Tag: "Medicare"

U.S. Busts 243 Providers for $713 Million Medicare, Medicaid Fraud

man-in-wheelchairThis blog does not often congratulate the Obama administration. However, it has been relatively successful at prosecuting Medicare fraud through old-fashioned, gum-shoe type investigations.

From yesterday’s news:

In Miami, the owners of a mental-health treatment center allegedly billed Medicare for tens of millions of dollars’ worth of intensive therapy that actually involved just moving people to different locations. Some of them had dementia so severe that they couldn’t even communicate.

And in Michigan, another physician allegedly prescribed unnecessary narcotic painkillers in return for the use of his patients’ IDs to generate additional false billings. When they tried to escape the scheme, authorities say, he threatened to cut off the medications, to which his patients were addicted.

In the single largest crackdown in an eight-year campaign against health-care fraud, the Justice Department charged 243 people Thursday with $712 million in false billings to Medicare — the medical insurance program for the elderly — and Medicaid, which serves the poor. (Lenny Bernstein & Sari Horwitz, “Government arrests 243 in largest crackdown on health-care fraud,” Washington Post, June 18, 2015)

Medicare’s Sustainable Growth Rate Was Not Entirely Bad

(A version of this Health Alert was published by RealClearPolicy.)

Supported by health-care interests, Medicare beneficiaries, and an overwhelming bipartisan consensus in Congress, President Obama has signed a law that will change how Medicare pays doctors — for the worse. Critics note the law will dramatically increase federal control of medicine and add $141 billion in deficits through 2025, a violation of Republican and Democratic pledges made since 2010.

The old system, called the Sustainable Growth Rate, was hardly perfect. In fact, in over a decade of working in health policy, I have never heard one person say anything good about it. Now that it is dead, it is time to give the SGR a fitting eulogy — to bury it, but also, for once, to praise it. Whatever its flaws, the SGR was this nation’s only attempt to connect the cost of an entitlement to our ability to afford it.

Hip Replacements in L.A.: $12,457 to $17,609

A short drive in the Los Angeles area can yield big differences in price for knee or hip replacement surgery.

New Medicare data show that Inglewood’s Centinela Hospital Medical Center billed the federal program $237,063, on average, for joint replacement surgery in 2013.

That was the highest charge nationwide. And it’s six times what Kaiser Permanente billed Medicare eight miles away at its West L.A. hospital. Kaiser billed $39,059, on average, and Medicare paid $12,457.

The federal program also paid a fraction of Centinela’s bill — an average of $17,609 for these procedures. (Chad Terhune & Sandra Poindexter, “Price of a common surgery varies from $39,000 to $237,000 in L.A.,” Los Angeles Times, June 2, 2015)

Okay, hospital bills are silly. We already know that. Let me point out two things.

Health Insurance Consolidation Begins With A Bang

Just last Thursday, I wrote about the forthcoming consolidation in U.S. health insurance. My thesis was that only large, centralized, politically powerful insurers could continue to thrive.

With perfect timing, Humana, Inc., announced on Friday that it was putting itself on the block, and the shares rallied about twenty percent. They continue to climb today.

“Because of the Affordable Care Act, the whole insurance market is shifting towards a lower margin model,” said Chris Rigg, an analyst with Susquehanna Financial Group. “Generally speaking, the bigger you are, the better.” (Michael J. de la Merced & Julie Creswell, New York Times DealBook, May 29, 2015)

“Transparency” Will Not Fix Medicare Physician Fees

The Government Accountability Office (GAO) has released a report criticizing the way the federal government sets physicians’ fees in Medicare. It concludes that “Better Data and Greater Transparency Could Improve Accuracy.”

I doubt it. Note the mind-numbing detail of this process: The government delegates its assumed authority to a group of physicians who comprise the Relative Value Scale Update Committee (RUC). The government “reviewed 1,278 RUC work relative value recommendations for about 1,200 unique (new and existing) services)” in the last four years.

Preventive Care Does Not Want To Be “Free”

One conceit behind Obamacare is that if the government mandates preventive care be “free”, people will use it. The notion should appeal to free-market types, too: As the price of a service drops, the quantity demanded should increase.

However, it is not that simple in health care. Let’s take another dive into the always heated and controversial discussions about preventive care for women (such as our recent entry about mammography).

