healthy4u: Medicare

"Emotion, not Information" - the Lucrative Deceptive Marketing of Hospice, and its Potentially Fatal Consequences

One of the real recent advances in health care, in my humble opinion, was the organization of compassionate, palliative care for people at the end of life.  During my training and early career I saw too many patients with terminal illness getting aggressive, sometimes very painful treatments which at best only offered hope of briefly prolonging their lives.  Some patients chose such treatments with full knowledge of the implications, at times with the hope that they might survive until some significant event, for example, the birth of a grandchild.  Many patients, however, seemed to be suffering with no purpose. The hospice and palliative care movement, however, offered true comfort to those with little hope of prolonged survival.  Good hospice care eased the final days of patients with advanced disease for whom no definitive treatments could be found. Hospice seemed like a great alternative for such patients, but its reasonable use depended on physicians' abilities to identify patients who really were at the end of life, and for whom aggressive treatment would be futile.  The Achilles Heel of the hospice movement remained health care professionals' inability to reliably identify such patients.  The big problem is that putting a patient who actually potentially could survive for a long time in hospice will doom that patient were he or she to develop an acute illness for which treatment is available, like a bacterial pneumonia that might respond to antibiotics, because in hospice antibiotics are not given for acute infections. So the development of hospice had a downside which could be fatal for some patients.  I think most physicians hoped, however, that we could minimize the number of such patients by trying hard to make accurate predictions, and that in the future, better technology would lead to better predictions. The Rise of Corporate Hospices Back in the 1980s, however, I did not anticipate that hospices might become parts of for-profit corporations, and that such corporations might be able to make more money by admitting more patients, even patients who really were not at the end of life.   Starting in 2011, however, we started to find cases in which that appeared to be what was going on (look <a href="http://hcrenewal.blogspot.com/2011/07/prepare-them-to-die-for-profit-hospices.html">here</a>, then <a href="http://hcrenewal.blogspot.com/2012/03/gentivas-odyssey-healthcare-settles.html">here</a>, <a href="http://hcrenewal.blogspot.com/2012/05/who-cares-if-patients-die-apparently.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2012/09/more-hospices-pretending-patients-are.html">here</a>). In 2013, more cases appeared, listed in chronologic order - Hospice of Arizona LC and American Hospice Management LLC - Per a <a href="http://www.justice.gov/opa/pr/2013/March/13-civ-326.html">news release</a> from the Department of Justice, these entities settled litigation that alleged, among other things, that they "submitted or caused the submission of false Medicare claims between Sept. 1, 2002, and Dec. 31, 2010, for Hospice of Arizona patients who did not need end of life care...."  Hospice Care of Kansas, and parent company Voyager HospiceCare - Per a Topeka (Kansas) Capital-Journal <a href="http://cjonline.com/news/state/2012-06-21/kansas-hospice-firm-pays-61-m-settlement">article</a>, these entities settled to resolve allegations that they "submitted inappropriate claims between January 2004 and December 2008 for patients without a terminal prognosis of six months or less." Hernando-Pasco Hospice - <a href="http://www.tampabay.com/news/health/hernando-pasco-hospice-agrees-to-pay-1-million-to-settle-false-billing/2132592">Per the Tampa Bay Times</a>, " Hernando-Pasco Hospice has agreed to pay $1 million to settle allegations that it billed the Medicare and Medicaid programs for patients who did not need end-of-life care, the U.S. Attorney's Office for the Middle District of Florida announced Monday.  The not-for-profit Hernando-Pasco Hospice, which goes by HPH Hospice, is accused of admitting ineligible patients in order to meet targets imposed by its management team, federal authorities said in a statement." These were all small settlements, that is, less than $15 million, reported in relatively small media outlets. This week the issue was in the media spotlight courtesy the Washington Post, in <a href="http://www.washingtonpost.com/business/economy/medicare-rules-create-a-booming-business-in-hospice-care-for-people-who-arent-dying/2013/12/26/4ff75bbe-68c9-11e3-ae56-22de072140a2_story.html">an article</a> which provided yet more data and vivid examples suggesting that for-profit hospices were putting money ahead of vulnerable patients' well-being.    The Post added to the background we provided above, <blockquote class="tr_bq">Medicare began paying for hospice care in 1983, following a resurgence of interest in end-of-life care, sparked in part by the publication of '<a data-xslt="_http" href="http://www.amazon.com/gp/product/0684839385?ie=UTF8&camp=1789&creativeASIN=0684839385&linkCode=xm2&tag=thewaspos09-20">On Death and Dying</a>' by Elisabeth Kubler-Ross. 'We can give families more help with home care and visiting nurses, giving the families and the patients the spiritual, emotional, and financial help in order to facilitate the final care at home,' Kubler-Ross testified to the Senate Special Committee on Aging in 1972.</blockquote> After this well-intentioned beginning, there was a rapid increase in the use of hospice, and hence its costs, <blockquote class="tr_bq">The benefit was quickly embraced by Americans and continues to grow, with Medicare paying for hospice care for more than 1.2 million people annually. In 2000, Medicare spent $2.9 billion on the hospice benefit. By 2012, that figure has risen fivefold, to $15.1 billion. But as more Americans have taken up hospice care, a profound change has been underway: Big businesses have moved in.</blockquote> In parallel, the nature of hospices changed, going from being predominantly local non-profit organizations to predominantly corporate, <blockquote class="tr_bq">When Medicare paid its first hospice benefit, the vast majority of hospice-care providers were nonprofit groups. Over the past decade, however, the for-profits have come to dominate the industry. In 2000, 70 percent of hospices were run by nonprofit organizations or government agencies. Today, nearly 60 percent are for-profit companies, and they may account for an even larger share of patients.</blockquote> They really were for-profit, <blockquote class="tr_bq">The profit margins as measured by MedPAC, the Medicare watchdog, climbed to 8.7 percent in 2011. The per-patient operating profit has risen from $353 in 2002 to $1,975 in 2012, according to the analysis of California data.</blockquote> Big money lured aggressive players, in particular, private equity, <blockquote class="tr_bq"> The returns have attracted some prominent financial firms, whose analysts have run the numbers and decided to invest. Among the private investment companies that have put down bets on hospices in recent years are Kohlberg Kravis Roberts & Co., KRG Capital Partners and Summit Partners.</blockquote> As we have discussed <a href="http://hcrenewal.blogspot.com/2012/07/private-equity-vs-patient-care-bainful.html">elsewhere</a>, the private equity model involves not long term management, but trying to make big money in the short term, either by directly extracting it from the companies taken over, of by rapidly selling them, if necessary, piece by piece.  Financial Incentives to Enroll the Wrong Patients Keep in mind that the revenue fueling the uber capitalists involved in for-profit hospices came predominantly from the US government, and depended on the rules set by the government to pay for hospice, <blockquote class="tr_bq">The vast majority of those profits flow from the U.S. government and Medicare, which makes an estimated 85 to 90 percent of all payments to hospices.</blockquote> The payments provide more profit from patients with the longest stay in hospice, <blockquote class="tr_bq">The reason that longer stays are more profitable is that hospice companies typically spend more on patients at the beginning of their care and then again at the end of their lives. When a patient is first enrolled, the hospice often must diagnose the patient’s illness, set up home equipment and get them stabilized. Then, during the last week of life, a hospice typically must pay for more frequent home visits by the nurse, aides and others. As a result, patients who live a longer time — and for whom there is a long, stable period in the middle — generate more profits.</blockquote> There is evidence that for-profit hospice management has reacted to these incentives to enroll patients who would live a long time, despite the fact noted above that hospice was intended for patients who were at the end of life, and were obviously thus expected not to live for a long time, <blockquote class="tr_bq">Indeed, it has been an open secret in the industry that, because of the method of payment, the way to run a hospice profitably is to enroll patients who stay for a long time. The <a data-xslt="_http" href="http://www.wikinvest.com/stock/VistaCare_%28VSTA%29/Filing/10-K/2007/F3366157">annual report in 2004 for one large hospice provider, VistaCare</a>, noted that its fortunes depended on its ability to manage costs and 'maintain a patient base with a sufficiently long length of stay.' The company also warned that 'cost pressures resulting from shorter patient lengths of stay . . . could negatively impact our profitability.' 'It is common knowledge in the industry that a longer length of stay is going to be more lucrative,' said Rachel Mason, who worked in marketing at Delta Hospice in California, where one of the company’s branches had one of the highest discharge rates of living patients in the state last year — 63 percent. 'If they come in very sick and die right away, it’s difficult to run a business that way.'</blockquote> So, in the aggregate, stays have gone up, costs have increased, partially because there are more hospice ''urvivors," that is, patients who actually were admitted to hospice not at the end of life, survived much more than the six months which was supposed to have been their expected lifespan, and thus ended up graduating from hospice, a service meant originally for the terminally ill, <blockquote class="tr_bq">over the past decade, the number of 'hospice survivors' in the United States has risen dramatically, in part because hospice companies earn more by recruiting patients who aren’t actually dying, a Washington Post investigation has found. Healthier patients are more profitable because they require fewer visits and stay enrolled longer. The proportion of patients who were discharged alive from hospice care rose about 50 percent between 2002 and 2012, according to a Post analysis of more than 1 million hospice patients’ records over 11 years in California, a state that makes public detailed descriptions and that, by virtue of its size, offers a portrait of the industry. The average length of a stay in hospice care also jumped substantially over that time, in California and nationally, according to the analysis. Profit per patient quintupled, to $1,975, California records show.</blockquote> Yet, while Medicare administrators have been warned about these perverse incentives, they have done nothing to fix them, <blockquote class="tr_bq">For five years, Medicare’s watchdog group has been recommending that the payments to hospice companies be revised to eliminate the financial incentive for improper care, but Medicare has not yet done so. To ensure that patients are appropriately selected for hospice care, Medicare relies on strict medical documentation requirements, a spokesman said. </blockquote> Perhaps Medicare administrators are listening harder to for-profit hospice executives than to their own advisory committee, <blockquote class="tr_bq"> The hospice industry is opposed to fundamental changes to the payment system. Jonathan Keyserling, senior vice president of health policy at the <a data-xslt="_http" href="http://www.nhpco.org/">National Hospice and Palliative Care Organization</a>, an industry group, said that the current payment system is sound and that tampering with it could have unintended consequences. </blockquote> Furthermore, <blockquote class="tr_bq">because of the large sums of money at stake, <a data-xslt="_http" href="http://www.medpac.gov/documents/Jun13_EntireReport.pdf" target="_blank">MedPAC in June added a sense of urgency</a> to its recommendation. 