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

The Milwaukee Journal-Sentinel reported a legal settlement worth noting.  Here are the basics:

One of the nation's largest providers of hospice care has agreed to pay $25 million to settle a Medicare fraud case initiated after a former company nurse in Milwaukee filed a whistle-blower suit.

It was the second such settlement in six years for Odyssey Healthcare Inc., which paid the federal government $12.5 million in 2006 after another Wisconsin-based employee sued.

Also,

Medicare provides a benefit meant to cover hospice care for the terminally ill. It covers 24-hour in-home nursing service only during limited crisis periods. But from 2006 to 2009, Odyssey practiced a pattern of enrolling and recertifying non-terminal patients, and billing for continuous care that wasn't necessary or reasonable, according to the False Claims Act suit filed in 2008 but just unsealed Thursday.

As is usual in such cases, Odyssey's parent company denied that it did anything wrong:

Odyssey, which operates in 26 states, is now part of Atlanta-based Gentiva Health Services, which runs hospice offices in West Allis and Burlington. Gentiva officials declined to comment, but referred to an announcement it posted on its investor relations website last month.

'Gentiva cooperated fully with this investigation, which covered a period prior to our acquisition of Odyssey, and the settlement is consistent with our efforts to instill Gentiva's culture of compliance throughout the company,' said John Camperlengo, general counsel and chief compliance officer.

The statement said the firm is proud of the care its thousands of hospice clinicians provide, and of Gentiva's efforts to ensure strict compliance with all regulatory requirements.

The Implications of the Need for a New Corporate Integrity Agreement

However, there are some disturbing aspects of this case that require a bit more explanation. First, as noted by the Associated Press (in a story available here from the Dubuque [Iowa] Telegraph-Herald),

Besides agreeing to pay the $25 million settlement, Odyssey entered a five-year corporate integrity agreement with the federal government.

Now corporate integrity agreements are not known for their effectiveness. In fact, as we noted in this blog post, according to Gentiva's 2010 annual report, its Odyssey subsidiary had been subject to a corporate integrity agreement arising from its 2006 settlement, one which was apparently not effective in preventing its misbehavior from 2006 to 2009.

However, corporate integrity agreements do serve as markers for the need to improve the integrity of the corporations who need to make them. In this case, why would Gentiva be asked to sign such an agreement if its integrity were already beyond reproach? So Gentiva's current "culture of compliance" is open to question.

The Implications of "Enrolling and Recertifying Non-Terminal Patients"

A quick read of the Journal-Sentinel and Associate Press stories above might give the impression that what Odyssey did wrong involved a billing technicality, admittedly, one that allowed it to collect more money that that to which it would otherwise be entitled.

This story actually goes beyond the issue of fraud, and raises important concerns about patient care.

The enrollment  by a hospice of patients who are actually not terminally ill could have serious adverse effects on such patients. As we noted in this post, hospices are meant for patients with very limited life expectancies. The goal of hospice is to provide comfort and palliation, not active treatment of illnesses. So if patients who actually do not have such severely limited life expectancies are admitted to a hospice, they might be denied therapy that could actually make them feel better, or even cure acute illnesses or prolong their lives. For example, a hospice patient who developed an open wound might not get maximal wound therapy, as in an example (allegedly involving a different commercial hospice provider) in the post above.

So it is possible that Odyssey's enrolling and re-certifying of non-terminally ill patients could have lead to failure to provide some of these patients with the care they should have had. Whether this did or did not occur in individual cases, and what adverse effects may have been produced is not clear from the coverage of this case.  

Summary

As I wrote in 2011, .... There has been a lot of blather from politicians in the US about "death panels" in debates about health care reform. Many such politicians seem worried that the US government has or will have death panels under the new health care reform legislation. We have criticized that legislation for not addressing many important health care problems. No one, however, has convincingly demonstrated how its provisions would convene "death panels."


Wendell Potter argued in his book, Deadly Spin, (see this post) that for-profit insurance companies had their own "death panels." The Bloomberg article strongly suggests that for-profit hospices may also act like death panels. In search of more revenue, for-profit hospices may enroll patients who are not at the end of life, but then provide them only "comfort care," so that if they develop new conditions that are treatable, they are likely to die in the absence of treatment.

