Category: Daily News

Prices hospitals charge for their services will all go online Jan. 1 under a new federal requirement, but patient advocates say the realities of medical-industry pricing will make it difficult for consumers to get much out of the new data.

A new federal rule requires all hospitals to post online a master list of prices for the services they provide so consumers can review them starting Jan. 1.

The health care industry nationally has a reputation for having little price transparency, which can make it difficult for consumers to price compare. But the hospital’s master list prices, sometimes called a chargemaster, is also not a complete look, consumer advocates say.

That’s because the final bill a patient receives is almost never the same as the sticker price for the services they received. Insurance companies negotiate discounts on the sticker prices. Co-pays, co-insurance, deductibles also add other layers of complexity that bring discounts or increased costs before a final charge is determined.

“The list prices are so high that the vast majority of hospitals don’t even try to collect list prices from uninsured patients,” said Benedic Ippolito, with the American Enterprise Institute, who has researched hospital list prices.

The federal rule is being brought out as a measure to improve competition and help educate consumers.

“We are just beginning on price transparency,” Seema Verma, head of U.S. Centers for Medicare & Medicaid told the Associated Press. “We know that hospitals have this information and we’re asking them to post what they have online.”

But real transparency comes when consumers can easily see what they will pay to a provider based on their insurance benefits, said Thomas Campanella, Baldwin Wallace University health care MBA program director. He said some insurance companies are providing that information through price comparison tools. “I almost see it being more of a political ‘look at what we did,’” Campanella said of the requirement to post list prices.

A benefit of having health insurance is that the insurance companies negotiate with hospitals on a discount from what is listed on the chargemaster. If a hospital is “in network” it means the insurer and hospital have an agreement on discounted rates and the insurance company typically covers a higher portion of those prices. If a patient goes to a medical provider that is out-of-network, they could be billed the difference between what the chargemaster lists as the price and what their insurance writes a check for. The practice is called balance billing or sometimes called “surprise billing.”

Miranda Creviston Motter, president and CEO of Ohio Association of Health Plans, which represents insurance companies, said as health care costs continue to rise, provider cost information is important and the association supports federal policies requiring providers to provide easy to understand cost information directly to health care consumers.

“This information supplements the cost information health plans currently offer their members. ,” she said in a statement.

Price comparison tools are becoming increasingly available through insurance companies, but they have limits in usefulness. Not all health care costs can be shopped for ahead of time, such as emergency visits, and consumers can prioritize other things besides cost, such as a doctor they trust or a hospital close to home. Only a small number of employees at two large companies with a price transparency tool used the tool and it was not associated with lower health care spending, according to 2016 study in the Journal of the American Medical Association.

Scott McGohan, CEO of McGohan Brabender, a benefits broker, said while many of the major insurance carriers have price shopping tools, it’s not always easy to know enough about medicine to know how to price shop.

Patients undergoing surgery don’t often receive practical advice about what to do and what to expect during the recovery process, says a surgeon who has been on the giving and receiving end of post-op instructions.

These directions need a more commonsense approach to rest, diet and pain, Dr. J. David Richardson of the University of Louisville School of Medicine in Kentucky writes in the Journal of the American College of Surgeons.

“We give patients these catchphrases about how they’ll feel better, but that’s not always true,” Richardson told Reuters Health.

“For a long time, surgeons have been happy with surgical outcomes as long as a big issue didn’t come up, such as an infection,” he said in a phone interview. “Patients are concerned about the small aspects of recovery, and we should be attuned to that.”

One of the most important tenets of recovery, he writes in his commentary, is that it’s not a progressive linear process. The advice that ‘You will feel better every day’ is not true, for example, and it often makes patients uneasy when they don’t recover as they believe they should.

Instead, patients tend to have a ‘stuttering progression to wellness,‘ Richardson writes, which means three steps forward and two steps back. When patients are aware of this, they’re less apprehensive and less discouraged when they have a “bad day.” Rather than measuring progress daily, he advises tracking progress from one Friday to the next.