'Given the magnitude of hospice spending devoted to long-stay patients, who are more profitable under the current payment system than other patients, it is important that an initial step toward payment reform be taken as soon as possible,' MedPAC wrote.</blockquote> Yet Medicare administrators still seemed to feel no sense of urgency, and are not eager to address the specifics of the MedPac recommendations, <blockquote class="tr_bq">A spokesman for Medicare said the agency is considering hospice payment reform but that no such changes will happen in fiscal 2014. 'While the Medicare hospice benefit provides a choice for beneficiaries to seek the care that best meets their care needs and desires, Medicare has and will continue to take actions to safeguard this benefit from inappropriate use,' said <a data-xslt="_http" href="http://www.cms.gov/About-CMS/Leadership/jonathanblum2.html">Jonathan Blum</a>, principal deputy administrator of the Centers for Medicare and Medicaid Services, said in a statement. </blockquote> So to recap so far, the hospice movement devolved from one involving non-profit organizations providing care to the terminally ill to ever larger corporations providing care to the less ill, paid largely by the US government under rules from a simpler era.  However, since hospice provides only palliative care, this transition meant that some patients who were not terminally ill may have died from illness that would have been treated in an environment other than hospice. Vivid Anecdotes of the Deceptive Marketing of Hospice The Washington Post article summarized allegations from multiple legal actions that provided a disturbing tapestry of deceptive marketing deployed to recruit patients unsuitable to hospice care, <blockquote class="tr_bq">While the lawsuits against the for-profit hospices vary in the details, as a whole they depict an industry in which companies compete for new patients and provide services to patients who are not eligible for them. Hospice 'outreach specialists' and 'community education representatives' seek out patients in a variety of ways: They solicit doctors and hospitals who might regularly deal with the terminally ill; they make connections at nursing homes, assisted-living developments and Meals on Wheels groups. They show up at the 'health fairs' held at senior centers with, for example, machines that test blood pressure. For families struggling to take care of a loved one, they offer the promise of extra help. At AseraCare, officials gave advice to their recruiters on how to close a deal with families who are 'not ready yet' for hospice, according to a company presentation for Alabama employees. It instructed recruiters to 'focus families' by stressing the urgency of a decision, and saying things like, 'We only have 10 minutes left.' 'Effective communication is the transfer of emotion, not information,' the presentation said. At Odyssey Healthcare, one of the nation’s largest hospice companies, representatives earned bonuses if they met their goals for new patients, according to that complaint. The case led to a $25 million settlement with the company. At <a data-xslt="_http" href="http://www.vitas.com/Aboutus/Newsroom/ParentCompany.aspx">Vitas</a>, a division of Chemed, a company that also owns the Roto-Rooter plumbing service, the corporate culture encouraged staff members to admit as many patients as possible, regardless of whether they were eligible for hospice care, according to the lawsuit. The lawsuit said the company paid bonuses based on the number of patients enrolled. One former manager said that the company philosophy was 'sign everybody up' and that medical staffers felt pressured to admit patients regardless of whether they were appropriate. And at Angels of Hope hospice in LaGrange, Ga., audio recordings cited in the complaint described how some salespeople found patients: by cruising neighborhoods, looking for elderly people with disabilities.</blockquote> The article coned down on specific litigation about AnseraCare, <blockquote class="tr_bq">One of the primary lawsuits against AseraCare was initiated by Dawn Richardson, a clinical manager at the company, and Marsha Brown, the former executive director at the company’s Monroeville, Mobile and Foley, Ala., outlets. There was steady pressure for AseraCare managers to find more patients, the lawsuit said. An executive who did not meet a quota was penalized, according to the lawsuit, and the company offered a massage chair for the person who brought in the most hospice patients. 'In order to make our admission goal for the month, we are down to the wire, and need today to be a huge admit day for every region,' a regional vice president wrote in an e-mail, according to the lawsuit. 'Mobilize your teams, get them into the game this morning . . . when we call on them, they always respond with referrals and a push to convert those referrals into admits ASAP.' 'We had a director who would be like, ‘Get a patient, get a patient, get a patient,’ ' Michael Bonham, a Lutheran minister who worked as a chaplain at the company in Alabama, said in an interview. He is not a party to any of the lawsuits. These demands for patients were sometimes met with people who were sickly but not dying, according to the federal lawsuit, which outlines five examples. One patient was supposed to have had end-stage heart disease and thus would have had trouble breathing and walking, according to the lawsuit. He left the nursing home for his granddaughter’s graduation and for Christmas, had a good time and ate a lot, according to notes from hospice workers cited in the lawsuit. Another, diagnosed with end-stage 'debility,' was not losing weight as is typically the case, according to the legal filing, and instead went out for a trip to Wendy’s and another to go birdwatching.</blockquote> Hospice firms' public relations departments provided the usual high minded statements that did not address specific allegations about the marketing of hospice, for example, <blockquote class="tr_bq">'AseraCare provides an important and valuable service to patients and their families facing difficult end-of-life decisions,' the company said in a statement. 'Our policies and programs comply with the Congressional intent of the hospice benefit to reduce the stress and anxiety of the end of life of a loved one,' the company said. 'Doctors for each patient in question determined that the patient needed hospice care, and expressed their clinical judgment by signing the required physician certifications. Other independent and well-qualified physicians reviewed the charts of these patients, and overwhelmingly agreed with the original conclusions that these patients were entitled to receive the hospice benefit.' The company declined to identify the doctors who certified the patients in Alabama.</blockquote>That seems about as relevant as the <a href="http://www.goldenliving.com/about-us.aspx">mission and values statements of Golden Living,</a> AseraCare's parent corporation, <blockquote class="tr_bq"><h3>Our Mission</h3>To share our passion for improving quality of life through innovative healthcare — one person, one family and one community at a time. <h3>Our Values</h3>Make integrity and accountability your pledge. Share our passion for excellence. Be uncompromising in delivering quality care.</blockquote> Summary <blockquote class="tr_bq">Yet somehow our society must make it right and possible for old people not to fear the young or be deserted by them, for the test of a civilization is in the way that it cares for its helpless members. </blockquote> Pearl S Buck, My Several Worlds, 1954, p 377 (see <a href="http://en.wikiquote.org/wiki/Civilization">Wikiquote</a>) I also was once taught that the true test of a doctor is his or her care of the sickest and most vulnerable patients.  By this token,  how the hospice movement in the US evolved into corporate health care delivery which generates tremendous revenues from the most vulnerable patients, and in some cases may condemn ill but not terminal patients to death from treatable disease marks how badly US health care has failed. The story combines many of the themes we have sounded before - <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">Perverse Incentives</a> - a reimbursement scheme that made sense when hospices were local community non-profit organizations now provides incentives for commercial hospices to enroll patients who are not terminally ill, putting them at risk of inadequate care should they develop a new serious but treatable problem. Money Before Mission - For-profit hospices which market themselves as equivalent to their community non-profit forerunners, are run, as is suggested above, to maximize revenue no matter the effect on mission. Presumably this is justified by the fallacy of <a href="http://hcrenewal.blogspot.com/2012/04/health-care-dysfunction-explained-by.html">maximizing shareholder value</a>, which really means maximizing apparent short-term revenue in order to maximize executive compensation, no matter what the collateral damage. <a href="http://hcrenewal.blogspot.com/search/label/impunity">Impunity</a> - Although hospice enrollment of unsuitable patients not only may defraud the government, but may put such patients at risk of their lives, the only regulatory or law enforcement actions against big corporate hospices so far involve corporate fines that are small in comparison with revenues, but not penalties imposed on any individuals who authorized, directed or implemented such patient enrollment, even when patients wrongly enrolled have died from lack of treatment of potentially treatable problems. <a href="http://hcrenewal.blogspot.com/search/label/corporatism">Corporatism</a> - Government agencies which could seriously challenge corporate hospices' actions have been curiously inert, perhaps because agency leaders feel more sympathetic to their fellow managers within corporate hospices than to the citizens whose interests they are supposed to protect. Because of their potentially severe adverse effects on our most vulnerable patients, reform of hospices should be at the forefront of true health care reform.  At the least, we need vastly tougher regulation of corporate hospices, removal of perverse incentives for them from the government payment system, and vigorous law enforcement when their leaders induce them to misbehave.  Leaders of corporate hospices need to be held accountable for their actions, and must be pushed towards putting their patients' health ahead of all other considerations, including the leaders' personal enrichment. Furthermore, the story of corporate hospices shows that while turning direct health care over to poorly regulated for-profit corporations may have been increased efficiency, been "disruptive" and lead to innovations, the efficiency, disruption and innovation have mainly lined the pockets of corporate insiders, and not improved patients' or the public's health.  We ought to give strong consideration to banning corporate hospices, and banning all forms of the <a href="http://hcrenewal.blogspot.com/search/label/corporate%20physician">corporate practice of medicine </a>and corporate health care "delivery." Given how many insiders make so much money from the current version of laissez faire capitalism in health care, however, I would expect strong resistance should such apparently "radical," but actually conservative proposals actually get any mainstream attention.