New research shows that women under 65 are over screened for osteoporosis, and women aged 65 and over are under screened, although older women get screened for “free”:

Commonwealth Fund: “Underinsurance” Unchanged Under Obamacare

Yet another pro-Obamacare organization has had to publish a study indicating that Obamacare is failing to achieve its objectives. I recently discussed Families USA’s report that one third of low income families cannot afford care under Obamacare.

This time it is the Commonwealth Fund, inventor of the notion of “underinsurance,” which is defined as out-of-pocket health costs (excluding premiums) comprising at least 10 percent of household income, or five percent if household income is less than 200 percent of the Federal Poverty Level.

In 2014, the proportion of so-called “underinsured”, aged 18-64, was 23 percent – exactly the same as in 2012 and just one percentage point more than in 2010.

Ex2

High U.S. Health Prices From “Market Power”?

The National Academy of Social Insurance (NASI) recently published a consensus report on provider consolidation. Basically, we have a growing problem in that hospitals are buying each other up and also physician practices, which leads to reduced competition and higher prices.

The report was promoted with an op-ed in The Hill by the esteemed Robert A. Berenson (Urban Institute) and G. William Hoagland (Bipartisan Policy Center):

The use of market power—or the ability to raise and keep prices higher than would prevail in a competitive market – is the key reason the United States spends so much more on healthcare than other countries.
For policymakers, tackling the lack of competition is like climbing a mountain. Even the initial steps — creating more competition – may be difficult, but they must be explored before more regulatory action further down the path is considered.

These are remarkable statements; and difficult to accept uncritically.

Medicare Fraud: Moratoria Miss the Mark

(A version of this Health Alert has been published by Forbes. A longer version of this Health Alert has been submitted to the U.S. House of Representatives Committee on Ways & Means, Subcommittee on Health, for the May 19, 2015 hearing titled, “Improving Competition in Medicare: Removing Moratoria and Expanding Access.)

Senior Man ThinkingMedicare fraud is a serious problem. The Medicare bureaucracy has the power to impose moratoria on new providers in geographic or program areas it deems susceptible to fraud. However, preventing new competitors from providing Medicare benefits reduces competition and cannot reduce fraud by incumbent providers. A better way would be to give Medicare beneficiaries a financial interest in combatting fraud.

Last February, the Government Accountability Office issued its annual report on federal programs that it identifies as high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement.  Medicare is a longstanding member of the list: “We designated Medicare as a high-risk program in 1990 due to its size, complexity, and susceptibility to mismanagement and improper payments”. A quarter of a century has gone by and Medicare is still on the list.

Medicare’s Pioneer ACOs Ending with a Whimper?

UntitledThis blog has covered the mediocre and inconclusive results of Medicare’s Pioneer Accountable Care Organization (ACO) model for a couple of years now. A new research paper in JAMA, the Journal of the American Medical Association furthers the narrative that the much ballyhooed program has very slim results:

 

 

 

Results  Total spending for beneficiaries aligned with Pioneer ACOs in 2012 or 2013 increased from baseline to a lesser degree relative to comparison populations. Differential changes in spending were approximately −$35.62 (95% CI, −$40.12 to −$31.12) per-beneficiary-per-month (PBPM) in 2012 and -$11.18 (95% CI, −$15.84 to −$6.51) PBPM in 2013, which amounted to aggregate reductions in increases of approximately −$280 (95% CI, −$315 to −$244) million in 2012 and −$105 (95% CI, −$148 to −$61) million in 2013. Inpatient spending showed the largest differential change of any spending category (−$14.40 [95% CI, −$17.31 to −$11.49] PBPM in 2012; −$6.46 [95% CI, −$9.26 to −$3.66] PBPM in 2013). Changes in utilization of physician services, emergency department, and postacute care followed a similar pattern. Compared with other Medicare beneficiaries, ACO-aligned beneficiaries reported higher mean scores for timely care (77.2 [ACO] vs 71.2 [FFS] vs 72.7 [MA]) and for clinician communication (91.9 [ACO] vs 88.3 [FFS] vs 88.7 [MA]).

Let’s leave the quality measurements aside for now, and focus on the fiscal effects. There appears to be a small positive effect. However, it appears extremely slim and likely even illusory for a number of reasons: