Tag: 2016 News

The Personal Care Services program, which exceeded $14.5 billion in fiscal year 2014, is rife with financial scams, some of which threaten patient safety, according to a recent report from the Office of lnspector General at the Department of Health and Human Services.

The report exposes vulnerabilities in a system that more people will rely on as baby boomers age. Demand for personal care assistants is projected to grow by 26 percent over the next 10 years – an increase of roughly half a million workers – according to the U.S. Department of Labor.

“This type of industry is ripe for fraud,” warned Lynne Keilman-Cruz, a program manager at Alaska’s Department of Health and Social Services who has investigated widespread fraud. The risks increase because the care takes place out of view in people’s homes, and because neglected patients may not advocate for their own care.

The OIG report describes a range of rip-offs, some of which involve caretakers caught up in the nation’s opioid epidemic. In one Illinois case, a woman whose nursing license had been suspended for allegedly stealing drugs at work signed up as a caretaker. She billed Medicaid for $34,000 in caretaking services she didn’t provide – including charges made while she was on a Caribbean vacation. In Vermont, a caretaker on probation for drug possession split her paychecks with the patient’s wife – in exchange for stealing the patient’s prescription painkillers, while he lay in visible discomfort.

In other cases, Medicaid beneficiaries colluded in hoaxes, faking disability so they could hire unneeded help.

In some cases, elderly patients were neglected by their own children, who signed up for caretaker payments. In Idaho, a woman was hospitalized for severe dehydration and malnourishment after her son and caretaker, Paul J. Draine, neglected her. Investigators found the home they shared littered with drug paraphernalia. Draine pleaded guilty to fraud and abuse or neglect, and was sentenced to a sober home.

Investigators provided no count of how many cases of fraud and abuse involved relatives, but “it’s fairly common for family members to be the attendants, and it’s fairly common for those same family members to be the ones who are abusing, neglecting, or committing fraud,” said David Ceron, an OIG special agent based in Washington, DC. In California, three-quarters of Medicaid-funded personal assistants are relatives, though some states restrict hiring family members.

In California, a Kaiser Health News investigation last year revealed widespread problems, as well as a lack of training and oversight, in the state’s program, which is the largest in the U.S.

California’s frail elderly and disabled residents increasingly are receiving care in their own homes, an arrangement that saves the government money and offers many people a greater sense of comfort and autonomy than life in an institution. Yet caregivers are largely untrained and unsupervised, even when paid by the state, leaving thousands of residents at risk of possible abuse, neglect and poor treatment, a Kaiser Health News investigation found.

The move from nursing-home to in-home care is part of a massive shift across the nation, driven by cost-cutting and patient preference. In California, at least four times more elderly and disabled residents receive in-home care than live in nursing facilities – a rate that is only expected to rise as baby boomers age. California’s $7.3 billion IHSS program is the largest publicly funded caregiver program in the nation. The caseload has more than doubled since 2001 and now serves about 490,000 low-income clients throughout the state.

Kaiser Health News’ investigation into the IHSS program found that: training for caregivers is minimal and mostly optional. California doesn’t require training for everyone – even in CPR, first aid or preventing injuries. By design, IHSS is not a medical program and caregivers are supposed to confine themselves to tasks such as feeding, dressing or bathing. But some become ad hoc nursing aides, helping to dress wounds and manage medications. The state requires caregivers receive training and authorization from physicians in these cases, but only about one in nine caregivers receives it, officials say.

Counties are also supposed to report to the state “critical incidents” potential neglect, abuse or self-harm requiring immediate action. But reporting practices vary widely, yielding puzzling results. In fiscal year 2012-2013, for instance, not a single critical incident was reported among the 235,000 clients in Los Angeles, Orange and San Diego counties, the three largest in the state. That same year, smaller Sacramento County reported 1,688 incidents – accounting for most of the problems reported statewide.

“There is no evidence indicating that Sacramento County has a disproportionately higher number of critical incidents than other counties,” a Sacramento county spokeswoman said.

It is possible to have CMS approve a Zero Allocation settlement. In such a case, nothing is set aside for payment of future medical care. However the Centers for Medicare and Medicaid Services (CMS) made news last month by purportedly “correcting” their position on zero allocations by adding a new, controversial requirement.

CMS announced on November 1, 2016 , that effective immediately, the Workers’ Compensation Review Contractor (WCRC) will utilize procedures that were previously in effect in reviewing zero MSAs. CMS’s purported “new” position basically adopted a three-part test for a Medicare Set-Aside (MSA) to qualify for a zero allocation: (1) The case or body part in question has been denied throughout the case; (2) There has been no medical or indemnity payment for the denied case or body part; and (3) There is either a finding from a hearing on the merits from a court of competent jurisdiction relieving the carrier of liability or documentation from the beneficiary’s treating physician recommending no future treatment.

In other words, under this new requirement CMS may only approve a zero allocation if a judge has determined that no compensable workers compensation claim exists and no payments were made.

