Tag: 2016 News

The Oregon Department of Consumer and Business Services (DCBS) announced the results of its bi-annual nationwide study of the costs of workers’ compensation programs for 2016. The study findings are generally released in the fall of each even-numbered year, in summary form. A full report, including detailed data and notes on methodology, is released several months later. Oregon has been doing these studies in even-numbered years since 1986.

DCBS surveys insurance regulators and workers’ compensation rating bureaus in each of the 50 states plus Washington, D.C., for rate information, as of Jan. 1 of the study year.

The study is based on methods that put states’ workers’ compensation rates on a comparable basis, using a constant set of risk classifications for each state. This study used classification codes from the National Council on Compensation Insurance (NCCI). Of approximately 450 active classes in Oregon, 50 were selected based on relative importance as measured by share of losses in Oregon. To control for differences in industry distributions, each state’s rates were weighted by 2010-2012 Oregon payroll to obtain an average manual rate for that state. Listed in Table 1 of the study are Oregon’s rankings in the top 10 (by payroll) of the 50 classifications used.

According to the study, California once again is the worst state in the union in terms of costs. It ranks at 176% of the study median. It is a good distance away from the second highest state, New Jersey, which ranks 158% of the study median. Rounding off the worst five, third worst is New York at 154%, Connecticut is the fourth worst at at 149%, and fifth is Alaska also at 149%.

On the other end of the spectrum, North Dakota was the lowest cost at 48% of the study median, followed by Indiana at 57%, Arkansas at 58%, West Virginia at 66%, and Virginia at 67% of the study median.

Workers Compensation costs are not the only indicator of concern. California also has the distinction of being the absolute worst in other areas of importance to business.

Between 2008 and 2015 at least 9,000 companies have left California for a better business environment, according to the 378 page study by Spectrum Location Solutions titled, California’s Forty Year Legacy of Hostility to Business.

Joseph Vranich, president of site selection consultants Spectrum Location Solutions (VLS) in Irvine, places the blame on the Golden State’s “hostile” business environment.

The 2015 Chief Executive Magazine annual survey of business climates was completed by 511 CEOs across the U.S.  States were measured across three key categories to achieve their overall ranking: Taxes and regulations, quality of the workforce, and living environment, which includes such considerations as quality of education, cost of living, affordable housing, social amenities and crime rates.

For the 11th year in a row, Chief Executive Magazine found California to be the “worst state for business in 2015.” This placement is not “near the worst” but actually “THE WORST” ranked as 50 out of 50, the lowest rank possible for each of 11 years. CEO’s comments include: “California could hardly do more to discourage business if that was the goal.” “The state regulates and taxes companies unreasonably.” “California is getting worse, if that is even possible.”

Well, yes that is possible. Yet another national study continues to place California at the absolute bottom in the eyes of business officials.

An oncologist in suburban Detroit ordered “lifetime” chemotherapy, with all its adverse effects, for patients whose cancer was in remission. He ordered it for patients on their deathbed with stage IV cancer. And perhaps worst of all, Dr Fata ordered chemotherapy for patients who never had cancer but believed that they did because of his fabricated diagnoses. Now serving a 45-year prison sentence for fraud, Dr Fata was taken down by a team of Department of Justice (DOJ) prosecutors who included Gejaa Gobena.

Besides personally tackling cases such as Dr Fata’s, Gobena headed the healthcare fraud unit in the DOJ’s criminal division overseeing the prosecution of close to 1000 individuals across the country. Bringing Medicare fraudsters to justice earned Gobena a number of honors, including the Award for Excellence from the Office of Inspector General in the Department of Health and Human Services.

He was interviewed about his work. Medscape just published an article about what he said. “Medicare’s under full assault by fraudsters,” Gobena told Medscape Medical News in the recent interview.

Medscape asked Gobena how and why a tiny minority of physicians are breaking bad, whether it’s cheating Medicare or writing painkiller prescriptions every 10 minutes at an outlaw pill mill. Here are his answers.

Gobena said that the most common factor is financial difficulty. Sometimes it intersects with another factor, which is age. Because you have a doctor in a tough financial situation towards the end of their career, participating in these schemes gives them a way to make some money very quickly. Oftentimes it is personal bankruptcy, or someone who’s been married a couple times, got divorced, has various alimony or child support obligations.

What about medical specialties? Do some types of physicians show up disproportionally in fraud schemes?

Gobena said there were not a ton of specialists that he saw. It’s usually the opposite. He saw a lot of internists billing for tests and services that didn’t make sense and probably should have been billed by specialists in the first place. A  primary care physician suddenly billing for an unusually high percentage of, let’s say, nerve conduction tests. Very expensive, and usually done by neurologists.

Medscape asked about opioid pill mills. “In some cases, you’d have physicians working for nonphysicians. How widespread is that?”

Gobena said it was definitely common in a lot of the schemes that he personally prosecuted or oversaw. It’s a reflection of the fact that until the last few years, the vetting of people who could open a clinic, open a home health agency, was not as strong as it could have been. CMS in the last few years has really stepped up its efforts to screen potential providers. CMS now does criminal background checks. When he first started prosecuting cases, what he saw was people running multiple clinics with no medical background.

