Tag Archives: Hospital Charges

Interesting Article on PPO’s

Forbes.com has published an extensive article claiming that PPO’s have perpetrated a great heist [author’s words] on the American middle class.

According to the article,  trillions has been redistributed from the American workforce to the healthcare industry, creating an economic depression for the middle class.

The article consists of an interview conducted by author Dave Chase and Mike Dendy, Vice Chairman and CEO of Advanced Medical Pricing Solutions, Inc., a healthcare cost management company.

Here is the link to the full article:

http://www.forbes.com/sites/davechase/2016/09/05/have-ppo-networks-perpetrated-the-greatest-heist-in-american-history/#25489cd66d00

Is it any wonder why work comp is also so screwed up? Too many cooks (or is that crooks?) taking their “cut” out of the middle class.

But we keep insisting that we have the best health care system in the world, that our workers get the best care when they are injured and don’t need to have any alternatives explored to improve the care and treatment they get, and that the free market is the best way to provide health care. It’s free alright. Free for the greedy to become more greedy. But not for you and me.

Large Variations in Payments for Hospital Outpatient Care to Injured Workers

Back in April of this year, I wrote about a study by the Workers’ Compensation Research Institute (WCRI) in which it was found that fee schedules may increase the number of workers’ comp claims.

Today, the WCRI released a new study that said that “hospital outpatient payments per surgical episode varied significantly across states, ranging from 69 percent below the study-state median in New York to 142 percent above the study-state median in Alabama in 2014,” according to Dr. Olesya Fomenko, co-author of the study and economist at WCRI, and who also is mentioned in my previous post.

The report also stated that “variation in the difference between average workers’ compensation payments and Medicare rates for a common group of procedures across states was even greater—reaching as low as 27 percent (or $631) below Medicare in New York and as much as 430 percent (or $8,244) above Medicare in Louisiana.”

Here are the major findings:

  • States with no workers’ compensation fee schedules for hospital outpatient reimbursement had higher hospital outpatient payments per episode compared with states with fixed-amount fee schedules—63 to 150 percent higher than the median of the study states with fixed-amount fee schedules. Also, in non-fee schedule states, workers’ compensation paid between $4,262 (or 166 percent) and $8,107 (or 378 percent) more than Medicare for similar hospital outpatient services.
  • States with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules—32 to 211 percent higher than the median of the study states with fixed-amount fee schedules. Similar to non-fee schedule states, workers’ compensation payments in states with percent-of-change based fee regulations for common surgical procedures were at least $3,792 (or 190 percent) and as much as $8,244 (or 430 percent) higher than Medicare hospital outpatient rates.
  • Most states with fixed-amount fee schedules and states with cost-to-charge ratio fee regulations had relatively lower payments per episode among the study states. In particular, for states with fixed-amount fee schedules, the difference between workers’ compensation payments and Medicare rates ranged between negative 27 percent (or -$631) and 144 percent (or $2,916).

Still think that workers’ comp is doing okay? Still think that keeping the status quo is the best option for injured workers? Still think that thinking outside the box, and considering alternatives to the ever increasing cost of medical care for workers’ comp is stupid, ridiculous and a non-starter?

Or do you believe, as Joe Paduda wrote about today in his blog, that workers’ comp is no longer needed for 90% of America’s employees, as the workplace has become safer than the non-occ environment.

The idea brought forth, and as Joe said, it is an intriguing, but wrong one, is that the medical care can be provided under health insurance, and the disability coverage can be added to long-term or short-term disability insurance.

Whichever way you look at the issue, workers’ comp is not going away, but it is getting more expensive to pay for medical care. The problem here is, too many Americans are slavishly wedded to outmoded ways of thinking, outmoded economic policies and models, as well as an outmoded economic ideology, to think rationally and seriously about alternatives.

Lastly, there are too many cooks (or should that be crooks) with their hands in the pot who have a vested interest in keeping things the way they are. If that is so, then the WCRI is only telling us what we should already know…injured workers are screwed and so are the carriers and employers. As long as outside interests have a hand in the system, and those who profit from higher costs block real change, this situation will only get worse.

