Tagged Health Care Costs

State Highlights: Foster Children Return To Oregon Following Charges Of Abuse From Caretakers; Missouri’s Planned Parenthood Lawyers Seek Answers About License Denial

New Estimate On House’s Proposed Drug Bill Reports Fast Savings Of $345B To Taxpayers, Big Changes To Drugmakers

Pay Close Attention To Subtle Changes, Cost Savings During Open Enrollment Period For Medicare, Health Officials Warn

Alarmed By Rash Of Rural Hospital Closures, Georgia Lawmakers Wonder If Financial Management Classes Are The Answer

Patients Eligible For Charity Care Instead Get Big Bills

When Ashley Pintos went to the emergency room of St. Joseph Medical Center in Tacoma, Wash., in 2016, with a sharp pain in her abdomen and no insurance, a representative demanded a $500 deposit before treating her.

“She said, ‘Do you have $200?’ I said no,” recalled Pintos, who then earned less than $30,000 at a company that made holsters for police. “She said, ‘Do you have $100?’ They were not quiet about me not having money.” But Pintos, a single mom with two kids who is now 29, told state officials St. Joseph never gave her a financial aid application form, even after she asked.

Pintos said she was examined and discharged with instructions to buy an over-the-counter pain medication. Then St. Joseph sent her a bill for $839. When she couldn’t pay, the hospital referred the bill to a collection agency, which she said damaged her credit and resulted in a higher interest rate when she applied for a mortgage.

St. Joseph denied erecting barriers to charity care. But the hospital’s owner settled a lawsuit from the state attorney general earlier this year alleging such practices and agreed to pay more than $22 million in refunds and debt forgiveness.

When Ashley Pintos sought emergency care at St. Joseph Medical Center in Tacoma, Wash., in 2016, an employee first demanded a $500 deposit, which Pintos couldn’t cover. After she was examined, Pintos was told by a doctor to buy an over-the-counter pain medication. The hospital later billed her for $839. “They were not quiet about me not having money,” she says.(Dan DeLong for KHN)

Under the Affordable Care Act, nonprofit hospitals like St. Joseph are required to provide free or discounted care to patients of meager incomes — or risk losing their tax-exempt status. These price breaks can help people avoid financial catastrophe.

And yet nearly half — 45% — of nonprofit hospital organizations are routinely sending medical bills to patients whose incomes are low enough to qualify for charity care, according to a Kaiser Health News analysis of reports the nonprofits submit annually to the Internal Revenue Service. Those 1,134 organizations operate 1,651 hospitals.

Together, they estimated they had given up collecting $2.7 billion in bills sent to patients who probably would have qualified for financial assistance under the hospitals’ own policies if they had filled out the applications.

These written-off bills, known as bad debt, represented a tenth of all nonprofit hospital bad debt reported to the IRS in either 2017 or the most recent year for which data is available. That sum may represent an undercount because it is based on self-reported estimates from hospitals and is not independently audited. And it does not include money that financially struggling patients eventually paid.

“People, including me, had the impression that these new protections under the ACA would prevent people who should be getting help from being financially devastated,” said Sayeh Nikpay, an assistant health policy professor at Vanderbilt University School of Medicine. “Clearly, this policy isn’t working, and that’s a major failing.”

About 56% of American community hospitals have nonprofit status, which frees them of paying most taxes and allows them to float tax-exempt bonds. In return, they are supposed to provide community benefits including free or discounted care for patients who can’t afford to pay.

The IRS leaves it up to each hospital to decide the qualifying criteria. A comparatively generous hospital may give free care to people earning less than twice the federal poverty level — around $25,000 for an individual and $50,000 for a family of four — and may provide discounts for people earning up to double that.

For those who do not qualify, hospitals often offer payment plans. But they can turn to aggressive tactics if bills are not resolved. Patients can be pestered by debt collectors, and some hospitals sue them or try to garnish their wages. Medical debt can damage credit ratings — one study calculated Americans had $81 billion in collections in 2016 — and forces some people into bankruptcy.

When hospitals give up on collecting a bill, they categorize it as bad debt and absorb the cost of the care, which is indirectly subsidized by the rates they charge private insurers.

It became this moneymaking system. People would be crying at registration desks, people would be upset, people would walk out.

Rachael Murphy, a former St. Joseph’s Medical Center employee

Charity Options Often Thwarted

In 2017, BJC HealthCare, a large St. Louis-based system, estimated $77 million of its $134 million in bad debt was owed by patients who probably would have qualified for free or discounted care.

Hospitals now owned by Ballad Health, in Tennessee, estimated that $60 million of bad debt in 2016, or 70%, came from patients who might have been eligible for help.

The Hospital of the University of Pennsylvania said $43 million of its bad debt, or 52%, might have involved patients who could have been excused in 2016 from being billed.

While some hospitals say they write off the debt of poor patients without ever resorting to collection measures, several hospitals whose practices were highlighted in news reports this year for aggressively suing patients admitted to the IRS they knew many unpaid bills might have been averted through their financial assistance policies.

A quarter of bad debt at Mary Washington Healthcare, which sued so many patients that a Virginia court convened special sessions to hear the cases, involved candidates for free or discounted care, according to its IRS filing.

