TITLE: The One-Hour Nurse Visits That Let Insurers Collect $15 Billion From Medicare
https://www.wsj.com/health/healthcare/medicare-extra-payments-home-visits-diagnosis-057dca8b
EXCERPT: Millions of times each year, insurers send nurses into the homes of Medicare recipients to look them over, run tests and ask dozens of questions.
The nurses aren’t there to treat anyone. They are gathering new diagnoses that entitle private Medicare Advantage insurers to collect extra money from the federal government.
A Wall Street Journal investigation of insurer home visits found the companies pushed nurses to run screening tests and add unusual diagnoses, turning the roughly hourlong stops in patients’ homes into an extra $1,818 per visit, on average, from 2019 to 2021. Those payments added up to about $15 billion during that period, according to a Journal analysis of Medicare data.
Nurse practitioner Shelley Manke, who used to work for the HouseCalls unit of UnitedHealth Group, was part of that small army making home visits. She made a half-dozen or so visits a day, she said in a recent interview.
Part of her routine, she said, was to warm up the big toes of her patients and use a portable testing device to measure how well blood was flowing to their extremities. The insurers were checking for cases of peripheral artery disease, a narrowing of blood vessels. Each new case entitled them to collect an extra $2,500 or so a year at that time.
But Manke didn’t trust the device. She had tried it on herself and had gotten an array of results. When she and other nurses raised concerns with managers, she said, they were told the company believed that data supported the tests and that they needed to keep using the device.
“It made me cringe,” said Manke, who stopped working for HouseCalls in 2022. “I didn’t think the diagnosis should come from us, period, because I didn’t feel we had an adequate test.”
Other nurses interviewed by the Journal said many of the diagnoses that home-visit companies encouraged them to make wouldn’t otherwise have occurred to them, and in many cases were unwarranted.
Last month, the Journal reported that insurers received nearly $50 billion in payments from 2019 to 2021 due to diagnoses they added themselves for conditions that no doctor or hospital treated. Many of the insurer-driven diagnoses were outright wrong or highly questionable, the Journal found.
TITLE: Survey Exposes Pervasive Billing Errors, Aggressive Tactics in US Health Insurance
https://www.ajmc.com/view/survey-exposes-pervasive-billing-errors-aggressive-tactics-in-us-health-insurance
EXCERPTS: A new report published by The Commonwealth Fund has revealed that within the last year, 45% of insured adults received a medical bill for a service they believed to be covered by their insurance.1 Even when a service was recommended by a physician, 17% were denied coverage.
This discrepancy not only leads to financial strain but also contributes to worsening health outcomes for many patients. The survey, which included responses from over 7800 insured Americans of working age, found that about 60% of those who experienced coverage denials reported delays in care, with 47% indicating that their health conditions deteriorated as a result.
Some individuals also reported that they found out about serious health problems later than they would have liked due to the delays in care. Aside from the negative impact these adults experienced related to their condition, denials and delays created additional emotional turmoil, with 80% reporting that the situation caused worry and anxiety.
Recent media investigations have found that some insurance company doctors are not incentivized to spend the time needed to scrutinize patients’ medical records and follow guidelines for making informed decisions about approving or denying a care request, survey authors wrote.1 The survey itself didn’t name specific health plans or insurers, although a couple appeared in its references.
An article published in ProPublica delved into PXDX, Cigna’s review system, which was developed more than a decade ago by Alan Muney, MD, ScB.4 Muney was recruited by Cigna to help “spot savings” in its processes because of his work with UnitedHealthcare.
With this system, the speed of rejecting claims is instantaneous, citing “medical grounds without opening the patient file, leaving people with unexpected bills,” according to the ProPublica investigation.
“Over a period of 2 months last year, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of 1.2 seconds on each case, the documents show. The company has reported it covers or administers health care plans for 18 million people,” the article stated.
Muney’s system was designed “to prevent claims for care that Cigna considered unneeded or even harmful to the patient." He told ProPublica that “the policy simply allowed Cigna to cheaply identify claims that it had a right to deny.” However, the article explained that while Cigna was generating the system to swiftly sort through denials, some executives had concerns about its legality. One stated that Cigna’s legal department approved it, and the executives considered “it might fall into a legal gray zone.”
Patients and providers are not the only ones affected; there's evidence that Cigna used fraudulent tactics to inflate payments from its Medicare Advantage plans.5 Last year, the company paid $172 million to settle claims of wrongful reimbursement after using false diagnosis codes.