"Emotion, not Information" - the Lucrative Deceptive Marketing of Hospice, and its Potentially Fatal Consequences

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02 Jan 2014

Another Attempt to Show the RUC Behind the Curtain

In 2007, readers of the Annals of Internal Medicine could read part of the solution to a great medical mystery.(1)  For years, health care costs in the US had been levitating faster than inflation, without producing any noticeable positive effect on patients.  Many possible reasons were proposed, but as the problem continued to worsen, none were proven. Prices are High Because They are Fixed That Way The article in the Annals, however, proposed one conceptually simple answer. The prices of most physicians' services, at least most of those that involved procedures or operations for Medicare patients, were high because the US government set them that way. Although the notion that prices were high because they were fixed to be so high was simple, how the fixing was done, and how the fixing affected the rest of the health system was complex, mind numbingly complex. Perhaps because of the complexity of its implementation, the simplicity of the concept has not seemingly reached the consciousness of most American health care professionals or policy makers, despite the publication of several scholarly articles on the subject,.<a href="http://hcrenewal.blogspot.com/search/label/RUC">efforts by humble bloggers such as yours truly,</a> a major journalistic expose, and recent congressional hearings.  The lack of discussion of this issue seemed to be a prime example of what we have called the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, that important causes of health care dysfunction whose discussion would discomfit those who are currently personally profiting from the current system rarely produce many public echoes.  (For a review of what is known to date about how the offputtingly named Resource Based Relative Value Scale Update Committee (RUC) works, and previous attempts to makes it central role in fixing what US physicians are paid public, see the Appendix.) The Washington Monthly Pulls Back the Curtain Now another attempt to pull back the curtain that hides the RUC was just made by the Washington Monthly.  A long, detailed, well-written <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/features/special_deal045641.php">article</a> by Haley Sweetland Edwards went through the major points, and included some new discoveries.  She asserted: The RUC is Well Hidden <blockquote class="tr_bq">[The RUC is] probably one of the most powerful committees in America that you’ve never heard of.</blockquote> The RUC Fixes Prices <blockquote class="tr_bq">when a roomful of professionals from the same trade meet behind closed doors to agree on how much their services should be worth. It’s called price-fixing. </blockquote> The Government Enables the RUC to Fix Prices <blockquote class="tr_bq"> this kind of 'price-fixing' is not only perfectly legal, it’s sanctioned by the U.S. government. At the end of each of these meetings, RUC members vote anonymously on a list of 'recommended values,' which are then sent to the Centers for Medicare and Medicaid Services (CMS), the federal agency that runs those programs. For the last twenty-two years, the CMS has accepted about 90 percent of the RUC’s recommended values—essentially transferring the committee’s decisions directly into law.</blockquote> The Government Fixed Prices are Endorsed by the Private Sector <blockquote class="tr_bq"> private insurance companies also use Medicare’s fee schedule as a baseline for negotiating prices with hospitals and other providers. </blockquote> The Price Fixing Drives Up Costs and the Use of Services <blockquote class="tr_bq"> So if the RUC inflates the base price Medicare pays for a specific procedure, that inflationary effect ripples up through the health care industry as a whole.</blockquote> These Incentives Cripple Primary Care <blockquote class="tr_bq"> These manipulated prices are also a major reason why specialists are in oversupply in many parts of the country, while a worsening shortage of primary care providers threatens the whole health care delivery system. </blockquote> These Incentives Benefit Big Corporations, not just Medical Specialists <blockquote class="tr_bq"> the incentives are perfectly aligned: ordering that extra test means more money for a doctor’s practice or hospital, more money for the labs, and often more money for the device makers and drug companies, too. (Oh, and, by the way, the device makers and drug companies are, not incidentally, major funders of the medical specialty societies whose members vote on the RUC.)</blockquote><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHWzSplnD2du3x_SfpKZJ5CaSFXrAoZkdhDxue_1J1f0wQIAV2rbRMgDA-oHz01r7lgv341htPKIV2_EfPKtU_eEAzu6xAn9ZPSUdVYtqfaappwD18k5EziA-KfAvazcaaooKFrlj7doQ9/s1600/SpecialDeal(WashingtonMonthly0713).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="195" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHWzSplnD2du3x_SfpKZJ5CaSFXrAoZkdhDxue_1J1f0wQIAV2rbRMgDA-oHz01r7lgv341htPKIV2_EfPKtU_eEAzu6xAn9ZPSUdVYtqfaappwD18k5EziA-KfAvazcaaooKFrlj7doQ9/s320/SpecialDeal(WashingtonMonthly0713).jpg" width="320" /></a></div> [Art by Monte Wolverton for the Washington Monthly article] What to Do and What Will Happen? We previously wrote,  Economists have beaten us over the head with idea that incentives matter.  The RUC seems to embody a corporatist approach to fixing prices for medical services to create <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">perverse incentives</a> for physicians to do more procedures, and do less conversing with and examining patients, examining the best clinical research evidence about their problems, and rigorously thinking about how best to help them.  More procedures at higher prices helps physicians who do procedures.  It may help even more the corporations that provide the devices and drugs whose use is necessitated by such procedures, and the hospitals who can charge a lot of money as sites for performance of procedures.  It may even help insurance companies by driving ever more money through the health care system, and thus allow rationalization for higher administrative expenses as a function of overall money flow. Yet incentives favoring procedures over all else may lead to worse outcomes for patients, and more costs to patients and society.  If we do not figure out how to make incentives given to physicians more rational and fair, expect health care costs to continue to rise, while access and quality continue to suffer. Ms Edwards ended her article with two specific suggestions: <blockquote class="tr_bq">take the process away from the control of the AMA and put it in the hands of a well-resourced group of experts under the auspices of the federal government. This might take the form of a panel of doctors employed by the government, or of an advisory committee of representatives of different medical societies but with greater representation of primary care doctors.</blockquote> Or <blockquote class="tr_bq"> get Medicare out of the business of funding fee-for-service medicine. </blockquote> I can only hope that the latest Washington Monthly article, which was accompanied by an <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/editors_note/the_doctor_cartel_will_see_you045632.php">editorial</a> and a short first-hand <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/features/a_day_in_the_life_of_a_primary045640.php">account</a> of how difficult is the lot of the modern primary care physician, will succeed in increasing awareness of the RUC and its essential role in making the US health care system increasingly unworkable.  Of course, such awareness may disturb the many people who are making so much money within the current system.  But if we do nothing about the RUC, and about the ever expanding bubble of health care costs, that bubble will surely burst, and the results for patients' and the public's health will be devastating. APPENDIX - Background on the RUC  We have <a href="http://hcrenewal.blogspot.com/search/label/RUC">frequently posted</a>, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and more recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here,</a>  <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, <a href="http://hcrenewal.blogspot.com/2011/02/replace-ruc.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2011/03/getting-out-of-our-ruc-open-letter-to.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or <a href="http://hcrenewal.blogspot.com/search/label/RUC">RUC</a>. Since 1991, Medicare has set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1) A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients.   As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments.   However, the identities of RUC members were opaque for a long time, and the proceedings of the group are secret.  As Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."   In fact, the fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at health care reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name.   That <a href="http://hcrenewal.blogspot.com/2010/10/ruc-it-up-how-us-government-fixes.html">changed</a> in October, 2010.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser Health News yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here </a>from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted</a> by Kaiser Health News.) The articles covered the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc.   In 2011, after the "<a href="http://www.replacetheruc.org/">Replace the RUC</a>" movement generated some more interest about this secretive group, and its complicated but obscure role in the health care system, the current RUC membership was finally revealed.  It was relatively <a href="http://hcrenewal.blogspot.com/2011/04/rucing-about-conflicts-of-interest.html">easy for me to determine </a>that many of the members had conflicts of interest (beyond their specialty or sub-specialty identity and their role in medical societies that might have institutional conflicts of interest, and leaders with conflicts of interest).     Then that year a lawsuit was filed by a number of primary care physicians that contended that the RUC was functioning illegally as a de facto US government advisory panel.  It appeared that things might change.  However, it was not to be.  A judge <a href="http://careandcost.com/2012/05/19/medicare-physician-payment-the-rucs-hollow-victory/">dismissed the lawsuit</a> in 2012, based on his contention that the law that set up the RBRVS system prevented any challenges through the legal system to the mechanism used to set payment rates.  The ruling did not address the legality of the relationship between the RUC and the federal government.  The eery quiet then resumed, only punctuated briefly in early 2013, when a <a href="http://hcrenewal.blogspot.com/2013/01/us-senate-subcommittee-asks-what-ruc-is.html">Senate committee held hearings</a> with no obvious effect.       ADDENDUM (15 July, 2013) - see also <a href="http://brodyhooked.blogspot.com/2013/07/the-ruc-revisited-more-corruption-in.html">comments</a> by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog.   ADDENDUM (18 July, 2013) - see also <a href="http://www.nakedcapitalism.com/2013/07/how-the-ama-engages-in-government-sanctioned-price-fixing.html">comments</a> by Yves Smith on the Naked Capitalism blog. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

