Category: Health Care Finance

Tackling Medicaid In Massachusetts

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This new post by Jeffrey Sánchez appears on the Health Affairs Blog as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

The Affordable Care Act (ACA) provides a number of tools to address longstanding problems in our fragmented health care system. At the national level, the Centers for Medicare and Medicaid Services (CMS) are redefining Medicare through initiatives that promote payment and delivery reform, such as Shared Savings and Value-Based Purchasing. States are also seeking their own opportunities to move away from inefficient systems that reward volume over quality. In particular, state Medicaid programs have the potential to play a major role in these efforts.

Given the number of individuals Medicaid covers, it has the biggest potential impact in improving health care. Medicaid covers more than 1 in 5 Americans, funding more than 16 percent of total personal health spending in the United States. With ACA Medicaid expansion, enrollment increased in 2014 by 8.3 percent and led to an increased overall Medicaid spending growth of 10.2 percent. Total Medicaid spending growth in 2015 is expected to be 14.3 percent with a 13.2 percent enrollment growth. This is not an insignificant portion of both state and federal health care dollars. Thoughtful and concerted reforms to Medicaid have the potential to reduce spending and improve care quality. […]

Read the full article here.

A Test For Overpayment Liability

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By Zack Buck

The eyes of practitioners, compliance officers, and providers have been trained on the Southern District of New York as many await a decision on a motion to dismiss in Kane v. Continuum Health Partners, No. 11-2325. Kane has grabbed recent attention because of what it could represent: a new era in fraud enforcement.

The facts are straightforward. Throughout 2009 and 2010, three hospitals operating under the Continuum Health Partners umbrella (which is now Mount Sinai Health System) submitted erroneous Medicaid claims seeking reimbursement due to what has been described as a “computer glitch.” The New York Comptroller’s Office notified Continuum of the incorrect claims in the fall of 2010, and Continuum launched an internal investigation.

Relator Robert Kane was asked to investigate any erroneously submitted claims. By early 2011, he had created a spreadsheet containing around 900 claims he thought were erroneously submitted. He emailed the spreadsheet to superiors on February 4, 2011. On February 8, 2011, Kane’s employment was terminated.

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The Robust But Unsatisfying State Of Health Care Fraud Enforcement

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By Zack Buck

Earlier this spring, the U.S. Department of Health and Human Services and Department of Justice reported they had recovered nearly $28 billion as a result of anti-health care fraud efforts in FY 2014. The federal False Claims Act played a substantial role in achieving these recoveries: the government recovered $2.3 billion in FCA settlements and judgments, and opened nearly 800 new civil health fraud investigations, in FY 2014 alone. Further, the agencies noted that these anti-fraud efforts—bolstered by increased funding and authority under the Affordable Care Act—are continuing to abandon the “pay and chase” method of fraud enforcement, relying instead on prevention and “real-time data analysis.”

Interestingly, it is no longer just the federal government driving the enforcement regime. Increasingly, facing Medicaid shortfalls, states are getting involved—and, according to practitioners, state enforcement is “exploding.” For example, in New York, its Office of Medicaid Inspector General recovered more than $1.7 billion from FY 2011 to 2013. States have also had success in litigating claims to trial, most recently illustrated by the notable South Carolina Supreme Court verdict against pharmaceutical giant Johnson and Johnson. Further, Vermont is likely to become the newest state to establish its own state false claims act, another wide-ranging and powerful statute that mirrors the federal FCA.

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Exploring The Significant State-To-State Variation In Marketplace Enrollment

The Petrie-Flom Center Staff Leave a comment

This new post by the Petrie-Flom Center’s Academic Fellow Matthew J. B. Lawrence appears on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

What role did geography, advertising, community, Navigators, and the controversy surrounding the Affordable Care Act (ACA) play in consumers’ decisions whether to purchase health insurance in the individual marketplaces? The percentage of potential exchange marketplace enrollees who actually made use of the marketplace to purchase insurance varied widely from state to state for 2014 and 2015.

As of February 22, 2015, for example, there were eight states with enrollment at 50 percent or greater and eight states with enrollment at 25 percent or lower. (Per the Kaiser Family Foundation, the top eight were Vermont, Florida, Maine, DC, Delaware, Pennsylvania, New Hampshire, and North Carolina. The bottom eight were Colorado, Ohio, Alaska, Hawaii, North Dakota, Minnesota, South Dakota, and Iowa).

It would be an interesting and challenging task to explain this variation empirically. Generating reliable statistical inferences from inter-state comparisons is notoriously difficult, and the variables at play here range from the easily measured (percent of population eligible for subsidies, navigator grant amounts, number of participating insurers, premiums) to the not-so-easily measured (enthusiasm for Obamacare, efficacy of state or federal outreach efforts, geography, education, availability and usefulness of charity care and emergency Medicaid, functionality of state exchange website, population health, availability of health services). […]

Read the full post here.

Medicare’s Costly Drug Problem

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By Zack Buck

Last week, Dr. Salomon Melgen, an ophthalmologist who practices in North Palm Beach, Florida, was indicted on Medicare fraud charges. Melgen was charged with a variety of crimes, with prosecutors alleging he falsely diagnosed patients and falsified their files. Melgen’s name may be familiar. Last year, he was reported to be the provider with the highest total of Medicare Part B reimbursements in 2012, reportedly reimbursed by Medicare for more than $20 million, a substantial percentage of which was directly based upon his prescriptions for, and administration of, the drug Lucentis.

But the allegations against Melgen highlight a deeper challenge facing Medicare.

