late-breaking news from your medical association volume XX / no. 2 FEBRUARY 2013
local Healthcare Startups Scramble for Funding As reported last month, Epocrates hit the jackpot in early January when Athenahealth agreed to buy it for roughly $293 million, ending Epocrates’ 14-year rollercoaster ride as a private company. Three San Francisco digital health companies, Practice Fusion (founded in 2005), Castlight Health (founded in 2008), and ZocDoc (New York-based with a SF presence) are among a trio of firms seen as most likely to launch the next digital IPO. Some of the other health care startups in San Francisco and on the Peninsula are: AliveCor (2010); Aditazz (2010); Doximity (2010); Fitbit (2007); HealthTap (2010); One Medical Group (2007), which was founded by Epocrates co-founder Tom Lee, MD; SeaChange Health (2008); and Simplee (2011).
Daughters of Charity Health System Expands The Daughters of Charity Health System announced plans this past month to expand its new DCHS Medical Foundation, adding 22 physicians in San Jose, Daly City, Morgan Hill and southern California. The medical foundation now has 220 doctors on board. It launched in April 2012 and is headed by Executive Director Ernie Wallerstein. He is quoted as saying that over the next few months the foundation will add quite a few more doctors in Daly City, Morgan Hill and Gilroy. The doctors who recently joined DCHS include the 12-doctor Family Medicine Associates of San Jose, and two solo practitioners, George Smith, MD in Day City and Brian Joyce, MD in Morgan Hill. In addition eight employed doctors in Huntington Park’s All Care Medical Group joined DCHS.
HHS Makes Sweeping Change to HIPAA Privacy and Security Policy The SMCMA is offering a free seminar (webinar) to get you up to speed on the many changes make to this policy. Take this opportunity to learn about it on Wednesday, February 13, at 12:30 p.m. See our website, www.smcma.org, or call the SMCMA at 650-312-1663 to register.
state Website Helps Patients Make Difficult Medical Decisions Researchers at the SF Veterans Affairs Medical Center, the Veterans Health Research Institute, and UCSF have launcheda website, PREPARE, to help people make difficult medical decisions when faced with serious illness or a medical crisis. The website aims to help families identify their priorities, communicate those priorities with their loved ones and physicians, and to make informed medical decisions. The website is written in plain English and provides voice-overs of all text, large fonts for the visually impaired, and closed captioning for the hearing impaired. The website is also interactive and features videos of people discussing how they spoke about difficult issues with family and physicians. Go to prepareforyourcare.org to view this new website and recommend it to your patients.
state Anthem Blue Cross Mandates New Out-of-Network Policy Effective March 1, Anthem Blue Cross’ new “Advance Notice for Use of a Non-participating Provider Policy” will go into effect, which will require that this notice be given using he payor-provided APN form. The policy does not apply to emergencies.
Palmetto GBA Loses Its Appeal for Medicare Contract The GAO announced that they denied Palmetto’s appeal, and awarded the Medicare contract for Jurisdiction E (previously referred to as J1) to Noridian Administrative Services. The two companies are awaiting further direction from CMS on the transition plan. Until further direction is received, members should continue with business as usual.
$87,700 for 20-Minute Knee Surgery When a patient in southern California who underwent knee surgery learned that her insurer was charged $87,500 for the twenty-minute procedure, she turned to the California Attorney General’s Office to investigate. Blue Shield paid $84,800 of the bill. The female patient discovered that Advanced Surgical Partners (ASC), charged the high fee, she was outraged. The Los Angeles Times alleges that some surgery centers, seeking well-insured patients, will waive their copays and deductibles and then bill the patient’s insurers exorbitant amounts for out-of-network care. By the way, the $87,500 was just for use of the facility and supplies. The orthopedic surgeon and anesthesiologist billed separately and were paid about $1,200 combined! After release of this story, the ASC and Blue Shield reached a lower payment amount.
Disgruntled Patient Guns Down Urologist A 75-year old man shot to death his urologist because he blamed him for his prostate issues. Detectives recovered a handgun at the scene of the shooting, in a medical office exam room in Newport Beach, and found additional evidence as well. The patient shot 52-year-old Ronald Gilbert in his medical office near Hoag Hospital. According to neighbors, the gunman was angry abut his incontinence following recent surgery. Dr. Gilbert specialized in general urology, sexual dysfunction and related surgical techniques since 1993. He was an assistant clinical professor at UCI College of Medicine, on the staff of Hoag, and the chief technology officer of Absorption Pharmaceuticals.
national CMS Releases Final Physician Payments “Sunshine Rule” The National Coalition on Health Care has urged the White House to issue a long-delayed transparency rule under the Affordable Care Act, known formally as Transparency Reports and Reporting of Physician Ownership of Investment Interests, originally issued in December 2011. The final rule was released in early February. The Act has broad support from major medical, consumer, and industry groups and is intended to bring transparency to the financial relationships between physicians and pharmaceutical manufacturers and medical device companies. The rule would require applicable manufacturers and device companies to report on their payments to physicians, as well as reporting on certain physician ownership or investment interests. Physicians will have 45 days to review any data report before it goes live on the public website.
Few Smaller Employers Offer Health Care Coverage According to a report by the Kaiser Family Foundation, only 61 percent of small employers (having three to 199 employers) offered health insurance in 2012, compared to 98 percent of large employers with 200 or more employees. Only 50 percent of very small employers (three to nine employees), offered their employees coverage.