So did half of the bad debt at Methodist Le Bonheur Healthcare in Memphis, called out by news organizations for frequently garnishing wages, its filing said.

CHI Franciscan, which owns St. Joseph, said in multiple IRS filings that none of its bad debt arose from billing indigent patients. While Franciscan admitted no wrongdoing in its settlement with the Washington attorney general, the agreement bars the practice of discouraging charity care in the ways alleged in the lawsuit.

Charity care requests at St. Joseph’s Medical Center in Tacoma, Wash., required so much documentation that half of the requests were rejected, the state attorney general argued in a lawsuit against the hospital. The hospital agreed this year to provide refunds and debt forgiveness to thousands of patients.(Dan DeLong for KHN)

“We are exceeding the requirements of state law and providing charity care compensation to patients who may be in most need, even if they never applied for charity care or did not actually qualify at the time of service,” Cary Evans, a Franciscan spokesman, said in a statement. Franciscan declined to discuss individual patients.

According to the lawsuit and interviews with former employees, St. Joseph’s workers were told never to voluntarily offer patients a charity care application. If asked for one, they were instructed to insist on a deposit at least three times. Even when submitted, applications required so much documentation that half of the requests were rejected, the lawsuit alleged.

Internal hospital training documents the attorney general submitted as part of the case showed that St. Joseph workers were advised on how to best collect money from patients before they left the hospital. Instead of saying, “Can you pay today?” employees were told to use phrases like “How would you like to pay for that today? Cash, check or credit card?” according to the documents.

“It became this moneymaking system,” Rachael Murphy, a former employee, recalled in an interview. “People would be crying at registration desks, people would be upset, people would walk out.”

Pintos, who signed a written statement for the attorney general and was listed as a potential witness in the case, said the hospital never gave her an application even though she had qualified for charity care the previous year. “They made me feel like I wasn’t good enough to be there,” she said.

St. Joseph recently erased the $839 debt from her credit, but Pintos still owes $1,611 for care from the ER doctors, who have their own practice group and do not have to follow the hospital’s charity care policies, according to Franciscan. That bill remains in collections.

‘A Gap In Trust’

Nonprofit hospitals provide roughly $14 billion worth of charity care a year, about 2% of their operating costs. But their policies can have notable exemptions, such as excluding bills from doctors who are not on the hospital payrolls.

However, information about hospital charity care, often included in the reams of admissions documents or posted on hospital walls, can easily get overlooked by patients and families focused on medical emergencies.

“The signage might be a little hard to find, applications are complicated, documentation is complicated,” said Keith Hearle, a consultant who advised the IRS on collecting hospitals’ charity care data. “You could probably come up with 15 reasons people didn’t apply.”

In their IRS filings explaining the bad debt and in interviews, hospitals said that even when they give applications to patients, some fail to submit them or do not provide complete records of their finances, which can include tax returns and bank statements.

“There is a gap in trust where our patients must not believe that if they are willing to share information, that it will be to their benefit,” said June McAllister Fowler, a spokeswoman for BJC HealthCare.

(Story continues below.)

Shana Tate, senior vice president of revenue cycle at Ballad Health, said Ballad is looking to be more proactive.

“We made the assumption that, ‘We give you the information. What more do you need?’ But we realize a lot of patients don’t read it, don’t pay attention,” Tate said. “They need someone to hold their hand through this process.”

Methodist Le Bonheur, which erased more than 6,000 unpaid bills last month, said it is “increasing access to financial assistance information upfront and throughout the patient care journey” and “enhancing the screening process.”

Penn Medicine said that, as a safety-net hospital system, it has many patients who are poor or coping with other problems. These people, Penn said, face “barriers to completing the process for aid” and their bills are typically “left unpaid.”

Mary Washington did not respond to requests for comment, but after critical news reports last June it announced that it was suspending its lawsuits over unpaid bills and reevaluating its practices.

Laurie Jinkins, a state representative from Tacoma and author of legislation to strengthen Washington’s charity care laws, said, “The drive for dollars in the health care system, and the drive for dollars to expand, causes our nonprofit health systems to lose sight of why they’re actually here.” She said St. Joseph had “really gone off the deep end” in its focus on money.

St. Joseph’s practices hark back years, according to the attorney general’s lawsuit and interviews with employees and patients.

After Alisha Colyer’s husband went to the St. Joseph emergency room with pneumonia in 2007, she said, she tried to apply for help, but the charity care application “was like a book you had to fill out.”

“I remember them asking me what make and model my car was, and I was like, ‘You want me to sell my car to pay my hospital bill?’ ” recalled Colyer, who now works at the hospital as a dietary aide.

When Alisha Colyer applied for St. Joseph Medical Center’s charity care around 2007, she remembers them asking what make and model her car was. “And I was like, ‘You want me to sell my car to pay my hospital bill?’”(Dan DeLong for KHN)

In a statement, Franciscan noted that St. Joseph and its other hospitals now use a simplified two-page application designed by the state hospital association and have agreed to make charity care easier to obtain. It also offers free care for medically necessary services to patients earning up to three times the poverty level, which is more than most hospitals do.

It is too early to assess how the policy changes translate into results. The most recent Washington state analysis, for 2017, found St. Joseph lagged behind the regional average in the amount of charity care it provided.

