The OIG’s office has released some interesting Medicare Part D claims data on the prescribing patterns of participating pharmacies. All of this data comes from the most recent full calender term such information is available — 2009. Essentially, approximately 4 percent of US pharmacies exceed an acceptable amount of Medicare D payments within this time frame. Questionable billing, oversight, or perhaps deliberate fraud?

Government inspectors used eight measures to review the pharmacies, including average amount billed per beneficiary, average amount billed per prescriber and percentage of prescriptions for painkillers and other controlled substances that have the potential to be abused. In total, 2,637 retail pharmacies were found to have exceeded the threshold that indicated extremely high billing for at least one of the eight measures.

While greater government oversight is always welcome in situations like this, the next great challenges regulators face lie in the interpretation of these Medicare D claims. If long term care delivery is part of the problem (as opposed to deliberately fraudulent billing from questionable means) then targeted solutions to some of these issues surrounding Part D payments can be undertaken before greater problems occur with this method of Medicare privatization on the cusp of reform. | LINK

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With the rise of telemedicine covering most minor medical diagnoses, it is only inevitable that video is following that healthcare marketing path.

NowClinic, which started in 2010 and has expanded into 22 states, is part of the explosion of Web- and telephone-based medical services that experts say are transforming the delivery of primary health care, giving consumers access to inexpensive, round-the-clock care for routine problems — often without having to leave home or work.

Explosion, indeed. And as more insurers and plans sign on to such services with what is now still seen as a niche care delivery “product”, virtual ambulatory/telemedicine will become yet another viable mode of treatment for the busy 21st century patient-as-consumer. Predictably and politically, there are formal responses raised by certain representative primary care associations.

“Getting medical advice over a computer or telephone is appropriate only when patients already know their doctors,” said Glen Stream, president of the American Academy of Family Physicians. “Even for a minor illness, I think people are going to be shortchanged,” he said.

These “concerns” may be somewhat politically expedient, but — newsflash! — telemedicine has existed for much of the past three decades. Its potential as another profitable arm for payers is growing, and it is only a matter of time detractors will ever wonder why they had concerns with something that employers, patients, insurers, and healthcare organizations are quickly embracing as an appropriate care delivery model. | LINK

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Massachusetts state lawmakers have introduced a bill that would link healthcare spending to economic growth. Dubbed the Health Care Quality Improvement and Cost Reduction Act of 2012, the bill, if passed, would tie hospital and provider payments for services to the Gross State Product, less 0.5 percent. The measure is meant to keep spending by certain high-cost institutions in check, requiring taxation if the capped spending mechanism is exceeded.

A tax rate of 10 percent would be levied against hospitals which could not justify spending at a level of 20 percent or lower on the median price for a particular service. Raised funds would be used for indigent care spending. While not a requirement, ACO membership would be encouraged, as the bill would allow greater transparency for healthcare consumers. Greater consumer awareness would lead to greater adoption of coordinated care programs between hospitals and ambulatory primary care delivery systems.

To a leading MIT healthcare economist, Obama adviser, and Mass. universal coverage architect, the plan is described as “broad” and ”visionary”, a complement to rein in higher costs under that state’s universal coverage mechanism. | LINK

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Out yesterday is new data from the medical school application clearinghouse, the AAMC. It shows that the number of students entering the nation’s 137 accredited medical schools will increase nearly 30 percent from 2002 levels by 2016. Apparently this benchmark satisfies a goal set in the mid-2000s by medical schools in response to aging patient populations and the pending 65th birthday of the oldest in the Boomer demographic. All said, over 19,000 first-year students will enter medical school this fall, up from just over 16,000 ten years ago. More physicians means an effective buffer against factors like this and others, such as the looming retirment of many physicians. Good thing, right?

Not so fast. If current trends hold, the numbers of newly-minted MDs and DOs sacrificing primary care demand for higher-paying subspecialties will continue to eclipse any meaningful increase in the talent supply pipeline, bringing the cost of training these future proceduralists with it. This says nothing about the effect instant healthcare consumer coverage and the subsequent need for primary care phsyicians will demand in 2014 upon reform’s start. Indeed, more is not always better.

A recent survey of Medicare beneficiaries conducted by Dartmouth and the Centers for Medicare and Medicaid Services and published last year in Health Affairs found patients living in areas with more physicians per capita perceived no differences in their access to health care than beneficiaries with fewer available physicians. Moreover, there were no differences between the two groups in terms of visits or time spent with their personal physician, the number of tests they received or the number of specialists they saw.

As long as the reimbursement structure tilts toward specialization, there will always be an uphill battle for primary care penetration, to say nothing of care delivery in very rural and underserved urban markets.
Is the answer in revising payment schemes via coordinated care mechanisms, as this article suggests, or is the point-of-care the appropriate place to focus on quality, and by extension, cost containment? It would seem that the latter would take a more protracted course, with results probably more equivocal than certain. All the while, primary care rolls will continue to plateau and fall in comparison. Organizations may be more suited to focus on midlevel providers to compensate, but at what cost to the organization?

