Hospitals see alignment with doctors as boon to patient care

■ Executives say in a survey that the growth of physician employment eventually will lead to improved coordination of care, market share and better outcomes.

By KAREN CAFFARINI — Posted July 15, 2013

PRINT  |   EMAIL  |   RESPOND  |   REPRINTS  |   LIKE   |   SHARE   |   TWEET 

• WITH THIS STORY:
• » Related content

Hospital executives believe physician relationships are key to their success in the quickly developing accountable care environment.

Those relationships are expected to result in continued growth in physician employment by hospitals, co-management arrangements and other opportunities with independent practices.

But there will be growing pains: An overwhelming majority (76%) of 139 surveyed chief financial officers said they don't expect a return on their investment on physician employment in the first few years, according to a June 14 report on hospital-physician affiliation strategies. But most executives in the survey say the strategy will pay off later with improved coordination of care, market share and patient experience, among other factors.

The survey, conducted by Healthcare Financial Management Assn. and sponsored by the health care services and information technology company McKesson Corp., asked hospital executives about physician affiliation strategies to assess current and future trends and the impact changing care models have on employment. Fifty-four percent of respondents are with urban hospitals, and 46% work at rural hospitals.

The survey supports other research that indicates future physician compensation will be driven by value, not productivity and volume as in the current model. Cost-of-care or efficiency-related incentives in physician agreements are expected to grow from 16% to 67%, and quality-related incentives should increase from 65% to 85%. Productivity-related incentives, on the other hand, are expected to drop from 77% to 59%.

“The survey demonstrates the shift from the 'fill your beds' mentality of the past based on fee for service,” Janice Wiitalia, director of research for the HFMA, who led the research project, said in a statement. “Everyone is starting to realize that the focus in a value-based environment is keeping patients healthy, not the volume of care provided.”

Debra Williams, a marketing manager with McKesson, said the survey results show that the growth in physician employment will be steady, with 37% of respondents believing it will continue to grow at a rate of 10% to 24% a year. Meanwhile, 30% of hospitals will continue to pursue clinical relationships, directorships and co-management opportunities with independent practices.

“They want to align with physicians who want to remain independent,” Williams said.

Ashley Thompson, vice president of policy and deputy director of the American Hospital Assn., said the landscape is vastly different from the 1990s, when hospitals purchased a lot of practices and lost a lot of money in doing so.

“This time around there's more of a desire to improve patient care, and hospitals are working more closely with physicians to achieve this,” she said.

Thompson said hospitals are looking at different strategies to achieve a close physician alignment. Kaiser Permanente, for instance, employs many physicians, while Advocate Health Care has an expansive network of practices in the Chicago area.

“Advocate doesn't employ physicians. It works with them,” Thompson said.

Hospitalists in the boardroom

More physicians will find their way to the boardroom and executive seats as well, according to the survey and industry experts.

“You'll see more hospitalists in management positions,” said Larry Wellikson, MD, CEO of the Society of Hospital Medicine. “We already see many of them becoming CEOs and chief medical officers at hospitals.”

Williams said having physicians in key roles at the executive level will be critical for hospitals to understand the accountable care environment and to make decisions on the coordinated care level.

Dr. Wellikson said it's difficult to make money from physician services, but with care coordination there could be better outcomes and more efficient care for patients. He said in the accountable care environment, in which physicians and administrators would devise a strategy to reduce the number of patients with infections instead of just treating the infection, for instance, this would mean more money for the hospital and doctor.

While hospital CFOs reported more collaboration with physicians in an effort to improve care coordination, only 20% said they are “very prepared” and have the necessary infrastructure to support quality and outcomes-based management. Fifteen percent said they are very well-prepared to analyze and communicate physician-specific data, 14% are very prepared to manage case coordination and only 7% are very prepared in population health management.

Most practice functions, such as physician IT and billing, report to hospital/system leadership or are co-located, the survey found. Most hospitals are somewhat or completely satisfied with these functions of their employed physician groups. And they are more satisfied with hospital- or system-based billing, coding and collections than those by group practices.

Nervousness about ACOs

Williams said McKesson has held several briefings on the survey's findings with hospitals and found anxiety on executives' parts concerning the transition to an accountable care environment, including how to report on the metrics they collect and how to educate physicians on the difference between incentives for quality and for fee for service.

“Overall, we got the general sense of executives asking, 'Should we do this, and are we ready to do this?' ” Williams said of the move to accountable care. “The overall consensus was: We're moving in this direction, so we better be prepared.”

Williams said companies like McKesson can help hospitals work their way through the rigorous transition process to become an accountable care organization by doing some legwork for them and providing a revenue management analysis, among other aids.

Dr. Wellikson said CFOs tend to be a cautious group, but that change is moving fast in this case.