KHN data editor Elizabeth Lucas contributed to this report.

METHODOLOGY

Bad debt figures were derived from the IRS 990 tax returns filed electronically by nonprofit hospital organizations. That information was downloaded in data form from the IRS website on May 7, 2019, by Jacob Fenton, an independent consultant, and analyzed by Kaiser Health News. Returns that included Schedule H, which only hospital-owning nonprofits must file, were analyzed.

For each organization identification number, we selected the return with the most recent tax period end date. In case of duplicates such as amended returns, only the return with the most recent end date and the most recent signature filing date was selected. Because there were still a few duplicates, the one with the largest unique return identifier was selected. The most recent tax returns for 2,508 nonprofits were identified.

Organizations must report their bad debt — bills they have given up on collecting — and, separately, estimate the bad debt “that reasonably is attributable to patients who likely would qualify for financial assistance under the hospital’s financial assistance policy … but for whom insufficient information was obtained to determine their eligibility.” Generally, both figures are greater than the actual cost of providing the services: They are the amount the hospital expected to be paid. For our analysis, we calculated the percentage of bad debt that the organization attributed to patients who might qualify for financial assistance.

A handful of bad debt figures were reported as negative numbers. Those were converted to positives. The amounts were not significant enough to substantially affect aggregates or the analysis’s conclusions.

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California’s New Transparency Law Reveals Steep Rise In Wholesale Drug Prices

Drugmakers fought hard against California’s groundbreaking drug price transparency law, passed in 2017. Now, state health officials have released their first report on the price hikes those drug companies sought to shield.

Pharmaceutical companies raised the “wholesale acquisition cost” of their drugs — the list price for wholesalers without discounts or rebates — by a median of 25.8% from 2017 through the first quarter of 2019, according to the Office of Statewide Health Planning and Development. (The median is a value at the midpoint of data distribution.)

Generic drugs saw the largest median increase of 37.6% during that time. By comparison, the annual inflation rate during the period was 2%.

Several drugs stood out for far heftier price increases: The cost of a generic liquid version of Prozac, for example, rose from $9 to $69 in just the first quarter of 2019, an increase of 667%. Guanfacine, a generic medication for attention deficit hyperactivity disorder (ADHD), on the market since 2010, rose more than 200% in the first quarter of 2019 to $87 for 100 2-milligram pills. Amneal Pharmaceuticals, which makes Guanfacine, cited “manufacturing costs” and “market conditions” as reasons for the price hike.

“Even at a time when there is a microscope on this industry, they’re going ahead with drug price increases for hundreds of drugs well above the rate of inflation,” said Anthony Wright, executive director of the California advocacy group Health Access.

The national debate over exorbitant prescription drug prices — and how to relieve them — was supposed to take center stage in recent weeks, as House Speaker Nancy Pelosi released a plan to negotiate prices for as many as 250 name-brand drugs, including high-priced insulin, for Medicare beneficiaries. Another plan under consideration in the Senate would set a maximum out-of-pocket cost for prescription drugs for Medicare patients and penalize drug companies if prices rose faster than inflation.

President Donald Trump has highlighted drug prices as an issue in his reelection campaign. But lawmakers’ efforts to hammer out legislation are likely to be overshadowed, for now, by presidential impeachment proceedings. In Nevada, health officials in early October fined companies $17 million for failing to comply with the state’s two-year-old transparency law requiring diabetes drug manufacturers to disclose detailed financial and pricing information.

California’s new drug law requires companies to report drug price increases quarterly. Only companies that met certain standards — they raised the price of a drug within the first quarter and the price had risen by at least 16% since January 2017 — had to submit data. The companies that met the standards were required to provide pricing data for the previous five years. In its initial report, the state focused its analysis on drug-pricing trends for about 1,000 products from January 2017 through March 2019.

California’s transparency law also requires drugmakers to state why they are raising prices. Over time, that information, in addition to cost disclosures, could create “one of the more comprehensive and official drug databases on prices that we have nationwide,” Wright said. “That, in itself, is progress, so that we can get better information on the rationale for drug price increases.”

But the data does not reflect discounts and rebates for insurers and pharmacy benefit managers and bears little resemblance to what consumers actually pay, said Priscilla VanderVeer, a spokeswoman for the trade group Pharmaceutical Research and Manufacturers of America. The group filed a lawsuit seeking to overturn the California legislation that has not yet been resolved.

“If transparency legislation only looks at one part of the pharmaceutical supply chain, without getting into the various middlemen like insurers and pharmacy benefit managers that ultimately determine what patients have to pay at the pharmacy counter, it won’t help patients access or afford their medicines,” VanderVeer said in an email.

State Sen. Richard Pan (D-Sacramento), a pediatrician who chairs the Senate health committee, agrees — up to a point.

“Transparency always has value,” Pan said. But policymakers need more data on how much insurers and consumers are spending on prescription drugs, he said.

And he wonders why the price of generic drugs, including those with plenty of competition, rose at higher rates.

His concerns were echoed by University of Southern California policy researchers, who recently published a study that concluded most state-level drug-transparency laws are “insufficient” to reveal the true transaction prices for prescription drugs, or where in the distribution system excessive profits lie.