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Think Tanks on Prescription Drug Coverage – Missed Opportunity

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By Lydia Stewart Ferreira

Two Canadian think tanks – the C.D. Howe Institute and the Institute for Research on Public Policy – recently issued contradicting reports on whether prescription drug plans should be age-based or income-based.

As background, medications prescribed outside a Canadian hospital setting are not covered by Canada’s medicare system. They are financed through a patchwork of private and public drug insurance plans that only provide coverage for select populations. For example, up until the late 1990s, people 65 and older received universal, public drug coverage in most provinces. But with population aging, the public liability associated with age entitlements has become a major concern for governments. Four Canadian provinces have discontinued their age-based programs, which covered most of the cost of medications for seniors, and replaced them with income-based programs, which protect all residents against catastrophic drug costs. Other provinces have started to move or are considering moving in this direction.

The C.D. Howe Institute think tank concluded that provincial drug plan benefits based on age are ‘outdated’ and drug plan benefits should be based on income instead. “[I]ncome-based plans are a better alternative for cash-constrained provinces and offer more equitable access to public benefits.”

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How to Fix Our Hospital Pricing Problem (and How Not To)

The Petrie-Flom Center Staff 1 Comment

Guest post by Erin Fuse Brown
[Cross-posted from Center for Law, Health and Society Blog]

Last month, Slate columnist Reihan Salam wrote a provocative article about outrageous hospital prices that are driven, according to Salam, by greed, avarice, and market power. Salam gets a few things dead right, namely his diagnosis that we have a massive hospital pricing problem that is bleeding us dry and that the problem is largely caused by growing hospital market power. However, he misses the mark when laying out policy recommendations to curb monopoly-driven hospital prices.

The solutions

Antitrust:  Salam favors using antitrust enforcement to prevent health care consolidation and to reduce barriers to entry for competition. The biggest problem with antitrust enforcement is that it can do little to reverse or break up existing monopolies. Antitrust laws will be unable to help the vast majority of hospital markets that are already concentrated. Second, even with its improving success rate in court, the FTC simply cannot prevent or police the ongoing wave of hospital mergers, resulting in price increases up to 40% price increases in some areas. To be sure, increased antitrust enforcement is a necessary element of the strategy to control hospital prices to stem the tide of consolidation that is driving prices upward. But antitrust is no silver bullet, especially for hospital markets that have already become noncompetitive. Read More

Replacing the Affordable Care Act?

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By David Orentlicher

[cross-posted at HealthLawProfs blog]

With the future of the Affordable Care Act in doubt after last week’s hearing before the U.S. Supreme Court, Republican lawmakers are busily preparing back-up legislation. New options should not be necessary—the government should prevail against those challenging its interpretation of the Act’s premium subsidy provisions. But it is prudent to consider alternatives in the event that the Court rules against the government.

While most of the ideas being floated would do little to bring health care insurance to the uninsured, there is an option that really could expand access to coverage while also containing health care spending. And it could be attractive to Republicans and Democrats alike on Capitol Hill. Read More

Open Payments: Early Impact And The Next Wave Of Reform

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This new post by Tony Caldwell and Christopher Robertson appears on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

The Physician Payments Sunshine Act, a provision in the Affordable Care Act, seeks to increase the transparency of the financial relationships between medical device and drug manufacturers, physicians, and teaching hospitals. Launched on September 30, 2014 by the Centers for Medicare & Medicaid Services (CMS), the Open Payments database collects information about these financial relationships and makes that information available to the public.

As of early February, the Open Payments database includes documentation of 4.45 million payments valued at nearly $3.7 billion made from medical device and pharmaceutical manufacturers to 546,000 doctors and 1,360 teaching hospitals between August 2013 and December 2013. This included 1.7 million records (totaling $2.2 billion) without the names of physicians or teaching hospitals who received the payments.

These records were intentionally de-identified by CMS because the records had not been available for review and dispute for 45 days, or because the records were not matched by CMS to a single physician or teaching hospital due to missing or inconsistent information within the submitted records. Future reports will be published annually and will include data collections from a full 12 month period. […]

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“Volume to Value” Still Needs an Ethics Consult

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By Kelsey Berry

Whereas “allocation of scarce resources” is a buzz phrase that inspires a great deal of distress and desire for good ethical argument, “waste avoidance” strikes us as a relatively uncontroversial method for containing health care spending. Perhaps this is because rationing implies a trade-off between two individuals, each of whom have the potential to benefit from a possible intervention, whereas waste avoidance, on the other hand, implies a trade-off between two services – one of which has the capacity to benefit an individual, and the other which does not. Surely the latter trade-off is preferable, and perhaps even imperative, to make before we take up the former. This week U.S. Secretary of Health and Human Services Sylvia Burwell signaled a commitment to making the latter trade-off in her announcement on a complex area of health care financing: Medicare payment & payment reform. Medicare payment is one of the few levers that the federal government has relatively direct control over when it comes to controlling health care spending, and Burwell’s announcement was a welcome change in the policy discourse from the oft-lamented “doc fix”/SGR debacle (a fix for which was just bypassed again).

In her announcement and this perspectives piece in NEJM, Burwell set goals to (1) move 50% of Medicare payments to alternative payment models such as Alternative Care Organizations (ACOs) and bundled payment arrangements by 2018, and (2) tie 90% of all Medicare payments made under the traditional fee-for-service model to quality or value, through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs, by 2018. Notably, these are the first explicit goals for transitioning to alternative payment models and value-based payments that have been set in the history of the Medicare program – though it remains to be seen how these goals will be pursued.

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