“Hospitals in Southern California started doing this [transition to accountable care] in the '90s,” he said. “It took 15 years to do. Now this is happening in the blink of an eye. It's going to be a very bumpy ride.”

But Thompson said many hospitals have been steadily moving in the direction of accountable care during the past four to five years. She said there are more than 250 accountable care organizations.

http://www.amednews.com/article/20130715/business/130719990/1/

Data analytics: Eye-popping results from Intel, UPS and Express Scripts

These three top-tier businesses are reaping huge rewards from data analytics. Here's what your company might be missing out on.

Simply put, data is the lifeblood at Express Scripts, a $44 billion pharmacy benefits management company based in St. Louis.

The Fortune 100 company processes close to 1.5 billion prescriptions for some 300 million consumers per year, all the while analyzing the wealth of information that accompanies each order.

"As we track a prescription through data entry and the pharmacy process and into the fulfillment system, we're tracking all sorts of information that gets fed to an analytics team that is focused on process improvement," says CTO Jim Lammers. Internally, it's how the company speeds delivery and cuts errors, he says.

But Express Scripts also processes more than 1 billion pharmacy insurance claims annually, and they represent a gold mine of information that could help cut healthcare costs and address the multibillion-dollar healthcare problem created by people who don't take their medications as prescribed, says Lammers.

Computers, mobile phones, tablet devices, sensors, tweets, texts and posts to social networks, not to mention run-of-the-mill retail and registration transactions online, are all generating potentially valuable data. A lot of data. By 2020, IDC estimates that the number of business-to-business and business-to-consumer online transactions will reach 450 billion per day. We took a look at three organizations that are ahead of the curve in generating big business value from big data and analytics technology. At the top of their lists of lessons learned: A deeply-rooted culture of analytics and a relentless focus on cost efficiency and process improvement are invaluable.

The Win: Lower Healthcare Costs

At Express Scripts, claims data can show whether patients are filling their prescriptions in the most cost-effective way, which is frequently by mail order. If they aren't, Express Scripts can intercede by providing the patient with additional cost information and offer to switch delivery fulfillment methods for them with a minimum of hassle.

"If they're taking a maintenance medication for high cholesterol and we know they've been taking it but they've been taking it from a retail pharmacy, we know if they move to a mail order, they can save," Lammers says. "We'll do proactive emails and drive the patient to our website and use specific messaging to get them to make [a mail order] decision."

What it boils down to is "doing the data analysis, creating the interaction and getting out the right message so that the patient can make a different choice," Lammers explains. "One of the key tenets is that if we offer people the right choice, they'll take the right path."

It sounds easy, but behind the seemingly effortless redirection is a massive amount of technology, not to mention a strict culture of analytics that permeates virtually all of Express Scripts' operations.

One of the company's largest IT investments has been in IBM's master data management software, which is critical to creating a single record that connects all of a customer's actions, regardless of whether a transaction is made via email, on the Web, by phone or in person at a retail pharmacy.

"One of the biggest challenges is linking all information together across all these different sources," says Lammers. "We've made very heavy investments in master data management. We invested early on and we've been through two or three iterations."

Express Scripts also created what Lammers calls a federated analytics model that includes a business analytics team embedded in each key functional operation, such as supply chain, sales and finance. A single data warehouse and centralized data governance are two other keys to the company's analytics success, he says. "With a centralized core, everyone is looking at the same data," Lammers notes.

With a proven data governance model and a data management foundation in place, Express Scripts recently expanded into predictive analytics, introducing an application called Screen Rx that's designed to reduce the problem of patient non-adherence to prescriptions for chronic conditions such as diabetes and high cholesterol. At a cost of more than $317 billion annually, non-adherence is the most expensive healthcare-related problem in the U.S., according to Express Scripts.

For example, skipping doses of a prescribed cholesterol medication might trigger heart attacks for some patients. Using predictive modeling based on 400 factors, such as a patient's location, family situation and the number of medications involved, Express Scripts can now identify, and proactively intervene with, patients who are likely to skip doses. Interventions might include a timely reminder to the patient to take his medication or a referral to a patient assistance program to help him pay for his medications. A third option is a referral to a clinical pharmacist who can assist with questions or concerns about a drug's side effects.

"This is really one of the key things we've been building to -- to change behavior," says Lammers. He adds that striving to foster healthy behaviors in patients is especially important in light of impending healthcare reform as millions of people gain access to consistent healthcare for the first time.

"We have to train them to take care of themselves," he says. "When we can put Screen Rx into a population that hasn't had consistent access to healthcare, we can get them to get the right stuff right away."

The Win: Fuel Savings and Better Driver Safety

Transportation and logistics giant UPS, which has annual revenue of $54 billion, invests roughly $1 billion per year in IT, and a very hefty portion of that is devoted to data analytics, according to Juan Perez, vice president of information services. The goal -- for now -- is to improve business processes, cut costs and increase efficiency.