“The question is, why are these prices going up? Typically, there are competing stories for that,” said Neeraj Sood, vice dean of the University of Southern California’s School of Public Policy and an author of the study. “Maybe cost of production is going up,” he said. “Maybe there’s a drug shortage, or some competitors got eliminated. This reporting of [wholesale acquisition cost] data doesn’t really tell us which of these stories is true.”

For now, California’s new data is not likely to be of much help to consumers, Pan said. But he said it might help state officials in their bid to overhaul the way the state purchases drugs for 13 million people served by Medi-Cal, the state’s Medicaid program for low-income residents. Gov. Gavin Newsom’s controversial plan to have the state, rather than individual Medi-Cal managed-care plans, negotiate directly with drugmakers would save the state an estimated $393 million a year by 2023, according to the administration.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

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Must-Reads Of The Week From Brianna Labuskes

Happy Friday! Yours truly is back from beautiful Vietnam and it seems I missed one or two … ahem … minor news events while traipsing around.

I come bearing no souvenirs but rather two health reminders (one via Sen. Bernie Sanders). Firstly, don’t forget your flu shot — Australia has had an unusually early and severe season, which rarely bodes well for our own. The second comes in the form of a hard-earned lesson from a 2020 candidate: Don’t ignore those heart attack warning signs! (This is especially directed at women, who are dying unnecessarily from cardiac events.)

Now enough mother-henning. (You missed me, didn’t you?) On to the news of the week!

The Supremes are back in action, and a look at the high court’s docket reveals a potentially doozy of a politically charged term (with rulings expected to land as the general election heats up in 2020).

In the health care sphere, a big case to watch is the Louisiana abortion suit. An essentially identical Texas law — which requires doctors performing abortions to have admitting privileges at nearby hospitals — was ruled unconstitutional by the court in 2016, but that means little with two new justices appointed by President Donald Trump weighing in.

The New York Times: As the Supreme Court Gets Back to Work, Five Big Cases to Watch

Oral arguments in two other health-related cases were held this week. The justices grappled with the moral and legal complexities of the insanity defense. The case prompted questions such as this one from Justice Stephen Breyer: One defendant kills a victim he thinks is a dog. “The second defendant knows it’s a person but thinks the dog told him to do it,” Breyer said. “They are both crazy. And why does Kansas say one is guilty, the other is not guilty?”

The New York Times: Supreme Court Opens New Term With Argument on Insanity Defense

Tuesday was all about LGBTQ rights. Although most of the justices were divided along ideological lines on whether federal civil rights legislation applies to sexual orientation and gender identification, Justice Neil Gorsuch hinted his vote might be in play. As an avowed believer in textualism, he suggested that the words of Title VII are “really close, really close” to barring employment discrimination for those workers. But don’t go placing bets on the outcome yet. He also noted that he was worried about “the massive social upheaval” that would follow such a Supreme Court ruling.

The New York Times: Supreme Court Considers Whether Civil Rights Act Protects L.G.B.T. Workers


On that note, the 2020 Democratic candidates participated in an LGBTQ forum on the eve of National Coming Out Day. There were a handful of notable moments through the night (including a zinger from Sen. Elizabeth Warren that was met with loud applause), but much of the spotlight was on protesters who demanded the candidates pay attention to violence against black transgender women. “We are hunted,” said one member of the audience.

CNN: Protesters Interrupt CNN LGBTQ Town Hall to Highlight Plight of Black Transgender Women

Elsewhere on the campaign trail this week, controversy over a pregnancy discrimination talking point from Warren’s stump speech prompted women — including Warren rival Sen. Amy Klobuchar — to speak out on social media about their own and their mothers’ experiences.

NBC News: Women Rally in Support of Elizabeth Warren by Sharing Their Own Pregnancy Discrimination Stories

Sanders’ campaign confirmed that the health scare from last week was indeed a heart attack. The 2020 candidate — who promised to return “full blast” to the race — said he hopes people learn from his “dumb” mistake of ignoring the warning signs. In true politician-running-for-office style, he also was able to use the scare as a way to emphasize the importance of his signature policy proposal, “Medicare for All.”

Reuters: Democratic Presidential Hopeful Sanders Says He Was ‘Dumb’ to Ignore Health Warnings

In a sign of what’s to come for Big Pharma, South Bend Mayor Pete Buttigieg, one of the field’s more moderate candidates, released a drug pricing plan that is decidedly not moderate. The move falls in line with a broader sense that there’s an ever-growing appetite among even middle-ground Dems for action to rein in drugmakers.

Stat: Buttigieg Unveils an Aggressive Plan for Lowering Drug Prices

And for you political wonks out there, this was an interesting read on the shifting political dynamics of doctors, who once used to be a sure thing for the GOP.

The Wall Street Journal: Doctors, Once GOP Stalwarts, Now More Likely to Be Democrats


A key ruling on the health law is expected in the next few weeks, but officials (on condition of anonymity,  mind you) said that if the ruling is against the ACA, the Trump administration will ask the court to put any changes on hold — possibly until after the election. The reports further support the idea that the law, which has been, uh, politically fraught (to say the very least) over its entire life span, is at the moment viewed as an Achilles’ heel for Republicans.