I am waiting for the politicians who so enthusiastically condemned the supposed "death panels" to be found in health care reform legislation to condemn for-profit hospices for behaving like death panels.

In my humble opinion, the case discussed above are the strongest argument yet that we need to reconsider our headlong rush to turn health care, particularly the direct care of patients, over to relatively unregulated, for-profit corporations. The cases above suggest that the pursuit of revenue ahead of patients' welfare by such organizations may lead to sick and dead patients.

I cannot see how for-profit direct patient care can be made safe for patients without intense government regulation. If any of those vocal advocates of "free market" health care (in the absence of any good explanation of how health care can ever be an ideal free market, see this post) can explain to me how for-profit hospices can be made safe for patients without such regulation, I would welcome their attempts.

Meanwhile, this just calls out for legislative and legal investigation, and urgent policy changes.
 
By the way, the case above also shows how the current approach used by the government to address misbehavior in health care does not work.  We have noted previously how these legal settlements often only lead to financial penalties imposed on companies, not individuals, which diffuses their impact, and provides no disincentives to future bad behavior by individuals.  Sometimes corporate integrity agreements are added, but as in the current case, they also seem not to deter future bad behavior.   So, I further conclude, de rigueur, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

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

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

CMS' Coziness with Leaders of the "Capital Markets"

Here is the introduction and the example most relevant to health care:

Nearly a dozen senior staff at the Centers for Medicare and Medicaid Services (CMS), the giant agency that administers hundreds of billions in federal health care dollars, had been called to a meeting. After a discussion with five Wall Street professionals that lasted nearly two hours, one senior CMS analyst filed an ethics complaint that later went to the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS).

His beef: that a handful of deep-pocketed investors had won a private hearing to probe whether the agency would allow Medicare reimbursement for specific medical devices manufactured by companies in which they already held a stake or might put new money. The market for one device, already approved for Medicare, was rapidly heading toward $1 billion annually; the agency’s impending decision to reimburse competing devices could have major market impact, a shift potentially worth hundreds of millions of dollars.

'This meeting forced agency staff to redirect their attention toward a select group from Wall Street, when neither competing investors nor patient-oriented stakeholders were present,' the whistleblower told the Project On Government Oversight (POGO). 'They got to probe us for hours in private about what we planned to do and how we approached procedures for reimbursing medical devices, the mechanics and psychology of CMS decision-making, in general and with respect to these specific devices.'

The meeting was set up by a former CMS employee working for the Marwood Group, an asset manager that counsels big health-care industry investors, the whistleblower says. The firm’s president is Edward 'Ted' Kennedy Jr., son of the late Massachusetts senator and a major supporter of President Obama’s health care reforms, and includes Kennedy cousins Robert F. Kennedy, Jr. and Stephen E. Smith, Jr., as senior advisors. The firm’s website highlights its staff recruitment among Congressional aides, the Executive Office of the President and CMS. One CMS veteran who joined Marwood after the 2009 meeting with Wall Streeters is Barry Straub, the agency's former Chief Medical Officer, who is also an expert on Medicare reimbursement, the website says. A company spokesman had no comment.

A supervisor at CMS’s Coverage Advisory Group, which decides which services the agency will pay for, also helped organize the session with investors. The whistleblower says he was told by a supervisor that such get-togethers are 'a routine practice at CMS.' At the time, in 2009, CMS’s top administrator had an aide with the title, 'capital markets advisor,' tasked with tracking investment community activity in Washington and elsewhere.

At the investor meeting, Wall Streeters asked a range of questions 'about confidential CMS information.' The whistle blower says he does not believe they received illegal disclosures, though they peppered CMS analysts with queries about the agency’s decision-making process and other sensitive matters which, if answered, could have violated the law or related regulations that bar the sharing of internal deliberations and decisions.

The whistleblower first filed his complaint in April 2009. He was terminated in 2011 for being disloyal to the agency mission after he made a series of internal protests, including the objection to what he calls a pattern and practice of unfettered access to CMS staff by Wall Street investors. He says he is currently fighting his dismissal through all available legal and administrative channels.