The effort has been a success. By analyzing a continuous stream of sensor data from its thousands of delivery trucks, the global company has eliminated 5.3 million miles from its routes, reduced engine idling time by almost 10 million minutes, saved 650,000 gallons of fuel and reduced its carbon emissions by more than 6,500 metric tons.

At the heart of these eye-popping metrics is ORION, which stands for On-Road Integrated Optimization and Navigation, a data-intensive system that lays out the most efficient routes for individual drivers to deliver their loads via a series of complex algorithms. Additionally, the system taps into the mountain of sensor data to predict when a truck part might fail so that preventive maintenance can be scheduled and completed.

ORION also lets UPS managers peer into the habits of individual drivers, pinpointing, for example, the number of times a driver backs up a truck or makes a U-turn. This information can be used to identify drivers who need additional training.

"We have sensors that capture information about the vehicle and the driver's behaviors. We marry that information to delivery and acquisition information, and we can get a complete picture of how a driver is completing his work, day in and day out," Perez says. "That has incredible consequences for the way we manage the business across the board."

Now, the company's appetite for data is extending outward. Its goal is to get closer -- much closer -- to its millions of customers with another analytics-intensive service called UPS My Choice, which lets people set individual preferences for how they interact with the company.

Customers using the service can, among other things, give specific instructions about how and precisely where to deliver their packages to specific addresses, reroute packages if they change locations, and sign up to receive status alerts.

"What we've done is take a new approach to managing personal supply chains. Having that level of connectivity with our customers is going to change our business now and in the years to come. The integration with consumers is what is enabling revenue growth," says Perez. In the first year UPS My Choice was available, more than 2 million customers signed up for the service, and more than 25 million packages were delivered under its auspices.

Data about customers' delivery preferences helps UPS to continue to refine its internal processes in response to those preferences "so we can build a one-to-one experience," Perez says.

But even more critical is the insight that the data provides into what new products and services to offer.

"All of the [tracking and delivery] notifications we provide and how customers respond to notifications tell us what they want so we can create the products and services they want. It's a lot of data to define new products and services."

The next step, as Perez sees it, is to tie everything together and create a graphic picture of UPS's various big data systems so the company can uncover new uses for the data -- and thereby derive more business value from it.

"It starts with process improvements, but once you start tying all of this together, it can mean very big changes in the business," Perez says. "That's what we're getting at."

The Win: Millions in Added Sales

Traditional business intelligence is alive and well at Intel, but big data mining and predictive analytics are the forces driving design and manufacturing efficiencies, and uncovering new revenue sources that added up to tens of millions of dollars in 2012 alone.

"It starts with believing that you can change outcomes," says CIO Kim Stevenson of the chip manufacturer's massive success with analytics. That, she says, requires less time spent on historical questions, which is the purview of traditional BI, and more focus on the future, which is what predictive analytics is all about.

Predicting the future at $53 billion Intel requires analyzing massive amounts of data to discern patterns and then applying predictive algorithms to solve high-value business problems.

In 2012, for example, Intel IT created a new reseller sales tool that worked to increase the chip maker's revenue by enabling its sales team to identify, then strategically focus on, larger-volume resellers. The new software engine mines large sets of internal and external data, then applies a predictive algorithm to pinpoint the most promising resellers. So far, it has helped identify three times as many high-potential resellers in the Asia-Pacific region as manual methods typically would have uncovered, according to Stevenson. That translates to about $20 million in potential new and incremental sales. More gains are expected as the tools are rolled out to other geographies.

On the manufacturing front, Intel is using a predictive analytics tool to reduce microprocessor testing time. The company saved about $3 million in testing during a proof-of-concept period. By 2014, as the tool is implemented more widely, Stevenson expects it to rack up another $30 million in savings companywide.

Intel's analytics success has been fast-tracked, to say the least. The key, Stevenson says, is tackling big-money problems with relatively small and swift-acting teams.

"To get the business to focus on the future and ask better questions that would lead to better outcomes, we knew we would have to do things quickly," she explains. "We were coming out of a traditional BI environment where solving master data is the unsolvable problem. People work on it forever and the business doesn't necessarily see the value."

So Stevenson came up with the "six months and $10 million" rule. "A $10 million problem solved in six months is important. Any general manager would say they'd invest six months if we could save them $10 million," she says. (At Intel, business managers must support and fund IT projects.)

Stevenson recruited five-person teams made up of a business expert, a statistician, a predictive modeler, a machine learning expert and a data scientist. "Each person on the team had a slightly different perspective on the problem we were trying to solve. Doing it in six months was our way of earning the right to prove the capability was there to really change the way we do things," she says.