One other thing that CMS is doing. In certain regions, they’re putting “freezes” on the ability to open up certain types of services. There has been a freeze in Houston on ambulance companies for a while. There is rampant ambulance fraud down there. So they’re freezing the number of ambulance companies that can be signed up as Medicare providers. Home health, as well, in Houston, South Florida, and Detroit.

In Michigan, it was very easy to open a home health agency if you’re a fraudster. Home health agencies were popping up all over the place, and statistically, it didn’t even make sense when you looked at the population.

Medscape asked about physicians who work for criminals especially where physicians were recruited into pill mills and did the bidding of people who had gangster nicknames and guns. The physicians were pressured, and sometimes bullied, to keep up a certain level of prescribing and not make waves. “That astounded me.”

Gobena said that there are instances where doctors get into a scheme and then can’t get out. They may not want to prescribe the amount of OxyContin or fentanyl that they’re prescribing. It’s often difficult to get out when the owner of the place is a hardened criminal. But I can’t think of any instance when, at least initially, the doctor didn’t voluntarily agree to be part of the scheme.

Many criminal practices employ patient recruiters who offer people fast food, cash, or some other kind of benefit to visit the office and receive services. An example based on a case he prosecuted 5 or 6 years ago, was a general-practice clinic that came onto his radar because they billed nerve conduction studies for 75% or 80% of patients, an outrageously high percentage given that a typical neurologist will perform these on 30% to 40%.

There were doctors who were signing off on the tests. In addition, there was the owner who hired patient recruiters who would go into the poorer parts of Detroit. They would recruit in low-income housing and soup kitchens, offering $50 to $100 to anyone who had a Medicare card to come to this clinic.

The recruiters would coach the patients based on instructions from the owners. The medical records have to show that there is medical necessity for these nerve conduction studies. So they’d coach the beneficiaries to say that they had pain or that their back or arms had tingling sensations, to show that there was some sort of nerve damage. They told the beneficiaries to tell the doctor that.

The doctors would sign off even though it didn’t make sense to have that high of a percentage coming to a general practice having these exact same symptoms. They often would prescribe opioids in addition.

At the end of the day, the doctor was able to bill for their professional services. The clinic was able to bill for the nerve conduction studies, which would run something like $2500 to $3000 a study. The recruiters would get paid by the owners of the clinic. There was an office manager who would help coach patients when recruiters didn’t do an effective job, and help falsify medical records.

“It takes a village to build a fraud.”

Defense giant Northrop Grumman has signed a nearly $92-million contract with the Centers for Medicare and Medicaid Services to build the second phase of a computer system that’s currently focused on reducing fraud but down the road will play a greater role in anticipating beneficiaries’ medical disorders.

The story in the Los Angeles Times says it’s the most prominent example of how public and private insurers are spending millions of dollars on “big data” – using advanced technology to predict people’s future healthcare needs based on their interactions with doctors, hospitals and pharmacies, as well as information gleaned from other sources, such as social media.

Such systems, known as predictive analytics, aim to make healthcare more efficient and effective by opening the door to addressing medical issues before they become serious problems.

“There are tremendous advantages to big data in healthcare,” said Gerard Magill, a professor of healthcare ethics at Duquesne University in Pittsburgh. “It’s about creating a comprehensive approach to using medical information.”

The trade-off: Say goodbye to individual privacy.

“Big data requires that information; it’s nonnegotiable,” Magill said. “Individual privacy is gone for the common good.”

Medicare’s contract with Northrop Grumman is one of the largest efforts underway to create a healthcare crystal ball capable of looking into patients’ futures.

“The use of data in healthcare is absolutely critical,” said Dr. Shantanu Agrawal, director of Medicare’s Center for Program Integrity, which is tasked with lowering costs. “Having it be predictive of various issues is extremely important.”

Medicare has been criticized in the past for using a “pay and chase” approach to fraud – that is, paying all 4.5 million claims that are submitted daily and then attempting to determine which ones may have been bogus and trying to reclaim the funds.

Rep. Peter Roskam (R-Ill.), chairman of the House Ways and Means Oversight Subcommittee, said at a hearing on healthcare fraud last month that the agency needs to move faster in implementing “better data analysis and predictive analytics.”

Medicare says the first phase of its Northrop-designed fraud-detection system produced more than $1 billion in savings over the last two years.

Amy Caro, vice president of the health solutions division of Northrop Grumman Technology Services, told me it’s clear that sophisticated algorithms are the best way to spot and crack down on fraudulent medical claims. They’re capable of sifting through millions of submissions and recognizing signs and patterns that indicate a claim may not be on the up and up.

The next step, she said, will be using big data capabilities to get ahead of Medicare and Medicaid beneficiaries’ healthcare needs.

“You have all types of data out there and available,” Caro said. “You’re able to drill down and look for signs of certain diseases or conditions.”

Intense physical exertion or extreme emotional upset can each trigger a heart attack, and the risk may be highest if the two are combined, according to a new study reviewed in Reuters Health.

