Pediatrics association to highlight concerns with retail-based clinics

The American Academy of Pediatrics’ Retail Based Clinic Policy Work Group has a set of recommendations coming out in this month’s issue of Pediatrics.  (See earlier HealthBlawg post on retail-based clinics here.) Advance notice, courtesy of Medscape (free registration required), identifies the work group’s views on the shortcomings of this model:

1.  Fragmentation of care;

2.  Possible effects on the quality of care;

3.  Providing episodic care to children with special healthcare needs and/or chronic diseases, some of which may not be readily identifiable;

4.  Lack of access to and maintenance of a complete, accessible, central health record containing all of a patient’s pertinent information;

5.  The application of medical tests for the purposes of diagnoses without proper follow-up;

6.  Potential public health issues that could occur when patients with contagious diseases are in a commercial retail environment (eg, mumps, measles, fevers, chicken pox, strep throat, etc); and

7.  Problems in addressing concerns that require anticipatory guidance, long-term counseling, and medical supervision, such as obesity, nutrition, behavioral issues, and even immunization schedules.

These are virtually identical to the gripes one would expect pediatricians to have with use of emergency departments for primary care. 

Benefits of this model that should not be overlooked may include opportunities for some children to receive care that they otherwise would not. 

The retail-based clinic phenomenon very likely is here to stay, so let’s hope organized medicine will stay focused on offering constructive criticism designed to improve this addition to the health care system.

— David Harlow 

OIG issues semiannual report – laundry list of what not to do

The OIG’s semiannual report came out today, offering the usual insight in how not to run your business.  The press release offers some highlights, detailing how

OIG’s $38.2 billion in savings and expected recoveries encompasses $35.8 billion in implemented recommendations and other actions to put funds to better use, $789.4 million in audit receivables, and $1.6 billion in investigative receivables.

Interesting items in the report include:

(1) Review of emergency preparedness in Gulf Coast nursing facilities post-hurricanes, yielding the conclusion that the regulations, not the regulated community, need some work; and

(2) Closer to home here in Boston:

OIG identified $87 million in Federal Medicaid overpayments for targeted case management services in Massachusetts. Medicaid pays for targeted case management services to assess Medicaid beneficiaries’ service needs, refer beneficiaries to needed services, and monitor the services. It does not pay for direct social services to which beneficiaries have been referred. However, the State included the costs for direct social services in the rates used to claim reimbursement for targeted case management services. OIG recommended that the State refund the resulting $87 million overpayment.

To quote an old TV cop:  "Be careful out there."

— David Harlow

New York State Commission on Health Care Facilities in the 21st Century releases its final report recommending significant bed closures and mergers

The NY State Commission on Health Care Facilities in the 21st Century released its final report yesterday.  Its recommendations include the closure of nine hospitals, merger or other restructuring of about fifty hospitals and the elimination of 4,200 hospital beds (7% of the state’s total supply), and the closure of 2,000 nursing facility beds (4% of the state total).

Many of the institutions welcome these recommendations and have been involved with their development. 

The press release accompanying the report notes:

The Commission’s recommendations will produce an estimated total benefit to payors and providers of over $1.5 billion annually, or $15 billion over ten years. Included in this figure is an estimated $806 million annually in savings to Medicaid and other payors. Thebenefits to providers in the form of reinvestment opportunities are estimated to be $721 million annually.

. . . .

The Commission’s report also includes recommendations for broad policy reform in the areas of reimbursement, the uninsured, primary care infrastructure, workforce development, the SUNY hospitals, county-owned nursing homes, and information technology. Such recommendations provide a blueprint for further efforts to fully reconfigure the health care system.

As the former CON lawyer for the Commonwealth of Massachusetts, I still have the central health planning gene somewhere in my makeup.  Even though I realize that the need to close and consolidate facilities is a result of market pressures from payors and specialized competitors, part of me reacts to this report by thinking: What a colossal waste of resources!  This could have been managed so much better with a little central health planning.  Those were the days . . . .

The approach to nursing facility bed reduction is philosophically similar to policies in play here in Massachusetts — the idea is that many nursing facility residents could be cared for in community-based settings.  While this may be true for some residents, the advocate community is rightly concerned that perhaps too many residents may be displaced or may be left in the future without appropriate placements.

As other states consider undertaking studies such as the one New York has just completed (New Jersey comes to mind; I’m sure there are others), it will be very interesting to see how the implementation of the recommendations in this report unfold. 

— David Harlow

Another cardiac surgery gainsharing opinion from the OIG

The OIG released another advisory opinion this month approving a cardiac surgery gainsharing program.  The key elements, as in the previously approved cardiac gainsharing programs (see the early 2005 opinions, 05-01 through 05-06, here), are "open-on-use" policies (thus reducing waste of unused OR supplies which have been opened in advance) and limiting the use of certain drugs to cases in which they are shown through benchmarking studies to be necessary and appropriate.