In addition to the projects that reduced testing time and pinpointed lucrative resellers, 13 other analytics projects have been completed using that approach. So Stevenson has upped the ante by finding $100 million problems and challenging teams to solve them.

"When you have a track record, you can ratchet up," she says. Other ongoing projects include a predictive engine for streamlining Intel's chip design and debugging process and another to predict new information security threats.

But Stevenson cautions enterprises not to underestimate the skills required for analytics initiatives and the time it may take to nurture those skills.

"When I think about our learning curve with Hadoop and some of the more advanced presentation layers that are very different from SAP or traditional BI, I'd emphasize that there is a learning curve there for technical skills that isn't insignificant," she warns.

Her other piece of advice: "Develop an appetite for experimentation," especially since analytics technology is still evolving. "The winners and losers on the tech side are not completely shaken out yet," she says. "Keep your aperture wide."

http://www.computerworld.com.au/article/520871/data_analytics_eye-popping_results_from_intel_ups_express_scripts/?fp=4&fpid=1398720840

OHSU Receives Higher Medicare Payments than other Oregon Hospitals

Uninsured patients are charged two to three times more for the same procedure at area hospitals

By: 

 Courtney Sherwood

July 15, 2013 -- Sick Oregonians without health insurance regularly receive bills for two to three times what Medicare or private insurers are willing to pay to cover treatment, newly released medical billing data appears to indicate.

The data, from the Centers for Medicare & Medicaid Services, shows how much hospitals are paid for treating Medicare patients. The release includes average payments made for 99 medical conditions treated at 32 Oregon hospitals in 2011.

With an estimated 40 percent to 50 percent of health care charges originating at hospitals, the data is feeding a debate about U.S. medical costs – and fueling outrage about wide payment variations across hospitals.

“Billing procedures for American hospitals hold about as much logic and fiscal accountability as a lemonade stand,” said Patrick Riley, a senior industry analyst with market research firm Frost & Sullivan. Riley said the new financial data will provide a key role in showing just what health care costs – something that has been difficult, if not impossible, to dig up until now.

The data release shines a light on just how complicated medical billing is, as well. Medicare has shown how much hospitals bill for treatment, but those bills don’t determine how much each hospital is paid. Instead, Medicare uses a formula to determine how much hospitals are paid, based on condition, location of the hospital, and status of the hospital. Patients covered by Medicare or other forms of health insurance almost never pay the billed amount.

For example, hospitals across Oregon charged an average of $17,915 per patient with chronic obstructive pulmonary disease (or COPD), but when treating Medicare patients they were only paid $6,952. In some cases, the difference between hospitals’ official price tag and what they receive from Medicare is substantial:

• Sky Lakes Medical Center has an average price tag of $27,919 when treating COPD patients who have complications, but the hospital is only paid $7,692 to treat them.
• Rogue Valley Medical Center’s average price tag for treating heart failure is $44,708, but the hospital receives an average of $13,132 per Medicare patient.

There’s also huge variation in the official price tag that hospitals affix to procedures. Providence Newburg billed an average of $9,933 to each of 13 kidney failure patients, while Legacy Mount Hood Medical Center billed an average of $24,409 to each of 20 patients treated for the same condition there. (Despite the wide variation in billed amount, the two hospitals collected fairly similar payments after treating Medicare patients – for treating kidney failure in Medicare patients, Providence Newberg was paid $5,987 on average and Legacy Mount Hood was paid $6,864 on average.)

Though Medicare’s data release demonstrates that the government pays far less than the official price tag for providing medical care, people without health insurance are billed the full amount.

Hospital officials point out that uninsured patients typically get an automatic discount. Oregon hospitals then typically offer a no-insurance discount. Bay Area Hospital knocks 25 percent off the bill, for example, and Legacy’s hospitals offer a 35 percent bill reduction for the uninsured. People with low incomes may be eligible for even deeper discounts if they qualify for charity care.

And even with discounts, the uninsured often receive bills for more than Medicare would pay.

Sky Lakes Medical Center billed an average of $17,776 to treat kidney and urinary tract infections. After applying the 15 percent discount that Sky Lakes offers uninsured patients, someone without health coverage could expect a bill for $15,109. Yet Sky Lakes collected just $5,949 per Medicare patient with the same diagnosis.

“Hospitals, in essence, charge the least capable of paying the most,” said Riley, the healthcare analyst.

The gap between what hospitals bill the uninsured, and what they’re paid for treating Medicare patients, is clear across numerous conditions.