Implications and Summary

As the POGO article put it,

CMS does have a set of 'Open Door' policies and affords a variety of avenues for public access. The disclosure of payments to physicians and teaching hospitals by pharmaceutical companies and other interests are required under President Obama’s health reform. In practice, however, the public, not to mention competing investors and stakeholders, rarely get the kind of information and insight available in meetings like the whistleblower described.

In general,

A balance is necessary between the danger of too much insider access, and imposing excessive limitations. Indeed, the biggest problem with special access for Wall Street insiders is not just that they seem to get meetings and acquire information that may be privileged and non-public, but that others, including other investors, do not get a crack at the same material.

The activities above have all the usual elements of excess corporate - government coziness.  These include enhanced access for corporate leaders beyond what any ordinary members of the public might achieve; the revolving door between government service and corporate leadership; the participation of well-connected inside the beltway types, etc, etc. 

It also includes the apparent formalization of representation of corporate interests, e.g., the "Capital Markets Advisor," with no parallel formalization of the public's or patients' interests.  Even more worrisome is that an effort to make this all less anechoic resulted in alleged intimidation of a whistle-blower.

So, let's see, CMS, the Center for Medicare and Medicaid Services, the US Department of Health and Human Services (DHHS) branch which controls the Medicare and Medicaid programs, the government run single-payer programs for the elderly, the disabled, and the poor, does not seem to be able to afford to figure out in-house how to pay physicians for specific services.  Instead, it has effectively farmed out this task to a private committee, the American Medical Association's RBRVS Update Committee (RUC).  As we have discussed many times, this obscure and secretive committee likely had a major role in structuring the financial incentives that favor procedures and disfavor primary care. leading to excess costs, declining access, and degrading quality.  However, CMS can afford to have a "Capital Markets Adviser" and to use up staff time briefing wealthy investors and hedge fund types.  What is wrong with this picture?

In my humble opinion, government health care agencies ought to put the public's and patient's health first. They should not give special consideration to the rich, the powerful, the well-connected, whom some now call the one percent. Yet in the US we seem to have an increasingly corporatist state in which government and the plutocrats work together for their mutual interests, regulatory capture writ large.

We need to restore government, and our health care agencies to being of the people, by the people, and for the people.  Obviously, true health care reform would start with the government and its officials putting patients' and the public's health first, way ahead of the financial comfort of corporate leaders.

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

Since 2007, we have been writing about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians.  The RUC has been accused of setting up incentives that strongly favor invasive, high technology procedures while disfavoring primary care and other "cognitive medicine."  Despite the central role of (perverse) incentives in raising health care costs while limiting access and degrading quality, there has been surprisingly little discussion about the pivotal role played by the RUC. 

Now there is a movement afoot to replace the RUC.  In a new post on the Care and Cost blog, and the Replace the RUC site, Paul M. Fischer and Brian Klepper urged four approaches:

1. Make the public aware of the RUC’s role and urge the primary care societies to stop “enabling” the RUC through their participation.
2. Recruit experts who can credibly calculate the economic impacts of the RUC’s actions, and who can devise alternative payment methodologies.
3. Demonstrate the unlawfulness of CMS’ (and HCFA’s) two-decades long reliance on the RUC.
4. Develop a collaboration between primary care and non-health care business.

They are also urging three specific actions:

1. Contact your primary care society to demand that they withdraw from the RUC.
2. Broaden awareness of what we’re doing and why by rebroadcasting to your primary care colleagues.
3. Get in touch to help us with resources, relationships or approaches that can strengthen this project.

They have set up an electronic petition that people can use to urge the three major medical societies that represent primary care physicians to quit the RUC.

On Health Care Renewal, we have been trying to make the systemic problems with with the leadership of health care organizations less anechoic in the hopes that greater realization that these problems exist would lead to actions to solve them. The regulatory capture by the RUC of Medicare's payment setting mechanism is one problem that really cries out for a solution. In 2007, I called for "an unbiased re-evaluation of the components of the RBRVS by people who are dedicated to doing it fairly, not benefiting one group of physicians, or the organizations that benefit from the increased use of procedures"; and "an unbiased investigation of what went awry with the process used by Medicare to determine physician payments."  Your heard it here first on Health Care Renewal.  It is nice to now have such distinguished company. 