The OIG maintains that this opinion is consistent with the 1999 special advisory bulletin finding gainsharing arrangmenets genreally to be in violation of the anti-kickback statute.  The opinion lists the ways in which the proposed gainsharing program satisfies concerns about potentially improper limitation of services provided to beneficiaries, and potentially improper financial incentives.

Clearly, the OIG is getting more comfortable with gainsharing.  As more opinions are issued, and as the two series of gainsharing demonstration projects get under way next year (see earlier posts here and here), this is likely to become a more and more mainstream approach to aligning physician and hospital incentives, and to expand beyond cardiology services as well.

— David Harlow

Federal appeals court: No private right of action to enforce HIPAA

Is there a private right of action to enforce HIPAA?  The answer is now more definitive than ever: No. 

This week, the Fifth Circuit Court of Appeals — the first federal appeals court to decide this issue — went along with every federal district court that has considered the issue (not to mention the regs themselves, which are pretty clear on the subject).  (See the decision here.  See HIPAA regs and more on OCR’s HIPAA page here.)

Why has the plaintiff bar continued to assert a private right of action under HIPAA?  First of all, why not?  Throw it all against the wall and see what sticks. Second, if it were successful, it would bootstrap a state law claim into Federal court, which may be beneficial to the plaintiff.  (In Acara v. Banks, the 5th Circuit decision handed down November 13, the remaining state law claims were dismissed because there was no diversity jurisdiction.)  Third, from a broader perspective, one function of the private lawsuit is to effect social change.

Now that the government seems poised to actually enforce HIPAA, the third reason may go by the boards (I know, I know . . . we still need to wait and see).  If enforcement is truly stepped up for the benefit of the public, perhaps the plaintiff bar can make peace with its inability to rely on the first two reasons for pursuing the private right of action. 

In any event, those within the community of "covered entities" under HIPAA need to get with the program and come into full compliance, and I have seen a renewed interest in HIPAA compliance audits of late.

— David Harlow

OIG advisory dings existing and proposed home oxygen arrangements of DME supplier

The OIG issued a negative advisory opinion earlier this month. A DME supplier requested confirmation that providing free home oxygen before patients qualify for Medcare coverage, and overnight oximetry testing services free of charge, would not be considered illegal remuneration to a person in a position to order or purchase covered goods or services.

At first blush, one wonders why this request was ever submitted in the first place.  Most advisories conclude — unsurprisingly, based on the arrangements presented — that while the arrangement technically is not within a safe harbor, the government believes that adequate safeuards against inappropriate overutilization/remuneration are in place and so the arrangement will be permitted.  The writing of the advisory is surely influenced by the ultimate outcome already determined by the OIG, but the arrangements described in this opinion seemed particularly doomed to failure from the outset.

CMS and Congress have come down hard on the DME suppliers in general, and oxygen suppliers in particular.  (The same may be said for various state Medicaid programs as well.)   

Consider, for example, the September OIG report on reimbursement for oxygen concentrator rentals.  Among other things, the report notes that the acquisition cost of an oxygen concentrator is under $600, yet DME suppliers are paid equipment rental payments for up to 36 months — which may total over $7,000 (beneficiary copayments may exceed $1,300 over 36 months), and which are not justified by the industry position that the apparent unreasonable profit is appropriate and is required in part to cover inflation and maintenance costs. 

The industry position is further detailed here, and includes the typical complaints that the government is using old cost data, and that the sample of beneficiaries surveyed by OIG is too small to be statistically valid and is not representative.  In addition, the implication that most, if not all, oxygen concentrators are used by beneficiaries for more than 36 months is disputed.

The OIG report notes that 25% of all Medicare DME expenditures are oxygen-related.  And while DME expense pales in comparison to inpatient hospital expenditures (the industry offers the comparison of $7 and change per diem for home oxygen, vs. $4,500+ per diem for Medicare inpatient hospital expense; the numbers may be accurate, but are they comparable?), over the years CMS has focused on provider and supplier groups whose services consume successively smaller chunks of the Medicare dollar and at the aggregate level the DME dollars are significant.

There are industry- and CMS-supported changes on the legislative agenda for the future, and with the changed face of Congress it will be interesting to see what happens.

The background helps to contextualize the advisory request (oxygen suppliers seeing themselves as being under attack), but doesn’t explain to my satisfaction the request itself. 

A better solution (which is already in place with respect to certain other covered services) — perhaps one being pursued by the industry in tandem with the advisory request — would be making determinations of medical necessity for home oxygen retroactive, so that beneficiaries who truly require home oxygen therapy may be provided the oxygen before the paperwork goes through.  Suppliers would then be at risk only for oxygen provided to those beneficiaries who do not eventually receive a finding of medical necessity.

— David Harlow