For example, after treating kidney failure:

• Providence Newberg Medical Center was paid $5,987 to treat each of 13 Medicare patients, the lowest Oregon reimbursement rate for this procedure. Price tag without insurance: $5,987.
• Providence St Vincent was paid an average of $6,882 to treat each of 45 Medicare patients. Price tag without insurance: $12,011.
• Salem Hospital was paid an average of $6,905 to treat each of 52 Medicare patients. Price tag without insurance: $17,327.
• Good Samaritan Hospital in Corvallis was paid an average of $6,618 to treat each of 42 Medicare patients. Price tag without insurance: $19,262.
• Legacy Good Samaritan was paid an average of $8,108 to treat each of 19 Medicare patients. Price tag without insurance: $19,698.
• OHSU was paid an average of $10,335 to treat each of 65 Medicare patients, the most any Oregon hospital was paid for this procedure. Price tag without insurance: $17,066.

(Click here for complete kidney failure cost information.) 

OHSU paid more than other hospitals

A Lund Report review of the Medicare data release found that OHSU was paid considerably more than average when treating 94 percent of reviewed health conditions.

When patients enter OHSU with kidney failure with complications, the total cost is likely to average $10,335 – more than at any other hospital in Oregon. The same condition cost an average of $5,987 to treat at Providence Newberg Medical Center. Treating heart failure with multiple complications averages $15,012 at OHSU – compared to $9,006 at McKenzie-Willamette Medical Center.

Government officials have warned that the Medicare data is far from comprehensive, and that wide variation in payments to hospitals may be justified. Some patients are sicker than others, for example.

One hospital can also receive more than others because of Medicare’s own rules, according to OHSU officials.

Base payments are the same for all hospitals in the Portland metro area, said OHSU Hospital Chief Financial Officer Diana Gernhart. But Medicare pays OHSU extra because it serves more low-income patients than is typical across the state – a condition that bumps payments to a number of hospitals in the state. Medicare then pays still more to OHSU because it is a teaching hospital.

http://www.thelundreport.org/resource/ohsu_receives_higher_medicare_payments_than_other_oregon_hospitals

Owner of Cranford home health care company faces charges of fraudulent billing Medicaid

Acting Attorney General John Hoffman announced that the owner of Cranford home health aide provider was charged with fraudulent billing Medciad for services that were never rendered.The Star-Ledger 

CRANFORD — State authorities today charged the owner of a township-based company that provides home health care aides with submitting bills to Medicaid for services that were never rendered over a period of more than two years.

Laurie Provost, 53, of Sea Girt, owner of Home Care Solutions, was charged with seven counts of second-degree health care claims fraud and one count of third-degree Medicaid fraud, Acting Attorney General John Hoffman said in a statement.

State officials allege Provost submitted multiple requests for payment for services that were not provided, including bills for services to Medicaid beneficiaries while they were hospitalized or on vacation, Hoffman said.

He said Provost's company sends health care aides to serve Medicaid patients in their homes.

The charges cover bills filed from 2011 through this year, Hoffman said.

Today investigators from the state Office of the Fraud Insurance Prosecutor executed search warrants at the company's Commerce Drive office, as well as Provost's home and her 2009 Porsche Ceyanne, authorities said.

"Defrauding the Medicaid program is a very serious crime that puts an unfair burden on honest taxpayers and takes money out of a system meant to help those who are most vulnerable,” Hoffman said.

Acting Insurance Fraud Prosecutor Ronald Chillemi credited the state comptroller's office with first referring the matter for investigation.

A call to the Provost's company office was not immediately returned.

http://www.nj.com/union/index.ssf/2013/07/owner_of_cranford_home_health_care_company_faces_charges_of_fraudulent_billing_medicaid.html

North Carolina: Provider auditing firm ‘unreliable’

Posted: Saturday, July 13, 2013 5:00 pm | Updated: 12:58 am, Sun Jul 14, 2013.

By Steve Terrell
The New Mexican | 1 comment

The Boston-based company that found $36 million in Medicaid overpayments to 15 New Mexico behavioral health providers — and claimed evidence of fraud by the companies — did a similar study with similar results in North Carolina.

However, the North Carolina state auditor last year found some of the findings against those providers were overstated, and the figures reported by Public Consulting Group were “not proven to be reliable.”

One North Carolina provider that allegedly overcharged the state by more than $1.3 million actually had overcharged by less than 2 percent of that amount, the North Carolina state auditor said.

No spokesman for Public Consulting Group could be reached for comment Friday. But a spokesman for the New Mexico Human Services Department on Friday defended the company’s work in North Carolina.

In New Mexico last month, based on the audit performed by Public Consulting Group, the state Human Services Department froze funding for 15 behavioral health providers and referred the audit to the Attorney General’s Office for possible criminal prosecution.

Three of the 15 providers have had their funding fully or partly restored. But eight of the providers filed a federal lawsuit against Human Services Secretary Sidonie Squier. In the suit, the providers claim the action has been financially devastating. Some of the behavioral health companies have begun furloughing employees and shutting down services.

New Mexico’s Human Services Department is in the process of contracting with five Arizona companies — at a cost of up to $17.8 million — to be “on stand-by” to provide help with behavioral health services.