‘Some days just don’t go that well, which is the way the body functions,’ he told Reuters Health. ‘Patients need to know that what they’re going through is normal.’

Richardson also disagrees with the advice to recovering patients about activities, “You can do what you feel like doing.” Although it sounds practical, this often backfires or discourages patients as they go through the healing process. Some feel great after waking up but then have fatigue or adverse reactions later in the day. Those who try to drive, shop or return to work too quickly may “hit a wall,” he notes.

The body needs a physical recovery as much as a mental recovery, he notes, so he often tells patients to be cautious about performing mental tasks after a significant operation. Avoid “trying to work in a fog” or making important decisions in early post-operative stages, Richardson said.

Diet is another aspect that is often misrepresented, and the advice to “Eat what you feel like eating” can be too vague. Instead, a slower progression to a full normal diet could prevent nausea, vomiting, bloating, constipation and other gastrointestinal issues that occur during the early recovery phase. This is particularly true when patients are taking new pain medications, Richardson added.

On a related note, pain management can also be misleading, he said. The opioid crisis speaks to the dangers of over-prescribing pain drugs, and points to the fact that pain is an individual response. Some patients require fewer doses, and others need heavy doses, but prescriptions are often given “by the book” where one size fits all. A more nuanced, individualized approach would help, taking into account previous pain medication use, psychotropic medication use and previous operation recovery experience.

Robert L. Hamilton was working as a letter carrier for the United States Postal Service when he was injured on the job on November 28, 2014, due to slipping and falling while delivering packages. On January 13, 2015, Hamilton began receiving wage replacement based on his claim of temporary total disability

After a co-worker saw Hamilton at a casino in March 2015, a federal agent was assigned to conduct surveillance of Hamilton. The surveillance revealed that Hamilton was able to perform certain physical acts that he told his doctor were impossible. Specifically, the doctor was shown surveillance videos of Hamilton and concluded that Hamilton had exaggerated or misrepresented some aspects of his medical condition.

After Hamilton became aware that he was being investigated, he returned to work on August 26, 2015, and then retired on September 1, 2015. Thus, Hamilton received wage replacement compensation from the Department of Labor pursuant to FECA from January 13 to August 25, 2015.

The District Attorney in San Diego County filed a criminal complaint against Hamilton on April 13, 2016, which charged Hamilton with eight counts of violating Insurance Code section 1871.4, subdivision (a)(1)

A jury convicted him on three counts of making a false or fraudulent statement for the purpose of obtaining compensation under the California workers’ compensation law in violation of Insurance Code section 1871.4, subdivision (a)(1).

The trial court placed Hamilton on formal probation for a period of three years and ordered that he serve 180 days in custody, with the intention that Hamilton serve the term of custody in home detention with electronic monitoring, if he was eligible. Among other things, the trial court also ordered that Hamilton pay $11,972 in victim restitution to the United States Department of Labor.

Hamilton appealed claiming that Insurance Code section 1871.4, subdivision (a)(1) applies only to false or fraudulent statements made for the purpose of obtaining compensation afforded under the California workers’ compensation law, which was not applicable to him as a federal employee. The Court of Appeal agreed, and reversed the conviction and dismissed the case in the published decision of People v Hamilton.

The Insurance Code makes it a crime to “[m]ake or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.” Labor Code section 3207 defines compensation as “compensation under this division…” The division of the Labor Code referred to in section 3207 is Division 4 of the Labor Code, which covers California workers’ compensation laws, and is titled “Workers’ Compensation and Insurance.”

The provisions in Division 4 of the Labor Code, when read together, make clear that its provisions do not cover a federal employee of the United States Postal Service.

The Agriculture Improvement Act of 2018 was signed into law this week. Among other things, this new law changes certain federal authorities relating to the production and marketing of hemp, defined as cannabis (Cannabis sativa L.). These changes include removing hemp from the Controlled Substances Act, which means that it will no longer be an illegal substance under federal law.

