Harris Meyer, Author at �鶹Ů�� Health News

He Went in for a Colonoscopy. The Hospital Charged $19,000 for Two.

Harris Meyer — Thu, 19 Dec 2024 10:00:00 +0000

Tom Contos is an avid runner. When he started experiencing rectal bleeding in March, he thought exercise could be the cause and tried to ignore it. But he became increasingly worried when the bleeding continued for weeks.

The Chicago health care consultant contacted his physician at Northwestern Medicine, who referred him for a diagnostic colonoscopy, at least partly because Contos, 45, has a family history of colon issues.

“I work out a lot,” he said. “But my partner said this isn’t normal. My primary care physician said, ‘Given your family history, let’s get you in.’”

Northwestern Memorial Hospital asked him to prepay $1,000 out-of-pocket, and he underwent the procedure in June.

Then the bill came.

The Medical Procedure

Colonoscopies are performed in the United States a year. Rates of colorectal cancer are on the rise, particularly among younger people.

The procedure, which is also a recommended screening for people 45 or older, involves examining the large intestine using a tube with a video camera that can also collect tissue samples.

It typically takes less than one hour, with another hour spent taking the patient’s history, administering anesthesia, and monitoring their recovery, said Glenn Littenberg, a physician who recently chaired the reimbursement committee of the American Society of Gastrointestinal Endoscopy.

According to Contos’ medical record, the gastroenterologist who performed his colonoscopy described it as “not difficult.” He biopsied and removed small growths called polyps from two spots and identified large internal hemorrhoids, which are swollen veins.

The biopsy samples were sent to pathology for testing and found to be precancerous. But the gastroenterologist reported finding no evidence of cancer, and after reviewing the pathology report, he concluded hemorrhoids were the likely cause of the bleeding.

The Final Bill

The hospital charged a total of $19,206 for the procedure, including physician fees. The insurer negotiated the price to $5,816 and paid $1,979, leaving a patient share of $4,047. (It wasn’t clear why the payments added up to slightly more than the negotiated price.) After Contos had paid $1,000 up front, plus $1,381 right after the procedure, the hospital said he still owed $1,666.

The Billing Problem: Colonoscopies That Find Polyps Cost More

Contos was shocked and angry when he received his itemized bill. “I said, ‘I don’t understand this.’ Then I started to research the cost.”

He asked the hospital what it charges for a diagnostic colonoscopy and was told he’d been sent a cost estimate through his online patient portal prior to the procedure.

The estimate, which took his deductible of $3,200 into account, listed a total price of $7,203, with an out-of-pocket bill of $2,381. He asked Northwestern why the charges were nearly three times the estimate and why his out-of-pocket share was nearly twice as high.

One big reason was revealed in an explanation of benefits (EOB) statement from Contos’ insurance company, Aetna: Northwestern had charged for two colonoscopies, at $5,466 each. And there were two fees for the gastroenterologist — $1,535 and $1,291.

The first procedure was listed as “colonoscopy and biopsy,” while the second was listed as “colonoscopy w/lesion removal.” Aetna’s negotiated member rate reduced the first $5,466 hospital charge to $3,425, while the charge for the second procedure was lowered to $1,787 — $1,638 less.

Neither the bill nor the EOB explained why there was a second procedure listed, at a reduced price.

After examining Contos’ bill, Littenberg said it’s standard for providers to bill for two colonoscopies if they remove two or more polyps in different ways, because of the extra work. As in this case, hospitals typically use a modifier code that reduces the amount charged for the second billed colonoscopy so they charge only for the extra work, he added.

“How do you explain that in sensible terms that anyone could understand?” Littenberg said.

Even with that reduction, Littenberg said, he thought Contos’ total out-of-pocket cost of $4,047 was “a lot, though not rare for large academic centers.”

Contos paid a fee up front, then made another payment after his procedure. He was shocked and angry when he got his itemized bill showing he still owed more. (Taylor Glascock for �鶹Ů�� Heath News)

Contos’ insurance documents show Aetna’s negotiated rate for his colonoscopy at Northwestern was more than twice the insurer’s median negotiated rate for the same procedure at other Chicago-area hospitals, according to Forrest Xiao, director of quantitative research at Turquoise Health, a company that gathers health care price data.

In exchanges with Northwestern and Aetna representatives, Contos asked why he was charged for two colonoscopies. A Northwestern representative said that because of the modifier code, he wasn’t actually being billed for two procedures, which Contos found bewildering.

“I told Northwestern, ‘I’m not paying that, and I don’t care if you send me to collections,’” he said. He filed appeals with the hospital and Aetna but was ultimately told the billing was correct.

The Resolution

In an email, Contos told the billing department that its charge was “ridiculously high.” A representative responded that Northwestern’s pricing is in line with other academic medical centers in Chicago and “non-negotiable” — and that his account would be turned over to a collections agency.

CVS Health spokesperson Phillip Blando said in a written statement to �鶹Ů�� Health News that the claims for Contos were “paid accurately” by Aetna, declining further comment. (CVS Health owns Aetna.)

Northwestern did not respond to multiple requests for comment.

Contos said he wrote to his physician that he was regretfully dropping him and leaving Northwestern entirely because of the health system’s high pricing.

He said he’s still experiencing periodic symptoms, which he relieves with over-the-counter Preparation H. A one-ounce tube of the ointment costs $10.99 at CVS.

The Takeaway

To get a colonoscopy at a lower price, Littenberg said, patients should consider going to a freestanding endoscopy center or ambulatory surgery center not associated with a hospital. found that ambulatory surgery centers billed insurers an average of about $1,030 for a colonoscopy with biopsy or with removal of a polyp, compared with $1,760 at a hospital.

To get a sense of how much a diagnostic colonoscopy could cost, patients can consult a hospital’s price website and an insurer’s cost-estimator website, both required by federal price transparency rules.

Patients also can look up a of the cash price, which can be lower than the price for patients using insurance to pay for a procedure. In addition, they can check prices through websites such as and , which draw from federal price transparency data or claims data from insurers.

Still, the actual cost could be higher than the estimate if the colonoscopy finds one or more polyps that need to be removed and biopsied, which occurs in at least 40% of all colonoscopies, Littenberg said. Patients should ask whether the price includes those potentially extra services. After all, the point of a diagnostic colonoscopy is to find and, if necessary, treat lesions that could cause problems — regardless of the number found.

It all should be easier for patients, Xiao said: “You shouldn’t have to be a medical billing expert to know what you’re going to pay.”

Bill of the Month is a crowdsourced investigation by �鶹Ů�� Health News and that dissects and explains medical bills.��Since 2018, this series has helped many patients and readers get their medical bills reduced, and it has been cited in statehouses, at the U.S. Capitol, and at the White House. Do you have a confusing or outrageous medical bill you want to share? Tell us about it!

�鶹Ů�� Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at �鶹Ů��—an independent source of health policy research, polling, and journalism. Learn more about .

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Health Worker for a Nonprofit? The New Ban on Noncompete Contracts May Not Help You

Harris Meyer — Wed, 05 Jun 2024 09:00:00 +0000

Many physicians and nurses are happy about the Federal Trade Commission’s banning the use of noncompete agreements in employment contracts. But they are disappointed that it may not protect those who work for nonprofit hospitals and health care facilities, which provide most of the nation’s care and employ the largest number of medical professionals.

In April, in a 3-2 vote, the FTC prohibiting contracts that prevent an employee from taking a job with a competitor. Calling the noncompete agreements “a widespread and often exploitative practice,” an agency announcement described them as an unfair method of competition that depresses wages and hinders new business formation.

The rule bars employers in most industries, including health care, from using contract clauses that block employees from leaving for other jobs or starting a competing business in the same geographic area for a fixed period of time.

But that doesn’t help many health professionals, because the FTC Act gives the agency authority over companies organized to operate for profit but not over nonprofit, charitable organizations, which are also tax-exempt.

Still, the agency noted some nonprofits could be bound by the rule if they do not operate as true charities. The rule establishes a two-part test to determine if the FTC has jurisdiction over a nonprofit — whether the organization is carrying on business for only charitable purposes, and whether its income goes to public rather than private interests.

“Our rulemaking record includes powerful stories from health care workers who are employed by nonprofits about how noncompetes hurt patients and providers,” said FTC Commissioner Rebecca Kelly Slaughter, one of three Democratic commissioners, before the April 23 vote. “I do not think there is a good justification for them to be excluded from this rule.”

Noncompete contract terms for physicians, nurse practitioners, and other medical professionals in hospitals and various health care facilities. Some providers say these agreements have forced them to leave their communities and patients behind if they wanted to exit unethical or unsafe workplace conditions.

of U.S. community hospitals are nonprofits or government-owned, and they employ many of the nation’s medical professionals. As of 2022, nearly three-quarters of U.S. physicians were employed by , both nonprofit and for-profit.