In addition, the providers’ lawsuit claims Squier’s public statements saying there is evidence of fraud has damaged the reputations of the providers. They have demanded “a meaningful name-clearing hearing, as required by the due process clause of the Constitution.”

State Auditor Hector Balderas said Friday that his office has received complaints about the behavior health provider issue and that his auditors and investigators are currently making “formal inquiries” to decide what course of action to take. Balderas said he’s already reached out to the North Carolina state auditor concerning the PCG Medicaid audit in that state.

The providers’ lawsuit brings up Public Consulting Group’s work in North Carolina, saying the company made auditing errors in New Mexico similar to mistakes made in North Carolina.

The company was hired by that state’s Health and Human Services Department to help identify Medicaid fraud. The contract was based on how much potential overpayments to providers they could identify. PCG reported $38.5 million in Medicaid overpayments and was paid $3.2 million.

However, in a July 2012 report, North Carolina State Auditor Beth Wood found that of the $38.5 million overpayments cited, the Health and Human Services Department had only been able to collect $3.7 million — less than 10 percent.

Wood’s report said “recoupments identified by PCG have not proven to be reliable, so the actual benefit derived from the contract is unclear.”

The report found at least one example in which the initial overpayment claimed by PCB turned out to be drastically less.

According to Wood’s report, her office began receiving a number of complaints about PCG’s review process. They decided to re-review one of the companies, which PCG said had overpayments totaling $1.34 million. “As a result of the providers submitting additional documentation and re-reviews … the recoupment amount was revised downward to only $22,093. It was unclear whether this was the result of the additional documentation provided or PCG’s policy interpretations during the review process.”

Similar to the situation in New Mexico, Wood told WRAL TV in Raleigh, N.C., last year, “We’ve had some complaints from providers that they’re about to be put out of business because of all the time they’ve had to spend to prove that they really haven’t committed fraud.”

Wood told the station that the way the contract was written was an incentive to PCG to inflate its findings.

Matt Kennicott, external affairs director for New Mexico’s Human Services Department, said the company’s New Mexico contract was not based on how much potential overpayments it identified. “There is zero financial incentive for them to produce findings,” he said.

A spokeswoman for the North Carolina Department of Health and Human Services told WRAL last year, “The auditor’s report does not emphasize one crucial piece of information — the value of identifying fraudulent providers and stopping them from ever operating again. Even if we don’t recoup all the money lost, it’s impossible to put a price tag on the deterrent effect of our efforts. We may never know just how many millions we will prevent from ever going out the door.”

Kennicott said North Carolina benefited from PCG’s work there and has seen a 23 percent improvement in provider compliance in the past two years because of the audits.

“The vast majority of PCG’s clinical findings have been upheld by the [North Carolina] Department of Health and Human Services during their due process hearings,” Kennicott said. “More than 85 percent of their audit findings have been upheld during hearings upon appeal” in North Carolina, he said.

Contact Steve Terrell at sterrell@sfnewmexican.com. Read his political blog atroundhouseroundup.com.

North Carolina: Provider auditing firm ‘unreliable’ - The Santa Fe New Mexican: Local News

Harvard Medical School Focuses on Challenge of Healthcare Innovation

Boston: The Forum on Healthcare Innovation, a collaborative effort sponsored by Harvard Medical School and Harvard Business School, has released a report highlighting the results of the first of a series of annual conferences and surveys.

Titled “5 Imperatives: Addressing Healthcare’s Innovation Challenge,” the conference report represents the views of more than 100 experts from a wide variety of areas, including academics, physicians, healthcare providers, executives, public policymakers, investors, and insurers. The report summarizes the participants’ collective insights regarding one overarching concern: How can healthcare and business leaders best encourage innovations that lead to value—that is, the most optimal outcomes relative to dollars spent?

The accompanying survey reported several startling conclusions: Twenty percent of the more than 200 senior leaders responding to the full survey strongly believed that healthcare quality in the United States was starting from only a fair or poor position and falling behind other countries.

In addition, only one percent of them held the strongly positive sentiment that this country could significantly increase value through the combination of quality pulling ahead of other industrialized nations and healthcare costs growing more slowly than general inflation.

The Forum report prescribes five key imperatives most likely to yield practical progress:

Making value the central objective: In isolation, efforts to either reduce costs or improve outcomes are insufficient; we need to do both through care coordination and shared information.

Promoting novel approaches to process improvement: In the race for new products and services, we are overlooking important opportunities for improving the ways in which we deliver care. In addition, failure, managed wisely, represents an important component of experimentation and learning.

Making consumerism really work: Consumerism remains a strong idea with weak execution. We will achieve greater success when providers organize efforts around patient needs, and when patients become more active and informed agents in managing their own health.