“Our study is the largest study exploring this issue, and unlike previous studies we included people from many different countries and ethnicities,” said lead author Andrew Smyth of the Population Health Research Institute at McMaster University in Hamilton, Ontario, Canada.

The association between the triggers and the onset of heart attack was similar across all locations, he added.

The researchers used data from more than 12,000 cases of first heart attack in 52 countries, recorded in the INTERHEART study. After the heart attack, study staff asked patients if they had been engaged in heavy physical exertion or were angry or emotionally upset in the hour leading up to the heart attack and in the same hour on the previous day.

Almost 14 percent said they had been engaged in heavy physical exertion and 14 percent said they were angry or emotionally upset in the hour leading up to the heart attack.

Being angry or physically strained roughly doubled the heart attack risk. If the two factors were combined, heart attack was about three times as likely, as reported in Circulation.

The researchers didn’t explicitly define “upset” or “exertion” for patients, who decided this for themselves, Smyth told Reuters Health by email.

In terms of heart attack triggers, there was no difference between those with and without diabetes or high blood pressure, he said.

“It’s useful to know that either getting angry to an extreme or exercising to an extreme could potentially be harmful especially for middle aged people with cardiac risk factors,” said psychologist Barry Jacobs, director of behavioral sciences at the Crozer-Keystone Family Medicine Residency Program in Springfield, Pennsylvania, and spokesperson for the American Heart Association, who was not part of the new study.

“One of the weaknesses of the study is that it doesn’t define what an extreme physical exertion experience would be or an extreme anger experience,” Jacobs told Reuters Health by phone.

Everyone can benefit from keeping their tempers in check, and when angry, it’s not a good idea to throw yourself into extreme physical exercise, he said.

In 2011, plaintiff Kristen Nicodemus was admitted to Saint Francis Hospital for treatment of injuries sustained when she was burned. Later she engaged an attorney to represent her in a potential lawsuit. This attorney sent a fax to Saint Francis asking that it provide her copies of her medical records, and attaching a signed authorization to release. This was sent to HealthPort who provided Saint Francis with patient medical record release-of-information services pursuant to a contract.

HealthPort responded to plaintiff’s attorney’s request for medical records, sending a “California Agent Fee Information” sheet and an invoice. In a section explaining the invoice charges, the information sheet quoted section 1158, acknowledging its requirement that medical providers must allow attorneys to inspect and copy patient records on presentation of a patient’s written authorization. The information sheet, however, went on to state: “HealthPort has agreed to copy records for you, upon your hiring of HealthPort as your representative/agent for purposes of making such copies. The rates that HealthPort is charging do not fall under [Evidence Code] 1158.”

HealthPort personnel index all requests, assigning them to categories, depending on the context. Requests involving subpoenas or workers’ compensation claims, respectively, for example, are grouped in separate categories.

Evidence Code Section 1158 is designed to require medical providers to produce the medical records demanded by patients prior to litigation in a timely fashion and at a reasonable cost.

At the time of plaintiff’s appeal, section 1158 provided in pertinent part: “Whenever, prior to the filing of any action or the appearance of a defendant in an action, an attorney at law . . . presents a written authorization signed by an adult patient [or by a patient’s guardian, conservator, parent, or personal representative], . . . a licensed hospital . . . shall make all of the patient’s records . . . available for inspection and copying by the attorney at law . . . promptly upon presentation of the written authorization.”

The statute authorizes the requesting attorney to employ a professional photocopier to obtain the records on the attorney’s behalf, and the provider must produce the records within five days. (Ibid.) All “reasonable costs” incurred by a medical provider in locating, copying, or making the records available may be charged to the requesting party, subject to limits set forth in the statute, which include $0.10 per page for reproducing documents measuring up to 8.5 by 14 inches, $0.20 per page for producing documents from microfilm, and clerical costs not to exceed $16 per hour per person for locating and making records available.

HealthPort’s invoice to plaintiff’s counsel sought payment of $86.52, and provided directions for payment. The amount included a $30 “basic fee,” a $15 “retrieval fee,” $25.25 for copying 101 pages at $0.25 per page, $10.30 for shipping, and $5.97 for sales tax. Plaintiff’s attorney paid HealthPort’s invoice in full, noting on the check’s memo line, “under protest – in violation of CA EVID CODE 1158,” He later filed suit alleging causes of action for violation of section 1158 and violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.) and moved to have the action certified as a class action. The trial court denied this motion and plaintiff appealed. The Court of Appeal reversed in the published decision of Nicodemus v Saint Francis Memorial Hospital..

Section 1158 enables the patient to seek freely advice concerning the adequacy of medical care and to create a medical history file for the patient’s information or subsequent use. It operates to prevent a medical provider from maintaining secret notes which can be obtained by the patient only through litigation and potentially protracted discovery proceedings.

“The common question here is the application of section 1158 to HealthPort’s uniform practices in response to attorney requests for medical records. The fact that each class member ultimately may be required to establish his or her records request was submitted before or in contemplation of litigation does not overwhelm the common question regarding those uniform copying practices. The trial court erred in ruling otherwise.”