Another Attempt to Show the RUC Behind the Curtain

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08 Jul 2013

Gentiva's Odyssey Healthcare Settles Again, Signs Yet Another Corporate Integrity Agreement

The Milwaukee Journal-Sentinel <a href="http://www.jsonline.com/news/milwaukee/whistleblower-case-on-hospice-fraud-settled-for-25-million-e54d9un-141143483.html">reported</a> a legal settlement worth noting.  Here are the basics: <blockquote>One of the nation's largest providers of hospice care has agreed to pay $25 million to settle a Medicare fraud case initiated after a former company nurse in Milwaukee filed a whistle-blower suit. It was the second such settlement in six years for Odyssey Healthcare Inc., which paid the federal government $12.5 million in 2006 after another Wisconsin-based employee sued.</blockquote> Also, <blockquote>Medicare provides a benefit meant to cover hospice care for the terminally ill. It covers 24-hour in-home nursing service only during limited crisis periods. But from 2006 to 2009, Odyssey practiced a pattern of enrolling and recertifying non-terminal patients, and billing for continuous care that wasn't necessary or reasonable, according to the False Claims Act suit filed in 2008 but just unsealed Thursday.</blockquote> As is usual in such cases, Odyssey's parent company denied that it did anything wrong: <blockquote>Odyssey, which operates in 26 states, is now part of Atlanta-based Gentiva Health Services, which runs hospice offices in West Allis and Burlington. Gentiva officials declined to comment, but referred to an announcement it posted on its investor relations website last month. 'Gentiva cooperated fully with this investigation, which covered a period prior to our acquisition of Odyssey, and the settlement is consistent with our efforts to instill Gentiva's culture of compliance throughout the company,' said John Camperlengo, general counsel and chief compliance officer. The statement said the firm is proud of the care its thousands of hospice clinicians provide, and of Gentiva's efforts to ensure strict compliance with all regulatory requirements.</blockquote> The Implications of the Need for a New Corporate Integrity Agreement However, there are some disturbing aspects of this case that require a bit more explanation. First, as noted by the Associated Press (in a story available <a href="http://www.thonline.com/news/iowa-illinois-wisconsin/article_d2a4d2d0-8f73-53c2-86dc-e6ff3c7e2ab5.html">here</a> from the Dubuque [Iowa] Telegraph-Herald), <blockquote>Besides agreeing to pay the $25 million settlement, Odyssey entered a five-year corporate integrity agreement with the federal government.</blockquote> Now corporate integrity agreements are not known for their effectiveness. In fact, as we noted in <a href="http://hcrenewal.blogspot.com/2011/07/executives-get-rich-despite-ethical-and.html">this blog post</a>, according to <a href="http://files.shareholder.com/downloads/GTIV/1338648526x0x456437/CEA1782E-FB2C-4850-A530-9CF06AA6C55B/Gentiva_AR_2010.pdf">Gentiva's 2010 annual report</a>, its Odyssey subsidiary had been subject to a corporate integrity agreement arising from its 2006 settlement, one which was apparently not effective in preventing its misbehavior from 2006 to 2009. However, corporate integrity agreements do serve as markers for the need to improve the integrity of the corporations who need to make them. In this case, why would Gentiva be asked to sign such an agreement if its integrity were already beyond reproach? So Gentiva's current "culture of compliance" is open to question. The Implications of "Enrolling and Recertifying Non-Terminal Patients" A quick read of the Journal-Sentinel and Associate Press stories above might give the impression that what Odyssey did wrong involved a billing technicality, admittedly, one that allowed it to collect more money that that to which it would otherwise be entitled. This story actually goes beyond the issue of fraud, and raises important concerns about patient care. The enrollment  by a hospice of patients who are actually not terminally ill could have serious adverse effects on such patients. As we noted in <a href="http://hcrenewal.blogspot.com/2011/07/prepare-them-to-die-for-profit-hospices.html">this post</a>, hospices are meant for patients with very limited life expectancies. The goal of hospice is to provide comfort and palliation, not active treatment of illnesses. So if patients who actually do not have such severely limited life expectancies are admitted to a hospice, they might be denied therapy that could actually make them feel better, or even cure acute illnesses or prolong their lives. For example, a hospice patient who developed an open wound might not get maximal wound therapy, as in an example (allegedly involving a different commercial hospice provider) in the post above. So it is possible that Odyssey's enrolling and re-certifying of non-terminally ill patients could have lead to failure to provide some of these patients with the care they should have had. Whether this did or did not occur in individual cases, and what adverse effects may have been produced is not clear from the coverage of this case.   Summary As I wrote in 2011, .... There has been a lot of blather from politicians in the US about "death panels" in debates about health care reform. Many such politicians seem worried that the US government has or will have death panels under the new health care reform legislation. We have criticized that legislation for not addressing many important health care problems. No one, however, has convincingly demonstrated how its provisions would convene "death panels." Wendell Potter argued in his book, <a href="http://wendellpotter.com/deadlyspin">Deadly Spin</a>, (see <a href="http://hcrenewal.blogspot.com/2011/02/wendell-potters-deadly-spin.html">this post</a>) that for-profit insurance companies had their own "death panels." The Bloomberg article strongly suggests that for-profit hospices may also act like death panels. In search of more revenue, for-profit hospices may enroll patients who are not at the end of life, but then provide them only "comfort care," so that if they develop new conditions that are treatable, they are likely to die in the absence of treatment. I am waiting for the politicians who so enthusiastically condemned the supposed "death panels" to be found in health care reform legislation to condemn for-profit hospices for behaving like death panels. In my humble opinion, the case discussed above are the strongest argument yet that we need to reconsider our headlong rush to turn health care, particularly the direct care of patients, over to relatively unregulated, for-profit corporations. The cases above suggest that the pursuit of revenue ahead of patients' welfare by such organizations may lead to sick and dead patients. I cannot see how for-profit direct patient care can be made safe for patients without intense government regulation. If any of those vocal advocates of "free market" health care (in the absence of any good explanation of how health care can ever be an ideal free market, see <a href="http://hcrenewal.blogspot.com/2010/08/how-fallacy-of-perfect-health-care.html">this post</a>) can explain to me how for-profit hospices can be made safe for patients without such regulation, I would welcome their attempts. Meanwhile, this just calls out for legislative and legal investigation, and urgent policy changes.   By the way, the case above also shows how the current approach used by the government to address misbehavior in health care does not work.  We have noted previously how these <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> often only lead to financial penalties imposed on companies, not individuals, which diffuses their impact, and provides no disincentives to future bad behavior by individuals.  Sometimes <a href="http://hcrenewal.blogspot.com/search/label/corporate%20integrity%20agreement">corporate integrity agreements</a> are added, but as in the current case, they also seem not to deter future bad behavior.   So, I further conclude, de rigueur, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Gentiva's Odyssey Healthcare Settles Again, Signs Yet Another Corporate Integrity Agreement

The Milwaukee Journal-Sentinel reported a legal settlement worth noting. Here are the basics:One of the nation's largest providers of hospice care has agreed to pay $25 million to settle a Medicare f…