I urge our readers to consider the actions urged above. 

True health care reform will require a transparent, honest, fair process for governments to decide on how they will pay for physicians' care and other health care services and goods. 

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

On July 7, President Obama appointed Dr. Donald Berwick as Administrator of the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick, a pediatrician, is well known as the CEO of the non-profit Institute for Healthcare Improvement (IHI), which "exists to close the enormous gap between the health care we have and the health care we should have — a gap so large in the US that the Institute of Medicine (IOM) in 2001 called it a 'quality chasm'.” Dr. Berwick was one of the authors of that IOM report. His IHI has been a major player in the patient safety movement, most notably with its "100,000 Lives Campaign" and, more recently, its "5 Million Lives Campaign."

Berwick's CMS gig is a "recess appointment": it was made during the Senate's July 4th recess period, without a formal confirmation hearing---although such a hearing must take place before the end of this Senate term, if he is to remain in the position. A recent story suggested that Obama made the recess appointment in order to avoid a reprise of "last year's divisive health care debate." The president had originally nominated Berwick for the position in April, and Republicans have opposed "Berwick's views on rationing of care," claiming that he "would deny needed care based on cost."

A "Patient-Centered Extremist"

If there is a problem with the appointment, it is likely to be roughly the opposite of what Republicans might suppose: Dr. Berwick is a self-described "Patient-Centered Extremist." He favors letting patients have the last word in decisions about their care even if that means, for example, choosing to have unnecessary and expensive hi-tech studies. In an article for Health Affairs published about a year ago, he explicitly argued against the "professionally dominant view of quality of health care":

I think it wrong for the profession of medicine—or any other health care profession, for that matter—to “reserve to itself the authority to judge the quality of its work.” I eschew compromise words like “partnership.” For better or worse, I have come to believe that we—patients, families, clinicians, and the health care system as a whole—would all be far better off if we professionals recalibrated our work such that we behaved with patients and families not as hosts in the care system, but as guests in their lives. I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care.

A new definition. My proposed definition of “patient-centered care” is this: The experience (to the extent the informed, individual patient desires it) of transparency, individualization, recognition, respect, dignity, and choice in all matters, without exception, related to one’s person, circumstances, and relationships in health care.

Does this mean that Dr. Berwick would also eschew professional, i.e., expert, judgment in favor of patients' wishes? In a word, yes:

Evidence-based medicine sometimes must take a back seat. First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat. One e-mail correspondent asked me, “Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.” On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase “a fully informed patient.”

Dr. Berwick is not so naive as this opinion might suggest. He envisions a "mature dialogue" in such a case, and argues that "if, over time, a pattern emerges of scientifically unwise or unsubstantiated choices...then we should seek to improve our messages..." He also admits that there might be an occasional patient whose demands are so unreasonable that "it is time to say, 'No'." That exception, he argues, should not dictate the rule.

There are situations in which most civilized people would agree with Dr. Berwick's view of 'patient-centeredness'. In both the Health Affairs article and in his recent address to the 2010 graduating class of the Yale School of Medicine, he offered real examples of petty, arbitrary hospital rules causing unnecessary sorrow for patients and their loved ones. It is in such contexts that he makes a convincing case that health professionals ought to behave "as guests in their lives." In an interview for the New York Times, he argued:

We don’t have a standard of services or processes that are comfortable for patients. We have built a technocratic castle, and when people come into it, they are intimidated.

Nothing to disagree with there. To create that standard, moreover, would not undermine settled medical practice ethics---it would celebrate them, even as it rightly embarrasses the profession for having taken so long to do so.


Enter the Woo

Eschewing the scientific basis for modern medical practice, however, is another matter. In February of 2009, Dr. Berwick gave a 'keynote' address at the IOM and Bravewell Collaborative-sponsored Summit on Integrative Medicine and the Health of the Public. He shared the podium with Mehmet Oz, Dean Ornish, Senator Tom Harkin, and other advocates of pseudoscientific health claims. I wrote about the conference at the time, mainly to call attention to its misleading use of the term "integrative medicine": literature emanating from the Summit characterized it as "preventive" and "patient-centered," whereas the only characteristic that distinguishes it from modern medicine is an inclusion of various forms of pseudomedicine.


