United Healthcare Uses Market Power to Hammer Physicians...Again

April 2009: The AAFP announced that insurance giant UHC has decided to reimburse providers based on the 2008 Medicare fee schedule and associated RVUs.  As the AAFP states, "Essentially, UHC's action locked in the lower 2008 RVUs, a money-saving move for the insurer that creates a pay freeze for 70,000 physicians, including nearly 14,000 family physicians who hold UHC contracts."  RVUs change yearly based on an annual reassessment of procedure risk, difficulty, and effort required, but UHC has seen fit to ignore these industry changes under the guise of "consistency" by stating, "You will see no difference with this new fee schedule and your current reimbursement."  Well, thank you sir because providers surely don't want better reimbursement; they want consistency!  Here is a company that had to pay $50 million for "cooking the books" and paying physicians below market (see article below), had to withdraw reliance on their own financial statements because of accounting errors (see below), and once again recorded record profits (see below).  When are providers going to quit squawking and drop this payor until it learns to play nice in the sandbox? 

Payor Survey Results are in for Missouri and Kansas

March 2009 - MGMA has released its most recent payor surveys.  To see the Missouri and Kansas results click the following links.  You will need Adobe Acrobat to see them:  Missouri    Kansas

Payor Fast Facts - Also go to www.Payerview.com to see how insurers rate.

2008 full year Insurer profits and CEO salaries are shown further down this page.

Competition for clinical talent heats up in Kansas City

1/27/09 - MediCo Unlimited, LLC: Even in these tough economic times when retailers and manufacturers are laying off employees by the thousands, staffing shortages remain in the healthcare sector. Medical assistants, technologists, mid-level providers, and even physicians are projected to be in high demand well into the next decade.  Recent AHA reports indicate 42% of hospitals have a shortage of ultrasound technicians. The medical assistant shortage has even affected the military. As an answer, Johnson County Community College (JCCC) and Metropolitan Community College (MCC) are now stepping up efforts to fill those gaps.  JCCC has partnered with Olathe Medical Center (OMC) to open a $15 million Health Services Education Center.  OMC is donating the 5.8 acres of land on its campus in Olathe Kansas (southwest of downtown Kansas City), which is valued at $1.65 million, and JCCC is building the 50,000 square foot facility.  Construction is slated to start in 18-24 months.  Not to be outdone, MCC is opening a $27 million facility in early 2010. It will be renovating the 132,000 square foot American Century Investment building on Broadway, just North of the Country Club Plaza.  MCC plans to build a 10,000 square foot Human Patient Simulator Lab as part of the facility.  Students at MCC will be offered needs-based scholarships to attend their program.

The competition bodes well for area students as they will have two distinct choices, based on quality of education and locale, from which to choose. The question arises, even with staffing shortages ever-present, whether both programs can be successful.  The MCC facility will be twice the size of the JCCC facility and will be located in the "backyard" of St. Luke's Hospital and KU Medical Center, both nationally recognized research facilities, and will also be in close proximity to another research hospital, Research Medical Center (part of the HCA system) as well as North Kansas City Hospital and Children's Mercy Hospital. 

The JCCC / OMC partnership in the Health Education Center is a different approach.  OMC is attempting vertical integration relating to its future allied health personnel.  However, unlike vertical integration via employed physicians who feed patients to the hospital, these students will have no contractual requirements to join OMC once they graduate.  While the JCCC / OMC facility will be on the OMC campus, it is also in relatively close proximity to Shawnee Mission Medical Center, Overland Park Regional Medical Center and Menorah Medical Center, all three of which will certainly draw graduating students away from OMC.  The good news for OMC is that its investment appears to be the land and not ongoing expenses that could drain its coffers. In one sense, this is a smart marketing move by OMC as it will, at a minimum, enhance OMC's status in the public's eye even if the students eventually go elsewhere for employment. It is reported OMC leadership will have joint administrative responsibilities with JCCC, which has shown to be problematic if the vision of each entity is not similar.

   United Healthcare to pay $50 million

Update 3/24/09 yahoo.com: Sen. Jay Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, wants answers at a hearing Tuesday from the chief executives of UnitedHealth Group Inc. and its subsidiary Ingenix Inc., a claims database used by insurers nationwide to calculate out-of-network rates. In January, UnitedHealth agreed to pay $350 million to settle a suit by the American Medical Association and others over the issue. UnitedHealth did not admit wrongdoing. But, under pressure from Cuomo, the company agreed to pay $50 million toward creation of an independent claims database and eventually close down the Ingenix databases. Cuomo has secured similar agreements from other major insurers, including WellPoint Inc., Aetna Inc., and Cigna Corp. The AMA is pursuing suits against those companies, too.

