Negative Consequences Abound When Nonprofits Hospitals Sue Poorest Patients

Nonprofit hospitals receive a tax-exempt status based on their work to serve the poor by addressing their medical needs. However, the medical billing practices of hospitals was recently called into question by a Consumer Financial Protection Bureau report. The report examined medical debt in this country and found that 1 in 5 consumers, or 43 million individuals, have a negative mark on their credit report from a medical debt. The debt collections practices employed by hospitals raise several concerns including releasing private medical information covered by HIPAA to outside parties not involved in treatment, unfair billing practices that disproportionately impact low-income patients, a failure to provide and educate patients on available aid, the need for aid to retroactively cover eligible medical costs, and the legality of nonprofit hospitals suing their poorest patients. 

A recent NPR story highlighted the issues that arise for low-income patients when nonprofit hospitals sue for unpaid medical bills. In addition to the aribtrarily higher prices many low-income patients are charged for medical treatment, the debts associated with their medical care negatively impact nearly every area of their lives. Medical debts reported to credit agencies lower credit scores which in turn, raises the prices for many basic needs such as car insurance, mortgages, credit cards, and loans. Additionally, some employers examine the credit report in the hiring process and a low credit score or history of medical debt may negatively impact an individual's chance to get a job because they are viewed as irresponsible or the employer feels they will not be reliable due to the medical issues insinuated in the report. 

Hospitals are turning to the courts to recover these inflated debts from their low-income patients. When the hospitals are successful they may be able to recover the debt, in addition to court costs, debt collection administration fees, and interest by garnishing the low-income individual's wages. This practice creates a cycle of poverty that is nearly impossible to escape and discourages individuals from receiving medical care. It particularly provides a disincentive for low-income individuals to receive preventative care, which would be beneficial to all parties involved. 

Reform is imperative. Hospitals and health access managers must be diligent in educating patients about aid, prudently billing, and limiting the debts that move to collection agencies. 

Resources to help those with medical debt may be found at the following websites:

• Legal Aid
• Families USA
• National Consumer Law Center
• USA.Gov

CMS Proposes 3-Year Penalty Delay for Accountable Care Organizations & New ACO Model

Accountable Care Organizations (ACO) are voluntary organizations that providers may choose to participate in which are comprised of doctors, hospitals, and other health care providers. The Centers for Medicare and Medicaid (CMS) created Accountable Care Organizations with the goal of coordinating care to ensure that patients get the right care at the right time while avoiding unnecessary duplicaiton of services an preventing medical errors. Currently Medicare offers the Medicare Shared Savings Program that allows ACOs to share in the savings it achieves for the Medicare program. ACOs may also be penalized for poor performance. 

Penalty Delay
However, CMS recently proposed that health care systems experimenting with a new way of being paid by Medicare would have three extra years before they could be punished for poor performance. This three-year delay is in addition to the three-year extension currently in place, for a total of six years. The proposal can be found here. The new rule applies to both new and existing ACOs. 

While ACOs wouldn't face penalties for an additional three years, any ACO that chose to avoid penalties after the initial delay period of three years would be limited to 40-percent of the money they save Medicare. There is a 50-percent maximum cut off of savings ACOs are able to keep during the first three years. 

Track Three ACO Model
The new ACO model, known as "Track Three," allows ACOs to keep up to 75-percent of the money they save Medicare. Track Three ACOs would be responsible for 15-percent of any excess spending they cost Medicare. This is higher than the 10-percent limit to the other models of ACOs that are in place now. 

Omnibus Continues Tax Breaks for Blue Cross and Blue Shield Insurance & Ups Spending to Detect Healthcare Fraud and Abuse

The 2015 Fiscal Year Omnibus Appropriations Bill provides just over $1 trillion in discretionary spending in compliance with the Murray-Ryan budget agreement and funds the majority of the federal government through Sept. 30, 2015. 

Nongermane Riders

The New York Times reports that "Steve Ellis, vice president of Taxpayers for Common Sense, a nonprofit research group that tracks federal spending, said the bill bestowed favors on all sorts of constituencies.