I noticed that Dr. Berwick was on the speaker roster, which I found disappointing: I imagined that he had either gone over to the Dark Side or, perhaps, was sufficiently naive about the topic to have been duped; or, more likely, that he had cynically accepted the offer to further his ambitions. I didn't bother to listen to his speech until the CMS appointment was announced a few days ago.

It is troubling, to say the least. Dr. Berwick did not argue, as he had in the NYT piece, that "If we doctors feel a person is going to make unwise choices, we have to take on the responsibility of being teachers, educators and informers." Rather, he praised his fellow speakers, most of whom were spouting nonsense, for their "reach" and "eloquence." He praised the IOM for its "glorious record...in pursuit of better designs in health care...traditional, allopathic curative care and now migrating into this distinguished and important new arena." He mentioned homeopathy and acupuncture, not to wonder why they should be promoted as effective, but merely to warn that they will fail---presumably in some economic sense---if they try to compete with each other for reimbursement.

Such language, and Dr. Berwick's very presence at the Summit, were a far cry from advocating "patient-centeredness." What they amounted to was a generous endorsement of pseudoscientific practices and of the socio-political movement that promotes them. Even granting some naivete on his part (he called himself "an amateur at this topic"), he must have known this. Such an endorsement, unlike tearing down the "technocratic castle," has ethical implications at least as profound as those that Dr. Berwick tacitly or explicitly relies upon to support his arguments for patient-centeredness.

"Physicians have no Immunity to Moral or Ethical Constraints"

The relevant medical ethics treatises (reviewed here) are in substantial agreement that it is unethical for physicians to prescribe scientifically implausible methods or to refer patients to other practitioners for the same purpose. They are also in agreement that it is unethical to prescribe a placebo to a patient while claiming that the treatment has specific biologic activity---a point that has been vigorously argued in the UK this year, with regard to homeopathy. These ethical tenets are not mere odes to nerdy, sciency thinking; they are matters of honesty and integrity---fundamental bases for ethical interactions between physicians and patients.

In 1983, philosophers Clark Glymour and Douglas Stalker published an article in the New England Journal of Medicine titled “Engineers, cranks, physicians, magicians.” They framed modern medicine as follows, comparing it to what was then called "holistic medicine" (the article is quoted extensively here):

Medicine in industrialized nations is scientific medicine. The claim tacitly made by American or European physicians, and tacitly relied on by their patients, is that their palliatives and procedures have been shown by science to be effective. Although the physician’s medical practice is not itself science, it is based on science and on training that is supposed to teach physicians to apply scientific knowledge to people in a rational way.

The practice of medicine in the United States and in other industrialized nations is a form of consultant engineering...

That statement is just as accurate now---even more so, in this era of Evidence-Based Medicine---as it was nearly 30 years ago, even if some might find the likening of medicine to engineering displeasing. Nor is it at odds with almost any definition of "patient-centeredness," other than one that presumes that the patient's desires trump the physician's ethics:

A physician engineer can act as consoler; nothing in either logic or social psychology forbids it. But certain combinations are impossible or extraordinarily unlikely. A physician engineer cannot honestly claim powers of magic or occult knowledge. The principles governing scientific reasoning and belief are negative as well as positive, and they imply that occult doctrines are not worthy of belief. Moreover, physician engineers have no immunity to moral or ethical constraints. On the contrary, they are by training and by culture enmeshed in a tradition of rational thought about
the obligations and responsibilities of their profession.

Dr. Berwick---if he really believes what his presence and words at the "Integrative Medicine" Summit imply---is playing with ethical fire. (If, as I hope, he doesn't really believe those things, he's playing with ethics of another kind). Will we begin to see pseudomedicine "integrated" into Medicare and Medicaid? That is certainly the expectation of those who observed Dr. Berwick's performance at the Summit, and who appear intent to hold him to his word.

KA

Two other blogs that have addressed this issue are:

Dr. RW: Not only evidence based medicine but science based medicine may take a back seat in Donald Berwick's vision for patient centered care

Dr. David Gorski: Dr. Donald Berwick and “patient-centered” medicine: Letting the woo into the new health care law?