The Washington Post: Trump Administration Plans to Delay Any Changes If the ACA Loses in Court

Two other major news items out of the administration this week to pay attention to:

The Associated Press: Trump Signs Proclamation Restricting Visas for Uninsured

The Associated Press: Overhaul Is Proposed for Decades-Old Medicare Fraud Rules


The first teenager’s death in the outbreak of vaping-related lung illnesses drove home this week public health officials’ message that young people are “playing with their lives” when they partake. The number of cases jumped to 1,299 as of Oct. 8, with the number of deaths rising to 26.

The Wall Street Journal: New York City’s First Vaping-Related Death Is a Bronx Teen

Reuters: U.S. Vaping-Related Deaths Rise to 26, Illnesses to 1,299

Although Juul is facing a barrage of lawsuits, one filed this week was notable. It was believed to be the first from school districts, which claim that fighting the vaping epidemic has been a drag on their resources. While some legal experts are dubious about whether the school districts can establish their standing, others aren’t ruling it out.

The New York Times: Juul Is Sued by School Districts That Say Vaping Is a Dangerous Drain on Their Resources

And the ripple effect of the crisis is spreading to life insurance prices.

Bloomberg: Prudential Plans to Boost Life Insurance Prices for Vapers


Time for you to flex your ethical muscles for the week: Should there be boundaries to highly personalized medicine? A pricey drug designed — and named for! — just one patient sparked questions this week about how far researchers should go in the name of curing a single person. Especially when there are thousands of patients out there with rare diseases. Would only the wealthiest subset be given cures? Who would decide which patients deserve limited research hours over others?

The New York Times: Scientists Designed a Drug for Just One Patient. Her Name Is Mila.

And ProPublica shines a light on the practice of drug companies using flashy Facebook ads, cash incentives and other marketing techniques to woo Mexican residents over the border to donate plasma. It’s not as innocuous as it might seem — donating too much plasma can compromise the immune system. (Selling plasma has been banned in Mexico since 1987.)

ProPublica: Pharmaceutical Companies Are Luring Mexicans Across the U.S. Border to Donate Blood Plasma


In the miscellaneous file for the week:

  • An Ohio doctor is being charged in 25 fentanyl-related deaths. How on earth was such a lapse allowed to occur? The New York Times peels back the curtain on years of lapses and missed warnings in one Columbus intensive care unit.

The New York Times: One Doctor. 25 Deaths. How Could It Have Happened?

  • During the week of World Mental Health Day, research finds that Americans are starting to internalize all the political rhetoric (and myths) about the connection between mental health and violence. “People want simple solutions: They want to be able to neatly explain things,” said one expert.

Los Angeles Times: Americans Increasingly Fear Violence From People Who Are Mentally Ill

  • There’s more than one way to keep a community healthy, and that goes beyond doctor’s offices, clinics and hospitals. A growing number of medical professionals are embracing the notion that steady paychecks, stable housing and good food are crucial to supporting their patients before they get sick.

The New York Times: When a Steady Paycheck Is Good Medicine for Communities

  • In a sad sign of the times, a muppet on “Sesame Street” is going to have a mother struggling with addiction. The storyline is meant to help an ever-increasing number of children affected by the opioid crisis.

Stat: ‘Sesame Street’ Launches Initiative to Help Explain Parental Addiction to Kids

  • High levels of uranium were found in the blood of Navajo women and babies in a study that underscored the real costs of America’s atomic development. Lawmakers are pushing for legislation that would compensate those who have been exposed.

The Associated Press: US Official: Research Finds Uranium in Navajo Women, Babies

  • And the Nobel Prizes are given out this week: In medicine, scientists who worked with oxygen and cells were honored. Their work has the potential to be the building blocks for things like cancer treatments.

The Washington Post: Nobel Prize in Medicine Awarded for Discovery of How Cells Sense Oxygen


That’s it from me! It’s good to be back with you guys, and I hope you have a great weekend!

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Age-Old Health Care Debate Shifts From Insuring More People To Cutting Costs

In a new article in the BMJ journal, Julie Rovner, chief Washington correspondent for Kaiser Health News, examines the debate over the future of the U.S. health insurance system — a debate that has waxed and waned for the better part of a century. While political parties once argued over whether the government should make sure all residents have coverage, the discussion is changing. As the cost of medical services continues to grow faster than most Americans’ incomes, even people with private insurance coverage — which comes with ever-increasing expenses in the form of deductibles and copayments — are finding the cost of care becoming unaffordable. That’s true for Medicare as well. Read the article here.

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State Highlights: Strict Abortion Ban Divides Voters In Louisiana Governor’s Race Where Democrat Leads; NYC Public Hospital Back In Step With Surplus of $36M

Head Of PhRMA Says It Would Be Mistake To Think Pelosi’s Aggressive Drug Pricing Bill Won’t Become Reality

Social Security Recipients To Get Modest Boost, But Advocates Say It’s Not Enough To Cover Health Care, Other Costs

State Highlights: Florida Community Still Struggles With 5,000 Homeless One Year After Hurricane; Troubled VA Medical Center Once Again Infested With Flies

Dozens Of Georgia Hospitals Hit With Medicare Readmission Penalties

VCU Health Will Halt Patient Lawsuits, Boost Aid In Wake Of KHN Investigation

VCU Health, the major Richmond medical system that includes the state’s largest teaching hospital, said it will no longer file lawsuits against its patients, ending a practice that has affected tens of thousands of people over the years.

