not affiliated with Kaiser Permanente
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