WSJ exposes flaws of Medicare’s pay now, investigate later culture
In the latest story to take advantage of their paper’s Medicare data trove, The Wall Street Journal’s Mark Schoofs and Maurice Tamman use egregious cases of physicians abusing Medicare’s physical therapy reimbursements to demonstrate the weakness of Medicare’s “pay first, look into fraud later” approach.
They show that, given the data the federal government has access to, detecting fraud should be a speedier, more effective process. CMS has its reasons for slow fraud detection, but Schoofs and Tamman clearly aren’t buying them all.
There are plenty of reasons why Medicare often fails to stop questionable payments up front. To protect law-abiding doctors and hospitals — the vast majority — Medicare is required to pay nearly everybody within 30 days. Medicare says it is reluctant to suspend payments to providers who may have made honest mistakes, out of concern that beneficiaries might go without needed treatment.
The reporters identify what they say is “a central problem” – Medicare isn’t taking advantage of its claims database, a computerized record of every claim submitted and every dollar paid out.
The Wall Street Journal originally identified Dr. Wayne and the other medical providers discussed in this article through a Medicare database that is much more limited than the one available to fraud investigators. The database, obtained in conjunction with the nonprofit Center for Public Integrity, contains records only through 2008, and includes the claims of just 5% of randomly selected Medicare beneficiaries.
Peter Budetti, the head of the new Center for Program Integrity at the Centers for Medicare & Medicaid Services, says the system is working toward fraud prevention and that “he’d like to emulate the credit-card industry, which has developed software to flag suspicious charges before paying them.”
WSJ details conflicts that drive spine fusion surgery
Filed under: Conflicts of interest, Health data, Hot Health Headline, Public records
The Wall Street Journal’s John Carreyou and Tom McGinty have taken advantage of their paper’s Medicare data stockpile to look at the conflicts of interest and piles of royalty money that drive the popularity of spine fusion treatments whose effectiveness has been disputed. Their work centers on Medtronic, which the Milwaukee Journal Sentinel’s John Fauber also has written about.
Photo by planetc1 via Flickr
For surgeons, the financial incentives to perform spine fusions can be strong. Though hospitals often lose money on the procedure when it’s performed on Medicare patients due to the high cost of the implants, the surgeons themselves can get paid as much as $12,000 per surgery.
Complex fusions … are reimbursed by Medicare at a sharply higher rate than decompressions, to account for the elaborate spinal devices used and the longer length of surgery. Complex fusions increased 15-fold among Medicare beneficiaries with spinal stenosis from 2002 to 2007, according to the JAMA study.
A big part of many surgeons’ income lies in their consulting and royalty arrangements with device makers, although disclosure of these arrangements remains piecemeal for now. Medtronic began releasing information about its payments to surgeons on its website in June, after coming under intense scrutiny from Sen. Charles Grassley (R., Iowa).
They’re required to keep some details under wraps, but the WSJ duo still manages to unleash anecdotes, including one about a surgeon who received “between $400,000 and $1.3 million in royalty, consulting and other payments from three spine-device makers.”
For reporters looking to understand the medical issues surrounding these procedures and why these conflicts can be detrimental to patients, see Janet Moore’s work in the Star Tribune.
Why insurers care about the medical-loss ratio
The Wall Street Journal’s Avery Johnson explains the significance of the “medical-loss ratio,” a single metric within the reform bill that holds great significance for the insurance industry.
The ratio, known to wonks as the MLR, signifies the percentage of premiums insurers use for medical costs versus the amount that goes to paying administrative overhead. For individual and small-business plans, it’s set at 85 percent medical to 15 percent administrative. For larger businesses, the magic medical number is 80. Those who don’t meet the threshold would be forced to pay rebates to customers.
At present, the key issue seems to be subsidiaries. Major insurers have hundreds of them each, and while the insurer could meet the requirements if all subsidiaries were averaged together, they won’t be able to hit the numbers at every single subsidiary. Current draft documents, Johnson reports, seem to imply that each subsidiary would be judged separately, a practice which insurers say might force them to stop providing insurance in certain high-risk areas.
Applying uniform numbers to the segmented, fragmented insurance industry could prove tricky. Johnson looked at the numbers.
UnitedHealth, for instance, has about 392 subsidiaries, according to Goldman Sachs health-care analyst Matthew Borsch. Its average MLR for individual policies is 69%, dragged down by a 63% ratio at its dominant Golden Rule subsidiary, according to a report by Goldman Sachs that examined state insurance filings. The Minnetonka, Minn., insurer could owe about $280 million in rebates in 2012, Mr. Borsch estimates, based on his reading of the methodology in the health care law.