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

Last week, the influential New England Journal of Medicine published an article by Bruce Vladek entitled "Fixing Medicare's Physician Payment System."(1)  Although only identified as working for Nexara, a health consulting business, Mr Vladek was a former administrator of what was then called the Health Care Financing Administration (HCFA) of the US Department of Health and Human Services (DHHS), the part of the department that then ran the US Medicare program.  Vladek thus can reasonably be viewed as an expert on Medicare. 

Vladek identified two main problems with the current way physicians are paid by Medicare.  First,

Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare's physician payments, which already trail those from private insurers, as far into the future as the eye can see.

Second,

there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.

Vladek expanded on the second point as follows

the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units. Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix.

The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed. Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.

This is about all that Vladek wrote about how the imbalance between how Medicare pays for primary care and other "cognitive services," and for procedures came about. Vladek, and many others have argued that this imbalance has lead to strong financial incentives that have been slowly destroying primary care, and strong incentives that have lead to the use of too many procedures, both strong drivers of rising costs in the most expensive health care system in the world.

Vladek noted vaguely that "through various reasons," the incentives were imbalanced by "the process of annual updating of relative value units."

However, as we have discussed in several blog posts, a lot more is known about how this process got "totally off track."

In fact, in 2007, an article by Bodenheimer et al in the Annals of Internal Medicine explained the problems in considerably more detail.(2)  As we wrote then, Its main points included

• Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
• The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."
• Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
• Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The role of the RBRVS Update Committee (RUC) is complex and in many ways mysterious.  As we wrote before, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee. The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret.

To expand on the penultimate point, the current page on the AMA web-site that describes the RUC only lists its members in terms of their specialties and organizational affiliation.  Their names do not appear.  A response to a previous post by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA here for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it.  Thus, the RUC membership as at best relatively opaque.

To expand on the ultimate point, as Goodson(3) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."

The fog surrounding the operations of the RUC seems to have affected many who write about.  We have posted (here, here, and here) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC.  In 2010, post the US recent attempt at health care reform, the RUC seems to remain the great unmentionable.  Even the leading US medical journal seems reluctant to even print its name. 

Thus, as we noted before, however, the mysteries about it remain:

• How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.
• Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?
• How did the RUC become de facto in charge of this process?
• Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?
• Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?
• Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?

Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  In this case, the persistence of the anechoic effect seems to be doing real damage to the discussion of the critical issues we in the US face today.
References


1. Vladek B. Fixing Medicare's physician payment system. N Engl J Med 2010; 362:1955-1957. (Link here.)
2. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link here.)
3. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310.  (Link here.)

Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud.

In "Health care: A 'goldmine' for fraudsters", CNN senior writer Parija Kavilanz observes that:

NEW YORK (CNNMoney.com) -- There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminal gangs who are bilking the system of as much as $100 billion a year.

Health care identity theft dominated all other crimes in the sector last year, according to Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association (NHCAA), an advocacy group whose members include insurers, law enforcement and regulatory agencies.

The most common method of health care identity fraud occurs when someone with legitimate access, such as a hospital administrator or a doctor's assistant, sells patients' information to organized criminal groups.

Increasingly, criminal groups are hacking into digital medical records so that they can steal money from the $450 billion, 44-million-beneficiary Medicare system -- making the government, by far, the "single biggest victim" of health care fraud, according to Rob Montemorra, chief of the FBI's Health Care Fraud Unit.

All the stolen information includes medical insurance data and Social Security numbers, explained James Van Dyke, president of Javelin Strategy & Research, a research firm specializing in trends in security and fraud initiatives.

Van Dyke said that, with the information, the fraudster falsely bills Medicare and private insurers for drugs, equipment or treatment that were never prescribed.

I have somewhat constrained confidence in the health IT prowess of a government that cannot implement proper processes and information systems to prevent $100 billion per year in Medicare fraud. The fraud is not sophisticated; it is performed in the most simplistic manner via simple submission of fraudulent claims via boiler-room billing companies:

To collect the money, the criminals set up shell billing companies that disappear as soon as there's any indication of an investigation, according to the FBI.

I have less than stellar confidence that the very same government can oversee a national project for health IT to implement technology that is not just a panacea to healthcare's ills as effectively claimed, but goes far beyond that as an alterative that will revolutionize healthcare.