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Medicaid Funding Looks Secure in Upcoming Budget Battle News outlets report that Medicaid funding seems surprisingly secure in upcoming fiscal fights, as much as the Medicare and Social Security programs. Medicaid and the Children’s Health Insurance Program, which together provide coverage to more than one in five Americans and almost one in threeCalifornians over the curse of a year, appear off-limits despite their huge price tag. According to a White House economic adviser, the President is prepared to make cuts to Medicare to protect the Medicaid program.
AMA Joins in Law Suit Opposing “Pay-for-Delay” Deals The American Medical Association has joined healthcare and consumer groups calling on the U.S. Supreme Court to limit the ability of drugmakers to enter agreements that keep generic competition off the market. The FTC has been battling what is calls “pay-for-delay” agreements in court with limited success for several years, arguing they illegally deny consumers the benefits of competition. The case, FTC v. Watson Pharmaceuticals is scheduled for oral arguments in March. The AMA, AARP, the National Legislative Association and the U.S. Public Interest Research Groups are all parties in a friend-of-the-court brief. Many believe the pay-for-delay agreements undermine the balance between spurring innovation through the patent system and fostering competition through the development of generic drugs. Watson and Par Pharmaceuticals filed suits challenging the patent for a topical synthetic testosterone called AndroGel, a product of Abbott Laboratories subsidiary Solvay Pharmaceuticals. Solvay ultimately agreed to pay the companies $42 million a year to settle the litigation and keep generic versions of Androgel off the market until 2015. The FTC challenged the agreements
Disclosing Patient Information Involving Health/Public Safety Threats The Department of Health and Human Services HHS) has issued a letter to ensure that physicians are aware of their ability under the HIPAA Privacy Rule to take action, consistent with their ethical standards or other legal obligations, to disclose necessary information about a patient to law enforcement, family members of the patient, or other persons, when they believe the patient presents a serious danger to himself or other people.
Minnesota Court Rues Patient Reviews are Protected Speech The Minnesota Supreme Court has ruled that an online patient review was not defamatory. The decision ends a fouryear legal battle that stemmed from a defamation lawsuit by neurologist David McKee. Following the hospitalization of Dennis Laurion’s father, Laurion wrote reviews on several sites, with one claiming a nurse called the doctor “a real tool.” The court dismissed the defamation lawsuit and reversed an Appeals Court ruling that the statements harmed the doctor’s reputation and could be proven as false. Referring to someone as “a real tool” falls into the category of pure opinion because the term “real tool” cannot be reasonably interpreted as stating a fact and it cannot be proven true or false, the court stated. The situation highlights that a defamation lawsuit is not without cost to the providers and the patients involved. The doctor spent at least $50,000 in legal fees, as well as $11,000 to clear his reputation after the incident prompted hundreds of negative online reviews. The patient’s father also paid out two years’ income in litigation costs.
Rude Behavior Impacts Productivity and Commitment from Workers According to researchers from Georgetown university, workers across sectors reported being treated rudely at least once a week. Rude behavior impacts productivity and commitment from workers, according to the researchers. Nearly half (48 percent) intentionally decreased their work effort as a result, while 38 percent intentionally decreased the quality of their work. What is more, a quarter (25 percent) said they took out their frustration on customers. A unnamed Los Angeles hospital sends its physicians who exhibit disruptive behavior to “charm school” to improve their behavior and reduce the potential for lawsuits. Many hospitals have learned that it simply doesn’t pay to harbor habitual offenders, even if they are rainmakers.
FEBRUARY 2013
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medicare Business Roundtable Recommends Premium Support System and Higher Eligibility Age The Business Roundtable has proposed to Congress in budget talks that it should adopt proposals to turn Medicare into a premium support system and raise the eligibility age from 65 to 70. Adopting the group’s proposals, which includes requiring wealthy seniors to pay more for their coverage, would save Medicare $300 billion over the first ten years and $6 trillion over 25 yeas. The Business Round-table is composed of CEOs of leading U.S. companies. By tackling these issues now, Congress can send a clear signal to American workers, investors, and the world that our leadership has the courage to make tough choices that will ensure a stale and growing economy, said Randall Stephenson, the CEO of AT&T. If we want future generations to have access in Social Security and Medicare, America cannot afford to wait, he said.
American Hospital Association v. CMS’ Sebelius It does not appear likely that AHA’s lawsuit against CMS will end in settlement, according to an AHA attorney. AHA and four hospitals in November filed suit over what they say are millions of dollars of denied Medicare payments based on setting. The hospitals allege that recovery auditors (known as RACs) essentially second guess medical decisions, determining that inpatient care should have been performed in an outpatient setting. Briefs are scheduled to be filed in July.
CMS Unveils 4 Bundled Payment Models Some hospitals and doctors will soon embrace big financial risks with four federal bundled payment models that allow them to reap some avoided Medicare costs, even though it may mean absorbing excess patients’ expenses up to 90 days after they leave acute care settings. These initiatives will change traditional Medicare where Medicare pays hospitals and physicians on a single illness or treatment, which Medicare believes contributes to fragmented care. The new models will test payments made on episodes of care rather than single line item. CMS hopes these bundled payment models will encourage hospitals, physicians, post-acute facilities, and other providers to work together across settings and specialties to improve outcomes. Model 1 focuses on acute care inpatient hospitalization; in Model 2 and 3 Medicare payments will not change but after the care, the aggregate Medicare expenditures are compared to a target price; and Model 4 focuses on acute hospital stays. Both Sutter Medical Center and Scripps hospitals are participants in this model. 4
JANUARY 2013