For all of these questions, we do have some answers. If you build it, they may come, but at a higher cost. With the potential for burgeoning access to healthcare under reform, cost to provide care — not increasing physician representation in the marketplace — will continue to be the driver that will characterize primary care’s role in medicine under reform, and right now, it’s not looking to rosy.

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Medicare (and Medicaid) fraud seems to be not only occurring with ubiquity, but also appears as a persistent scourge on government spending. It is also the elephant in the room in this entire discussion on healthcare reform. Its absense from the national discourse may say more about the candidates than it does about the problem itself. When the story broke this week on the massive FBI sweep of at least 7 cities across the country involving a price tag of almost half a billion dollars to taxpayers, it was just the latest ho-hum moment in the ongoing saga as to how its spending should be regulated.

Discussions on healthcare reform on the campaign trail from both sides have attempted to address this issue without being entirely “complacent” about its mere existence as somewhat of an afterthought. There could be many reasons for this: in a world of pithy soundbites, Medicare policy is about as interesting as watching grass grow; voters tend to pay attention to healthcare expenses as a personal out-of-pocket issue — subconsciously (or, perhaps consciously) showing little regard to services that are covered unless they have to pay for it; and, perhaps most important, both voters and politicans see this as a necessary evil to be tolerated within the entire scope of heatlhcare delivery.

It is certainly prematurely rosy to think that with each large scale bust on a fraudulent Medicare scheme there will be some major atonement on the provider side that will make the problem more amenable to any perfunctory government intervention; in fact, the potential for fraud could be greater under reform — as more diverse mechanisms for billing and payment will exist in the brave new marketplace of guaranteed coverage in 2014. I do take some solace, however, in the fact that the very public debate on healthcare spending on this country as a perennial election boilerplate is here to stay and is constantly informing the electorate. Perhaps this “knowledge is power” aesthetic will rub off on candidates and lawmakers alike an place a dent into this very serious problem and its constant effect on government spending of healthcare delivery, while reserving equal importance for its sorely needed public discussion.

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Yesterday, one of the legislature’s most powerful bodies — the House Ways and Means Committee — released a report highlighting the potential savings to corporate America if employers dumped coverage or significantly curtailed the cost of coverage to employees as reflected in the provisions of the ACA. Pretty standard stuff, given the GOP partisan leadership of the House, but it is also compelling reading. One has to wonder how much of an impact the collective cold feet of many employers would have on the implementation of reform come 2014.

The white paper brief suggests a savings of over $400B to taxpayers over 10 years if 100 of the largest companies jettisoned employer-based coverage under the ACA. Further, the committee warns that employers simply cannot forego the coverage and pay the penalty — at a collective $400M yearly, or so — as a result of policy non-participation; because the alternative would be higher healthcare costs resulting from pressure from the marketplace to stay competitive with companies which choose to comply with the law. This would spur a government spending spree that would be unsustainable. For the House GOP, a vicious cycle, indeed.

So, will some of this country’s largest employers drop coverage in a couple of years? If you look at RomneyCare (the Massachusetts reform microcosm), you can breathe a sigh of relief. Well, employees can, anyway — as levels of coverage have largely remained the same in that state pre- and post-2006 reform. Companies want to remain competitive, and sound employer-based coverage is a huge part of that ideal. There’s nothing to suggest that exchanges — whose rates of coverage comparisons will vary from state to state — will usurp the longstanding comprehensive benefits many large employers can offer employees.

While congressional surveys like this shed some light on the potential partisan bickering sure to obliterate our collective senses this election season with respect to the reform law, there is no reason to believe, based upon current evidence, that the employer-based coverage landscape will differ by much, at least in the short term.

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It’s May Day and time to ramp up posting after a well-deserved break from things here at Doctor Pundit. Lots going on and much to comment on. As we continue the wait for word from SCOTUS on the fate of the individual mandate provision of the ACA, now seems to be a good time to talk about the latest controversies in a key player in healthcare delivery via insurers on the cusp of reform — the insurer. Is this the shape of things to come? Kaiser has a great piece up in which it reports on the ”diversification” of health plans and potential conflicts that arise within the realm of patient privacy.

Case in point: the purchase of health services and healthcare data entities by the very insurers tasked with being an integral part of delivery under reform.

As insurers eager to add revenue streams convert themselves into diversified health-services companies, they often buy traditional business adversaries, including physician groups and hospital consultants such as [a company called Executive Health Resources]. They’re also buying technology companies and research firms that serve medical-care providers, raising questions not only about independence but about the privacy of patient information.

What’s a health system to do when issues over payment arise, as insurers seem to hold all the cards in the name of diversifying? Insurers are quick to point out that potential conflicts of interest are minimized by carefully disclosing such purchases and relegating them in a compartmentalized manner to insure proper organizational regulation and scrutiny. Still, trepidation by hospitals and health systems exists.