Based on their designation as charities that don’t have to pay income or property taxes, U.S. nonprofit hospitals received a total estimated tax exemption of , according to �鶹Ů��, a nonpartisan research organization.

That exceeded the estimated $16 billion they spent on charity care for patients unable to afford their medical bills, �鶹Ů�� said.

Physician and nursing groups say it makes no sense to treat nonprofit hospitals differently because they are just as money-driven as for-profit hospitals. Patients, they say, will benefit if providers are free to call out unsafe conditions and change jobs. “Giving physicians freedom of movement will force hospitals to compete to improve working conditions,” said Jonathan Jones, immediate past president of the American Academy of Emergency Medicine.

Chad Golder, general counsel and secretary of the American Hospital Association, which represents mostly nonprofit hospitals, said the rule would increase health care costs and reduce patient access by triggering hospital bidding wars for physicians. He predicted the FTC would try to apply the rule to both nonprofit and for-profit hospitals.

“They aren’t saying exactly what they’ll do, but it’s a pretty significant move for them to say we’ll apply our own test to determine if we can regulate a nonprofit,” Golder said. “Nonprofit entities now will need to be extra careful.”

In addition, some nonprofit hospitals have joint ventures with for-profit hospitals and medical groups. That could create complicated questions about whether their employee contracts come under the rule, said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents for-profits.

The new rule arose from President Joe Biden’s 2021 executive order to curb the unfair use of noncompete agreements, part of his broader mandate to boost U.S. economic competition and worker mobility.

The FTC argued that banning noncompetes, which it said cover 1 in 5 American workers, would lower health care costs by up to $194 billion over the next decade. It will ensure Americans “freedom to pursue a new job, start a new business, or bring a new idea to market,” FTC Chair Lina Khan said.

The rule also prohibits contract terms that function like noncompetes to stop employees from leaving to work for competing companies or start their own businesses. These might include overbroad nondisclosure agreements, training repayment provisions, and nonsolicitation clauses.

“No one should be trapped in an unsafe job by onerous contracts that prevent them from taking another job,” said Brynne O’Neal, a regulatory policy specialist at National Nurses United, the profession’s largest dedicated labor union in the U.S. Hospitals, she said, use that require nurses to pay as much as $30,000 in training costs if they leave, essentially locking them in their jobs.

California, Minnesota, North Dakota, and Oklahoma already ban enforcement of noncompete clauses for all employees of both nonprofits and for-profits, while prohibit noncompetes for physicians. Even in states without bans, when they have found them to be overbroad or unreasonable.

Hospital executives argue that the noncompete rule will force them to compete against each other to hire physicians and other providers and ultimately cost them more, and that it advantages nonprofits over for-profits. “All it would do is increase the price of labor in a field that already has labor shortages and thin margins,” Golder said.

“The nonprofit hospital across the street could pursue our employees, while their employees would be protected, and that’s a basic fairness issue,” Kahn said.

But Clifford Atlas, an employment attorney with Jackson Lewis in New York, said that argument against the noncompete rule “won’t fly” in court because preventing competition for the services of physicians or other workers is not a business interest that’s protected by law or public policy.

The rule is set to take effect in September, though business groups against it in Texas and . Many legal experts predict that conservative judges will strike down the rule on the grounds that it .

Physician and nurses’ groups hope the FTC rule, whatever its fate in the courts, helps persuade hospitals and other health care employers to stop using noncompetes and to prohibit them.

“We’re telling our members it could be struck down, but we’re asking them to renegotiate their contracts,” said Jones of the American Academy of Emergency Medicine. “They should be asking their employers, ‘Wouldn’t you like to be on the right side and not to be seen as fighting against physicians and patients?’”

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Concerns Grow Over Quality of Care as Investor Groups Buy Not-for-Profit Nursing Homes

Harris Meyer — Wed, 13 Mar 2024 09:00:00 +0000

Shelly Olson’s mother, who has dementia, has lived at the Scandia Village nursing home in rural Sister Bay, Wisconsin, for almost five years. At first, Olson said, her mother received great care at the facility, then owned by a not-for-profit organization, the Evangelical Lutheran Good Samaritan Society.

Then in 2019, Sanford Health — a not-for-profit, tax-exempt hospital system — acquired the nursing home. The covid-19 pandemic struck soon after. From then on, the facility was regularly short of staff, and residents endured long wait times and other care problems, said Olson, a registered nurse who formerly worked at the facility.

Now Scandia Village has a new, for-profit owner, . Olson said she was reassured when Continuum hired two locals as the facility’s new administrator and nursing director.

But Kathy Wagner, a former Scandia Village nursing director, is not optimistic. “The for-profit owner will face the same problems,” said Wagner, who is now retired and serves on that monitors the facility’s quality of care. “No one has articulated what the for-profit owner will bring to the table to change the picture.”

The sale of Scandia Village this year is part of a trend of for-profit companies, including private equity groups and real estate investment trusts, snapping up struggling not-for-profit nursing homes, many of which were operated for decades by Lutheran, , , and .

The pace of sales has ticked up, reaching a high last year, . Since 2015, 900 not-for-profit nursing homes and senior living communities nationwide have changed hands, with more than half of them acquired by for-profit operators.

For-profit groups of the roughly 15,000 nursing homes in the United States, which serve more than 1.3 million residents.

While overall for-profit ownership percentage hasn’t notably increased in recent years, the type of for-profit companies that own these facilities has shifted toward private equity, real estate investment trusts, and complicated ownership structures, said David Grabowski, a professor of health care policy at Harvard Medical School.

Consumer advocates, researchers, and about this trend. They point to studies showing that nursing homes owned by for-profit companies — particularly investors in private equity and real estate — tend to have , and more regulatory violations. Motivated by these concerns, the Biden administration last fall that requires nursing homes to disclose more information about their owners and management firms.

Executives at not-for-profit organizations, as well as researchers who study nursing homes, wonder how for-profit companies can accomplish what the previous not-for-profit owners could not: reviving financially struggling nursing homes.

“I don’t know where these investor groups can see savings without cutting back on the level of quality,” Grabowski said.

Part of the problem is that to boost profits, many for-profit operators set up to provide fee-based services such as management, physical therapy, and staffing. They also may sell a nursing home’s real estate to a sister company, which then charges high rent. These payments cut into the available operating funds to provide adequate staffing and quality care.

Last year, New York Attorney General Letitia James of four nursing homes for financial fraud and resident neglect, alleging that they used more than $83 million in public funds to enrich themselves through a complex network of related companies while providing horrendous care.

“When nonprofits are sold, you start to see a precipitous decline in quality,” said Sam Brooks, director of public policy for National Consumer Voice for Quality Long-Term Care. “Nonprofits generally staff well above for-profits. When churches and nonprofits divest these homes, for-profits move in, and the care gets really bad.”

The leaders of not-for-profits that have sold facilities to for-profit operators cite a variety of reasons for exiting or downsizing. Those reasons include state Medicaid payment rates that are too low to cover operating costs and a shortage of nursing and other staffers that makes it hard to maintain quality care. In addition, they say their facilities have seen fewer admissions, at least partly because Medicare Advantage plans for rehabilitation care in nursing homes.

Susan McCrary, chief executive of St. Ignatius Community Services in Philadelphia, said her organization sold its nursing home because it was losing money. She said low state Medicaid rates forced their hand, even after the state bolstered its Medicaid payments by 17.5% in January 2023.

McCrary said the St. Ignatius board worried the losses would jeopardize the organization’s ability to continue its mission of serving low-income seniors, for whom it also operates three independent-living and assisted living buildings.

At the same time, “our board definitely had concerns about selling to a for-profit because we’re aware of the research that shows the quality of care is not the same as with a nonprofit,” McCrary said. “But we knew we needed to move forward with this process to continue our services in West Philadelphia.”

Nate Schema, CEO of the Evangelical Lutheran Good Samaritan Society, said his organization decided to sell some of its long-term care facilities to Continuum Healthcare, a New Jersey-based corporation, and a second company, Idaho-based Cascadia Healthcare, as part of its strategy to better serve its communities. Good Samaritan now operates in seven Midwestern states, . Consolidating markets better enables his organization to launch programs for nursing home residents in conjunction with Sanford’s hospitals and clinics.

“We’ve been very intentional about finding quality partners to carry on our mission,” Schema said. “Unfortunately, we haven’t seen a lot of nonprofit providers coming to us.”

Continuum, which took over Scandia Village nursing home in January, will address staffing shortages by improving wages, benefits, and career opportunities, said Tim Hodges, the corporation’s communications director. Continuum, which is owned by private investors and commercial lenders, owns eight nursing homes in four states.