-- SS

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

An important part of the noisy and contentious debate about health care reform in the US centers on the role of the government as a provider of health insurance. Some on the left want a government "single-payer" plan to be the only health insurance available. Some left of center want a government "public option" health insurance plan to be available, particularly to those who have trouble obtaining commercial insurance. Some on the right want none of it, and sometimes note that the existing government single-payer plan for the elderly and disabled, Medicare, has important faults that would only become more significant if the plan is extended or duplicated. Yet even critics of Medicare on the right do not seem to want to talk about what may be its worst fault.

The latest example, an op-ed piece by Dr Scott Gottlieb, appeared in the Wall Street Journal yesterday. Dr Gottlieb's main point was that health care rationing by either government or private insurers is inevitable, but that "government does it in far more byzantine and arbitrary ways." In particular,

Consider the $450 billion Medicare program. It provides a model for—indeed its bureaucracy could well end up running—the 'public option' health plan that Mr. Obama wants to offer all Americans under the age of 65. In recent years, Medicare's staff has been aggressively restricting coverage for costly treatments.

This often means limiting access to the costliest technologies. To do this Medicare relies on its rationing and pricing systems.

Gottlieb then cited several examples, "tortured decisions concerning the use of implantable defibrillators," and "the travails of the pharmaceutical company Spracor and its drug Xopenex, an innovative respiratory medicine that competes with the chemically distinct and much cheaper generic albuterol."

Finally Gottlieb decried Medicare's decision making processes applied to costly technologies as "impenetrable." His summation was

There's nothing inherently wrong with a program like Medicare seeking value for taxpayers. But it shouldn't make up the rules as it goes.

Let me first say that I actually agree with Dr Gottlieb's main points. Any government or private health insurance plan ought to seek value for its money. However, how it does so ought to be rational, based on understanding of medicine and the clinical context, and transparent and accountable to the patients on whose behalf such plans pay. "Covert rationing" (as has been well discussed in the Covert Rationing Blog) raises worries that decisions are being made just to save money, not to improve value, and even that decisions are being made without informed consideration of the clinical context, or based on the self-interest of the decision makers, or even that decisions may result from bribery and corruption.

But if Dr Gottlieb is so concerned about Medicare rationing care as a result of opaque and unaccountable decision making, why is he not more concerned about how Medicare controls the prices of physicians' services than about its decisions about a few expensive, high-tech and infrequently used treatments?

We have written again and again about how Medicare has allowed decisions about what physicians are paid for providing various services to be made de facto by an opaque private committee run by the American Medical Association. This decision-making process has lead to relatively generous payments for procedures, versus miserly payments for "cognitive services," (that is, "evaluation and management services," or for physicians interviewing, examining, and counseling patients, making diagnoses, predicting prognoses, and making decisions about treatment.) The resulting perverse incentives are a major reason that primary care has become increasingly unavailable, and for our expensive patterns of care dominated by high-technology and invasive procedures. More detail quoted from a previous post appears below.

As we have discussed, the US Medicare system determines what it pays physicians using the Resource Based Relative Value System (RBRVS). This system determines the pay for every kind of medical encounter according to a complex formula that is supposed to account for physicians' time and effort, physicians' practice expense, and the cost of malpractice insurance. The components of physicians' effort assessed are, in turn, technical skill and physical effort; the required mental effort and judgment; and stress due to the potential risk to the patient.

To keep the system, which was started in 1990, current, requires addition of new kinds of encounters, which means encounters involving new kinds of procedures, and updating of the estimates of various components, including physicians' time and effort. To do so, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee (RUC). The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are secret, as are the proceedings of the group.

This opaque and unaccountable process has resulted in increases outstripping inflation in fees paid for procedures, while fees paid for 'cognitive" medicine,' i.e., for primary care, and for services that involve diagnosis, management of acute and chronic disease, counseling, coordination of care, etc, but not procedures, have lagged inflation. The effects of the RUC have been amplified by the unexplained tendency of commercial managed care and health insurance to track the RBRVS system when making their own payments to physicians.For further details about the RUC, see these posts on Health Care Renewal (here, here, here, here, and here) and important articles by Bodenheimer et al,(1) and Goodson.(2) By the way, why the US Center for Medicare and Medicaid Services (CMS) relies de facto exclusively on the RUC to control the RBRVS system, and why the AMA made the RUC into a secret organization apparently beholden only to the organization's proceduralist members are unanswered questions.