For lack of a better term, a judicial determination “on the merits” would be a trial. Trials in cases that are settled are extremely rare and almost never occur. Seeking to avoid an up or down determination at trial – realizing that both sides have significant risk in a trial – the parties agree to settle a denied claim on a doubtful and disputed basis. If the insurer or employer wins at trial, the case is over. There is no settlement. This makes CMS’s purported requirement of a judicial finding nearly impossible – and certainly irrational – to comply with.

In response to negative feedback from the worker’s compensation community, CMS provided the following announcement on its “What’s New” page:

“CMS recently received inquiries regarding procedural changes in the way that CMS’ Workers’ Compensation Review Contractor (WCRC) reviews proposed zero-dollar Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts. CMS determined changes had transpired without prior notification. Effective immediately, the WCRC will utilize procedures that were previously in effect. CMS continually evaluates all policy and procedures related to WCMSA reviews and will publish any pending changes when or before they go into effect.”

So, for now, CMS is maintaining the status quo when it comes to zero allocation review procedures. Until CMS makes a subsequent announcement, the basic requirements to obtain a zero allocation CMS approval remain as follows:

1) The claim is denied; and
2) No payments, medical or indemnity, have ever been made.

It now appears that CMS tested an additional requirement for zero allocations: that parties obtain an “on the merits” determination in addition to the above-referenced requirements. It ends up that this additional requirement would simply not work in certain jurisdictions or in true disputed settlements.

Property Casualty 360 reports that plaintiffs’ attorneys alleging that State Farm Mutual Automobile Insurance Co. bought off an Illinois Supreme Court justice to evade a $1.05 billion award have cleared a major hurdle in their long-running litigation against the insurer.

U.S. District Judge David Herndon of the Southern District of Illinois granted a motion certifying a class of roughly 4.7 million auto insurance policyholders who were allegedly deprived of their 1999 trial court victory against State Farm.

Herndon found that the alleged fixing of the state Supreme Court decision affected all the proposed class members uniformly, and that the named plaintiffs and their attorneys otherwise satisfied court rules around class actions.

A State Farm spokesman, said the company plans to appeal the ruling. “Plaintiffs have unsuccessfully asserted and reasserted these allegations for many years and should not be permitted to do so any longer.”

The suit stems from a 2005 decision by the Illinois Supreme Court that upended the billion-dollar judgement against State Farm. A jury had found the company defrauded policy holders by requiring the use of cheaper, non-manufacturer parts when repairs were made to covered vehicles after a crash, handing plaintiffs $1.18 billion in damages. An appeals court affirmed but reduced the amount of the award.

According to the complaint, filed in 2012, the state high court’s decision reversing the judgment was unfairly influenced by Justice Lloyd Karmeier, who State Farm and its agents worked to elect during a campaign in 2003 and 2004. Karmeier’s campaign received at least $4 million from the insurer and individuals connected to it, plaintiffs allege.

Illinois’ Supreme Court has seven justices, and the decision at issue was not authored by Karmeier. It won the support of four justices, with two issuing a dissent that still concurred on key holdings, and another abstaining. The court reversed the award against State Farm on the grounds that certification of a nationwide class of policyholders was improper, among other things.

RICO litigation has become a popular tool against insurance companies by disgruntled claimants, even within the workers’s compensation arena.

The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. Federal RICO allows a successful plaintiff to recover treble damages, plus attorney fees.

The plaintiffs bar has sought to apply RICO laws as a penalty in workers’ compensation claims for at least a decade with mixed results. Conceptually they allege that an employer, carrier or third party administrator concocts a fraudulent scheme that is used over and over to prevent workers from obtaining just benefits.

Workers’ compensation claimants recently lost a RICO case filed in California.

In the California case John Black, and a group of police officers and fire fighters asserted a RICO claim in their fourth amended complaint involving the City of Rialto and the City of Stockton, CorVel Enterprises, York Risk Services Group and others. These plaintiffs allege “York, CorVel, and Rialto engaged in a pattern of fraudulently denying and delaying legitimate claims in order to lower the liability of the city, while at the same time maximizing the TPA’s revenues (and allowing the TPA to maintain and obtain contracts with other public entities based on their ‘outstanding’ financial performance at the expense of public servants)”

The number of children and teens hospitalized for prescription opioid poisonings has more than doubled in recent years, with both accidental overdoses and suicide attempts on the rise, according to a new study published in the JAMA Pediatrics and summarized by Reuters Health.

Annually, the rate of these opioid poisonings among youth up to 19 years old surged from 1.4 per 100,000 children in 1997 to 3.71 per 100,000 kids by 2012, the study found.

“I believe that the two-fold increase in hospitalization rates over time for opioid poisonings in children are a direct consequence of the increasing reliance in the U.S. on opioid analgesics to treat acute and chronic pain,” said lead study author Dr. Julie Gaither, a public health researcher at Yale University in New Haven, Connecticut.