The rules will be set by the National Association of Insurance Commissioners, a coalition of state insurance regulators. They’re hoping to have recommendations ready for HHS by the end of this month.
Infection-reduction measures vs. the real world
The Wall Street Journal’s Katherine Hobson writes about the recent JAMA study which she says demonstrates that publicly reported infection control measures, including checklists, “don’t actually correlate with post-op infection rates.”
The study was designed to evaluate the six infection control measures tracked by the Surgical Care Improvement Project. Those measures include everything from antibiotics to hair removal and blood glucose levels.
None of those measures correlated with infection rates individually, Hobson writes, but when taken in aggregate things start to look a little better.
Study lead author Jonah Stulberg, a recent graduate of Case Western Reserve University School of Medicine (where the research was conducted) tells the Health Blog that the score is called an “all-or-none” composite, which is like a pass/fail: The hospital gets credit for a particular patient only if all the appropriate measures are taken.
With the statistics out of the way, Hobson addresses the biggest question: Why aren’t these prevention measures making a difference in the real world? The answer, as it always seems to be in these situations, is that life is complicated and human beings aren’t robots.
… there’s a big difference between a practice being proven to be effective in a clinical trial and then developing a measure that tries to estimate how often it’s done and then report it publicly.” Real life is messier, and factors such as surgical skill and hand-washing practices are tougher to measure.
Dale Bratzler, CEO of the Oklahoma Foundation for Medical Quality, tells the Health Blog the results don’t surprise him. Individual process of care measures for things such as heart attack and pneumonia also haven’t been shown to correlate with outcomes, he says.
APA’s new policy seeks collaboration with pharma
Filed under: Conflicts of interest, Hot Health Headline
The Wall Street Journal’s Shirley Wang looked beyond the American Psychiatric Association’s new conflict of interest guidelines to explore what the APA’s loosening of ties with major pharmaceutical manufacturers meant for their business model and future. The APA has lost 10 percent of its revenue – about $7.5 million – over the past year as pharma is spending less on advertising in their journals and sponsored symposia have been phased out of the APA annual meeting. That last move, Wang found, cost the organization about $2 million.
In an interesting twist, Wang says that while some of the decline in pharma advertising can be attributed to the recession and APA’s attention to COI, some of it comes “because the industry faces its own pressures to avoid potential conflicts of interest.” Overall, pharma’s ad spending in health care publications has slipped from $865 million in 2005 to $626 million in 2009.
Reactions to these tightening regulations and budgets among APA membership has been mixed, as Wang illustrates:
At the annual conference in 2008 in Washington, D.C., Dr. Scully recalled meeting a group of young residents and medical students at the bottom of an escalator who wanted to “express their outrage” at the industry influence at the meeting. At the top of the escalator ride, he encountered another group of doctors upset that there weren’t enough seats in the industry-sponsored symposia. “A number of members liked those [symposia] and they liked that they got fed,” said Dr. Scully.
In an accompanying blog post, Wang writes that the APA hopes its new guidelines will increase transparency, decrease conflict and still maintain a good, cooperative relationship with the pharmaceutical industry.
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COI policy change has medical associations talking
Pharma starts disclosing sample numbers
Filed under: Health care reform, Health data, Health journalism, Hot Health Headline, Pharmaceuticals
The health reform law will require drug makers to disclose the amounts of free samples they distribute, a requirement which promises to shed light on a practice whose scope could previously only be estimated. The Wall Street Journal’s Jared Favole has found some preliminary disclosures; the resulting numbers can be found in the graph below. The numbers should only be treated as the roughest of estimates, as some companies disclosed the market value of the drugs while others gave wholesale numbers. Likewise, some measured the number of samples based on the number of doses, while others counted larger units. 
Samples, Favole writes, are a key weapon in pharma’s war against generics as they can be a gateway to brand-name medicines.
A 2008 study in the Southern Medical Journal found that doctors in a clinic were more than three times more likely to prescribe generic medications to uninsured patients after drug samples were removed from that clinic. “Free drug samples may lead to higher costs for uninsured patients by encouraging physicians to write prescriptions for brand-name drugs only,” the study said.
A PDF of that study can be found here.