Our most recent posts about the RUC are here, here, and here. Other bloggers, notably including Dr Robert Centor on DB's Medical Rants, have criticized the RUC. The Society of General Internal Medicine seems to be the only medical society that has criticized the RUC (see this post). Yet even ostensibly conservative and libertarian pundits who decry price-fixing and rationing by Medicare have ignored this vivid and important example of opaque and unaccountable price-fixing and rationing. And ostensibly liberal proponents of public options and single-payer systems have not explained how they would make their rationing more rational, transparent, and accountable, or how simply insuring more patients under Medicare-like programs would not result in even higher costs, poorer access, and worse quality.

The lack of discussion of the RUC remains one of the more striking examples of the anechoic effect. Failing to address why our costs are so high, are access is so poor, and our quality is so challenged will make it likely that any supposed reform effort will only make these problems worse.

References

1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link here.
2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link here.

Congress expects physicians to implement EHR's when they can't post a PDF on the web?

Congress expects physicians to implement EHR's and review patient histories in detail, when they can't even review their own bills before acting, and post a PDF on the web?

This has to be the lamest, most inept, and/or most patronizing Congress in history (with approval ratings to match, 16% as of Sept. 25 according to Rasmussen):

Washington Examiner
Baucus claims it's too difficult to put health care bill online
By: BARBARA HOLLINGSWORTH
09/24/09

A proposal by Sen. Jim Bunning, R-Ky., that would have required the Senate Finance Committee to post the final language of the $900 billion health care reform bill, as well as a Congressional Budget Office cost analysis, on the committee’s website for 72 hours prior to a vote was rejected 12-11.

... Chairman Max Baucus, D-Mont., himself admitted that “This probably sounds a little crazy to some people that we are voting on something before we have seen legislative language.” Indeed.

Baucus’ excuse - that it would take his committee staff two weeks to post the bill online – sounds a little crazy too.

This very same Congress is pushing physicians to implement EHR's under penalty of Medicare payment reductions, while they claim an inability to post a PDF or Word document online. Implementing EHR's is only several orders of magnitude more complex...

Or, perhaps the "inability" to post the text has to do with text that appears at pages 80-81 of the bill:

"Beginning in 2015, payment [under Medicare] would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization." Thus, in any year in which a particular doctor's average per-patient Medicare costs are in the top 10 percent in the nation, the feds will cut the doctor's payments by 5 percent."

As in the Washington Times:

This provision makes no account for the results of care, its quality or even its efficiency. It just says that if a doctor authorizes expensive care, no matter how successfully, the government will punish him by scrimping on what already is a low reimbursement rate for treating Medicare patients. The incentive, therefore, is for the doctor always to provide less care for his patients for fear of having his payments docked.

And because no doctor will know who falls in the top 10 percent until year's end, or what total average costs will break the 10 percent threshold, the pressure will be intense to withhold care, and withhold care again, and then withhold it some more. Or at least to prescribe cheaper care, no matter how much less effective, in order to avoid the penalties.

No metrics on quality of care, outcomes, patient satisfaction, or other aspects of the complex process of medical care are apparently involved. Just an "aggregation of the physician's resource use."

May I use the words "capricious and arbitrary" to describe this metric?

Now, we should ask:

• Is this what our government means by "data driven healthcare?"
• Do they realize the likely adverse consequences of such half-baked measures?
• Are those who would propose such a bill friends of patients, and friends of physicians?

Where have I seen this before? (How about: biomedical dilettantes helping impair R&D at a pharmaceutical company, now in sale mode due to a poor pipeline of new drugs, through cutting drug discovery resources on the simplistic metric of "cost per user per database?")

Ultimately, this Medicare strategy is the end result of allowing medical dilettantes (no matter how well they've "self educated" themselves about medicine) to control the playing field. It is a poster example of a perverse incentive in direct conflict with the obligation of physicians to provide the best care.

In the end, patients and physicians get screwed.

-- SS