I am sure glad it is not my money being wasted like this.

As always, to purchase the study click this link:

http://www.wcrinet.org/studies/public/books/hci_5_book.html

 

Final Rule for Bundled Hip and Knee Replacements Published

Four months ago today, I wrote a piece called, “CMS to Require Bundling of Reimbursements for Hip and Knee Surgery”, that said the Centers for Medicare & Medicaid Services (CMS) will require the bundling of reimbursements for hip and knee surgeries.

Today, Health Affairs blog published an article reporting that CMS has recently published the final rule for the Comprehensive Care for Joint Replacement (CJR) model, which is a mandatory bundled payment model for lower extremity joint replacement (LEJR) services in certain geographic areas.

The article, by Patrick H. Conway, Rahul Rajkuma, Amy Bassano, Matthew Press, Claire Schreiber and Gabriel Scott, said that hip and knee replacements are the most common inpatient surgery procedures for Medicare beneficiaries, and can require long recovery and rehab periods.

The authors said that in 2014, more than 400,000 beneficiaries received hip or knee replacement, which cost more than $7 billion just for hospitalization.

They also reported that the quality and cost of care for these surgeries varied significantly by region and by hospital, and was true for both the care received in the hospital and for post-acute care outside.

The variation, they said, is due to the way Medicare pays for this care today, spread among multiple providers, with no single entity accountable for the total patient experience.

Care can be fragmented, they wrote, which leads to adverse outcomes.

Here are the key takeaways from the final rule:

  • the CJR model seeks to incentivize Medicare providers and suppliers to work together to improve the quality and reduce the costs of care for patients undergoing lower extremity joint replacement
  • the acute hospital where the procedure occurs will be accountable for aggregate Medicare expenditures and the overall quality of related care
  • the model will include participant hospitals located in 67 Metropolitan Statistical Areas (MSAs) throughout the country
  • acute hospitals paid under the Inpatient Prospective Payment System (IPPS) and located in the selected MSAs will be included in the model, with the exception of hospitals currently participating in Model 1 or Models 2 or 4 of the Bundled Payments for Care Improvement (BPCI) initiative
  • depending on the hospital’s quality and aggregate spending performance, the hospital may receive an additional payment from Medicare, or need to repay Medicare in the second year if spending exceeds targets
  • hospitals will need to work with physicians and post-acute care providers, such as home health agencies and skilled nursing facilities, to ensure patients get the care they need

This is in contrast to what I reported on in July, when I said that a former CMS official was cited in the Freeman article as saying that mandatory bundled payments for hip and knee surgeries would shutter one in four skilled nursing facilities and trigger “demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions.”

Whether or not this final rule will do what the authors of the Health Affairs article says it will do remains to be seen, but judging by past CMS programs to affect quality and costs, this may be wishful thinking on the part of the authors.

The insistence that one more new initiative, or more incentives, or one more new model or new rule will change the way health care is being provided in the US, just goes to show that until we adopt a single-payer, “Medicare for All” system with less rules and less incentives, some people will continue to game the system, then we will see a radical change in the American health care system.

And if workers’ compensation follows changes in health care under Medicare, especially how it determines reimbursements for hip and knee surgeries, which are also common to workers’ comp, we can expect to see issues in workers’ comp.

Alternatives must be considered to an ever expensive and poor quality of health care for workers’ comp. That alternative is medical travel.

A Hospital Bill We Can All Appreciate

Recently, a friend of mine received a hospital bill from a hospital they stayed at in Spain after suffering a life-threatening condition that kept her in the country longer than she expected.

The bill for her DVT/PE included a Chest x-ray, CT of the lungs and 2 nights of observation. The total in Euros was 1475.61. In US dollars, that translates to $1,641.02.

One reason given by a commentator on LinkedIn was that “the hospital (v. the US) is that they’re only billing you for incremental cost — there’s no capital expenditure or labor costs they need to recapture as that comes from other budgets. So, instead of your fractional share of billing, doctor’s salaries, etc., they’re just trying to keep the budget whole from the fact that you were there v. the bed being empty.”