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06 Mar 2012

The Center for Medicare and Medicaid Services' Quiet Coziness with Wall Street

An <a href="http://www.pogo.org/pogo-files/alerts/government-corruption/wall-street-in-washington-gc-ii-20111208.html">article</a> from the Project on Government Oversight (POGO) reveals a new aspect of the growing coziness between the US government and big corporations with obvious relevance to health care. CMS' Coziness with Leaders of the "Capital Markets" Here is the introduction and the example most relevant to health care: <blockquote>Nearly a dozen senior staff at the Centers for Medicare and Medicaid Services (CMS), the giant agency that administers hundreds of billions in federal health care dollars, had been called to a meeting. After a discussion with five Wall Street professionals that lasted nearly two hours, one senior CMS analyst filed an ethics complaint that later went to the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS). His beef: that a handful of deep-pocketed investors had won a private hearing to probe whether the agency would allow Medicare reimbursement for specific medical devices manufactured by companies in which they already held a stake or might put new money. The market for one device, already approved for Medicare, was rapidly heading toward $1 billion annually; the agency’s impending decision to reimburse competing devices could have major market impact, a shift potentially worth hundreds of millions of dollars. 'This meeting forced agency staff to redirect their attention toward a select group from Wall Street, when neither competing investors nor patient-oriented stakeholders were present,' the whistleblower told the Project On Government Oversight (POGO). 'They got to probe us for hours in private about what we planned to do and how we approached procedures for reimbursing medical devices, the mechanics and psychology of CMS decision-making, in general and with respect to these specific devices.' The meeting was set up by a former CMS employee working for the Marwood Group, an asset manager that counsels big health-care industry investors, the whistleblower says. The firm’s president is Edward 'Ted' Kennedy Jr., son of the late Massachusetts senator and a major supporter of President Obama’s health care reforms, and includes Kennedy cousins Robert F. Kennedy, Jr. and Stephen E. Smith, Jr., as senior advisors. The firm’s website highlights its staff recruitment among Congressional aides, the Executive Office of the President and CMS. One CMS veteran who joined Marwood after the 2009 meeting with Wall Streeters is Barry Straub, the agency's former Chief Medical Officer, who is also an expert on Medicare reimbursement, the website says. A company spokesman had no comment. A supervisor at CMS’s Coverage Advisory Group, which decides which services the agency will pay for, also helped organize the session with investors. The whistleblower says he was told by a supervisor that such get-togethers are 'a routine practice at CMS.' At the time, in 2009, CMS’s top administrator had an aide with the title, 'capital markets advisor,' tasked with tracking investment community activity in Washington and elsewhere. At the investor meeting, Wall Streeters asked a range of questions 'about confidential CMS information.' The whistle blower says he does not believe they received illegal disclosures, though they peppered CMS analysts with queries about the agency’s decision-making process and other sensitive matters which, if answered, could have violated the law or related regulations that bar the sharing of internal deliberations and decisions. The whistleblower first filed his complaint in April 2009. He was terminated in 2011 for being disloyal to the agency mission after he made a series of internal protests, including the objection to what he calls a pattern and practice of unfettered access to CMS staff by Wall Street investors. He says he is currently fighting his dismissal through all available legal and administrative channels. </blockquote>Implications and Summary As the POGO article put it, <blockquote>CMS does have a set of 'Open Door' policies and affords a variety of avenues for public access. The disclosure of payments to physicians and teaching hospitals by pharmaceutical companies and other interests are required under President Obama’s health reform. In practice, however, the public, not to mention competing investors and stakeholders, rarely get the kind of information and insight available in meetings like the whistleblower described.</blockquote> In general, <blockquote>A balance is necessary between the danger of too much insider access, and imposing excessive limitations. Indeed, the biggest problem with special access for Wall Street insiders is not just that they seem to get meetings and acquire information that may be privileged and non-public, but that others, including other investors, do not get a crack at the same material.</blockquote>The activities above have all the usual elements of excess corporate - government coziness.  These include enhanced access for corporate leaders beyond what any ordinary members of the public might achieve; the <a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving door</a> between government service and corporate leadership; the participation of well-connected inside the beltway types, etc, etc.  It also includes the apparent formalization of representation of corporate interests, e.g., the "Capital Markets Advisor," with no parallel formalization of the public's or patients' interests.  Even more worrisome is that an effort to make this all less <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a> resulted in alleged intimidation of a <a href="http://hcrenewal.blogspot.com/search/label/whistle-blowers">whistle-blower</a>. So, let's see, CMS, the Center for Medicare and Medicaid Services, the US Department of Health and Human Services (DHHS) branch which controls the Medicare and Medicaid programs, the government run single-payer programs for the elderly, the disabled, and the poor, does not seem to be able to afford to figure out in-house how to pay physicians for specific services.  Instead, it has effectively farmed out this task to a private committee, the American Medical Association's <a href="http://hcrenewal.blogspot.com/search/label/RUC">RBRVS Update Committee (RUC</a>).  As we have <a href="http://hcrenewal.blogspot.com/search/label/RUC">discussed many times</a>, this obscure and secretive committee likely had a major role in structuring the financial incentives that favor procedures and disfavor primary care. leading to excess costs, declining access, and degrading quality.  However, CMS can afford to have a "Capital Markets Adviser" and to use up staff time briefing wealthy investors and hedge fund types.  What is wrong with this picture? In my humble opinion, government health care agencies ought to put the public's and patient's health first. They should not give special consideration to the rich, the powerful, the well-connected, whom some now call the one percent. Yet in the US we seem to have an increasingly <a href="http://hcrenewal.blogspot.com/search/label/corporatism">corporatist</a> state in which government and the plutocrats work together for their mutual interests, regulatory capture writ large. We need to restore government, and our health care agencies to being of the people, by the people, and for the people.  Obviously, true health care reform would start with the government and its officials putting patients' and the public's health first, way ahead of the financial comfort of corporate leaders.

The Center for Medicare and Medicaid Services' Quiet Coziness with Wall Street

An article from the Project on Government Oversight (POGO) reveals a new aspect of the growing coziness between the US government and big corporations with obvious relevance to health care.CMS' Cozine…

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09 Dec 2011

Fresenius Fined $82 Million for False Claims

We open the week with yet another story of a large health care organization found by the judicial process to have misbehaved. Here is the story, <a href="http://www.infozine.com/news/stories/op/storiesView/sid/47599/">courtesy</a> of the Kansas City InfoZine: <blockquote>The United States Attorney’s Office announced that a federal judge has entered a judgment of $82,642,592 in favor of the United States in a 'whistleblower' lawsuit originally filed in the federal district court in St. Louis in 2005, and then transferred to the federal district court in Nashville, Tennessee. The lawsuit claimed that Renal Care Group, Renal Care Group Supply Company and Fresenius Medical Care Holdings, Inc. recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment during 1999-2005.</blockquote> The judge's reasoning was apparently based on some colorful facts, <blockquote>The Court's orders in this case discuss the concerns of multiple Renal Care Group employees who complained about the operation and Medicare billing activity of the Renal Care Group Supply Company, including one regional manager who wrote, 'I do not wish to go to jail,' and felt the company 'was not in the best interests of patients' after receiving a corporate directive about converting patients into the Renal Care Group Supply Company. The Court further noted that Renal Care Group failed to heed the advice of the company's lawyers when operating the supply company and also discussed an internal audit of the supply company that found that one hundred percent of the company's files were missing information that Medicare required for billing. Renal Care Group ('RCG') was a publicly traded for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care ('FMC'). RCG had its principal place of business in Nashville, Tennessee, and had locations throughout Missouri, including multiple facilities around the St. Louis metropolitan area. RCG Supply Company ("RCGSC") was a Tennessee corporation that was owned and operated by RCG.</blockquote> Note further the allegations of the mechanics of the misbehavior, as alleged by the government prosecutors: <blockquote>The Government's complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment. All of these claims, as well as related claims for support services rendered by RCG dialysis clinics were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients. Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company. Defendants set up a sham billing company, RCGSC, that was not independent from RCG. Further, RCG interfered with ESRD patients' choice of supply options, requiring patients to 'move' to RCGSC. Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created.</blockquote> Note further that we discussed an earlier judgment in this case, which has now been superseded, <a href="http://hcrenewal.blogspot.com/2010/03/settlement-and-conviction-round-up.html">here</a>. So here we go again: yet more misbehavior, yet another multi-million dollar fine, but no real live person suffers a negative consequence.   Almost daily, there are stories about criminal convictions for relatively small scale health care fraud, kickbacks, bribery, etc that often result in the perpetrators going to jail or paying potentially bankrupting fines. However, when misbehavior, including fraud, kickbacks, bribery is on a big scale, almost never does an individual pay a penalty. We have seen lots of stories of big corporations paying big fines like this (e.g., look <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">here</a>.)  However, in a world where those who authorize, direct, or implement misbehavior that makes the company money can get big pay, do we really expect that fines assessed against the company itself, whose costs can be passed on to the employees at large, customers, and shareholders will have any deterrent power? It is interesting that this latest case occurred around the same time that yet another breathless story appeared in the media about how the US government is about to get tough with executives whose companies misbehave.  The Associated Press ran <a href="http://www.google.com/hostednews/ap/article/ALeqM5jIGsUXYEAKspVXkeAdCDNumbbNFA?docId=d620a807289f47a6b01dfe728972a0b3">a story</a> claiming: <blockquote>Previously, if a company got caught, its lawyers in many cases would be able to negotiate a financial settlement. The company would write the government a check for a number followed by lots of zeroes and promise not to break the rules again. Often the cost would just get passed on to customers. Now, on top of fines paid by a company, senior executives can face criminal charges even if they weren't involved in the scheme but could have stopped it had they known. Furthermore, they can also be banned from doing business with government health programs, a career-ending consequence.</blockquote> It included a quote by one government official with which I would agree. <blockquote>'When you look at the history of health care enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy,' said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department. 'To our way of thinking, the men and women in the corporate suite aren't getting it,' Morris continued. 'If writing a check for $200 million isn't enough to have a company change its ways, then maybe we have got to have the individuals who are responsible for this held accountable. The behavior of a company starts at the top.'</blockquote> I agree with the concept.  However, the AP story provided no evidence of a get tough policy newer than the case of the proposed "disbarment" from dealing with the government of the elderly CEO of Forest, which we discussed <a href="http://hcrenewal.blogspot.com/2011/04/will-pharmaceutical-ceo-finally-be-held.html">here</a>.  Although a year ago we <a href="http://hcrenewal.blogspot.com/2010/06/attempt-to-hold-health-care-leaders.html">discussed</a> threats by the US government to hold health care leaders accountable using the "Responsible Corporate Officer Doctrine," which has been available since 1943, so far there is no evidence that this concept has been made operational. So the march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, and corporate convictions for <a href="http://hcrenewal.blogspot.com/search/label/bribery">bribery</a>, <a href="http://hcrenewal.blogspot.com/search/label/fraud">fraud</a>, and <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a> continue, but the problem does not go away.  In 2006, we <a href="http://hcrenewal.blogspot.com/2006/08/schering-plough-settles-again-again.html">wrote</a>, "It all is becoming so familiar, almost wearisome, yet the questions remain. Why do the mainly monetary penalties seem mainly to come out of the hides of stock-holders and consumers, rather than the people who actually made the decisions that lead to the offenses? And after all the indictments, prosecutions, settlements, and convictions involving large health care organizations, when will academics, policy makers and politicians, much less company CEOs and other organizational leaders admit we have a systematic problem here?" In 2008, we <a href="http://hcrenewal.blogspot.com/2008/09/walgreen-settles.html">wrote</a>, "As long as health care leaders can shrug off the consequences of unethical behavior merely as acceptable costs of doing business, absent any serious attempts to get health care organizations to enforce internal codes of ethical behavior or to avoid hiring ethically challenged leaders, the procession will likely continue. The effects will be continually rising costs, declining quality, shrinking access, and rising numbers of demoralized health professionals." I wonder what we will write about this in 2012?