Providers and experts across specialties have expressed frustration with the excessive barriers they face while trying to ensure their patients have access to the personalized, recommended care they provide. Jeffrey Sippel, MD, MPH, associate director of inpatient clinical services and associate professor of clinical medicine in the Pulmonary Sciences and Critical Care Medicine Division at the University of Colorado School of Medicine, told The American Journal of Managed Care® (AJMC®) he’s been inundated with denied insurance claims from Medicare Advantage plans for prescribing his patients amyotrophic lateral sclerosis noninvasive ventilators.7
“It's driven by money. It's driven by a lack of appreciation of how dynamic these patients are, and how quickly they can change from sort of stable to doing quite poorly,” he explained. “And then the final thing that [insurance companies] don't appreciate is that when we admit these patients appropriately, the costs associated with that admission are huge. They could have saved an admission and saved themselves tens of thousands of dollars. It's a short-sighted approach to making this quarter's profit statement look better.”
TITLE: Why are so many nonprofit (wink, wink) hospitals rolling in money?
https://www.wusf.org/health-news-florida/2024-08-04/why-are-so-many-nonprofit-wink-wink-hospitals-rolling-in-money
EXCERPT: “Hospitals are some of the biggest businesses in the U.S. — nonprofit in name only,” said Martin Gaynor, an economics and public policy professor at Carnegie Mellon University. “[Diversified businesses] realized they could own for-profit businesses and keep their not-for-profit status. So the parking lot is for-profit; the laundry service is for-profit; they open up for-profit entities in other countries that are expressly for making money. Great work if you can get it.”
Many universities’ most robust income streams come from their technically nonprofit hospitals. At Stanford University, 62% of operating revenue in fiscal 2023 was from health services; at the University of Chicago, patient services brought in 49% of operating revenue in fiscal 2022.
To be sure, many hospitals’ major source of income is still likely to be pricey patient care. Because they are nonprofit and therefore, by definition, can’t show that thing called “profit,” excess earnings are called “operating surpluses.” Meanwhile, some nonprofit hospitals, particularly in rural areas and inner cities, struggle to stay afloat because they depend heavily on lower payments from Medicaid and Medicare and have no alternative income streams.
But investments are making “a bigger and bigger difference” in the bottom line of many big systems, said Ge Bai, a professor of health care accounting at the Johns Hopkins University Bloomberg School of Public Health. Investment income helped Cleveland Clinic overcome the deficit incurred during the pandemic.
When many U.S. hospitals were founded over the past two centuries, mostly by religious groups, they were accorded nonprofit status for doling out free care during an era in which fewer people had insurance and bills were modest. The institutions operated on razor-thin margins. But as more Americans gained insurance and medical treatments became more effective — and more expensive — there was money to be made.
Not-for-profit hospitals merged with one another, pursuing economies of scale, like joint purchasing of linens and surgical supplies. Then, in this century, they also began acquiring parts of the health care systems that had long been for-profit, such as doctors’ groups, as well as imaging and surgery centers. That raised some legal eyebrows — how could a nonprofit simply acquire a for-profit? — but regulators and the IRS let it ride.
And in recent years, partnerships with, and ownership of, profit-making ventures have strayed further and further afield from the purported charitable health care mission in their community.
“When I first encountered it, I was dumbfounded — I said, ‘This not charitable,’” said Michael West, an attorney and senior vice president of the New York Council of Nonprofits. “I’ve long questioned why these institutions get away with it. I just don’t see how it’s compliant with the IRS tax code.” West also pointed out that they don’t act like charities: “I mean, everyone knows someone with an outstanding $15,000 bill they can’t pay.”
Hospitals get their tax breaks for providing “charity care and community benefit.” But how much charity care is enough and, more important, what sort of activities count as “community benefit” and how to value them? IRS guidance released this year remains fuzzy on the issue.
Academics who study the subject have consistently found the value of many hospitals’ good work pales in comparison with the value of their tax breaks. Studies have shown that generally nonprofit and for-profit hospitals spend about the same portion of their expenses on the charity care component.
Here are some things listed as “community benefit” on hospital systems’ 990 tax forms: creating jobs; building energy-efficient facilities; hiring minority- or women-owned contractors; upgrading parks with lighting and comfortable seating; creating healing gardens and spas for patients.
All good works, to be sure, but health care?
What’s more, to justify engaging in for-profit business while maintaining their not-for-profit status, hospitals must connect the business revenue to that mission. Otherwise, they pay an unrelated business income tax.
“Their CEOs — many from the corporate world — spout drivel and turn somersaults to make the case,” said Lawton Burns, a management professor at the University of Pennsylvania’s Wharton School. “They do a lot of profitable stuff — they’re very clever and entrepreneurial.”
The truth is that a number of not-for-profit hospitals have become wealthy diversified business organizations. The most visible manifestation of that is outsize executive compensation at many of the country’s big health systems. Seven of the 10 most highly paid nonprofit CEOs in the United States run hospitals and are paid millions, sometimes tens of millions, of dollars annually.