Decentralization: We should facilitate the movement of care delivery and healthcare innovation from centralized centers of expertise to the periphery, where more providers, innovators, and patients can engage in collaborative improvement efforts.

Integrating the Old and New: Existing healthcare institutions must be reinforced with efforts to integrate new knowledge into established organizations and the communities they serve.

According to Harvard Business School professor Robert S. Huckman, co-chair of the Forum on Healthcare Innovation, “The 5 Imperatives report is a provocative compilation of core issues that can help us focus our energy, regardless of discipline, on the most truly urgent areas of innovation.”

Added co-chair and Harvard Medical School professor Barbara J. McNeil, MD, “The report reflects in microcosm the larger possibilities of the Forum itself: the collaborative power of healthcare and business leadership to provide care in which we can have confidence, at costs we can manage.”

Harvard Medical School Focuses on Challenge of Healthcare Innovation

Lawsuit alleges Jackson cardiologist falsified patient records to justify billing Medicare for unnecessary medical procedures

JACKSON, MI – Jackson cardiologist Dr. Jashu Patel falsely interpreted stress tests for patients as abnormal to justify billing Medicare for unnecessary cardiac procedures, according to allegations in a lawsuit settled this week.

Almost 90 percent of patients who were listed as having "abnormal" stress test results at Patel's practice, Jackson Cardiology Associates, between Jan. 29 and Feb. 28, 2007 had no significant coronary artery disease, according to the complaint filed by Ann Arbor cardiologist Dr. Julie Kovach with the U.S. District Court.

Kovach, previously employed as an independent contractor cardiologist at the practice, 205 Page Ave., also alleges that an elderly woman died as result of a cardiac procedure that was not needed and requested by Patel's office.

Patel, Jackson Cardiology Associates and Allegiance Health settled in a $4 million lawsuit that alleges that all three parties fraudulently and recklessly performed unnecessary cardiac procedures and billed them to federal health care programs.

Allegiance Health, Patel and Jackson Cardiology Associates all disagree with the allegations in the lawsuit and said they decided to settle in order to devote their resources to the care of their patients.

Kovach also alleged Allegiance Health officials received multiple complaints and warnings that Patel was performing these unnecessary procedures and continued to allow him to do so. Read the entire complaint by Kovach

Kovach is expected to receive $764,700 as part of the settlement.

"Unnecessary cardiac procedures and tests put patients at potential risk for life threatening complications, long-term effects of radiation exposure, and additional unnecessary and risky procedures as a result of the first one," Kovach said in a statement issued by Birmingham-based law firm Vezina Law. "Paying health care providers who perform unnecessary cardiac testing and procedures increases the cost of health care to all Americans."

Efforts to reach Kovach for additional comment were unsuccessful.

Health care fraud is a problematic issue across the country, with cases leading to settlements costing upward of hundreds of millions of dollars, said Louis Saccoccio, CEO of the Washington, D.C.-based National Health Care Anti-Fraud Association, a private-public organization comprised of private health insurers and federal and state government officials.

What is unique about the lawsuit involving Allegiance Health and Jackson Cardiology Associates is that it involved allegations of billing for unnecessary medical procedures, Saccoccio said. More commonly, health care fraud cases involve billing for procedures that were not performed in the first place, he said.

"That's a real extreme thing, as it relates to those patients," Saccoccio said about the allegations in the lawsuit against Allegiance Health and Jackson Cardiology Associates. "It has the potential to harm patients physically."

Kovach listed several patient cases between January and May 2008 and stated that they represented only a small sample of fraudulent activities by Patel and Jackson Cardiology Associates between 1998 and 2008. The following are some of the allegations filed in Kovach's complaint:

• Patel has ordered unnecessary stress tests for patients and falsified patient records to make it appear that they needed the tests.
• Patel has repeatedly ordered, performed, and billed for cardiac catheterizations for patients who did not meet any Medicare covered indications or medical guidelines.
• In many cases, Patel falsified and manufactured complaints of symptoms in patients' charts.

Dr. Jashu Patel

Allegiance settled the case for $1.8 million. Patel and Jackson Cardiology Associates settled for $2.2 million, according to the U.S. Attorney's Office.

Because the unnecessary procedures were paid for by the Medicare or Medicaid, the United States is entitled to monetary damages under the federal False Claims Act, which allows private citizens to sue those committing fraud against government programs, according to a statement from the U.S. Attorney's office.

Patel said his practice has provided care to patients in the Jackson community for more than 20 years and that the patients are the best judges of the practice.

"I'm really deeply saddened by what has occurred," Patel said about the allegations. "I want to put my resources back into the patients' care. Our patients are very supportive."

Patel has an active medical license that expires Jan. 31, 2014, according to the Michigan Department of Licensing and Regulatory Affairs. There are no complaints or disciplinary actions filed against Patel at this time, according to the office.

