Healthy San Francisco

Posted on: March 24, 2008  |   Author: Nicole
Filed Under: Access to Care, Public Health Policy   |   Comments Off

San Francisco had about 73,000 uninsured adults which comprises 11% of the non-elderly population. Because of this problem the San Francisco Board of Supervisors decided to take action. On July 25, 2006, the San Francisco Board of Supervisors adopted the Health Care Security Ordinance by a unanimous vote. This created the Healthy San Francisco Program which provides health care services to all uninsured residence. The program provides access to affordable health care services. The program provides these services regardless of immigration and employment status or pre-existing medical conditions. This is the first program of its kind to include access to care for all uninsured residence. The program is expected to cost about $200 million a year. The financing for the Healthy San Francisco program will come from the city, federal funds, and the member participants. The city will redirect $110-$115 million that they currently spend on health care services for the uninsured. The program also has a $73 million in federal funds to spend over three years.

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The program provides access for San Francisco residents between the ages of 18 – 64 who have been uninsured for at least 90 days and are ineligible for other public programs. The plan only provides universal access and not universal coverage. This means that the basic and ongoing medical services can only be obtained from San Francisco General Hospital and other participating clinics. The program is looking to expand the network as the program grows in the upcoming years. The structure of the program is the use of medical homes. When a person enrolls in the program, they are assigned a medical home (which is one of the participating clinics). The medical home assigns a physician to each patient and is responsible for coordinating the patients care.

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The Health Care Security Ordinance also requires San Francisco employers to spend a minimum amount per hour on health care for their employees. This requirement only applies to employers with more then 20 workers. Employers with less than 20 workers and non-profit organizations with less than 50 workers are exempt. In January 2008, employers must pay between $1.17 and $1.76 per hour for a covered worker based on the employer’s size. A covered worker is an employee who works at least 10 hours a week and has been employed for at least 90 days.

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The Golden Gate Restaurant Association challenged the employer spending requirement on the grounds that it violated ERISA. The lower District Court ruled in favor of the restaurant, but the Appeals Court suspended the District Court’s ruling and allowed the provision to go into effect on January 9, 2008. The Supreme Court denied the Restaurant Associations request to lift the decision. The Appeals Court will hear oral arguments on April 17, 2008. Until then, the provision is in effect. The San Francisco program is the only program to date that has been challenged on ERISA grounds. Currently, there are programs in Massachusetts and Vermont and proposals in other states. These programs have not been challenged. The outcome of the San Francisco litigation will determine how these proposals will need to address the employer contribution.

Wendy Mariner: Duty to Stay Healthy - Wellness Programs

Posted on: March 24, 2008  |   Author: Julia
Filed Under: Distinguished Speaker Series   |   Leave a Comment

Ms. Mariner started her presentation with a slide picturing an insurance company add that proclaimed, “Healthy is now the law.” Although this is not yet true, there are signs that we might be moving towards a new era in which staying healthy might become a social responsibility. The speaker made a point that insurance coverage indicates what as a society we find acceptable. What we choose to cover is what we believe the society should be responsible for, and the items that we refuse to cover are indicative of what we believe the individuals should be responsible for. And although HIPAA prohibits discrimination based on health status, claims experience, medical history and genetic information, the Act makes an exception for wellness formulas.

Flat prohibition against discrimination doesn’t prevent the health plans from reducing premiums and giving discounts when wellness formulas are established. The reward has to be less than 20% of the premium, but as the speaker rightly pointed out, even 20% can amount to a substantial discount over the course of a year. Such wellness programs are composed of discounts for non-smokers, a waiver of deductible for participants with low BMI, and an exception to exception – individuals can get discounts if they demonstrate that they are following doctor’s orders.

The wellness program exception raises a concern that insurance companies are turning health into a compulsory obligation. Discrimination includes everything from changing premium rates to not covering certain conditions. If this simplified definition of discrimination given by the speaker is correct, are the insurance companies still discriminating against not so healthy individuals under the cover of wellness program discounts? Based on the presentation wellness programs appear to be a discrimination loophole that enables insurance companies to charge higher premiums to the ones who are deemed less than in perfect health.