But we know that hospitals are run like businesses, and many of them are owned by businesses, so they try to squeeze every last drop of profit out of the patient, or their insurance company.

Spain is not the only country that has lower cost medical, but travelling there for care is not yet practical until we can fly on suborbital commercial planes.

But there are places closer to home that will be much lower in cost, and not just for emergency care. But like the three monkees, we Americans are deaf, dumb and blind to reality, and unwilling to see that we are not No. 1.

Turbulence Ahead for Workers’ Comp Market

There may be turbulence ahead for the workers’ comp market, according to an article today on PropertyCasulty360.

The article, by Nancy Grover, says that the market can be characterized as stable, but that there are changes in the nation’s workforce, as well as technological advances, that threaten the balance of the industry. (see “Workers’ Comp Besieged: Independent Views of the Problems Workers’ Comp is Facing” and “Workers’ Comp at a Crossroads: Where Does it Go from Here?“)

Grover states that the industry’s financial outlook is positive, but that the NCCI State of the Line report earlier this year, warned that there was “calm now, but turbulence ahead”.

I will have more to say on the challenges facing workers’ compensation when I publish my second presentation slides that I may present in Mexico this December.

Among some of the challenges, Grover reports the industry is facing are increased medical costs (I have written extensively about this as well), threats to their security systems, and the changing nature of the workforce (another issue I have mentioned before, especially with regard to immigration and medical travel in the Western hemisphere).

According to one industry source she cites, medical costs are the number one cost driver (see “Lost-Time Medical Costs Approaching $30K: When Will You See the Light?“).

NCCI found that the average medical cost per lost time claim grew by 4% in 2014, which was an increase from the previous three years, where the average medical cost rose between 2 – 3%, Grover said.

Drug prices are also a cost driver, according to Joe Paduda (see “Drug Costs Make Up Bulk of Work Comp Medical Costs [Infographic]“).

“The other thing happening is facility costs for hospitals and healthcare systems are going up at or near double-digit rates for many payers and not many are paying attention”, according to Joe.(see “Outpatient Facility Costs Rising Could Benefit Medical Tourism Industry“)

There are also market threats, Grover writes, such as the “on demand” economy with companies like Uber. Lyft and others raising questions for workers’ comp industry personnel.

Unfortunately, Grover does not offer alternative solutions other than those that are being tried, and have been tried, with little or no success.

One such “solution” is medical provider networks, to closely contain costs by managing care for injured workers, but as she points out, they have not proven effective among all states.

Here is what  some in the industry really looks like to this reporter:

hear-no-evil-see-no-evil-speak-no-evil

They keep saying and doing the same things over and over again, and costs continue to rise, challenges are rushing headlong towards them, opt-out expansion threatens to destroy workers’ comp altogether, but they are deaf, dumb and blind to reality and to alternatives. One wonders if they really are like these three. They just act upon instinct and don’t have a grasp of the changes around them outside of their little space.

Oh well, evolution works in strange ways, so there is hope.

Rick Scott is a Crook

rick_scott

Kaiser Health News reported yesterday on a study in Health Affairs that some US hospitals charge patients more than 10 times the rates paid by Medicare.

Of the 50 U.S. hospitals with the highest charges, 49 are for-profit institutions, and 20 operate in Florida, and half are owned by a single chain, the study reported.

Yet, not all patients end up paying those charges says Jenny Gold, of Kaiser Health News.

Private insurers, she said, are able to negotiate the sticker price down significantly, and patients paying out of pocket can often negotiate discounts or get charity care if they are low-income.

However, the average U.S. hospital charges a somewhat less staggering sum: 3.4 times the rates paid by Medicare, according to Gold.

But the crux of the article has to do with the hospital chain that owns half of the 20 highest charging hospitals in the country.

That chain is Community Health Systems, a for-profit chain with 199 hospitals. In 2014, the company made $18 billion in profits, 45 percent more than in 2013.

Florida most likely had the most high-charging hospitals because it has an exceptionally high proportion of for-profit hospitals, according to consumer advocates, and North Okaloosa Medical Center, a CHA hospital in the Florida panhandle, was mentioned as having the highest charges of all: 12.6 times Medicare’s rate.