VCU’s in-house physician group filed more than 56,000 lawsuits against patients for $81 million over the seven years ending in 2018, according to a Kaiser Health News analysis of district court data. Those suits will end and VCU will increase financial assistance for lower-income families treated at the $2.16 billion system, according to Melinda Hancock, VCU’s chief administrative and financial officer.

Melinda Hancock, CFO, VCU Health System(Courtesy of VCU Health)

Kaiser Health News recently reported that UVA Health, the University of Virginia system, had filed more than 36,000 suits over six years against patients who could not pay their bills. That revelation, published last month in The Washington Post, led UVA to pledge to “positively, drastically” reduce patient lawsuits.

VCU’s new stance on lawsuits goes beyond UVA’s, which promised to stop suing only patients whose income is below 400% of poverty guidelines. UVA officials did not respond to requests for comment.

VCU’s flagship hospital, VCU Medical Center, hasn’t filed patient suits in at least seven years, Hancock said in an interview this week. But its in-house physician group continued to sue patients and families for overdue bills.

That approach stopped as of last month, she said. VCU Health, a state-operated system including Richmond’s VCU School of Medicine and Community Memorial Hospital in South Hill, Va., will stop suing patients “as part of normal debt collection,” she said. It is also ending garnishment of patient wages and attaching liens to patient homes, she said.

Hancock said VCU has been considering changing its policies since last year but recent revelations about UVA “expedited” the decision. Starting in June, KHN had requested comment from VCU officials about the health system’s financial assistance and lawsuits.

“We don’t want to be part of that,” she said about patient lawsuits, which are a standard tool for many hospitals seeking to maximize revenue. “We feel that taking care of the patient’s financial health is taking care of their holistic health.”

The system, affiliated with Virginia Commonwealth University, is also considering “how we should address pending lawsuits and retrospective cases,” said spokeswoman Laura Rossacher.

VCU Health will continue to send unpaid debts to collections and report patients with overdue bills to credit agencies.

“We still need to get our bills paid,” Hancock said. “We do need to deploy reasonable collection efforts.”

Policy scholars said the new guidelines, which would make VCU’s collection and billing practices among the most liberal for Virginia hospitals, would still leave many patients vulnerable to credit downgrades, financial hardship and bankruptcy.

“This certainly seems like progress,” said Sara Rosenbaum, a health law professor at George Washington University. But even if no lawsuit is filed, “being an apparent deadbeat on a bill written off as bad debt has terrible and enduring consequences on folks.”

Negative credit reports from a hospital, even without a court case, can send families into a downward spiral, said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management.

“If they send you to a collection agency, you’re not able to borrow any money because that’s going to put you in such a poor credit rating,” he said. “You cannot expect somebody to pay a $10,000 or $20,000 bill if they don’t have insurance.”

Analysts also criticized as inadequate VCU’s new discounts to the uninsured. Last year, the system started reducing list prices by 45% for those lacking coverage. The previous discount was 25%. Almost nobody pays list charges, which hospitals typically use as a starting point for negotiations with insurers.

But VCU’s average cost of care is 77% below list charges, according to 2017 government filings. That means the uninsured are still paying a big markup under the new policy.

“Most uninsured have very little income, and asking them to pay twice as much as it costs to deliver care is not appropriate,” Anderson said. “It is no wonder why so many cannot pay the bills.”

Uninsured patients paying promptly can receive discounts of up to 55%, Rossacher said. But few are able to do that.

Like UVA, VCU is raising the income threshold for patients seeking financial assistance ― in its case, awarding aid to families with income up to 300% above the federal poverty level, or $77,000 for a family of four. For most patients, the previous cutoff was 200%, or $52,000, for a family of four.

That aid threshold takes effect in November. VCU officials declined to give an estimate of what the new policies would cost the system.

KHN analyzed lawsuits filed by VCU and other hospitals using civil court data collected by Code for Hampton Roads, a nonprofit focusing on improving government technology.

“VCU Health System and its affiliated physicians are making important policy changes that are long overdue,” said Jill Hanken, a health care attorney for the Virginia Poverty Law Center. She urged “further and ongoing oversight” from lawmakers to ensure appropriate indigent care policies.

Virginia Gov. Ralph Northam, a physician, has said little publicly about the state hospitals and doctors under his leadership that often pursue patients for all they are worth.

“No one should go bankrupt because they get sick,” said Northam spokeswoman Alena Yarmosky. “Gov. Northam is glad to see health systems taking real steps to put Virginians first and address aggressive bill collection practices.”

VCU will continue reviewing its collections and assistance policies, Hancock said. “This is an ongoing process,” she said. “It doesn’t’ stop here.”

One impetus to dropping lawsuits was an increasing number of patients with health insurance who still have trouble paying, she said.

“With the rise of high-deductible plans,” in which patients pay thousands before insurance kicks in, she said, “we just felt that there are other collection efforts that were more suitable now.”

Methodology
KHN analyzed civil case records from the Virginia district courts from 2012 to 2018, based on the date the case was filed. The case records were part of a dataset KHN acquired from Ben Schoenfeld, a volunteer for Code for Hampton Roads, a nonprofit focused on improving government technology. Schoenfeld compiled court records available directly from Virginia’s court system (from both circuit and district courts) and posted them on the website VirginiaCourtData.org. The analysis included all “warrant in debt” cases where the plaintiff was listed as MCV Physicians.