Similarly, Steve LaForte, Cascadia’s executive vice president, said his company has revived the finances of the nine Good Samaritan nursing homes it took over in the Pacific Northwest partly by attracting more patient referrals and strengthening relationships with state policymakers, in the hope it “leads to more realistic Medicaid rates.” He said Cascadia has also focused on workplace culture — such as by not using workers from staffing agencies — and on empowering those who run the individual facilities to select vendors for pharmacy, rehabilitation, and other services.

Cascadia, he said, does not use tactics like contracting with sister vendors to boost its profits. “That type of organization gives the whole industry a bad name,” LaForte said.

The overall perception of for-profit corporations is unfair, said Zach Shamberg, CEO of the Pennsylvania Health Care Association, because all nursing homes are struggling under inadequate Medicaid rates and high labor costs due to a shortage in workers.

He said he hopes that Pennsylvania’s Medicaid rate increase — plus a new minimum staffing requirement and a mandate that 70% of total costs be dedicated to resident care — will address the financial and quality issues. Nursing homes in Pennsylvania and across the country are also lobbying state lawmakers and the federal government to offer for residents.

“If there aren’t for-profit entities to buy these facilities, these facilities are closing, which would exacerbate the existing access to care crisis as the population gets older,” Shamberg said.

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FTC Chief Gears Up for a Showdown With Private Equity

Harris Meyer — Thu, 30 Nov 2023 10:00:00 +0000

A recent Federal Trade Commission civil lawsuit accusing one of the nation’s largest anesthesiology groups of monopolistic practices that sharply drove up prices is a warning to private equity investors that could temper their big push to snap up physician groups.

Over the past three years, have signaled they would apply more scrutiny to private equity acquisitions in health care, including roll-up deals in which larger provider groups buy smaller groups in a local market.

Nothing happened until September, when the U.S. Anesthesia Partners and the private equity firm Welsh, Carson, Anderson & Stowe in federal court in Houston, alleging they had rolled up nearly all large anesthesiology practices in Texas. In the first FTC legal challenge against a private equity purchase of medical practices, the federal agency targeted one of the most aggressive private equity firms involved in building large, market-dominating medical groups.

In an interview, FTC Chair Lina Khan confirmed that her agency wants to send a message with this suit. Welsh Carson and USAP “bought up the largest anesthesiology practices, then jacked up prices and entered into price-setting and market-allocation schemes,” said Khan, who was appointed by President Joe Biden in 2021 to head the antitrust enforcement agency, with a mandate to combat health care consolidation. “This action puts the market on notice that we will scrutinize roll-up schemes.”

The large and growing volume of private equity in recent years has raised mounting concerns about the impact on health costs, quality of care, and providers’ clinical autonomy. A published last year found that prices charged by anesthesiology groups increased 26% after they were acquired by private equity firms.

“Now we’re seeing that scrutiny with this suit,” said Ambar La Forgia, an assistant professor of business management at the University of California-Berkeley, who co-authored the JAMA article. “This suit will cause companies to be more careful not to create too much local market power.”

The FTC’s lawsuit alleges that USAP and Welsh Carson engaged in an anti-competitive scheme to gain market power and drive up prices for hospital anesthesiology services. The FTC also accuses USAP and Welsh Carson — which established the medical group in 2012 and has expanded it to eight states — of cutting deals with competing anesthesiology groups to raise prices and stay out of one another’s markets.

USAP now controls 60% of Texas’ hospital anesthesia market, and its prices are double the median rates of other anesthesia providers in the state, according to the lawsuit. Learning that USAP would boost rates following one acquisition, a USAP executive wrote, “Awesome! Cha-ching,” the said.

In a written statement, Welsh Carson, which in radiology, orthopedic, and primary care groups, called the FTC lawsuit “without merit in fact or law.” It said USAP’s commercial rates “have not exceeded the rate of medical cost inflation for close to 10 years.”

The New York firm also said its investment in USAP “has allowed independent anesthesiologists to deliver superior clinical outcomes to underserved populations” and that the FTC’s action will harm clinicians and patients. Welsh Carson declined a request for interviews with its executives.

“This is a pretty common roll-up strategy, and some of the big private equity companies must be wondering if more FTC complaints are coming,” said Loren Adler, associate director of the Brookings Schaeffer Initiative on Health Policy. “If the FTC is successful in court, it will have a chilling effect.”

Since the FTC filed the USAP lawsuit, Khan said, the agency has received information from people in other health fields about roll-ups it should scrutinize. “We have limited resources, but it’s an area we are interested in,” she said. “We want to focus on where we see the most significant harm.”

In physician acquisition deals, PE firms to acquire a controlling interest in a large medical group, pay the physician owners a substantial upfront sum in exchange for sharply cutting their future compensation, and install a management team. Then they seek to acquire smaller groups in the same geographic market and bolt them onto the original medical group for more bargaining clout and operating efficiencies.

The PE firm’s goal is to garner at least 20% dividends a year and then sell the group to another investor for at least three times the purchase price in three to seven years. Critics say this short-term investment model spurs the investors and medical groups to boost prices and cut staffing to generate large profits as fast as possible.

“Private equity is trying to extract value quickly and sell the company for a profit, so there’s a lot more incentive to increase prices quickly and extract higher revenue,” La Forgia said.

In the two years after a sale, PE-owned practices in dermatology, gastroenterology, and ophthalmology charged insurers 20% more per claim on average than did practices not owned by private equity, according to published last year.

There are similar concerns about hospital systems acquiring physician practices, which also have . “The evidence shows that both private equity and hospital acquisitions of physician practices are bad for consumers, and scrutiny should be applied to all acquirers,” Adler said.

Critics warn that private equity roll-ups of medical groups can jeopardize quality of care, too. Chris Strouse, a Denver anesthesiologist who served on USAP’s national board of directors but left the company’s Colorado group out of disapproval in 2020, cited patient safety issues arising from short staffing and mismanagement. He said USAP would schedule shifts so that three or four providers would hand off to each other a single surgical procedure, which he said is risky. In addition, USAP frequently asked anesthesiologists to work the day after working a 24-hour on-call shift, he said. “The literature shows that’s outside the safety range,” he said. As a result, many providers have left USAP, he added.

The FTC has long been lax in monitoring roll-ups of physician groups, in part because federal law does not require public reporting of these deals unless they exceed , a threshold adjusted over time. Lowering the threshold would require congressional action. As a result, regulators may be unaware of many deals that lead to gradual market concentration, which allows providers to demand higher prices from insurers and employer health plans.

Recognizing that problem, the FTC proposed in June to for companies planning mergers, in hopes of spotting previous acquisitions of smaller groups that could lead to excessive market power and higher prices. In addition, in a draft of their , issued in July, the FTC and the Department of Justice said they would consider the cumulative effect of a series of smaller acquisitions.

“The ways PE firms are making serial acquisitions, each individual acquisition is under the radar, but in aggregate they roll up the whole market,” Khan said. “Between the merger reporting form and the new merger guidelines, we want to be able to better catch unlawful roll-up schemes. … This would enable us to stop roll-ups earlier.”

But Brian Concklin, a lawyer with the law firm Clifford Chance, whose clients include private equity firms, said the FTC’s proposed reporting requirements would hamper many legitimate mergers. “The notion that they need all that information to catch deals that lessen competition seems overblown and false, given that the vast majority of these deals do not lessen competition,” he said. “It will be a substantial burden on most if not all clients to comply.”

Researchers and employer groups, however, were encouraged by the FTC’s action, though they fear it’s too little, too late, because consolidation already has reduced competition sharply. Some even say the market has failed and price regulation is needed.

“Providers have been able to extort higher prices on services with no improvement in quality or value or access,” said Mike Thompson, CEO of the National Alliance of Healthcare Purchaser Coalitions. “The FTC stepping up its game is a good thing. But this horse is out of the barn. If we don’t have better enforcement, we won’t have a marketplace.”

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As More Patients Email Doctors, Health Systems Start Charging Fees

Harris Meyer — Thu, 14 Sep 2023 09:00:00 +0000

Meg Bakewell, who has cancer and cancer-related heart disease, sometimes emails her primary care physician, oncologist, and cardiologist asking them for medical advice when she experiences urgent symptoms such as pain or shortness of breath.

But she was a little surprised when, for the first time, she got a bill — a $13 copay — for an emailed consultation she had with her primary care doctor at University of Michigan Health. The health system had begun charging in 2020 for “e-visits” through its MyChart portal. Even though her out-of-pocket cost on the $37 charge was small, now she’s worried about how much she’ll have to pay for future e-visits, which help her decide whether she needs to see one of her doctors in person. Her standard copay for an office visit is $25.