Even so, United’s ambition to diversify has brought complications. This year, one of its newly acquired doctor networks, Monarch HealthCare in California, was accused of acting as a sales force for United’s insurance company, recruiting members from rival plans. Three years ago United agreed to a $350 million payment to doctors and patients and a $50 million deal with the New York attorney general to settle allegations that it rigged a database to underpay doctors.

Seems like it’s time for systems and insurers re-evaluate fiscal relationships to ensure not only payee/payer satisfaction, but also market PR and, of course, the need for what appears to be a management space ripe for the opinions of consultants. | LINK

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Out this week in the NEJM is a study whose results seem to question what role Medicare has in aligning hospitals’ quality with the philosophy of the reform law. That study looked at the prevention of death from all causes based upon pay-for-performance metrics aimed at quality adherence. Participating hospitals in the six-year demo project showed virtually no difference in mortality stats when compared to non-participating hospitals.

The hospital system taking part in the project/study is quick to say that — based upon processes — quality performance measures were upheld and improved upon. But the NEJM study focused on clinical outcomes. For its part, CMS is noting that process improvements are a vestige from policies crafted during the Bush administration and that it is now focusing on an “agressive push” to tie quality to clinical outcomes, with an obvious emphasis in cost-savings — essentially making hospital payments equivalent to “quality” patient outcomes.

Although hospital processes are important, the major goal with reform on the horizon is in redefining “quality” in terms of how those processes translate into purely clinical improvements in overall patient care. With payments to physicians and other healthcare providers of ambulatory delivery constantly on the legislative radar, payments to hospitals are now just beginning to be scrutinized and considered closely during this time of uncertainty of the fate of the reform law. CMS must temper its P4P expectations with respect to hopsitals in the wake of such equivocal data from this study — while noting the potential payment incentivization has in improving patient outcomes.

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After two days of deliberations before the Supreme Court, the national discourse on the wrangling of the ACA’s most salient political ramifications shifts into heavy duty poltical mode. The obvious question is what effect a ruling — either for or against the indiviual mandate — has on President Obama’s re-election chances. The Dems have come out swinging heavily on this issue.

If the mandate is struck down (but the rest of the law is intact) in June, the party argues that the vast majority of Obama’s signature domestic issue is intact, with early adoption of some key initiatives already underway. Since less than an estimated 5 percent of the population would be affected, spin among the Democrats indicates that the overall promise of increased access and lower costs will be the desired result in the long run, regardless of the existence of the mandate provision.

Democrats would also have one less contentious wedge to worry about should the provision be struck down. Without the visceral nature of this bit of legislation to rally around, the GOP base — Democrats argue — would be less energized in a GOTV sense, leaving Democratic voters to be more influenced by the sudden “tyranny of the SCOTUS” with regard to such an emotionally charged issue and giving the party another reason to rally around its increasingly popular incumbent.

Finally, although the option the mandate was supposed to supplant — the single payer strategy — would be hard pressed to find its way back into the political process as a viable option; the former’s absence would open up, once again, a national discussion on how to best pay for increased access to healthcare. Revisiting Medicare/Medicaid policies would be a likely result. Without a media-driven, galvanizing, emotion-baiting wedge buzzphrase feeding the voracious appetite of a willing electorate detracting from the real issues surrounding the broken financing of healthcare delivery in this country, the scope of thought will once again be determined by level-headed minds – a state I am having a difficult time recalling.

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Although the subject matter today — the final day of deliberations before the SCOTUS regarding the ACA’s constitutionality — is not as sexy as yesterday’s fiery individual mandate arguments, the overall tone will be just as intense. The expansion of Medicaid to include more than 15 million to its rolls as part of reform takes center stage. The pall cast by yesterday’s perceived negativity toward the reform law’s most contentious provision looms large today, as well.

At stake in today’s proceedings is the issue as to whether states have sovereign rights over and above the government’s insistence that they participate in the program’s expansion within reform. Under the ACA, 100 percent of non-elderly, non-disabled, newly qualified beneficiaries whose incomes fall below the approx. 130 percent of the poverty line cutoff will recieve coverage. Opponents of the ACA in its current form argue that this expansion of fed-state matching healthcare funds as a condition of states’ willingness to participate (even though they could opt-out, but would surrender Medicaid funds) is an overreach of legislative powers with respect to spending. SCOTUS will decide if this condition upon particiaption amounts to coercion.

There is also the issue of “severability” — whether the law is able to function if the key mandate provision is struck down. This pesky little matter is what many watchers consider to be the next most important issue as to the justification of the entirety of the extant law — and one about which politicos will use as a wedge no matter what the decision on the feasability of the ACA is come June. In my opinion, another robust day of arguments on the docket … even more compelling than yesterday.

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