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As Medicare Enrollment Nears, Popular Price Comparison Tool Is Missing

Millions of older adults can start signing up next week for private policies offering Medicare drug and medical coverage for 2020. But many risk wasting money and even jeopardizing their health care due to changes in Medicare’s plan finder, its most popular website.

For more than a decade, beneficiaries used the plan finder to compare dozens of Medicare policies offered by competing insurance companies and get a list of their options. Yet after a website redesign six weeks ago, the search results are missing crucial details: How much will you pay out-of-pocket? And which plan offers the best value?

That’s because the plan finder can no longer add up and sort through the prescription costs plus monthly premiums and any deductibles for all those plans. A mere human can try, but it is a cumbersome process fraught with pitfalls. One plan might have the lowest premium but not the lowest drug prices. Another could exclude a plan’s preferred pharmacy that offers lower prescription prices.

“We can’t guarantee you that you’re going to be in the best plan or the cheapest plan anymore,” said Howard Houghton, the former Fairfax County coordinator for the Virginia Insurance Counseling and Assistance Program who still helps with enrollment as a volunteer.

Using the old plan finder produced big savings. Counselors at Passages, the Senior Health Insurance Information Program (SHIP) serving five counties in Northern California, said in August they used it to save one woman $8,400 for this year and more than $5,000 when helping another client.

Medicare officials say the total cost calculator will be fixed in time for the annual enrollment season, which starts nationwide Oct. 15 and runs through Dec. 7. But they have yet to address multiple other issues raised by the Medicare Rights Center and industry groups.

“The new tool will provide more enhanced price and quality information” to assure informed health care decisions, Seema Verma, administrator at the Centers for Medicare & Medicaid Services, said when she unveiled the redesign in August.

During open enrollment, beneficiaries can sign up for Medicare Advantage plans, the alternative to traditional Medicare that offer drug coverage and often more benefits than the government program does. About a third of the 64 million people in Medicare choose this option. Next year, the average Medicare Advantage monthly premium is expected to drop 14% compared with 2019 to an estimated $23, according to CMS. 

This is also the only time most people in traditional Medicare can sign up for a drug plan, also known as Part D, to help cover their prescription costs. It’s a good idea to review plans every year since costs and covered drugs can change from year to year. Estimated average monthly premiums for these policies will be $30 next year, about 8% less than in 2019, CMS has reported.

Medicare Advantage plans next year are allowed to offer new additional benefits for people with certain chronic diseases, such as dementia, diabetes or heart disease. That’s on top of the non-medical benefits that are not tied to a person’s health problems they were allowed to add this year, such as home-delivered meals after a hospitalization, transportation to medical appointments and minor home improvements, such as grab bars to prevent falls in the bathroom.

Next year, the additional services some Advantage plans will offer hardly sound like insurance benefits: pest control, dog food for service animals, home-delivered meals and discounted groceries.

“It’s really shifting from reactive care to preventative care,” said Martin Esquivel, vice president for Medicare product management at Anthem, which will offer those and other new perks to some of its more than a million Medicare Advantage members.

Smaller Medicare Advantage plans have also expanded benefits. The 60,000 Alignment Healthcare members in some California, Florida and North Carolina plans will have access to free transportation to doctor appointments from Uber or Lyft.

To address social isolation, some California members who also have certain chronic diseases can receive visits from “Grandkids On-Demand,” college students who can help with light housekeeping and provide companionship for up to two hours a day. Humana and Aetna will also offer the service in some plans.

But most insurers are not embracing the opportunity to add extra benefits.

“Of those Medicare Advantage plans affected by the new rules, 10% (or about 500) offered new supplemental benefits in 2020 for people with serious chronic illnesses, such as in-home services, palliative care, respite support for people’s caregivers or adult day care,” said Robert Saunders, research director for payment and delivery reform at Duke University’s Margolis Center for Health Policy. He is still analyzing the other categories of extra benefits.

UnitedHealthcare, which controls 26% of the Medicare Advantage market, is focused“on providing the core medical benefits, which is why people purchase health insurance in the first place,” said Steve Warner, vice president of the UHC Medicare Advantage product team.”Most consumers don’t want to buy a plan that’s been loaded up with ancillary benefits that they don’t think they’re going to use.”

Instead, the insurer is offering more plans that do not restrict members to a network of health care providers and introducing specialized plans for people with diabetes or dementia, among other changes.

Because new extra benefits will not be accessible in every county, seniors may need to do some detective work to find out what’s available. Using the plan finder, it’s possible to narrow down the Medicare Advantage choices only to those plans that offer hearing, vision, dental, fitness and transportation coverage.

Bonnie Burns, a consultant to California Health Advocates, recommends that customers call insurers to confirm details before signing up.

Among the improvements in the new plan finder is the ability to compare estimated costs of Medicare Advantage plans against coverage under traditional Medicare with a separate drug plan and one of 11 kinds of Medigap supplement plans, which cover all or some of the out-of-pocket costs Medicare doesn’t pay for.