“If I send a message to all three doctors, that could be three copays, or $75,” said Bakewell, a University of Michigan teaching consultant who lives in Ypsilanti, Michigan, and is on long-term disability leave. “It’s the vagueness of the whole thing. You don’t know if you’ll get into a copay or not. It just makes me hesitate.”

Spurred by the sharp rise in email messaging during the covid pandemic, a growing number of health systems around the country when physicians and other clinicians send replies to their messages. Health systems that have adopted billing for some e-visits include a number of the nation’s premier medical institutions: Cleveland Clinic, Mayo Clinic, San Francisco-based UCSF Health, Vanderbilt Health, St. Louis-based BJC HealthCare, Chicago-based Northwestern Medicine, and the U.S. Department of Veterans Affairs.

Billing for e-visits, however, about the balance between fairly compensating providers for their time and enhancing patients’ access to care. Physicians and patient advocates fret particularly about the potential financial impact on lower-income people and those whose health conditions make it hard for them to see providers in person or talk to them on the phone or through video.

A large part of the motivation for the billing is to reduce the messaging. Soon after the pandemic hit, health systems saw a 50% increase in emails from patients, with primary care physicians facing the biggest burden, said A Jay Holmgren, an assistant professor of health informatics at UCSF, the University of California-San Francisco. System executives sought to compensate doctors and other providers for the extensive time they were spending answering emails, while prodding patients to think more carefully about whether an in-person visit might be more appropriate than a lengthy message.

After UCSF started charging in November 2021, the rate of patient messaging , by about 2%, Holmgren and his colleagues found.

Like UCSF, many other health systems now charge fees when doctors or other clinicians respond to patient messages that take five minutes or more of the provider’s time over a seven-day period and require medical expertise. They use for e-visits, implemented in 2020 by the federal Centers for Medicare & Medicaid Services.

E-visits that are include those relating to changes in medication, new symptoms, changes or checkups related to a long-term condition, and requests to complete medical forms. There’s no charge for messages about appointment scheduling, prescription refills, or other routine matters that don’t require medical expertise.

So far, UCSF patients are being billed for only 2% to 3% of eligible e-visits, at least partly because it takes clinicians extra time and effort to figure out whether an email encounter qualifies for billing, Holmgren said.

At Cleveland Clinic, only 1.8% of eligible email visits are being billed to patients, said Eric Boose, the system’s associate chief medical information officer. There are three billing rates based on the time the clinician takes to prepare the message — five to 10 minutes, 11 to 20 minutes, and 21 minutes or more. He said patients haven’t complained about the new billing policy, which started last November, and that they’ve become “a little smarter and more succinct” in their messages, rather than sending multiple messages a week.

The doctors at Cleveland Clinic, like those at most health systems that bill for e-visits, don’t personally pocket the payments. Instead, they get productivity credits, which theoretically enables them to reduce their hours seeing patients in the office.

“Most of our physicians said it’s about time we’re getting compensated for our time in messaging,” Boose said. “We’re hoping this helps them feel less stressed and burned out, and that they can get home to their families earlier.”

“It’s been a frustration for many physicians for many years that we weren’t reimbursed for our ‘pajama-time’ work,” said Sterling Ransone, the chair of the American Academy of Family Physicians’ Board of Directors. Ransone’s employer, Riverside Health System in Virginia, started billing for e-visits in 2020. “We do it because it’s the right thing for patients. But rarely do you see other professions do all this online work for free,” he said.

“We see physicians working two to four hours every evening on their patient emails after their shift is over, and that’s not sustainable,” said CT Lin, the chief medical information officer at University of Colorado Health, which has not yet adopted billing for email visits. “But we worry that patients with complex disease will stop messaging us entirely because of this copay risk.”

Many health care professionals share the fear that billing for messages will adversely affect medically and socially vulnerable patients. Even a relatively small copay could discourage patients from emailing their clinicians for medical advice in appropriate situations, said Caitlin Donovan, a senior director at the National Patient Advocate Foundation, citing studies showing the of copays on medication adherence.

Holmgren said that while patients with minor acute conditions may not mind paying for an email visit rather than coming into the office, the new billing policies could dissuade patients with serious chronic conditions from messaging their doctors. “We don’t know who is negatively affected,” he said. “Are we discouraging high-value messages that produce a lot of health gains? That is a serious concern.”

Due to this worry, Lin said, University of Colorado Health is experimenting with an alternative way of easing the time burden of e-visits on physicians. Working with Epic, the dominant electronic health record vendor, it will have an artificial intelligence chatbot draft email replies to patient messages. The chatbot’s draft message will then be edited by the provider. Several other health systems are already using the tool.

There also are questions about price transparency — whether patients can know when and how much they’ll have to pay for an email visit, especially since much depends on their health plan’s deductibles and copays.

While Medicare, Medicaid, and most private health plans cover email visits, not all do, experts say. Coverage may depend on the contract between a health system and an insurer. Ransone said Elevance Health, a Blue Cross Blue Shield carrier, recently told his health system it would no longer pay for email or telephonic visits in its commercial or Medicaid plans in Virginia. An Elevance spokesperson declined to comment.

Another price concern is that patients who are uninsured or have high-deductible plans may face the full cost of an email visit, which could run as high as $160.

At University of Michigan Health, where Bakewell receives her care, patients receive a portal alert prior to sending a message that there may be a charge; they must click a box indicating they understand, said spokesperson Mary Masson.

But Donovan said that leaves a lot of room for uncertainty. “How is the patient supposed to know whether something will take five minutes?” Donovan said. “And knowing what you’ll be charged is impossible because of health plan design. Just saying patients could be charged is not providing transparency.”

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Promising Better, Cheaper Care, Kaiser Permanente’s National Expansion Faces Wide Skepticism

Harris Meyer — Tue, 15 Aug 2023 09:00:00 +0000

As regulators review Kaiser Permanente’s proposed acquisition of a respected health system based in Pennsylvania, health care experts are still puzzling over how the , announced in April, could fulfill the managed care giant’s promise of improving care and reducing costs for patients, including in its home state of California.

KP said it would acquire Danville, Pennsylvania-based Geisinger — which has 10 hospitals, 1,700 employed physicians, and a 600,000-member health plan in three states — as the first step in the creation of a new national health care organization called Risant Health. Oakland-based Kaiser Permanente said it expects to invest $5 billion in Risant over the next five years, and to add as many as six more nonprofit health systems during that period.

Industry experts believe KP’s aim is to build a big enough presence across the country to effectively compete with players like Amazon, Aetna CVS Health, Walmart Health, and UnitedHealth Group in providing health care for large corporate customers. Kaiser Permanente executives touted the potential for spreading the group’s vaunted brand of quality, lower-cost care around the country.

But it’s not clear how KP will be able to bring its model, in which facilities and doctors receive a monthly per-member fee for all care, to markets where it doesn’t own an integrated system of physicians, hospitals, and health plans, as it does in California. Critics note that KP’s efforts to expand failed in a number of states in the 1980s and 1990s.

In addition, the physician-led Permanente Medical Groups, which lead KP’s patient care, were not involved in the Risant deal, raising questions about how their expertise would be shared.

“I don’t know how Kaiser will bring its knowledge and best practices to improve health care delivery without the involvement of the medical group, which does all the care delivery,” said Robert Pearl, a former CEO of the Permanente Medical Group who’s now a lecturer at the Stanford Graduate School of Business.

There are also questions about how the expansion will benefit current KP customers. The tax-exempt, nonprofit organization has 39 hospitals, 24,000 physicians, and 12.7 million health plan members in eight states and Washington, D.C., though about three-quarters of its members are in California, where it of the private insurance market. KP reported $95 billion in revenue last year.

“We’ve asked Kaiser Permanente management questions about the deal’s advantages to employees and customers, but we haven’t heard back,” said Caroline Lucas, the executive director of the Coalition of Kaiser Permanente Unions, several of which are in contentious contract talks with the company. “Where is the money coming from? Are the citizens of California and other states subsidizing this expansion? How are they benefiting?”

Kaiser Permanente CEO Greg Adams declined to comment. A KP spokesperson, Steve Shivinsky, said the group’s physicians would be involved in developing a “platform” to offer other health systems its value-based care expertise, including in design of care models, pharmacy practices, consumer digital engagement, development of health insurance products, and best practices for supply chains. Shivinsky said work on the platform was just beginning.

“Risant Health’s success will firmly establish value-based care as a better model for health care in this country,” said Shivinsky, KP’s director of national media relations.

“If there is a commitment to truly delivering higher-quality and lower-cost care, it will take time and hard work,” said John Toussaint, chair of Catalysis, a nonprofit that trains executives in health care and other industries in quality improvement. “But frankly I’m skeptical that’s the reason for these types of mergers. Bigger may be better for increasing prices, but not necessarily for improving care.”