Fresenius Fined $82 Million for False Claims

We open the week with yet another story of a large health care organization found by the judicial process to have misbehaved. Here is the story, courtesy of the Kansas City InfoZine:The United States …

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31 May 2011

Getting Out of Our RUC - "An Open Letter To Primary Care Physicians"

Since 2007, we have been <a href="http://hcrenewal.blogspot.com/search/label/RUC">writing</a> about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians.  The RUC has been accused of setting up incentives that strongly favor invasive, high technology procedures while disfavoring primary care and other "cognitive medicine."  Despite the central role of (perverse) incentives in raising health care costs while limiting access and degrading quality, there has been surprisingly little discussion about the pivotal role played by the RUC.  Now there is a movement afoot to <a href="http://replacetheruc.org/">replace the RUC</a>.  In a new post <a href="http://careandcost.com/2011/03/05/an-open-letter-to-primary-care-physicians/">on the Care and Cost blog</a>, and <a href="http://replacetheruc.org/2011/03/05/an-open-letter-to-primary-care-physicians/">the Replace the RUC site</a>, Paul M. Fischer and Brian Klepper urged four approaches: 1. Make the public aware of the RUC’s role and urge the primary care societies to stop “enabling” the RUC through their participation. 2. Recruit experts who can credibly calculate the economic impacts of the RUC’s actions, and who can devise alternative payment methodologies. 3. Demonstrate the unlawfulness of CMS’ (and HCFA’s) two-decades long reliance on the RUC. 4. Develop a collaboration between primary care and non-health care business. They are also urging three specific actions: <blockquote>1. Contact your primary care society to demand that they withdraw from the RUC. 2. Broaden awareness of what we’re doing and why by rebroadcasting to your primary care colleagues. 3. Get in touch to help us with resources, relationships or approaches that can strengthen this project.</blockquote> They have set up an <a href="http://www.ipetitions.com/petition/quittheruc/">electronic petition</a> that people can use to urge the three major medical societies that represent primary care physicians to quit the RUC. On Health Care Renewal, we have been trying to make the systemic problems with with the leadership of health care organizations less <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a> in the hopes that greater realization that these problems exist would lead to actions to solve them. The regulatory capture by the RUC of Medicare's payment setting mechanism is one problem that really cries out for a solution. In 2007, I <a href="http://hcrenewal.blogspot.com/2007/05/more-on-disparities-between.html">called for</a> "an unbiased re-evaluation of the components of the RBRVS by people who are dedicated to doing it fairly, not benefiting one group of physicians, or the organizations that benefit from the increased use of procedures"; and "an unbiased investigation of what went awry with the process used by Medicare to determine physician payments."  Your heard it here first on Health Care Renewal.  It is nice to now have such distinguished company.  I urge our readers to consider the actions urged above.  True health care reform will require a transparent, honest, fair process for governments to decide on how they will pay for physicians' care and other health care services and goods.

Getting Out of Our RUC - "An Open Letter To Primary Care Physicians"

Since 2007, we have been writing about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians. The R…

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07 Mar 2011

New CMS Chief Donald Berwick: a Trojan Horse for Quackery?