But the monthly premiums listed for Medigap policies ― at least in some areas ― are wildly off course. According to the plan finder, a senior in San Francisco can buy a Medigap plan for as little as $20.83 a month. Yet such a plan is not included in the rate chart published by the California Department of Insurance, which lists the cheapest bare-bones policy for a 65-year-old at four times more.

With a more complicated, slower enrollment process, it’s likely that older adults will need more help. And help may be scarce.

“It means fewer people that we get to see because we’re giving each one more time,” said Alicia Jones, administrator of the state SHIP program at Nebraska’s Department of Insurance.

To find your local SHIP program, call 1-877-839-2675 or visit www.shiptacenter.org/.

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Trump’s New Order For Medicare Packs Potential Rise In Patients’ Costs

Vowing to protect Medicare with “every ounce of strength,” President Donald Trump last week spoke to a cheering crowd in Florida. But his executive order released shortly afterward includes provisions that could significantly alter key pillars of the program by making it easier for beneficiaries and doctors to opt out.

The bottom line: The proposed changes might make it a bit simpler to find a doctor who takes new Medicare patients, but it could lead to higher costs for seniors and potentially expose some to surprise medical bills, a problem from which Medicare has traditionally protected consumers.

“Unless these policies are thought through very carefully, the potential for really bad unintended consequences is front and center,” said economist Stephen Zuckerman, vice president for health policy at the Urban Institute.

While the executive order spells out few details, it calls for the removal of “unnecessary barriers” to private contracting, which allows patients and doctors to negotiate their own deals outside of Medicare. It’s an approach long supported by some conservatives, but critics fear it would lead to higher costs for patients. The order also seeks to ease rules that affect beneficiaries who want to opt out of the hospital portion of Medicare, known as Part A.

Both ideas have a long history, with proponents and opponents duking it out since at least 1997, even spawning a tongue-in-cheek legislative proposal that year titled, in part, the “Buck Naked Act.” More on that later.

“For a long time, people who don’t want or don’t like the idea of social insurance have been trying to find ways to opt out of Medicare and doctors have been trying to find a way to opt out of Medicare payment,” said Timothy Jost, emeritus professor at Washington and Lee University School of Law in Virginia.

The specifics will not emerge until the Department of Health and Human Services writes the rules to implement the executive order, which could take six months or longer. In the meantime, here are a few things you should know about the possible Medicare changes.

What are the current rules about what doctors can charge in Medicare?

Right now, the vast majority of physicians agree to accept what Medicare pays them and not charge patients for the rest of the bill, a practice known as balance billing. Physicians (and hospitals) have complained that Medicare doesn’t pay enough, but most participate anyway. Still, there is wiggle room.

Medicare limits balance billing. Physicians can charge patients the difference between their bill and what Medicare allows, but those charges are limited to 9.25% above Medicare’s regular rates. But partly because of the paperwork hassles for all involved, only a small percentage of doctors choose this option.

Alternatively, physicians can “opt out” of Medicare and charge whatever they want. But they can’t change their mind and try to get Medicare payments again for at least two years. Fewer than 1%of the nation’s physicians have currently opted out.

What would the executive order change?

That’s hard to know.

“It could mean a lot of things,” said Joseph Antos at the American Enterprise Institute, including possibly letting seniors make a contract with an individual doctor or buy into something that isn’t traditional Medicare or the current private Medicare Advantage program. “Exactly what that looks like is not so obvious.”

Others said eventual rules might result in lifting the 9.25% cap on the amount doctors can balance-bill some patients. Or the rules around fully “opting out” of Medicare might ease so physicians would not have to divorce themselves from the program or could stay in for some patients, but not others. That could leave some patients liable for the entire bill, which might lead to confusion among Medicare beneficiaries, critics of such a plan suggest.

The result may be that “it opens the door to surprise medical billing if people sign a contract with a doctor without realizing what they’re doing,” said Jost.

Would patients get a bigger choice in physicians?

Proponents say allowing for more private contracts between patients and doctors would encourage doctors to accept more Medicare patients, partly because they could get higher payments. That was one argument made by supporters of several House and Senate bills in 2015 that included direct-contracting provisions. All failed, as did an earlier effort in the late 1990s backed by then-Sen. Jon Kyl (R-Ariz.), who argued such contracting would give seniors more freedom to select doctors.

Then-Rep. Pete Stark (D-Calif.) opposed such direct contracting, arguing that patients had less power in negotiations than doctors. To make that point, he introduced the “No Private Contracts To Be Negotiated When the Patient Is Buck Naked Act of 1997.”

The bill was designed to illustrate how uneven the playing field is by prohibiting the discussion of or signing of private contracts at any time when “the patient is buck naked and the doctor is fully clothed (and conversely, to protect the rights of doctors, when the patient is fully clothed and the doctor is naked).” It, too, failed to pass.

Still, the current executive order might help counter a trend that “more physicians today are not taking new Medicare patients,” said Robert Moffit, a senior fellow at the Heritage Foundation, a conservative think tank based in Washington, D.C.

It also might encourage boutique practices that operate outside of Medicare and are accessible primarily to the wealthy, said David Lipschutz, associate director of the Center for Medicare Advocacy.

“It is both a gift to the industry and to those beneficiaries who are well off,” he said. “It has questionable utility to the rest of us.”

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