State NAMI chapters got pharma money too
Wall Street Journal health blogger Katherine Hobson writes that, according to an investigation by Sen. Chuck Grassley, state chapters of the National Alliance of Mental Illness received millions of dollars in contributions from pharmaceutical manufacturers in a five-year period. This follows an Oct. 2009 New York Times report which found that “drug makers from 2006 to 2008 contributed nearly $23 million to the alliance, about three-quarters of its donations.”
The group’s state chapters – except for Alabama, Arizona, Connecticut and Hawaii – reported their own donations to Grassley, he wrote in a letter to NAMI’s executive director and president of the board of directors. According to the letter, the California chapter received $632,000 in contributions between January 2005 and October 2009, the most of any state. Ohio NAMI received $623,000 and New York NAMI $448,000. The top ten states received a total of $3.84 million.
Network to warn pharmacists of drug errors
Filed under: Health data, Hospitals, Public health
The Wall Street Journal’s Laura Landro spotlighted a new national network designed to send e-mail alerts to as many as 55,000 pharmacists.
The network is designed to alert pharmacists of dangerous and life-threatening errors as well as to educate them on how to prevent those specific errors from also occurring in their own respective practices. The system is intended to help the same errors from being repeated time after time across the country.
Photo by jypsygen via Flickr.Landro wrote that “Medication errors cause at least one death every day and injure approximately 1.3 million people annually in the United States,” and added that there are some indications that the weakening economy has had a negative impact on medication safety.
Here’s Landro explaining the new network:
The non-profit Institute for Safe Medication Practices, which is certified by the federal government to collect error reports and other information about quality breaches, and the American Society of Health-System Pharmacists are launching a new National Alert Network for Serious Medication Errors. The network, which was unveiled last month, will be used to send email alerts to 35,000 pharmacists working in hospitals and health systems, as well as physicians and nurses, when a dangerous or life-threatening error is reported to ISMP. The two organizations are also in discussions to extend the network to as many as 26 other organizations that promote safe medication use. The hope is that widely spreading the word about such errors will cause doctors and pharmacists to be more cautious—and ultimately prevent future mix-ups. Relevant alerts will also be sent to 20,000 drugstore pharmacists.
Landro also mentioned ISMP’s consumer med safety alert portal and the FDA’s consumer-focused error reporting tool. She also goes into greater detail as to how drug mishaps happen, and into what can be done to prevent them.
Related
Op-ed: Obama’s quality metrics could be dangerous
On the Wall Street Journal’s Op-Ed page, Jerome Groopman and Pamela Hartzband cite the shortcomings of a quality metric-based system in Massachusetts and describe various misguided quality metrics. Groopman and Hartzband are both on the staff of Beth Israel Deaconess Medical Center in Boston and on the faculty of Harvard Medical School.
Initially, the quality improvement initiatives focused on patient safety and public-health measures. The hospital was seen as a large factory where systems needed to be standardized to prevent avoidable errors. A shocking degree of sloppiness existed with respect to hand washing, for example, and this largely has been remedied with implementation of standardized protocols. Similarly, the risk of infection when inserting an intravenous catheter has fallen sharply since doctors and nurses now abide by guidelines. Buoyed by these successes, governmental and private insurance regulators now have overreached. They’ve turned clinical guidelines for complex diseases into iron-clad rules, to deleterious effect.
Groopman and Hartzband cite several examples of regulations later proven questionable or even harmful, including the monitoring of ICU patients’ blood-sugar levels, the provision of statins to patients with kidney failure, and the monitoring of blood sugar in certain diabetics.
These and other recent examples show why rigid and punitive rules to broadly standardize care for all patients often break down. Human beings are not uniform in their biology. A disease with many effects on multiple organs, like diabetes, acts differently in different people. Medicine is an imperfect science, and its study is also imperfect. Information evolves and changes. Rather than rigidity, flexibility is appropriate in applying evidence from clinical trials. To that end, a good doctor exercises sound clinical judgment by consulting expert guidelines and assessing ongoing research, but then decides what is quality care for the individual patient. And what is best sometimes deviates from the norms.
Groopman and Hartzband cite studies showing that quality metrics had “had no relationship to the actual complications or clinical outcomes” of hip and knee replacement patients at 260 hospitals in 38 states and that, in 5,000 patients in 91 hospitals “the application of most federal quality process measures did not change mortality from heart failure.”
Sounds like it could be fodder for discussion at the “Medical effectiveness: Is there a NICE in U.S. future?” panel at Health Journalism 2009 on Saturday morning.
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