On July 7, President Obama appointed Dr. Donald Berwick as Administrator of the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick, a pediatrician, is well known as the CEO of the non-profit <a href="http://www.ihi.org/ihi">Institute for Healthcare Improvement </a>(IHI), which "exists to close the enormous gap between the health care we have and the health care we should have — a gap so large in the US that the Institute of Medicine (IOM) in 2001 called it a 'quality chasm'.” Dr. Berwick was one of the authors of that <a href="http://iom.edu/Reports/2001/Crossing-the-Quality-Chasm-A-New-Health-System-for-the-21st-Century.aspx">IOM report</a>. His IHI has been a major player in the patient safety movement, most notably with its "<a href="http://www.ihi.org/IHI/Programs/Campaign/100kCampaignOverviewArchive.htm">100,000 Lives Campaign</a>" and, more recently, its "<a href="http://www.ihi.org/IHI/Programs/Campaign/">5 Million Lives Campaign</a>." Berwick's CMS gig is a "recess appointment": it was made during the Senate's July 4th recess period, without a formal confirmation hearing---although such a hearing must take place before the end of this Senate term, if he is to remain in the position. A <a href="http://www.boston.com/news/local/massachusetts/articles/2010/07/07/obama_bypasses_senate_for_new_medicare_chief/?camp=obnetwork">recent story</a> suggested that Obama made the recess appointment in order to avoid a reprise of "last year's divisive health care debate." The president had originally nominated Berwick for the position in April, and Republicans have opposed "Berwick's views on rationing of care," claiming that he "would deny needed care based on cost." A "Patient-Centered Extremist" If there is a problem with the appointment, it is likely to be roughly the opposite of what Republicans might suppose: Dr. Berwick is a self-described "Patient-Centered Extremist." He favors letting patients have the last word in decisions about their care even if that means, for example, choosing to have unnecessary and expensive hi-tech studies. In an <a href="http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w555v1">article for Health Affairs</a> published about a year ago, he explicitly argued against the "professionally dominant view of quality of health care": <blockquote>I think it wrong for the profession of medicine—or any other health care profession, for that matter—to “reserve to itself the authority to judge the quality of its work.” I eschew compromise words like “partnership.” For better or worse, I have come to believe that we—patients, families, clinicians, and the health care system as a whole—would all be far better off if we professionals recalibrated our work such that we behaved with patients and families not as hosts in the care system, but as guests in their lives. I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care. A new definition. My proposed definition of “patient-centered care” is this: The experience (to the extent the informed, individual patient desires it) of transparency, individualization, recognition, respect, dignity, and choice in all matters, without exception, related to one’s person, circumstances, and relationships in health care. </blockquote> Does this mean that Dr. Berwick would also eschew professional, i.e., expert, judgment in favor of patients' wishes? In a word, yes: <blockquote>Evidence-based medicine sometimes must take a back seat. First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat. One e-mail correspondent asked me, “Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.” On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase “a fully informed patient.” </blockquote> Dr. Berwick is not so naive as this opinion might suggest. He envisions a "mature dialogue" in such a case, and argues that "if, over time, a pattern emerges of scientifically unwise or unsubstantiated choices...then we should seek to improve our messages..." He also admits that there might be an occasional patient whose demands are so unreasonable that "it is time to say, 'No'." That exception, he argues, should not dictate the rule. There are situations in which most civilized people would agree with Dr. Berwick's view of 'patient-centeredness'. In both the Health Affairs article and in his <a href="http://www.ihi.org/NR/rdonlyres/0B7E1957-A466-4134-907D-F9E2B0F9BDE0/0/BerwickYaleMedicalSchoolGraduationAddressMay10.pdf">recent address</a> to the 2010 graduating class of the Yale School of Medicine, he offered real examples of petty, arbitrary hospital rules causing unnecessary sorrow for patients and their loved ones. It is in such contexts that he makes a convincing case that health professionals ought to behave "as guests in their lives." In an interview for the <a href="http://www.nytimes.com/2009/06/04/health/04chen.html?_r=1">New York Times</a>, he argued: <blockquote>We don’t have a standard of services or processes that are comfortable for patients. We have built a technocratic castle, and when people come into it, they are intimidated. </blockquote> Nothing to disagree with there. To create that standard, moreover, would not undermine settled medical practice ethics---it would celebrate them, even as it rightly embarrasses the profession for having taken so long to do so. Enter the Woo Eschewing the scientific basis for modern medical practice, however, is another matter. In February of 2009, Dr. Berwick gave a 'keynote' address at the IOM and <a href="http://www.bravewell.org/">Bravewell Collaborative</a>-sponsored <a href="http://www.iom.edu/Activities/Quality/IntegrativeMed.aspx">Summit on Integrative Medicine and the Health of the Public</a>. He shared the podium with Mehmet Oz, Dean Ornish, Senator <a href="http://www.csicop.org/si/show/ongoing_problem_with_the_national_center">Tom Harkin</a>, and other advocates of pseudoscientific health claims. I wrote about the conference at the time, mainly to call attention to its misleading use of the term "<a href="http://www.sciencebasedmedicine.org/?p=399">integrative</a> medicine": literature emanating from the Summit characterized it as "preventive" and "patient-centered," whereas the only characteristic that distinguishes it from modern medicine is an inclusion of various forms of pseudomedicine. I noticed that Dr. Berwick was on the speaker roster, which I found disappointing: I imagined that he had either gone over to the Dark Side or, perhaps, was sufficiently naive about the topic to have been duped; or, more likely, that he had cynically accepted the offer to further his ambitions. I didn't bother to listen to <a href="http://www.imsummitwebcast.org/">his speech</a> until the CMS appointment was announced a few days ago. It is troubling, to say the least. Dr. Berwick did not argue, as he had in the NYT piece, that "If we doctors feel a person is going to make unwise choices, we have to take on the responsibility of being teachers, educators and informers." Rather, he praised his fellow speakers, most of whom were spouting nonsense, for their "reach" and "eloquence." He praised the IOM for its "glorious record...in pursuit of better designs in health care...traditional, <a href="http://www.ncahf.org/articles/a-b/allopathy.html">allopathic </a>curative care and now migrating into this distinguished and important new arena." He mentioned homeopathy and acupuncture, not to wonder why they should be promoted as effective, but merely to warn that they will fail---presumably in some economic sense---if they try to compete with each other for reimbursement. Such language, and Dr. Berwick's very presence at the Summit, were a far cry from advocating "patient-centeredness." What they amounted to was a generous endorsement of pseudoscientific practices and of the socio-political movement that promotes them. Even granting some naivete on his part (he called himself "an amateur at this topic"), he must have known this. Such an endorsement, unlike tearing down the "technocratic castle," has ethical implications at least as profound as those that Dr. Berwick tacitly or explicitly relies upon to support his arguments for patient-centeredness. "Physicians have no Immunity to Moral or Ethical Constraints" The relevant medical ethics treatises (reviewed <a href="http://www.sciencebasedmedicine.org/?p=169">here</a>) are in substantial agreement that it is unethical for physicians to prescribe scientifically implausible methods or to refer patients to other practitioners for the same purpose. They are also in agreement that it is unethical to prescribe a placebo to a patient while claiming that the treatment has specific biologic activity---a point that has been <a href="http://www.publications.parliament.uk/pa/cm200910/cmselect/cmsctech/45/45.pdf">vigorously argued in the UK</a> this year, with regard to homeopathy. These ethical tenets are not mere odes to nerdy, sciency thinking; they are matters of honesty and integrity---fundamental bases for ethical interactions between physicians and patients. In 1983, philosophers Clark Glymour and Douglas Stalker published <a href="http://www.ncbi.nlm.nih.gov/pubmed/6835298?ordinalpos=6&itool=EntrezSystem2.PEntrez.Pubmed.Pubmed_ResultsPanel.Pubmed_RVDocSum">an article</a> in the New England Journal of Medicine titled “Engineers, cranks, physicians, magicians.” They framed modern medicine as follows, comparing it to what was then called "holistic medicine" (the article is quoted extensively <a href="http://www.sciencebasedmedicine.org/?p=177">here</a>): <blockquote>Medicine in industrialized nations is scientific medicine. The claim tacitly made by American or European physicians, and tacitly relied on by their patients, is that their palliatives and procedures have been shown by science to be effective. Although the physician’s medical practice is not itself science, it is based on science and on training that is supposed to teach physicians to apply scientific knowledge to people in a rational way. The practice of medicine in the United States and in other industrialized nations is a form of consultant engineering... </blockquote> That statement is just as accurate now---even more so, in this era of Evidence-Based Medicine---as it was nearly 30 years ago, even if some might find the likening of medicine to engineering displeasing. Nor is it at odds with almost any definition of "patient-centeredness," other than one that presumes that the patient's desires trump the physician's ethics: <blockquote>A physician engineer can act as consoler; nothing in either logic or social psychology forbids it. But certain combinations are impossible or extraordinarily unlikely. A physician engineer cannot honestly claim powers of magic or occult knowledge. The principles governing scientific reasoning and belief are negative as well as positive, and they imply that occult doctrines are not worthy of belief. Moreover, physician engineers have no immunity to moral or ethical constraints. On the contrary, they are by training and by culture enmeshed in a tradition of rational thought about the obligations and responsibilities of their profession. </blockquote> Dr. Berwick---if he really believes what his presence and words at the "Integrative Medicine" Summit imply---is playing with ethical fire. (If, as I hope, he doesn't really believe those things, he's playing with ethics of another kind). Will we begin to see pseudomedicine "integrated" into Medicare and Medicaid? That is certainly the expectation of <a href="http://theintegratorblog.com/site/index.php?option=com_content&task=view&id=669&Itemid=189">those who observed</a> Dr. Berwick's performance at the Summit, and who appear intent to hold him to his word. KA Two other blogs that have addressed this issue are: Dr. RW: <a href="http://doctorrw.blogspot.com/2010/05/not-only-evidence-based-medicine-but.html">Not only evidence based medicine but science based medicine may take a back seat in Donald Berwick's vision for patient centered care</a> Dr. David Gorski: <a title="Dr. Donald Berwick and “patient-centered” medicine: Letting the woo into the new health care law?" href="http://www.sciencebasedmedicine.org/?p=6040">Dr. Donald Berwick and “patient-centered” medicine: Letting the woo into the new health care law? </a>

New CMS Chief Donald Berwick: a Trojan Horse for Quackery?

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13 Jul 2010

RUC Off - the New England Journal Once Again Fails to Mention the Unmentionable

Last week, the influential New England Journal of Medicine published an article by Bruce Vladek entitled "Fixing Medicare's Physician Payment System."(1)  Although only identified as working for Nexara, a health consulting business, Mr Vladek was a <a href="http://www.leighbureau.com/speaker.asp?id=128">former administrator</a> of what was then called the Health Care Financing Administration (HCFA) of the US Department of Health and Human Services (DHHS), the part of the department that then ran the US Medicare program.  Vladek thus can reasonably be viewed as an expert on Medicare.  Vladek identified two main problems with the current way physicians are paid by Medicare.  First, <blockquote>Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare's physician payments, which already trail those from private insurers, as far into the future as the eye can see.</blockquote> Second, <blockquote>there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.</blockquote> Vladek expanded on the second point as follows <blockquote>the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units. Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix. The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed. Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.</blockquote> This is about all that Vladek wrote about how the imbalance between how Medicare pays for primary care and other "cognitive services," and for procedures came about. Vladek, and many others have argued that this imbalance has lead to strong financial incentives that have been slowly destroying primary care, and strong incentives that have lead to the use of too many procedures, both strong drivers of rising costs in the most expensive health care system in the world. Vladek noted vaguely that "through various reasons," the incentives were imbalanced by "the process of annual updating of relative value units." However, as we have discussed in several blog posts, a lot more is known about how this process got "totally off track." In fact, in 2007, an article by Bodenheimer et al in the Annals of Internal Medicine explained the problems in considerably more detail.(2)  As we <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">wrote then</a>, Its main points included <ul><li>Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.</li><li>The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."</li><li>Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.</li><li>Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.</li></ul>The role of the RBRVS Update Committee (RUC) is complex and in many ways mysterious.  As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret. To expand on the penultimate point, the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">current page</a> on the AMA web-site that describes the RUC only lists its members in terms of their specialties and organizational affiliation.  Their names do not appear.  A <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/posesresponse.pdf">response </a>to a <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">previous post</a> by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA <a href="https://catalog.ama-assn.org/Catalog/product/product_detail.jsp?productId=prod1170041">here</a> for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it.  Thus, the RUC membership as at best relatively opaque. To expand on the ultimate point, as Goodson(3) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." The fog surrounding the operations of the RUC seems to have affected many who write about.  We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC.  In 2010, post the US recent attempt at health care reform, the RUC seems to remain the great unmentionable.  Even the leading US medical journal seems reluctant to even print its name.  Thus, as we <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">noted before</a>, however, the mysteries about it remain: <ul><li>How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.</li><li>Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?</li><li>How did the RUC become de facto in charge of this process?</li><li>Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?</li><li>Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?</li><li>Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?</li></ul>Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  In this case, the persistence of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a> seems to be doing real damage to the discussion of the critical issues we in the US face today. References 1. Vladek B. Fixing Medicare's physician payment system. N Engl J Med 2010; 362:1955-1957. (Link <a href="http://content.nejm.org/cgi/content/full/NEJMp1004709">here</a>.) 2. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here.</a>) 3. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310.  (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