"It is very important to me to have excellent care in this town," Patel said. "We are trying to provide the best care for our patients."

Allegiance Health spokesman Jeff Kapuscinski said the hospital has brought in experts to review its processes and procedures to make sure they are based on evidence and best practices.

Kapuscinski said he believes there are some people who have concerns but has been pleasantly surprised by the support that the hospital has received.

"We place a great value in the trust that our patients have in our facility," he said. "Our main goal is to retain that trust that people have in us and in the care we provide."

In addition to the monetary settlement, the resolution also provides that Jackson Cardiology Associates and Allegiance Health will enter into integrity agreements with the U.S. Department of Health and Human Services Office of Inspector General.

The Office of Inspector General negotiates these agreements with health care providers and other organizations as part of the settlement, according to the department's website.

Providers agree to the obligations, and in exchange, the office agrees to not seek their exclusion from participating in Medicare, Medicaid or other federal health care programs.

An integrity agreement typically lasts five years and includes the following requirements:

• Hire a compliance officer and appoint a compliance committee
• Develop written standards and policies
• Implement an employee training program
• Retain an independent review organization to conduct annual reviews
• Establish a confidential disclosure program
• Report over-payments, ongoing investigations and legal proceedings
• Provide an implementation report and annual reports to the Office of Inspector General on the status of the institution's compliance activities.

Although health institutions are required to have a compliance program, it is a significant event for a hospital or medical practice to be under an integrity agreement, Saccoccio said.

"(Health care providers) have to show they are complying with all (governmental) regulations that are in place," Saccoccio said. "It's a pretty stringent thing that they have to comply with to ensure that this doesn't happen again."

By Tarryl Jackson | tjackso1@mlive.com 
Follow on Twitter 
on July 13, 2013 at 7:30 AM

http://www.mlive.com/news/jackson/index.ssf/2013/07/lawsuit_alleges_jackson_cardio.html

Leading the Charge for Change from the Encounter Level

By Kameron Gifford, CPC / 7.13.2013  / kgifford@ermconsultinginc.com

You can’t manage healthcare today, with yesterday’s models, and be in business tomorrow...

In the context of education, is it culture or strategy that drives our desire for something better? In terms of change, is it more power or responsibility that one is seeking? And what has enabled some leaders to drive mass change across large organizations while others fail? Perhaps the single greatest predictor is the power of influence, the human factor that encourages and sustains the necessary energy to get to that point of “something better.”

The process of identifying and eliminating waste and ultimately defects was made famous by Toyota and has since infiltrated every other industry on some level. But can process improvements alone be enough to tackle the bureaucracy of America’s healthcare system? Can regulatory reform inspire those farthest from Congressional hill, those who return to the front lines day after day to care for our aging population of seniors or will it take something more?

The path of progress must not be paved in external motivation alone but incite the flames of internal desires to be effective. If the agent of change is not truly embodied in the cause themselves, then can the message accurately be broadcast from payer to provider to consumer or is it lost in translation?

As a consultant, an educator, or a trainer, it is that single moment of transition from external to internal, that aha moment, if you will, that keeps us coming back again and again. Empirical Risk Management was founded on the belief that change, must be initiated at the initial point of contact to be effective, and in managed care that means the process must begin when the patient walks in the door.

Over the last week, my husband and I were once again taken aback at the power of an individual to influence and inspire those around them. In Buffalo, New York just a few shorts steps from the Mission of Mercy Hospital, we witnessed progress first hand. Discreetly set against a row of similar houses turned businesses that line just another typical lazy road in upstate New York. But this is not your typical practice, inside you will find a leader, whose charge for change begins with strength and whose passion resonates within all four walls. The epitome of a healer, a champion of champions.

Our call to action was prompted by a desire to improve the “team” and to create a shared vision for the future. Our mission was not defined by reaction, but instead action, originating from that desire for something better. We were not there to “fix” a specific problem, but instead to observe, assess, and to improve if at all possible. These projects, coined RPI or rapid practice innovation, are not for the faint of heart, and in fact the obscurity of the task often leads most to shy away. However, it is that exact uncertainity that elicits my passion. For isn’t it the shared success of the sum that is greater than the individual triumphs?

The value that is derived from a receptionist who understands the clinical significance of a 1% improvement in a Hgb A1c will far exceed the value of your investment. A nurse who understands the 10 guiding principles that influenced the creation of the CMS-HCC model will inherently improve the experience for both the provider and the health plan. A coder who understands the potential financial impact of rejected encounters on the Medicare Advantage plan will provide incredible value to your revenue cycle. It is this proactive team approach at the initial point of contact that ultimately improves outcomes and minimizes opportunities for errors.

And at the end of the day, it is this shared vision, that unites once starkly contrasting goals into one uniformed march towards innovation.