“Authors of the bill and lobbyists behind these provisions know they are in there,” Mr. Ellis said. “But the public will not find out about most of them for weeks or months, if ever.” Congress supposedly forswore spending earmarks several years ago, after federal largess led to several scandals. But lawmakers can still steer money in less conspicuous ways."

One example of a nongermane rider that went into the bill without public debate provides relief to nonprofit Blue Cross and Blue Shield plans, which have special tax breaks that may have been threatened by provisions in the Affordable Care Act. While Blue Cross is not mentioned by name in the legislation, the deduction is only available to Blue Cross and Blue Shield plans. Blue Cross and Blue Shield have been lobbying Congress for a clarification since the Affordable Care Act was signed in 2010.

Fraud Prevention

The Committee on Appropriations executive summary also explains that the bill provides $1.484 billion for cap adjustment funding to prevent waste, fraud, abuse and improper payments in the Medicare, Medicaid and Social Security programs. This is a $560 million increase in funding from last year's level.

A significant portion of those funds, $672 million, are dedicated to the Health Care Fraud and Abuse Control program at the Centers for Medicare and Medicaid Services. That amount more than doubles the level enacted in fiscal year 2014. One reason for the increase is that preventing fraud creates a significant savings for the government. The latest data shows that for every $1 spent on fraud and abuse control, $8.10 is recovered by the Department of Treasury. That recovery ration is the highest three-year average return on investment in the entire 17-year history of the Health Care Fraud and Abuse Control program.

Further Information

For a more comprehensive discussion of nongermane riders passed in the Omnibus see this New York Times article, "In Final Spending Bill, Salty Food and Belching Cows are Winners." The Senate Committee on Appropriations executive summary of the bill can be found here.

CMS State Innovation Models Grants Awarded

The HHS announced Tuesday that a significant portion of the $665 million in available grants was awarded to health IT programs.The District of Columbia, 28 states, and three territories received grant money to fund local experiments in improving health care. The money is the second round of grants coming from CMS's State Innovation Models initiative. A breakdown of the awarded grants can be found at the initiative website. 

Politico reports that the selected health IT projects largely focus on improving data in electronic health records and systems. Part of the $100 million New York will receive will go toward better health IT, "including greatly enhanced capacities to exchange clinical data and an all-payer database." Overall, the state is looking to create a stronger, more integrated primary care workforce and delivery system. Colorado will receive up to $65 million over four years to integrate physical and behavioral health care in primary care and community mental health center. Part of the money will expand IT efforts including telehealth. The money will also assist in integrating public health, behavioral health and primary care sectors. Data analytics is a factor in the plans for Michigan and Iowa.

CMS Boosts Coverage for Telehealth

The Centers for Medicare & Medicaid Services released new rules that significantly broaden coverage for chronic care telehealth services.The rulemaking changes are inside the 1,185-page document detailing Medicare payments to physicians and other providers. The new rules also include seven new covered procedure codes for telehealth, including annual wellness visits, psychotherapy services, and prolonged services at physicians' offices.

Health Leaders Media reports, "The American Telemedicine Association, which had sought the expanded coverage for five years, notes that among the rules are provisions that will pay for remote chronic care management using the new current procedural terminology (CPT) code 99490, with a monthly unadjusted, non-facility fee of $42.60.

"For us, it was more important to begin to specifically address chronic care," says Gary Capistrant, senior director of public policy at ATA. "The combination of the chronic care management code and being able to use it in conjunction with monitoring of those chronic conditions is a big step forward and a very substantial change for Medicare." Capistrant says the new rules also represent an acknowledgement by CMS that reimbursing for chronic care could prove to be cost effective.

"It's an important policy move. Whether it is sufficient, time will tell, but it is certainly a step in the right direction and an important initiative," he says. "There has been a lot of focus on primary care, even with the Medicare population. That may be the 80% of the people but it is only 20% of the problem. There's an increasing emphasis on looking at the 80% of the problem that is 20% of the people, and that is chronic and specialty care. They understand that the government is spending a huge amount for chronic care conditions and that there is a value managing those to reduce the overall expenditures."

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