The deal may be a sign that KP, founded in 1945, is hearing the alluring call of lucrative fee-for-service medicine. “This gets Kaiser into the much bigger part of the market — commercial insurance — and expands beyond their traditional model of owning all the pieces and selling their own insurance,” said Glenn Melnick, a health economics professor at the University of Southern California.

The Geisinger acquisition is being reviewed by the Pennsylvania Insurance Department, with a 30-day ending Aug. 7, 2023. The Federal Trade Commission and the California attorney general’s office declined to say whether they were reviewing the deal. KP expects the deal to close sometime in 2024. There was no purchase price, but KP said Risant would make a minimum of $2 billion available to Geisinger through 2028, including income that Geisinger generates itself.

Federal and state antitrust regulators have expressed growing concern about consolidation of hospitals and physician groups into ever-larger organizations with the power to drive up prices. But it’s unlikely regulators will challenge the deal since KP does not currently have a presence in Pennsylvania, Delaware, or Maine, where Geisinger operates.

Indeed, the deal could boost competition if KP’s investment enables Geisinger to expand beyond central and eastern Pennsylvania and take on the University of Pittsburgh Medical Center and Highmark, the state’s two dominant integrated health systems.

Around the country, Risant could be appealing to businesses that offer health plans to their employees. “If Kaiser can become an effective player in more markets through Risant and that leads to greater price competition, that will be very attractive to large employers,” said Bill Kramer, senior adviser for health policy at the Purchaser Business Group on Health, which represents large employer health plans.

Smaller health systems and physician groups that are struggling financially may also see joining Risant as a more palatable option than being acquired by more profit-hungry entities, such as private equity firms, Melnick noted.

Through tight coordination between its physicians, hospitals, and health plans, KP has a of producing good health outcomes, particularly for plan members with chronic conditions such as high blood pressure and diabetes. KP hospitals and doctors are paid a monthly per-member fee for all care — called capitated payment. That gives KP a powerful financial incentive to keep members healthy and prevent costly hospital admissions and emergency room visits.

In contrast, Geisinger and most other health systems across the country generally are paid for each separate procedure — known as fee-for-service payment — giving them less incentive to keep patients healthy and reduce overall costs. Because of that, it’s not clear how KP’s value-based care model will work at Geisinger and other health systems acquired through Risant.

Adams has said Risant won’t try to fully replicate Kaiser Permanente’s model. Instead, Risant will help other health systems achieve the same kind of outcomes and cost savings while working with multiple insurers and providers.

KP also could potentially learn lessons from Geisinger and other health systems about producing better health outcomes at lower cost for members. Geisinger has won acclaim for its , in which it accepts a fixed fee for providing an entire episode of care, such as heart bypass surgery, with no extra charge if the outcome isn’t satisfactory and the patient needs additional care.

But Kramer, a former KP executive, is skeptical. “It’s hard if not impossible to transform a medical group that’s reliant on fee-for-service payment into something like the Kaiser Permanente Medical Group,” he said.

Critics of the deal, citing KP’s in the 1980s and 1990s, also worry that building Risant Health could distract KP executives from cost-control and quality improvement efforts in their home state and draw down the organization’s financial reserves, potentially leading to premium hikes.

In 1999, for example, KP sold a money-losing medical group it had established in North Carolina in the mid-’80s. It faced opposition from the local medical community and challenges with employer health plans, among other factors. Kramer also pointed to its withdrawal from other markets including Connecticut, Missouri, Ohio, and Texas.

Still, KP did succeed in establishing a significant presence in the mid-Atlantic states, Washington, D.C., and Georgia, though it doesn’t own hospitals in those markets. It also has long-standing operations in Hawaii, Colorado, and Oregon.

With Risant, KP will be up against very large, sophisticated managed care competitors including UnitedHealth’s Optum, which across the country.

“Hopefully Kaiser’s senior leadership will be smarter this time around and avoid the kinds of problems they had when they expanded in the past,” Kramer said.

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Malpractice Lawsuits Over Denied Abortion Care May Be on the Horizon

Harris Meyer — Fri, 23 Jun 2023 09:00:00 +0000

A year after the overturning of Roe v. Wade, many physicians and hospitals in the states that have restricted abortion reportedly of women facing health-threatening complications out of fear they might face criminal prosecution or loss of their medical license.

Some experts predict those providers could soon face a new legal threat: medical malpractice lawsuits alleging they harmed patients by failing to provide timely, necessary abortion care.

“We will absolutely see medical malpractice cases emerge,” said Diana Nordlund, an emergency physician in Grand Rapids, Michigan, and former malpractice defense attorney, who chairs the Medical-Legal Committee of the American College of Emergency Physicians. When physicians decide not to provide treatments widely accepted as the standard of care because of these new laws, “that’s perceived as substandard care and there is increased civil liability.”

To some physicians and malpractice attorneys, the question is when — not if — a pregnant patient will die from lack of care and set the stage for a big-dollar wrongful death claim. Abortion rights supporters said such a case could pressure doctors and hospitals to provide appropriate abortion care, counterbalancing their fears of running afoul of state abortion bans, many of which call for criminal prosecution and revocation of medical licenses as punishment for violations.

“If we want to encourage proper care, there has to be some sort of counter-risk to physicians and hospitals for refusing to provide care that should be legal,” said Greer Donley, an associate professor at the University of Pittsburgh School of Law who studies the impact of abortion bans. “But most rational people would be more afraid of going to jail.”

Some supporters of abortion bans said they would welcome malpractice lawsuits. Providers are refusing to use that allow them to perform abortions to save a patient’s life or health, they said.

“It could help achieve our goal if it clarifies that the law did not contradict standard medical practice,” said John Seago, president of Texas Right to Life, referring to the state’s abortion ban.

A new �鶹Ů�� poll found that 59% of OB-GYNs practicing in states with gestational limits on abortion, and 61% of those in states with bans, are somewhat or very concerned about their legal risk when making decisions about the necessity of an abortion.

Some attorneys are exploring lawsuits on behalf of women who they said have been harmed by a state abortion ban. An attorney for Mylissa Farmer, a Missouri woman who was refused an abortion at two hospitals in August after her water broke about 18 weeks into her pregnancy, said she may sue for malpractice. Missouri’s abortion ban, which took effect last year, makes an exception for medical emergencies.

The federal government that the two hospitals violated a federal emergency care law in denying Farmer an abortion, which experts said could strengthen a malpractice claim. One of the hospitals, Freeman Health System in Joplin, Missouri, did not respond to a request for comment. The other, the University of Kansas Health System in Kansas City, said the care provided “was reviewed by the hospital and found to be in accordance with hospital policy,” according to a spokesperson, Jill Chadwick.

Farmer “experienced permanent physical and emotional damage,” said Michelle Banker, one of her lawyers at the National Women’s Law Center, who added that Farmer and her attorneys are “considering all our legal options.”

and show that some women with pregnancy complications have suffered serious health consequences when doctors and hospitals did not provide once-routine abortion care.

Last month, researchers released a study identifying in 14 states in which physicians said deficiencies in care due to abortion restrictions led to preventable complications and hospitalizations, with some patients nearly dying.

“The patients were sent home and told to come back when they had signs of infection,” said Daniel Grossman, an OB-GYN at the University of California-San Francisco, who led the study. “Many developed serious infections. And it’s clear many of these cases were very emotionally traumatic.”

He said though the researchers did not track patient outcomes, the lack of timely abortion care in such cases could result in severe health harms including loss of fertility, stroke, or heart attack.

“It’s just a matter of time before there will be a death that comes to light,” Grossman said.

Still, considering the conflict for doctors between medical ethics and personal risk, some stakeholders said patients may be reluctant to sue doctors and juries may balk at finding them liable.

“It’s a terrible position that providers are being put into, and I don’t think juries will blame the doctor unless it’s a super clear case,” said Morgan Murphy, a malpractice plaintiff’s attorney in Missouri.

She said her firm will not pursue malpractice cases based on abortion denials except in “pretty extreme” situations, such as when a patient dies. “Unless a mother is on her deathbed, it’s pretty hard to fault a provider who thinks if they provide treatment they’re going to be criminally liable or will lose their medical license.”

Another hurdle for malpractice cases is that state abortion bans could undermine the argument that abortion is the legal “standard of care,” meaning that it is a widely accepted and prescribed treatment for pregnancy complications such as miscarriage and for fatal fetal abnormalities.

“I absolutely see a breach of the standard of care in these cases,” said Maria A. Phillis, an OB-GYN and former lawyer in Cleveland. “But if someone goes to trial in a malpractice case, it will come down to a battle of medical experts about whether it’s no longer the standard of care, and the jury would have to decide.”

