HealthBlawg

David Harlow quoted in Medicare Compliance Alert on pre-employment background checks

Take some advice from the HealthBlawger in screening new employees.  Check out some specifics in the current edition of DecisionHealth's Medicare Compliance Alert, offered in point-counterpoint format with tips from my friend Bill Mandell.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

No pay for never events: Massachusetts edition

This week, Blue Cross Blue Shield of MA and the Commonwealth -- primarily through MassHealth (MA Medicaid) -- announced they would adhere to the Leapfrog no pay for never events policy.

According to a news story from about 9 months ago, half of the state's hospitals had already determined that they would not bill for never events.  Furthermore, the Massachusetts Hospital Association's members have previously all agreed to no pay for nine specified never events (vs. Leapfrog's 28 never events, and CMS's ever-growing list).  Thus, it seems that the impact of this week's announcement -- while notable -- is less than what is being touted.

As I've noted in the past, the Leapfrog approach is notable in that it not only addresses the no pay piece of the puzzle, but it also calls for apologies.

Update 6/20/08:  Leapfrog CEO Leah Binder chimed in with the following email this afternoon, reproduced here with her permission:

Thank you for making the point in your blog that the key element of Leapfrog’s never events policy is our insistence that the hospital apologize to the patient.  The aspect of our policy that gets the most attention has been our policy that providers should not bill for never events.  However, as you note, the apology is even more important to patients and to the employers Leapfrog represents.  Whatever business transactions are involved (ie the billing), at its core our health care system is a quintessentially human institution where very vulnerable people rely on the caring and compassion of others. Without an apology, a never event grows even more offensive: it becomes a betrayal of that sense of humanity and compassion that motivates Americans to invest enormous resources in our health care system.  The apology reminds us that compassion for the patient is the critical part.

Thanks again for making the point.
Leah F. Binder, MA, MGA
Chief Executive Officer
The Leapfrog Group

(And follow the link to see more HealthBlawgging on medical apologies.)

Refusal to pay does not eliminate all of the services that are used in the event of a never event  -- could we ever have a zero HAI rate, even if HAI is a never event? -- and those costs will be shifted elsewhere in the system.  Furthermore, payors aren't necessarily going to be able to identify no-pay events, and hospitals note that some no-pay events may be attributable to the actions or omissions of folks beyond the hospital's control (e.g., an infection attributable to supplier manufacturing practices and undetectable and unaddressbale by the hospital).

Well, it's not a panacea; the no pay policy is just one arrow in the quiver.

-- David Harlow

Private equity, public accountability, nursing facilities and grandstanding

Bob Coffield's recent post on a pending reconsideration of a West Virginia CON issued to The Carlyle Group (a private equity firm) for the acquisition of HCR Manor Care (a publicly-traded company with about 275 nursing facilities nationwide) got me thinking about the appropriateness of using these sorts of procedural acrobatics to address what may or may not be legitimate concerns about quality of care and transparency. 

SEIU 1199, the party that called for reconsideration, opposes transactions like this one all around the country, and even testified recently at the House Ways and Means Committee hearing on nursing facility ownership and accountability -- the same day it filed its request for reconsideration in West Virginia, by the way.  The hearing focused on the advisability of allowing private equity firms to own nursing facilities through subsidiary corporations, given the opacity of the corporate structure, insulation of the folks at the top from liability for substandard care that may be provided at individual facilities, and general alleged propensity of private equity firms to cut costs in order to pump up profits at the expense of patient care.  See the NY Times article on this issue, a few weeks ago, covering the hearing.  The industry associations (still controlled by the public companies, as the private equity folks own just a small percentage of nursing facilities nationwide) seem to be carrying the water on this issue; The Carlyle Group didn't even show up at the Ways & Means hearing.

Seems to me that SEIU is in this largely for the membership: Manor Care is essentially an open shop, and SEIU is presumably looking to cut a deal with management to ensure enrollment of a few new members among the company's 60,000+ employees.  (Tip of the hat to Politico.) 

The key principled objection seems to be lack of accountability, though to hear the advocates tell the tale, it's hard to see how regulators could hold anyone less accountable than they've held the large publicly traded companies (and their operating subsidiaries) that are now being bought up by private equity firms.  While the public companies -- and the private equity firms -- are all subject to the same licensure and certification standards as any local business owning and operating a nursing facility, in many states, they were (and are) considered "too big to fail."  Single-purpose entities and insulation of CEOs from front-line operational responsibility are nothing new; they've been part of corporate America -- and part of the medical-industrial complex -- for quite a while now.

Rather than simply continuing the demonization of for-profit ownership of health care operations, I hope that this dialogue results in one of three things: (1) some reasonable concrete standards for review of changes in ownership, and operations, of nursing facilities (hard to write, hard to enforce); (2) a policy decision that all health care facilities must be owned and operated by not-for-profit or governmental entities (not bloody likely); or (3) an acknowledgment that the present system, however imperfect, represents a reasonable balancing of interests.  The complaints are not new; the proposed solutions are not new.  Spinning wheels in political machinery are not new.  Perhaps there can be a new accommodation of interests so that appropriate operations of facilities, with a reasonable degree of accountability and transparency, can take place even in the presence of private equity ownership.