Ms. Mariner states that these programs aim at prevention. But who will benefit from the incentives? The presentation indicated that private parties and insurance companies will likely save some money in the immediate health care costs. There will also be some short term savings for employers and insurers. But Ms. Mariner makes a great point, while we might be able to prevent one disease, we all die from something and thereby sooner or later our insurance companies and employers will have to pay for our care. Furthermore, the longer a person lives, the more he or she burdens social security.

It was not surprising to find out that heath status is strongly correlated with income. Income and education are strong determinants of health. Chronic conditions are more common in lower income populations. A conclusion follows that lower income individuals are less likely to participate in wellness programs and receive discounts on their insurance premiums. With high insurance premiums, the poor will be highly likely to have insufficient coverage and will be less likely to see a physician or follow physician’s instructions. It appears from the presentation that the programs will favor the wealthy, leaving the poor behind.

Practitioner in Residence: A Discussion of Fraud and Abuse Masking Governmental Mistakes in Management

Posted on: March 11, 2008  |   Author: Julia
Filed Under: Distinguished Speaker Series, Fraud & Abuse, Medicare   |   Leave a Comment

Today, I heard the practitioner in residence, Tim Blanchard give a talk titled Regulatory Oversights - Crime and Fraud to Mask Governmental Mistakes in Management. Mr. Blanchard believes that not everything we hear in the press about Medicare fraud and abuse is true and should be blindly believed. In his own words, “even lawyers can get sucked into the notion that they work with people who committed fraud, when in fact they did not.” The area of Medicare fraud and abuse is complicated and much of the law is driven by settlements. And it is important to keep in mind that those who are accused of fraud and abuse do not have the standing to challenge the regulation. However, the government is permitted to ambush the defendant with ambiguity and introduce its statutory interpretation.
The Civil False Claims Act was extensively discussed in the presentation. Interestingly enough, under the Act, intent to defraud is not element. One simply has to have knowledge that claim presented did not occur as claimed. Knowledge is established by actual knowledge, deliberate ignorance and reckless disregard. Some providers are essentially presumed to know based on actual or constructive knowledge based on what CMS has published. Provider’s knowledge of acceptable standard of practice is also presumed to be knowledge.

One of the examples of a governmental mistake in management discussed by the speaker is an outlier investigation. Hospitals get paid a certain amount when they discharge a patient. The outlier payments are received in cases when the hospital charges more for complex cases. The investigation examined the structure of outlier payments where the hospitals began charging more for care in order to receive outlier payments. Hospitals were turbo charging, thereby raising the cost of services. Because of the ratios for the calculation of charges where evaluated every three to four years, all the hospitals had to do was to increase charges. In addition, until 2003 the law did not provide for retroactive adjustments and thus the means of calculating the amount overpaid to the hospitals did not exist. Although some view the outlier payments as a loophole for the hospitals to make more money, Mr. Blanchard sees this simply as bad regulation because the regulation doesn’t actually restrict what a hospital can charge and the hospitals who were sued by the government under the regulation did not misrepresent the numbers, but simply took advantage of the lag in calculation of charge – cost ratio. One of the hospitals who took advantage of this lag in calculation of charge-cost ration ended up paying a $ 900 million settlement, another hospital in New Jersey paid a settlement in excess of $200 million.

Mr. Blanchard believes that cases such as these are cases of governmental mistakes and mismanagement but not fraud. If you follow the rules it seems inappropriate for the government to accuse you of fraud and abuse. The hospitals paid because of the belief that they abused the system, but it is difficult to formulate a construction that would show that the hospitals did anything illegal under the statute. However, it is important to keep in mind if one has intent to defraud he cannot hide behind the rules. This also raises an inquiry into the state of mind - did someone try to raise as much money as possible under the rule or did the hospitals intend to cheat the system.

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