An additional justification for physicians not to provide abortions is that medical liability insurers generally do not cover damages from criminal acts, which “puts the finger on the scales even more to not do anything,” Phillis said.

Stuart Grossman, a prominent malpractice plaintiff’s attorney in Florida, said he would be eager to take an abortion-denial case in which the woman suffered serious health or emotional injuries.

Unlike other states with abortion bans, Florida does not cap damage amounts for pain and suffering in malpractice cases, making it more financially viable to sue there.

Grossman cited the case of Deborah Dorbert, a Florida woman who despite being told by her physicians at 24 weeks of pregnancy that her fetus, with no kidneys and underdeveloped lungs, had a fatal condition called Potter syndrome.

Her doctors and the hospital refused to end the pregnancy even though the for fatal fetal abnormalities. Months later, her baby shortly after birth.

“You can see how she’s been devastated mentally,” Grossman said. “She has a wrongful death case that I’d take in a minute.” He said the couple could file a malpractice suit for Dorbert’s physical and emotional damages and a separate malpractice and wrongful death suit for the couple’s suffering over the infant’s death.

Failing to counsel patients about their options and connect them with providers willing to terminate a pregnancy is also possible grounds for a malpractice suit, attorneys said. Katie Watson, an associate professor at Northwestern University’s Feinberg School of Medicine who has , said counseling and referral are not prohibited under these laws and that physicians have an ethical obligation to offer those services.

“I think breaching the obligation for counseling would make a strong malpractice lawsuit,” she said.

Nancy Davis said she received no counseling or referral assistance last July after her doctors at Woman’s Hospital in Baton Rouge, Louisiana, told her 10 weeks into her pregnancy that her fetus would not survive because it was missing the top of its skull, a fatal condition called acrania. She said they recommended that she terminate the pregnancy and she agreed.

Davis said her doctors then told her a hospital executive had denied permission for the procedure because of Louisiana’s abortion ban, even though the law has an exception for fatal fetal abnormalities. A hospital spokesperson declined to comment.

Davis, who has three children, contacted Planned Parenthood of Greater New York, which arranged for child care and a flight to New York City. She had an abortion performed there in September.

“The whole situation has been mentally and physically draining, and my family and I are receiving counseling,” Davis said. “I’m still very angry at the hospital and the doctors. I feel like I’m owed compensation for the trauma and the heartbreak.”

She sought the counsel of Benjamin Crump, a prominent attorney known for pursuing high-profile cases like wrongful death lawsuits on behalf of the families of Trayvon Martin and George Floyd.

But Crump said that after studying Davis’ legal options, he decided a judge would likely dismiss a malpractice suit and that Davis could end up paying the defendants’ legal fees and costs.

“The doctor’s lawyers will say, ‘You can’t expect my client to break the law and go to prison for up to 25 years,’” Crump said. “Unless you change the law, there is no option for her to receive compensation.”

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Banning Noncompete Contracts for Medical Staff Riles Hospitals

Harris Meyer — Mon, 27 Mar 2023 09:00:00 +0000

Dr. Jacqui O’Kane took a job with a hospital in southern Georgia in 2020, as the lone doctor in a primary care clinic in a small town that’s a medically underserved area. She soon attracted nearly 3,000 patients.

But she said the hospital pressed her to take more new patients, so she had to work nights and weekends — not ideal for the mother of two young daughters. She thought about opening her own practice in town, which would give her more control over her schedule.

The problem was that her three-year contract included a noncompete clause barring her from practicing within 50 miles of the hospital for two years after it ended.

So, she has decided to join a practice in South Carolina. That means she and her husband will sell their house, move hundreds of miles, and enroll their children in a new school.

“It sucks,” she said. “I know my patients very well, and I feel like I’m being forced to abandon them. But I can’t stay in this job because it’s unhealthy for me to work this much.”

In January, the Federal Trade Commission proposed to end predicaments like O’Kane’s by prohibiting noncompete clauses in employment contracts. “The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said Lina Khan, the FTC chairperson.

The proposed rule would prohibit employment contract provisions that block employees or contractors from working for a competing employer when they move on, or from starting a competing business. Such contracts typically bar people from working within a certain geographic area for a period after the job ends.

The FTC estimates that 30 million workers are bound by noncompete clauses. It says ending those provisions would boost economic competition, reduce prices, and increase workers’ earnings overall by up to $296 billion a year.

Eliminating noncompete contracts would allow doctors to practice wherever their services are needed, which would improve patients’ access to care. They say it would free them to speak out about unsafe conditions for patients, since they wouldn’t have to worry about getting fired and not being able to continue working in their community.

But the faces resistance from employers in all industries, including hospitals and private equity-backed medical groups that employ thousands of physicians, nurse practitioners, and other medical professionals.

It’s about money for them, too. They say eliminating noncompetes would drive up the cost of hospital care because hospitals would have to pay physicians more to keep them. to protect proprietary information and investments in employee training, and to prevent employees from taking clients and patients with them when they leave.

Business and hospital groups are to block the rule, arguing that Congress hasn’t authorized the commission to regulate noncompete clauses. While there is bipartisan support in Congress for noncompete clauses and authorize FTC action, the bill hasn’t advanced; similar legislation stalled in past years.

Health care industry groups hope to block any change with the argument that the FTC lacks statutory authority to regulate nonprofit, or tax-exempt, hospitals, which account for . In the proposed rule, the FTC acknowledged that entities not conducting business for profit may not be subject to the rule because they are exempt from coverage under the Federal Trade Commission Act, the law that gives the agency its authority.

“The rule would create an unlevel playing field because we compete with nonprofit and public hospitals that wouldn’t be subject to it,” said Chip Kahn, CEO of the Federation of American Hospitals, which represents for-profit hospital systems.

But other experts aren’t sure the FTC lacks authority over nonprofits. While the FTC Act exempts nonprofits, the commission has acted many times under the Sherman Act and the Clayton Act, federal antitrust laws used to block anti-competitive conduct by nonprofit hospital systems. It’s not clear whether the FTC will clarify this issue before it finalizes the rule.

“We fully support having the noncompete ban apply to all hospitals,” said Dr. Jonathan Jones, president of the American Academy of Emergency Medicine, half of whose members are bound by noncompetes.

California, North Dakota, and Oklahoma already ban enforcement of noncompete clauses for all employees, while prohibit enforcement of noncompete clauses for physicians. Even in states without bans, when they found them to be overbroad or unreasonable.

But it can cost tens of thousands of dollars in legal fees to challenge a noncompete clause, and other employers may not want to take the risk of hiring a person in the middle of a legal fight, said Luke Campbell, a Seattle attorney who represents physicians.

The FTC rule also would bar the use of nondisclosure or training repayment agreements in employment contracts if they functioned as de facto noncompetes.

Hospitals often require nurses to sign training repayment agreement provisions, called TRAPs, which nursing groups say lock nurses into jobs by demanding they pay as much as $20,000, for what’s essentially job orientation, if they leave before two years. National Nurses United, a labor union, wants the FTC to explicitly prohibit TRAPs.

As of last year, of all U.S. physicians were employed by hospital systems or other companies, with many working under noncompete agreements. found that nearly half of primary care physicians in California, Illinois, Georgia, Pennsylvania, and Texas were bound by noncompetes.

Private equity-owned staffing firms such as TeamHealth, Envision Healthcare, and Sound Physicians, which provide emergency physicians and other medical professionals to work in hospitals, commonly use noncompete provisions. None of those three companies agreed to talk about their employment contracts. As for-profit employers, noncompete clauses in their contracts clearly would be barred even if their employees were working in nonprofit hospitals.

Hospitals, insurers, and physician-owned medical groups also use noncompetes in employing doctors and other medical professionals.

Hospital-based doctors — emergency physicians, anesthesiologists, hospitalists, radiologists, and pathologists — refute the industry’s argument that they would take patients or proprietary information with them.

“We don’t have any trade secrets and we don’t have the capability of stealing patients because we don’t have our own patient referral base,” said Dr. Robert McNamara, the chair of emergency medicine at Temple University.

Instead, he said, noncompetes are a way for the physician staffing firms to lock in their contracts with hospitals. “The private equity group can say to the hospital, ‘You might not like what we’re doing, but if you get rid of us, every single one of your doctors must be replaced,’” McNamara said.

Dr. Vanessa Urbina, a general practice physician in central Florida, also worries about the impact on patients. She left a corporate-owned medical practice in Altamonte Springs last year because of what she said was an abusive environment. Hobbled by a noncompete agreement she signed forbidding her from practicing within 15 miles of the clinic, she opened her own primary care clinic in rural Mount Dora, 19 miles away.