-- David Harlow

Creative approaches to caring for seniors in less restrictive settings

Last year, Massachusetts amended its Medicaid laws to require that beneficiaries headed to nursing facilities be screened to see if they could be placed instead in less restrictive settings. The Commonwealth then applied for a so-called Section 1115 waiver from Medicaid rules in order to reallocate federal funds ordinarily devoted to health care facility based care to community based care. The Massachusetts program is called Community First.

This sort of thing is clearly better for beneficiaries, and easier on the public fisc. It also echoes a longstanding effort to keep seniors in community settings, where they can be more active, and to resist medicalizing the normal aging process. The PACE program (aka the Program for All-inclusive Care for the Elderly, begun at the On Lok community health center in San Francisco a couple decades ago) graduated a few years ago from a waiver/demonstration program to a regularly recognized program for federal funding purposes. PACE keeps seniors who are eligible for nursing facility placement out of nursing facilities, arranging for all needed services through community health centers (adult day health, home health, etc.).

Assisted living facilities also sprang up over the past couple of decades as an alternative, or in some cases way-station to, nursing facilities.

There are also programs designed to keep health care facilities from being too much like health care facilities: viz. the Green House model of homelike nursing facilities.

The latest entrant in this field of alternatives to traditional nursing facilities is the Going Home program in Massachusetts, highlighted in today's Boston Globe story about a four-resident home in West Peabody operated by North Shore Elder Services, which plans to add additional sites. The home provides a residence, a live-in aide, meals, and other services as needed. Per the Globe,

Services cost another $3,600 to $4,000 per person a month at West Peabody, covered through the Medicaid and Medicare programs, because the residents have medical and physical conditions that would otherwise qualify them for government-paid nursing home care. The total cost per day is less than the $187 average state payment for nursing home care, but more than the state pays for the least-ill nursing home residents.

The story continues:

Because the houses are not subject to state regulation like nursing homes, some question whether residents would be adequately protected. There have been occasional abuses in state-funded homes for the mentally ill.

Organizers say there are multiple checks and balances in the way the houses are run. One of the regular duties of the elder service agencies is to investigate abuse and neglect for the state. The agencies' staff monitors the care provided in the houses. And other professionals, obligated to report abuse, are regular visitors.

The market for these services is likely robust and it will be interesting to follow the growth of this initiative in Massachusetts and elsewhere.

-- David Harlow

OIG releases FFY 2008 workplan

The OIG workplan for FFY 2008 was released today. Reviewing the workplan is always instructive for those Medicare and Mediciaid suppliers and providers interested in keeping their noses clean for another year. There's too much in there to itemize here, but I will note one of the "Medicare Cross-Cutting Issues." It's everyone's current favorite: never events. OIG will be conducting a series of never-event-related studies over the next two years, as mandated by Congress. The workplan states:

OIG is mandated to study incidences of never events for Medicare beneficiaries, including types of events and payments by any party; the extent to which the Medicare program paid, denied payment, or recouped payment for services furnished in connection with such events; and the extent to which beneficiaries paid for such services. OIG is also required to review the administrative processes of CMS to detect such events and to deny or recoup payments for services furnished in connection with such events. We will assess the utility of current State and voluntary reporting systems and examine CMS’s oversight of and processes for identifying and responding to never events.

Stay tuned.

-- David Harlow

David Harlow quoted in Physician Compensation Report article on Stark regulations; final Stark Phase III rules to be published this week

Elyas Bakhtiari interviewed me for his September article on the proposed Stark regulation revisions tucked into the physician fee schedule regulation.  Check out a PDF of the September issue of Physician Compensation Report right here.  It's published by Health Leaders Media, and the Stark article is the lead story.

Among other things, I said:

This is the sort of thing that makes physicians throw up their hands. It is yet another factor that would lead many physicians to lean more toward work as an employee rather than as an entrepreneur.

Of course, once this issue went to "press," CMS went ahead and released the final Stark II, Phase III regulations a few months before its self-imposed deadline.  Check out the CMS press release, the full text of the regs, and the redlined version of the Stark Phase III regs.  They are to be published this week (September 5) in the Federal Register, and will be effective 90 days after publication.

As with the publication of the interim final regs a few years back, we can look forward to some restructuring of noncompliant deals, though not all arrangements currently in effect will need to be overhauled immediately.

Check back here at HealthBlawg for more on Stark Phase III as I dig out from vacation.