1/14/09 - St. Louis Business Journal: The parent company of the second-largest health insurance provider in the Kansas City market has reached a $50 million legal settlement in New York that is expected to have nationwide ramifications. UnitedHealth Group Inc. settled a case Tuesday with New York Attorney General Andrew Cuomo involving Ingenix Inc., a wholly owned subsidiary of UnitedHealth that provides billing information to large insurers. They use the information to determine “usual and customary” rates for out-of-network services. Cuomo alleged that Ingenix low-balled those rates to save money for insurers. No criminal charges have been brought in the case. As part of the agreement, UnitedHealth will pay $50 million to fund the development of an independent database to be used to determine how much health insurers reimburse members for out-of-network health care services.

CCHIT has named the members to its 2009 certification program. To see all products certified to-date go to http://www.cchit.org.
 

Health Savings Accounts and High Deductible Plans Summary

March 2009: According to AHIP, the number of people with HSA/HDHP coverage rose to 6.1 million in January 2008, up from 4.5 million in January 2007, and 3.2 million in January 2006. States with the highest percentage of HSA/HDHP enrollees among their under 65 populations with private health insurance were Minnesota (9.2 percent), Louisiana (9.0 percent), District of Columbia (8.7 percent), Vermont (7.5 percent), Colorado (7.1 percent), Nebraska (6.4 percent), Connecticut (5.8 percent), Wisconsin (5.6 percent), Indiana (5.1 percent), and Iowa (5.0 percent). States with the highest levels of HSA/HDHP enrollment were California (639,000), Florida (397,000), Illinois (384,000), Texas (358,000), Ohio (353,000), and Minnesota (325,000).

Kansas had 56,206 covered lives in 2008 and Missouri had 88,112 covered lives.

Large Group Market: For the "best selling product" of each insurer, the average deductible was $2,046 for an individual and $3,998 for a family.  The average annual premium was $3,185 for an individual and $8,241 for a family.

Small Group Market: For the "best selling product" of each insurer, the average deductible was $2,244 for an individual and $4,356 for a family.  The average annual premium was $3,189 for an individual and $8,125 for a family.

HIPAA Violation Settlements

March 2009:  CVS pharmacies are the latest and only second organization to pay to settle allegations that it violated HIPAA privacy regulations.  CVS will pay $2.25 million. The settlement follows a joint investigation by the Department of Health and Human Services and the Federal Trade Commission after media reports in 2006 that workers at CVS pharmacies were improperly disposing of sensitive patient and employee data. Employees allegedly tossed pill bottles with labels containing patient information into open dumpsters, along with medication instruction sheets, pharmacy order information, employment applications, payroll data, and credit card and insurance card information.

With the advent of new HIPAA regulations found in the Stimulus bill, one can expect more investigations and penalties.  Here are some interesting facts.

Notable Penalties, Settlements and Convictions

1. March 2009: CVS Pharmacies: $2.25 million

2. July 2008: Providence Health and Services (Seattle): $100,000

3. January 2007: Fernando Ferrer & Isis Machado: 20 years in prison plus possibly 10 more for HIPAA violations for purchase of PHI and fraudulent Medicare claims

4. August 2006: Liz Arlene Ramirez: 10 months total confinement for trying to provide PHI for $500

5. 2004 U.S. vs. Gibson: 16 months in prison for stealing patient data to obtain credit cards

Over the past five years, there were over 32,000 reports of complaint about HIPAA to the Office of Civil Rights (OCR). Approximately 25,500 of these have been resolved.

The Centers for Medicare & Medicaid Services (CMS) has authority to investigate complaints of non-compliance related to all of the HIPAA regulations other than the Privacy Rule. The regulations for which CMS makes decisions regarding enforcement include: the Transactions and Code Sets Rule (TCS); the National Employer Identifier Number (EIN) Rule; the Security Rule; and the National Provider Identifier (NPI) Rule. CMS' authority does not extend to enforcement of the HIPAA Privacy Rule; which is under the authority of the Office for Civil Rights (OCR). However, when privacy issues occur in the context of potential security violations, CMS and OCR collaborate to enforce the HIPAA rules. To view the chart that reflects the type and number of cases CMS is investigating individually, or in conjunction with OCR, click HERE.

To see OCR enforcement statistics for the Privacy Rule, click HERE.

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Patients rarely use online ratings to pick physicians

6/23-30/08: American Medical News: A California Healthcare Foundation survey found that in 2007 only 5% of patients considered a change after reviewing online physician ratings.  Only 22% even saw ratings about physicians.  Word of mouth is still considered the most critical advertisement. However the number of people who used rating sites grew 8% from 2004-2007.  Legal battles abound due to the insurers use of flawed logic and data in ranking hospitals and providers.

Political Tidbit

To see who is controlling the actions of your elected representatives, click here:  www.opensecrets.org/politicians.

Fun Fact: Congress, who approves the federal budget and all spending legislation, has been controlled by the Democratic party since 2006 (they have been in the majority in the Senate and House of Representatives since that time).  The Democratic party has also controlled all oversight committees since that time. 