She had to stay in the area because of a child custody agreement. Fighting the noncompete cost her $25,000 in legal fees and lost income. Even though she now must drive farther to transport her daughter to school and back, she’s happier in her new practice. But she’s angry she can’t take care of her former patients.

“They forced me to abandon my patients,” she said. “Now they have to wait three months for an appointment. Noncompetes should be illegal.”

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Surprise-Billing Law Loophole: When ‘Out of Network’ Doesn’t Quite Mean Out of Network

Harris Meyer — Tue, 28 Feb 2023 10:00:00 +0000

It was the first day of her family’s vacation in the San Juan Islands last June when Danielle Laskey, who was 26 weeks pregnant, thought she was leaking amniotic fluid.

A registered nurse, Laskey called her OB-GYN back home in Seattle, who said to seek immediate care. Staff members at a nearby emergency department found no leakage. But her OB-GYN still wanted to see her as soon as possible.

Laskey and her husband, Jacob, made the three-hour trip to the Swedish Maternal & Fetal Specialty Center-First Hill. Laskey had sought the clinic’s specialized care for this pregnancy, her second, after a dangerous complication with her first: The placenta had become embedded in the uterine muscles.

Back in Seattle, doctors at the clinic found Laskey’s water had broken early, posing a serious risk to her and the fetus, and ordered her immediate admission to Swedish Medical Center/First Hill. She delivered her son after seven weeks in the hospital. Though she was treated for multiple postpartum complications, she was well enough to be discharged the next day. Her son, who is healthy, went home a month later.

Laskey soon developed a fever and body aches, and she was told by her OB-GYN to go to Swedish’s emergency department. She said doctors there wanted to admit her when she arrived Aug. 20 and scheduled a procedure for Aug. 26 to remove a fragment of placenta that her body had not eliminated on its own.

Laskey, who had already spent weeks away from her 3-year-old daughter, chose to go home. She returned for the procedure, which went well, and she was home the same day.

Then the bills came.

The Patient: Danielle Laskey, 31, was covered by a state-sponsored plan offered by her employer, a local school district, and administered by Regence BlueShield.

Medical Service: In-patient hospital services for 51 days, plus a one-day stay that included a second placenta removal procedure.

Service Provider: Swedish Medical Center/First Hill, part of Providence Health & Services, a large, nonprofit, Catholic health system.

Total Bill: Swedish, through Regence, billed about $120,000 in cost sharing for Laskey’s initial hospitalization and about $15,000 for her second visit and procedure.

What Gives: The specialized clinic caring for Laskey before her hospital admission was in her insurance plan’s network. The clinic’s doctors admit patients only to Swedish Medical Center, one of the Seattle area’s only specialized providers for Laskey’s condition — which, given that connection, she assumed was also in the network.

So after being urgently admitted to Swedish, Laskey believed her bills would be largely covered, with the couple expected to pay $2,000 at most for their portion of in-network care because of her plan’s out-of-pocket cost limit.

It turned out Swedish was out of network for Laskey’s plan and, at first, Regence determined that Laskey’s hospitalizations were not emergencies. In November, a Regence case manager initially told Jacob that Laskey’s lengthy hospitalization was an emergency admission and out-of-network charges would not apply. But then she called back and said the charges would apply after all, because Laskey had not come in through the emergency department.

Both and prohibit insurers and providers from billing patients for out-of-network charges in emergency situations. The couple said neither Swedish nor Regence told them before or during the two hospitalizations that Swedish was out of network, and that they never knowingly signed anything agreeing to accept out-of-network charges.

Jacob, who works as a psychiatrist at a different hospital, said he mentioned the surprise-billing laws to the case manager, but she replied that the laws did not apply to his family’s situation.

It was only after Regence was contacted by KHN that the insurer explained its reasoning to the reporter: Regence said the Swedish hospital, while out of network for Danielle, had a broader contract with the insurer as a “participating provider” and so the insurer was not in violation of surprise-billing laws by approving Swedish’s out-of-network coinsurance charges.

The broader contract allowed Swedish to bill members of any Regence plan who receive out-of-network services there 50% coinsurance — the patient’s portion of the overall cost the insurer allows the provider to charge — with no out-of-pocket maximum for the patient.

What’s the difference between a hospital that’s “in network” and one that’s a “participating provider”? In this case, by contracting with Regence as an out-of-network but also participating provider, Swedish straddled the line between being in and out of network — designations that traditionally indicate whether a provider has a contract with an insurer or not.

Setting the terms with an insurer for providing its members emergency or other care appears to allow hospitals to sidestep new surprise-billing laws that prevent out-of-network providers from charging high, unpredictable rates in emergencies, according to government and private-sector medical billing experts.

Experts said they had not heard of out-of-network providers evading surprise-billing laws by being contracted as “participating providers” until KHN asked about Laskey’s case.

Ellen Montz, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services, said that under the federal No Surprises Act the definition of a “participating” emergency facility that’s subject to the law’s surprise billing protections depends on whether the facility has a contract with the insurer specifying the terms and conditions under which an emergency service is provided to a plan member.

Matthew Fiedler, a senior fellow at the University of Southern California-Brookings Schaeffer Initiative for Health Policy who studies out-of-network billing, said Laskey’s case seems to fall into a “weird” gray area of the state and federal laws protecting patients from out-of-network charges in emergency situations.

If there had been no contract between Regence and Swedish, the laws clearly would have prohibited those charges. But since there was a contract specifying a 50% coinsurance rate when Swedish was out of network for a particular Regence plan, those laws legally may not apply, Fiedler said.

After he declined to apply for the hospital’s financial assistance program, Jacob said Swedish also notified the couple in November that they had two months to pay or be sent to collections.

Natalie Kozimor, a spokesperson for Providence Swedish, said the hospital disagreed with “some of the details and characterizations of events” presented by the Laskeys, though she did not specify what those were. She said Swedish assisted Danielle with her appeal to Regence.

“We had no luck with Swedish taking any role or responsibility with regard to our billing or advocating on our behalf,” Jacob said. “They basically just referred us to their financial department to put us on a payment plan.”

Danielle Laskey at her home just outside Seattle, with her infant son. (Ryan Henriksen for KHN)

The Resolution: In December, the couple appealed Regence’s approval of Swedish’s out-of-network charges for the 51-day hospitalization, claiming it was an emergency and that there was no in-network hospital with the expertise to treat her condition. They also filed a complaint with the state insurance commissioner’s office.

The office told KHN that the “participating provider” contract does not override the laws barring out-of-network charges in emergency situations. “Danielle had an emergency and Regence acknowledges it was an emergency, so she cannot be balance-billed,” said Stephanie Marquis, public affairs director for the Washington state Office of the Insurance Commissioner.

On Jan. 13, Regence said it would grant the Laskeys’ appeal to cover the first hospitalization as an in-network service, erasing the biggest part of Swedish’s bill but still leaving the family on the hook for the $15,000 bill for Danielle’s second visit and procedure.

On Jan. 27, two days after KHN contacted Regence and Swedish about Danielle Laskey’s case, a Regence representative called and informed her that her second hospitalization also would be reclassified as an in-network service.

Ashley Bach, a Regence spokesperson, confirmed to KHN that both stays now will be covered as emergency, in-network services, eliminating Swedish’s coinsurance charges. But in what appears to be contrary to the insurance commissioner’s stance, he said the bills had not violated state or federal laws prohibiting out-of-network charges in emergency situations because of the contract with Swedish covering all its plans.

“Under the Washington state and federal balance-billing laws, the definitions of whether a provider is considered in network hinges on whether there is a contract with a specific provider,” Bach said.

The Takeaway: More than a year after the federal surprise-billing law took effect, patients can still get hammered by surprise bills resulting from health plans’ limited provider networks and ambiguities about what is considered emergency medical care. The loopholes are out there, and patients like Laskey are just discovering them.

Washington state Rep. Marcus Riccelli, chair of the House Health Care and Wellness Committee, said he will ask the state’s public and private insurers what steps they could take to avoid provider network gaps and out-of-network billing surprises like this. He said he will also review whether there is a loophole in state law that needs to be closed by the legislature.

Fiedler said policymakers need to consider addressing what looks like a major gap in the new laws protecting consumers from surprise bills, since it’s possible that other insurers across the country have similar contracts with hospitals. “Potentially this is a significant loophole, and it’s not what lawmakers were aiming for,” he said.

Congress might have to fix the problem, since the federal agencies that administer the No Surprises Act may not have authority to do anything about it, he added.

Bruce Alexander, a CMS spokesperson, said the Departments of Health & Human Services, Labor, and Treasury are looking into this issue. While the agencies can’t predict whether a new rule or guidance will be needed to address it, he said, “they remain committed to protecting consumers from surprise medical bills.”