Hemp is a type of cannabis plant with no or extremely low concentrations of the psychoactive compound known as THC, the ingredient in marijuana associated with “high” feelings. The Farm Bill removed hemp from the Controlled Substances Act, allowing for its commercial production in the United States, as long as those plants contain no more than 0.3 percent of THC.

Congress explicitly preserved the FDAs current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates.

This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.

To help members of the public understand how the FDA’s requirements apply to these products, the FDA has maintained a webpage with answers to frequently asked questions, which we intend to update moving forward to address questions regarding the Agriculture Improvement Act and regulation of these products generally.

In view of the proliferation of products containing cannabis or cannabis-derived substances, the FDA will advance new steps to better define its public health obligations in this area. It will also continue to closely scrutinize products that could pose risks to consumers. Where we believe consumers are being put at risk, the FDA will warn consumers and take enforcement actions.

While products containing cannabis and cannabis-derived compounds remain subject to the FDA’s authorities and requirements, there are pathways available for those who seek to lawfully introduce these products into interstate commerce. The FDA will continue to take steps to make the pathways for the lawful marketing of these products more efficient.

These pathways include ways for companies to seek approval from the FDA to market with therapeutic claims a human or animal drug that is derived from cannabis.

The FDA intends to hold a public meeting in the near future for stakeholders to share their experiences and challenges with these products, including information and views related to the safety of such products.

A number of small companies are already selling CBD in oils, beverages, topical creams and other products, and in some instances shipping them across state lines. The market for CBD derived from hemp could reach $22 billion by 2022, according to a report issued earlier this year by the cannabis industry analysis firm the Brightfield Group, which assumed passage of the farm bill in its forecast.

Coca-Cola Co in September became one of the largest U.S. companies to express interest in CBD, saying in a statement that it was “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.”

The California Insurance Commissioner issued a Decision and Order imposing a $4,345,000 penalty on American Labor Alliance and CompOne USA for selling workers’ compensation and liability policies to employers of farmworkers without being properly licensed with the Department of Insurance.

Central Valley based American Labor Alliance attracted customers by marketing low workers’ compensation premium rates. It had contracted with fewer than 100 employers and had a small membership roll before 2016, but its membership surged after it introduced its workers’ comp benefit, according to documents from the department. It had more than 400 employers with 30,000 members as of February 2017. “Two-thirds of those employees are seasonal agricultural workers employed by roughly 50 farm labor contractors,” according to documents from the department.

American Labor Alliance and CompOne USA are subsidiaries of Agricultural Contracting Services Association, which is a Nevada not-for-profit corporation headquartered in Clovis, Calif., according to documents from the Department of Insurance. It characterizes itself as a “union labor organization” operating in California, New York and Georgia. Neither Agricultural Contracting Services Association nor any of its subsidiaries is licensed by the California Department of Insurance.

Despite a Cease and Desist Order issued by the Department of Insurance in October 2016 against the Agricultural Contracting Services Association, Incorporated and its affiliates, the American Labor Alliance and CompOne USA, and Board Chair Marcus Asay, and a Decision and Order issued by Commissioner Jones in November 2017 ordering them to refrain from selling insurance policies in California, the company continued to transact insurance without a license.

The new Decision and Order imposes the $4.3 million penalty that represents $5,000 for each of the 869 days that the companies sold workers’ compensation insurance without a license.

Pursuant to California Insurance Code section 12921.8, the Commissioner may also impose a monetary penalty which shall be the greater of five times the amount of money received by the company for which the license was required, or five thousand dollars ($5,000) for each day the company transacted insurance without a license.

FBI agents on behalf of the U.S. Department of Labor served warrants for workplace injury benefit program records in July 2017 at the headquarters office of American Labor Alliance.

Employers transacting business with Agricultural Contracting Services Association, Inc., American Labor Alliance, or affiliate CompOne USA, should contact the Department of Insurance Investigation Division at 661-253-7500 for assistance in determining the validity of their workers’ compensation coverage.