RUC Off - the New England Journal Once Again Fails to Mention the Unmentionable

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01 Jun 2010

Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud. In "<a href="http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/index.htm">Health care: A 'goldmine' for fraudsters</a>", CNN senior writer Parija Kavilanz observes that: <blockquote>NEW YORK (CNNMoney.com) -- There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminal gangs who are bilking the system of as much as $100 billion a year. Health care identity theft dominated all other crimes in the sector last year, according to Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association (NHCAA), an advocacy group whose members include insurers, law enforcement and regulatory agencies.The most common method of health care identity fraud occurs when someone with legitimate access, such as a hospital administrator or a doctor's assistant, sells patients' information to organized criminal groups.Increasingly, criminal groups are hacking into digital medical records so that they can steal money from the $450 billion, 44-million-beneficiary Medicare system -- making the government, by far, the "single biggest victim" of health care fraud, according to Rob Montemorra, chief of the FBI's Health Care Fraud Unit. All the stolen information includes medical insurance data and Social Security numbers, explained James Van Dyke, president of Javelin Strategy & Research, a research firm specializing in trends in security and fraud initiatives.Van Dyke said that, with the information, the fraudster falsely bills Medicare and private insurers for drugs, equipment or treatment that were never prescribed. </blockquote> I have somewhat constrained confidence in the health IT prowess of a government that cannot implement proper processes and information systems to prevent $100 billion per year in Medicare fraud. The fraud is not sophisticated; it is performed in the most simplistic manner via simple submission of fraudulent claims via boiler-room billing companies: <blockquote> To collect the money, the criminals set up shell billing companies that disappear as soon as there's any indication of an investigation, according to the FBI.</blockquote> I have less than stellar confidence that the very same government can oversee a national project for health IT to implement technology that is not just a panacea to healthcare's ills as effectively claimed, but goes far beyond that as an alterative that will <a href="http://web.archive.org/web/20080714203445/http://www.hhs.gov/healthit/vision.html">revolutionize healthcare</a>. -- SS

Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud.In "Health care: A 'goldmine' for fraudsters", CNN senior writer Parija Kavilanz observes that:NEW YORK (CNNMoney.c…

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13 Jan 2010

The Role of the RUC in Medicare's Price-Fixing and Rationing Remains Anechoic

An important part of the noisy and contentious debate about health care reform in the US centers on the role of the government as a provider of health insurance. Some on the left want a government "single-payer" plan to be the only health insurance available. Some left of center want a government "public option" health insurance plan to be available, particularly to those who have trouble obtaining commercial insurance. Some on the right want none of it, and sometimes note that the existing government single-payer plan for the elderly and disabled, Medicare, has important faults that would only become more significant if the plan is extended or duplicated. Yet even critics of Medicare on the right do not seem to want to talk about what may be its worst fault. The latest example, an <a href="http://online.wsj.com/article/SB20001424052970204488304574435464052451436.html">op-ed piece by Dr Scott Gottlieb</a>, appeared in the Wall Street Journal yesterday. Dr Gottlieb's main point was that health care rationing by either government or private insurers is inevitable, but that "government does it in far more byzantine and arbitrary ways." In particular, <blockquote>Consider the $450 billion Medicare program. It provides a model for—indeed its bureaucracy could well end up running—the 'public option' health plan that Mr. Obama wants to offer all Americans under the age of 65. In recent years, Medicare's staff has been aggressively restricting coverage for costly treatments. This often means limiting access to the costliest technologies. To do this Medicare relies on its rationing and pricing systems. </blockquote> Gottlieb then cited several examples, "tortured decisions concerning the use of implantable defibrillators," and "the travails of the pharmaceutical company Spracor and its drug Xopenex, an innovative respiratory medicine that competes with the chemically distinct and much cheaper generic albuterol." Finally Gottlieb decried Medicare's decision making processes applied to costly technologies as "impenetrable." His summation was <blockquote> There's nothing inherently wrong with a program like Medicare seeking value for taxpayers. But it shouldn't make up the rules as it goes. </blockquote> Let me first say that I actually agree with Dr Gottlieb's main points. Any government or private health insurance plan ought to seek value for its money. However, how it does so ought to be rational, based on understanding of medicine and the clinical context, and transparent and accountable to the patients on whose behalf such plans pay. "Covert rationing" (as has been well discussed in the <a href="http://covertrationingblog.com/">Covert Rationing Blog</a>) raises worries that decisions are being made just to save money, not to improve value, and even that decisions are being made without informed consideration of the clinical context, or based on the self-interest of the decision makers, or even that decisions may result from bribery and corruption. But if Dr Gottlieb is so concerned about Medicare rationing care as a result of opaque and unaccountable decision making, why is he not more concerned about how Medicare controls the prices of physicians' services than about its decisions about a few expensive, high-tech and infrequently used treatments? We have written again and again about how Medicare has allowed decisions about what physicians are paid for providing various services to be made de facto by an opaque private committee run by the American Medical Association. This decision-making process has lead to relatively generous payments for procedures, versus miserly payments for "cognitive services," (that is, "evaluation and management services," or for physicians interviewing, examining, and counseling patients, making diagnoses, predicting prognoses, and making decisions about treatment.) The resulting perverse incentives are a major reason that primary care has become increasingly unavailable, and for our expensive patterns of care dominated by high-technology and invasive procedures. More detail quoted from <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">a previous post </a>appears below. <blockquote>As we have discussed, the US Medicare system determines what it pays physicians using the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/overview-of-rbrvs.shtml">Resource Based Relative Value System (RBRVS)</a>. This system determines the pay for every kind of medical encounter according to a complex formula that is supposed to account for physicians' time and effort, physicians' practice expense, and the cost of malpractice insurance. The components of physicians' effort assessed are, in turn, technical skill and physical effort; the required mental effort and judgment; and stress due to the potential risk to the patient.To keep the system, which was started in 1990, current, requires addition of new kinds of encounters, which means encounters involving new kinds of procedures, and updating of the estimates of various components, including physicians' time and effort. To do so, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee (RUC). The <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RUC</a> is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are secret, as are the proceedings of the group.This opaque and unaccountable process has resulted in increases outstripping inflation in fees paid for procedures, while fees paid for 'cognitive" medicine,' i.e., for primary care, and for services that involve diagnosis, management of acute and chronic disease, counseling, coordination of care, etc, but not procedures, have lagged inflation. The effects of the RUC have been amplified by the unexplained tendency of commercial managed care and health insurance to track the RBRVS system when making their own payments to physicians.For further details about the RUC, see these posts on Health Care Renewal (<a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/05/payments-for-patient-centered-medical.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>) and important articles by Bodenheimer et al,(1) and Goodson.(2) By the way, why the US Center for Medicare and Medicaid Services (CMS) relies de facto exclusively on the RUC to control the RBRVS system, and why the AMA made the RUC into a secret organization apparently beholden only to the organization's proceduralist members are unanswered questions. </blockquote>Our most recent posts about the RUC are <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2009/08/sgim-urges-chuck-ruc.html">here</a>. Other bloggers, notably including Dr Robert Centor on <a href="http://www.medrants.com/">DB's Medical Rants</a>, have criticized the RUC. The Society of General Internal Medicine seems to be the only medical society that has criticized the RUC (see <a href="http://hcrenewal.blogspot.com/2009/08/sgim-urges-chuck-ruc.html">this post</a>). Yet even ostensibly conservative and libertarian pundits who decry price-fixing and rationing by Medicare have ignored this vivid and important example of opaque and unaccountable price-fixing and rationing. And ostensibly liberal proponents of public options and single-payer systems have not explained how they would make their rationing more rational, transparent, and accountable, or how simply insuring more patients under Medicare-like programs would not result in even higher costs, poorer access, and worse quality. The lack of discussion of the RUC remains one of the more striking examples of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>. Failing to address why our costs are so high, are access is so poor, and our quality is so challenged will make it likely that any supposed reform effort will only make these problems worse. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link <a href="http://www.annals.org/cgi/content/full/146/4/301">here</a>. 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.

The Role of the RUC in Medicare's Price-Fixing and Rationing Remains Anechoic

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02 Oct 2009

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