-- David Harlow

Study validates Green House model for nursing facilities

I've posted before about the Green House model for nursing facilities.  The research team that had previously done some work in this area (linked to in the post above) has now published another study under the auspices of the Commonwealth Fund.  The current longitudinal study of the Green House model yielded the following conclusions:

• Green House residents reported significantly higher satisfaction with their facility as a place to live than did residents of the other two traditional nursing homes, and better scores on many dimensions of self-reported quality of life.
• In terms of care and health outcomes, Green House residents experienced lower rates of depression, bed rest, reduced activ-ity, and decline in functional abilities, but did have higher rates of incontinence than did one of the comparison settings.
• Green House residents reported significantly higher scores on emotional well-being indicators.

Here's hoping that with or without the assistance of RWJF (described in the post linked to above) or other non-direct-nursing-facility-care funding sources the Green House model can take hold and spread across more and more facilities.  The limiting factor (aside from cash) is the fact that many nursing facility residents are either short-stay residents, or are not well enough, to take advantage of, and contribute to, the Green House model of care.  What do we do for such other residents?

-- David Harlow

Final 2008 Medicare rates for nursing facilities released by CMS; Massachusetts 2008 Medicaid rates are out too

As proposed back in May, Medicare rates for nursing facility services have been increased by $690 million, or 3.3%, in total, for FFY 2008.  The Medicare final rule went on display yesterday and is to be published in the Federal Register August 3.

Per the state budget, Massachusetts Medicaid rates for SNFs have been increased by $80 million, or 4% on average, for SFY 2008, through emergency regulations promulgated last week.

So far, so good.  The regulations are simply implementing legislative rate adjustment principles.

Well, not so fast:  Those principles are hardly written in stone.  Congress currently seems hell-bent on monkeying with all sorts of things as the SCHIP reauthorization bill, now known (in the House) as the Children’s Health and Medicare Protection Act of 2007 (CHAMP Act), rolls along.  The industry association, AHCA, observes that the CHAMP Act, now in House Ways & Means, includes a cut of $2.7 billion over five years for Medicare services to seniors in nursing facilities.  This follows up on our fearless leader's (DOA) proposed five-year, $2.8 billion Medicare nursing facility payment cut in his FFY 2008 budget, based on a negative inflation factor.

So NF reimbursement looks stable, back on the upswing, even -- but only so long as the basic rules don't get changed. 

Unfortunately, while health care seems to have the nation's attention, nobody seems to want to pay for it; talk of negative inflation factors trigger outpourings of invective from the provider communities (cf. the SGR issue for docs), but nobody else seems to care enough to sit down and work hard at structural change.

-- David Harlow

Mandatory long term care insurance?

It's fair to say that there's probably no appetite for yet another health insurance mandate in Massachusetts right now.  (The individual mandate for health insurance kicks in July 1.)  Nevertheless, State Sen. Richard Moore is sponsoring a bill that would make the purchase of long term care insurance mandatory.  Have a listen to Martha Bebinger's WBUR story on the subject.

To be fair, I don't think Sen. Moore expects this proposal to move right now; he and others are trying to get ahead of the baby boomers so that we don't bankrupt the public fisc.  He rightly notes that if long term care insurance policies were more widely held, the individual premium levels would come down. 

Discussion of mandates is all the rage these days on the national stage as well.  For the other side of the story, check out Bob Laszewski's post on the mandate myth.

Keep an eye on this issue -- it will be back.

Update 6/13/07: Georgetown's Long Term Care Financing Project offers a wealth of information on this topic.  Its most recent report, Long Term Care Finacing: Options for the Future, is a worthwhile read, and frames the case for a public-private partnership to finance long-term care.  (TOH to the Kaiser Network's Daily Health Policy Report.) 

-- David Harlow

OIG issues the Compendium of Unimplemented OIG Recommendations

Read the full Compendium.  Or just take a look at the priority recommendations.  There's something for everyone. 

The OIG scopes out its "priority" recommendations as being "comprised of both monetary and non-monetary recommendations, representing various time frames. The list comprises three categories: savings, integrity and efficiency, and quality of care." 

The quantified "priority" unimplemented OIG recommendations would save over $6bln if implemented.

The OIG announcement follows: 

The "Compendium of Unimplemented Office of Inspector General Recommendations" combines the "Red Book" (unimplemented monetary recommendations) and the "Orange Book" (unimplemented nonmonetary recommendations) into one publication. The "Red Book" focused on significant Office of Inspector General (OIG) cost-saving recommendations that had not been fully implemented. The "Orange Book" focused on unimplemented recommendations to improve HHS programs. Full implementation of the recommendations in this compendium could achieve substantial savings and increase the effectiveness of the Department’s programs.

Each narrative contains a background summary, findings, recommendation(s), status, report number(s), and report issue date(s). In the case of monetary recommendations, there is also an estimate of the savings that may be achieved by implementing the recommendations. The estimated value of each monetary recommendation is based on the specifics of each review and not extrapolated beyond the scope of the original review. The actual savings to be achieved depends on the specific legislative, regulatory, or administrative actions. However, the estimates provide a general indication of the magnitude of savings possible.

-- David Harlow