Is bigger government the answer? For those of you who believe in national insurance or that governmental oversight is the answer to most issues, consider this.

1. For a list of the biggest government security breaches since 1940 click HERE.

2. August 15, 2007: According to the Treasury Inspector General for Tax Administration (TIGTA), US taxpayers' personal information is at risk because managers and employees within the Internal Revenue Service (IRS) are not complying with security policies and procedures. Despite the IRS losing at least 490 computers with sensitive data between 2003 and 2006, employees were still found not to be encrypting personally identifiable information on their laptops and disregarding email policy. In addition systems were found neither to have been hardened nor to have the default passwords changed. The report calls for IRS executives to hold managers and staff accountable for their actions. http://www.fcw.com/article103499-08-15-07-Web&printLayout

3. June 21, 2007(computerworld.com): Recent testimony centering on more than 800 IT security incidents at the Department of Homeland Security (DHS) has caused House Homeland Security Committee Chairman Rep. Bennie Thompson (D-Miss.) to question whether DHS CIO Scott Charbo should continue in his position. Thompson was vexed that it took external auditors to point out to DHS that their IT systems have serious security problems. Thompson said DHS should serve as an example to the rest of the government. Additionally, Thompson says that "a 'do as I say, not as I do' policy is a recipe for disaster, and if we are serious about the security risks facing our networks, then we need to start acting and stop posturing." GAO chief technologist Keith Rhodes tested DHS systems over the last year and said he "would label [DHS] as being at high risk."

4. September 15, 2006: A GAO report finds that the Department of Health and Human Services has information technology (IT) and Privacy Issues. Two reports issued earlier this month from the Government Accountability Office (GAO) criticize Department of Health and Human Services' (HHS) efforts regarding health IT and patient privacy. One of the GAO reports states HHS and the Centers for Medicare and Medicaid Services (CMS) systems and controls have significant weaknesses. The other GAO report finds more than 40% of federal contractors to the Medicare and Tricare programs and state Medicaid agencies had experienced privacy breaches. http://www.hipaadvisory.com/news/index.cfm#0915mh
 

Healthcare Technologies that Don't Deliver

 August 2008: Mdnglive.com shares that the "Hype Cycle" has driven unwitting physicians to adopt technologies that don't live up to their promise and may actually harm their practice.  Other "neat" technologies simply haven't caught on and it's unlikely they will.  They state that insufficiently mature technical capabilities, flawed business models, faulty interpretations of the underlying challenges they were supposed to solve, unsustainable financial requirements, and other reasons have resulted in these selected technologies falling short of the mark (there are many more):

• Patient Portals: A practice website interface where patients can click on a link on your site and access information and services of the provider, including email visits.  It seems those patients who liked the idea of the portal had an original dissatisfaction with the provider's communication / responsiveness and access to information in the first place, and those who dislike the portal LIKE their provider-patient relationship!  So, providers unwittingly utilize the portal thinking it's improving customer service when it doesn't address the issue at all!  Learn More.
   

• RHIOs (regional health information organizations): A RHIO is a group of organizations with a business stake in improving the quality, safety and efficiency of healthcare delivery. RHIOs are the building blocks of the proposed National Health Information Network (NHIN) initiative, where providers in different health systems can share data seamlessly. The problem? Many are based on an unsustainable business model, non-renewing federal grants.  Once the money is gone the misaligned interests of stakeholders kick in. Learn More.
   

• RFIDs (radio frequency I.D. or implantable chips): Seems like a no-brainer to have your medical information on you at all times, even if you are unconscious.  Only 200 hospitals have RFID readers and 500 patients have them implanted.  The problem?  HIPAA, standardization, migration under the skin, interference with electrosurgical devices.
   

• PHRs (personal health records):  The cousin to RFIDs, are in the same boat.  Limited compatibility, limited storage, legal worries for those who store data on it, and no financial incentives from insurers (imagine that!).
   

• Exam Room Computers: The common sense idea that it would increase provider productivity and thoroughness in documentation falls flat.  A 2006 study sponsored by the National Coordinator for Health IT showed only 24% of physicians used any type of computerized record system.  Providers state the effect on patient-physician communication is the main reason for no PCs in the room.  Another study showed that physicians with poor communication skills go lost in the computer, communicating with it rather than the patient!  A poorly positioned computer exacerbates the problem.  Also, computers give the physician more tasks to complete, with attention to the patient suffering. Click here to Learn More #1.    Or Learn More #2.
   

• Oh, I forgot.  EHR's also made the list of failures.  You know why - no need to elaborate.

I guess this all falls into the category, "Just because we can doesn't mean we should."
 

HIPAA Answer:  "A".  TRUE. The new HIPAA regulations originated in the 2009 Stimulus Bill now add this penalty.  If you don't know about all the changes to HIPAA in the Stimulus Bill and have not re-trained your employees, you need to give us a call.