The highest charging hospitals, Gold wrote, besides Florida, were in 13 states, mostly in the South: Alabama, Arkansas, Arizona, California, Kentucky, New Jersey, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia.

So when you hear that Florida Governor Rick Scott is suing the federal government to get billions for Florida’s hospitals because he won’t expand Medicaid, you have to wonder if he’s not doing so because he wants to funnel that money to for-profit chains like Community Health Systems.

After all, he did steal millions from the government once before and got away with it. Why should now be any different?

When will people realize our health care system is a scam. I am seeing this in the articles I am reading, the articles I am writing, and in my personal life, but too many of you out there are convinced this is the right way to handle health care. It isn’t.

As I wrote in the following two posts, “We’re No. 1!”, NOT! — Why the US Health Care System is Not the Best in the World and Why Implementing Medical Tourism into Workers’ Comp Could Improve Outcomes, and in, “We’re Not No. 1!” We’re No. 11, we are fooling ourselves when we say we have the best health care in the world. We have the most expensive health care, and health care should not be expensive.

But we continue to bury our heads in the sand and allow men like Rick Scott and others to skim off the top, all the while elderly parents go without the medical care they need and the home care they need, younger people are forced onto sub-standard plans because there are no employers nearby who will hire them and put them on their company plans, or they are ineligible to apply for the exchanges because of politics or IRS rules, as well as many other reasons why other Americans are not completely covered, and are left out of the system altogether.

The real reason behind this mess is simple: profit and greed. The system is built for and on top of, the generation of profit and the process of greed.

Mother Jones magazine also discussed this issue yesterday. Here is the link to its article: http://www.motherjones.com/kevin-drum/2015/06/here-are-americas-top-50-health-care-thugs

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

What part of ‘You’re being ripped off’ do you not understand?

Arbitrary-Hospital-Fees

The issue of what hospitals charge and how much doctors are paid, and what Medicare pays for, has import to the workers’ comp industry, as an article in Workers’ Comp Insider.com stated today, and in Modern Healthcare.com

According to Workers’ Comp Insider, the inpatient data released earlier this month by CMS, shows Medicare paid about $62 billion to cover more than 7 million discharges.

Bob Herman of Modern Healthcare said the following about hospital charges:

Hospitals have been under intense scrutiny for their billing practices, often triggered by extremely high charges—or sticker prices—for common procedures. Consumer groups and patient advocates argue hospital pricing is shrouded in secrecy, which has put patients on the hook for costly bills. But hospitals have said the listed charges are irrelevant because they only serve as a starting point for negotiations with insurers and that patients rarely, if ever, pay those prices.

Herman goes on to say that:

…Philadelphia, Los Angeles and Newark, N.J., had the largest gulfs in charges between the top and bottom hospitals. For example, in Philadelphia, the average difference in average hospital charges across all procedures was $123,847. In Los Angeles—an area rife with academic medical centers such as Cedars-Sinai Medical Center—the average difference between the highest-charging hospital and the lowest-charging hospital was about $112,000.

Physician data encompasses 950,000 physicians, nurse practitioners and other providers and $90 billion of Medicare funds, according to Herman, and spending on hospitals and physician services makes up a majority of U.S. healthcare expenses.

The Modern Healthcare article also listed the top ten Diagnostic Related Groups (DRG’s) by total payments to hospitals, and the number one DRG was DRG 470, Major Joint Replacement without major complications/comorbidities, with 446,148 discharges and $7 billion in payments.

So here’s the bottom-line:

If you think that you can negotiate your way out of paying through the nose, if you think that opt-out is going to be the savior to your bottom-line that its promoters promise it to be, and if you think that getting better medical care is possible in your local hospital, then by all means, continue to delude yourself, because that is what you are doing.

But if you see through all of the hype about opt-out, and see it for what it really is, an ideological tool that employers will wield against workers, and if you are tired of paying hospitals outrageous charges and paying for physicians to pad their bank accounts, then you need to consider an alternative to high-cost, average quality medical care, and consider medical travel.

It will save you money, and provide your employees with a better outcome and a better outlook on the job.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.