In the meantime, patients, even in emergencies, should ask their doctors before a hospital admission whether the hospital is in their plan network, out of network, or (watch for these words) a “participating provider.”

As the Laskeys discovered, hospital billing departments may offer little help in resolving surprise billing. So, while it is worth contesting questionable charges to the provider, it’s also usually an option to quickly appeal to your state insurance department or commissioner.

Bill of the Month is a crowdsourced investigation by �鶹Ů�� Health News and that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? !

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A Baby Spent 36 Days in an In-Network NICU. Why Did the Hospital Next Door Send a Bill?

Harris Meyer — Mon, 30 Jan 2023 10:00:00 +0000

[UPDATED at 3:45 p.m. ET]

Brenna Kearney was seven months pregnant in December 2019 when she experienced what she thought were bad flu symptoms.

Her husband, Casey Trumble, drove her from their Chicago home to her OB-GYN’s office at Northwestern Medicine Prentice Women’s Hospital downtown. With suddenly elevated blood pressure and protein in her urine, she was diagnosed with preeclampsia, a potentially fatal but treatable pregnancy complication. Doctors admitted her to the hospital, saying she could expect to stay up to six weeks and have an induced delivery.

Then Kearney developed a bad headache and her blood platelet count plummeted, signs she was experiencing a rare, dangerous type of preeclampsia and requiring an immediate delivery by cesarean section.

Kearney’s daughter, Joey, born at 31 weeks, was placed on a ventilator and moved to the hospital’s neonatal intensive care unit. Small but healthy, she slowly began breathing on her own and eating normally. She was discharged in late January 2020, after 36 days in the NICU.

Then the bill came.

The Patient: Josephine “Joey” Trumble, now 3, was covered by her mother’s health plan through her employer, an advertising agency. For 2019, it was an Aetna plan, and for 2020, it was a plan from Blue Cross and Blue Shield of Illinois. Both policies were fully insured plans governed by Illinois laws.

Medical Service: Neonatology physician services provided in January 2020. Joey needed tube feeding and ventilator care to provide oxygen.

Service Provider: Ann & Robert H. Lurie Children’s Hospital of Chicago, whose staff physicians treated Joey at Northwestern Medicine Prentice Women’s Hospital. Ownership-wise, Lurie is independent of Northwestern Medicine, but it is physically connected to Prentice Women’s by an enclosed walkway. Lurie has a with Northwestern Medicine to provide neonatology and pediatric physician services to Prentice Women’s patients.

Total Bill: Aetna paid for nearly all of Joey and her mother’s hospital and physician charges in December, while Blue Cross picked up nearly all of Joey’s hospital charges in January. Physician charges from Lurie in January totaled $14,624.55, of which the family was asked to pay $12,531.58 after payments from Blue Cross.

What Gives: It took Kearney months of calls to Blue Cross and the two hospitals to find out why Lurie billed more than $14,000 for physician services: The physicians treating her daughter at Prentice Women’s — an in-network hospital under her health plan — actually worked for a separate, out-of-network hospital.

Illinois law bars insurers from charging patients out-of-network rates for neonatal care at in-network hospitals.

When Brenna Kearney was pregnant in 2019, she developed a rare type of preeclampsia and underwent an emergency cesarean section. Her daughter, Joey, spent more than a month in the NICU, and the family was billed about $12,500 for Joey’s care because, unbeknownst to Kearney and her husband, the doctors at the in-network hospital were actually out of network. (Taylor Glascock for KHN)

Kearney said no one had told her or her husband that Lurie doctors were treating their daughter. She said the family never signed an agreement consenting to receive care from out-of-network doctors.

Though it did not happen here, many patients unknowingly sign broad financial agreements — saying they’ll pay for almost anything their insurance doesn’t cover — in the piles of paperwork they receive upon admission to a hospital. In many cases, they are simply asked to sign on a screen, without seeing the document.

Blue Cross agreed to pay Lurie the in-network rate for the doctors’ services, reducing the bill to about $12,500 — which Lurie expected the family to pay.

In November 2020, Kearney started receiving letters from ICS Collection Service, a collection agency.

“Talking to Blue Cross was impossible, and Lurie said it’s not their problem and just wanted to put us on a payment plan,” Kearney said.

Joey’s 36-day stay in the NICU happened before the federal government implemented the No Surprises Act barring surprise out-of-network billing. A state law prohibiting it, though, was in effect.

Since 2011, has prohibited insurers from charging out-of-network rates when patients are treated at in-network hospitals.

Kearney said she repeatedly mentioned the law to Lurie and Blue Cross representatives, who denied knowledge of the provision.

“It definitely appears that under the 2011 law, Brenna can only be billed for in-network cost sharing,” said Kathy Mikos, a registered nurse and patient advocate with the Navocate Group in Woodridge, Illinois, who is not involved with Kearney’s case.

In December 2020, an insurance broker working for Kearney’s employer persuaded Blue Cross to pay the full out-of-network charges for the Lurie doctors, leaving the family owing $289.63 for coinsurance, which they promptly paid.

Having spent nearly the first year of her daughter’s life fighting medical bills from her birth, Kearney thought the ordeal was over.

Then, last month, she got a call from the collection agency, which again demanded payment at the full out-of-network rate for Lurie physician services provided to her daughter three years ago — the bill she believed Blue Cross had paid.

It took five hours on the phone for Kearney to piece together what had happened. Blue Cross had indeed paid the out-of-network charges in December 2020 — but, two days later, had taken back the money, ultimately paying Lurie’s doctors only the in-network rate.

A Lurie representative said Kearney and her husband still owed thousands of dollars. A Blue Cross representative suggested she set up a payment plan.

“I was at wits’ end, and I didn’t know how to fight this anymore,” Kearney said.

Lurie, Blue Cross, and Northwestern Medicine repeatedly declined to comment on the case. Lurie cited patient privacy, despite receiving a release from Kearney regarding the federal Health Insurance Portability and Accountability Act, or HIPAA, which authorized the hospital to discuss Joey’s case with KHN.

Brenna Kearney plays with her daughter, Joey, at home in Chicago. (Taylor Glascock for KHN)

The Resolution: After KHN contacted Lurie and Blue Cross, a Lurie representative called Kearney offering to accept payment at the in-network rates after all.

Kearney said Tracy A. Spicer, manager of consolidated services at Lurie, told her Lurie has a “long-standing policy” of accepting in-network rates for Lurie physician services provided at Prentice Women’s. Spicer subsequently described it as a “long-standing courtesy,” then explained that acceptance of in-network rates was subject to “case-by-case consideration,” Kearney said.

Spicer said the family owed about $3,000 for their coinsurance share and offered to set up a payment plan.

A day later — following additional requests by KHN for comment — Spicer called Kearney and said she would remove all physician charges for her daughter’s care. Spicer did not return KHN’s call seeking comment.

“I’m certain I’m not the only person still dealing with this” kind of predicament, Kearney said.

Kearney has filed complaints with the Illinois Department of Insurance and the Illinois Attorney General’s Office. The attorney general’s office told KHN it had never enforced the 2011 law barring certain out-of-network billing.

Presented with the facts of Kearney’s case, state Sen. Ann Gillespie, who sponsored a 2022 state law expanding consumer protections against out-of-network bills, told KHN she plans to contact Lurie, Blue Cross, and Northwestern Medicine to ask about their billing arrangement and whether they are in compliance with state law.

“We’ll see if it was a pattern and whether they need to look back and see if refunds are warranted,” Gillespie said.

The attorney general’s office told KHN it will investigate Kearney’s complaint, including whether Lurie violated the state Consumer Fraud and Deceptive Business Practices Act by telling her it was extending a “courtesy” by charging her only in-network rates, when that is what the 2011 law required. The insurance department also said it would investigate the complaint.

The Takeaway: Even resourceful consumers who appear to have the law on their side, like Kearney, may find themselves in a losing, time-consuming battle with medical billing bureaucracies and facing collection actions.

Gillespie, the state senator, said Lurie, Northwestern Medicine, and Blue Cross should have known about the state law. She said patients who believe they have been improperly charged should file complaints with their state’s insurance department, which can trigger a broader investigation.

The federal No Surprises Act, which took effect last year, prohibits medical providers or insurers from billing patients for out-of-network physician charges at an in-network hospital, unless the patient formally consents to an out-of-network doctor. To be safe, patients should ask treating doctors whether they are in or out of network, even at an in-network hospital.

While the federal law offers patients new protections from out-of-network bills, many Americans still face problems from before the law took effect, said Loren Adler, associate director at the USC-Brookings Schaeffer Initiative for Health Policy. Illinois is one of that had prior laws to protect consumers.

Also, some out-of-network physicians continue to bill patients, despite the new federal protections. So know your rights. Cite the new law. And don’t write the check.

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