For teens aged 15 to 19, the rate of poisonings surged from 3.69 per 100,000 at the start of the study to 10.17 per 100,000 by the end, fueled in part by overdoses involving heroin and methadone, researchers report in JAMA Pediatrics.

“Trends we see in teens mirror what we’ve seen in adults – an increase in accidental overdoses (poisonings) from either taking an opioid as prescribed or, increasingly, using opioids for purposes other than to treat pain, including to get high or to enhance the effects of alcohol or other drugs,” Gaither noted by email.

With children 4 years old and under, the rate of poisonings climbed from 0.86 per 100,000 kids to 2.62 per 100,000 by the end of the study period.

“The vast majority of opioid poisonings in young children – toddlers and preschoolers – are the result of unsupervised ingestions of medications prescribed for an adult (parent, grandparent) in the household,” Gaither added.

To assess trends in poisonings over time, researchers examined data from 13,052 pediatric hospitalizations due to ingestion of prescription opioids. For teens, they also identified poisonings due to heroin.

Overall, 176 children, or 1.3 percent, died during hospitalizations for opioid poisoning during the study period.

Among teens in the study, poisonings from heroin increased by 161 percent from 0.96 to 2.51 per 100,000 children, while poisonings involving methadone increased by 950 percent from 0.10 to 1.05 per 100,000 children.

When the authors examined intent behind the opioid poisonings, there were 16 poisonings attributed to suicide or self-inflected injury among children younger than 10 from 1997 to 2012.

In children ages 10 to 14, the incidence of poisonings attributed to suicide or self-inflicted injury increased by 37 percent from 0.62 per 100,000 in 1997 to 0.85 per 100,000 in 2012. The incidence of poisonings attributed to accidental intent increased by 82 percent from 0.17 to 0.31.

For teens ages 15 to 19, opioid poisonings attributed to suicide or self-inflicted injury increased by 140 percent, while those attributed to accidental intent roughly tripled in this age group.

“It is a common practice for adults to place leftover opioid medications in the medicine cabinet or in the kitchen, which leaves them completely available to not only children and adolescents in the household but also any friends that come to visit,” said Dr. Constance Houck, a researcher at Harvard Medical School and Boston Children’s Hospital who wasn’t involved in the study.

“It is a well-known technique for adolescents with substance use issues to ask to use the bathroom in a friend’s or relative’s home and rifle through the medicine cabinet while alone in the bathroom,” Houck said. “Many adolescents have described this as a way that they have regularly obtained opioids.”

CompPharma’s 13th Annual Survey of Prescription Drug Management in Workers’ Compensation analyzed the 2015 pharmacy cost data of 30 workers’ compensation insurance carriers, third-party administrators, self-insured employers, and state funds.

Total workers’ comp annual pharmacy spend is approximately $5.5 billion, but it is not possible to more precisely calculate workers’ compensation drug spend.

After a one-year bump up in inflation, work comp drug costs declined again, this time by 8.7%. The 30 payers saw a decline in spend, which they attributed to tighter clinical management, better integration with their PBMs on a variety of services, and specific efforts to reduce initial opioid scripts and decrease the level of morphine equivalents across as many patients as medically appropriate.

Over the last four years, drug costs for payers surveyed by CompPharma have dropped by 11%. This year, seven respondents’ drug costs dropped by 17 points or more. Claim volume changes were only involved for a handful of payers. Respondents attributed the steep decline to more active and assertive clinical management, especially focused on opioids and other potentially problematic drugs.

Over the 13 years the survey has been conducted, the pharmacy cost inflation rate decreased by 26.5 points.

Compounds were named as the emerging issue of most concern to payers, while opioids remained the “biggest problem” in workers’ comp pharmacy management.

Payers credited tighter clinical management, better integration with their pharmacy benefit managers, and prescriber interventions for the decrease. All have opioid management programs to limit the number of initial opioid prescriptions and/or decrease morphine equivalents across as many claims as medically appropriate.

“Twenty percent of the respondents also had assertive settlement initiatives and have been closing older claims,” said Joseph Paduda, president of CompPharma, LLC. “Overall, payers have seen drug costs go down by 11 percent in the past six years despite the 2014 increase.”

PBM consolidations received mixed reactions from the payer community. Some respondents hoped mergers would bring better pricing and more clinical capabilities while others expressed concern that the lack of competition would breed complacency.

The survey’s final question asks respondents to identify the single biggest problem in workers’ compensation pharmacy. This year the answers were diverse indeed. Prescriber behavior and variations thereof garnered a quarter of the responses; opioids were named by four respondents and compounds by three. If anything the most insightful answers involved the need to work with other stakeholders to address prescribing patterns, implement evidence-based guidelines and influence regulatory authority. Respondents would also like to receive more complete data (not just on pharmacy, but other medical cost data) and have better communication of the right information among stakeholders.