Singularity Health Law Blog

AIRLINE MODEL IN HEALTH INSURER MERGER

Fueled to a large extent by the survival of the Affordable care Act in two United States Supreme Court challenges, and countless Congressional votes, the health insurance industry is set to further consolidate the major health insurance players from five to three as Anthem proposes to acquire Cigna for $48.3 billion dollars and Aetna seeks to acquire Humana for a mere $37 billion dollars. The argument is being made that consolidation in the health care insurance industry will help reduce costs and it is likely that it will.

 

“DEATH PANELS” REDUX

CMS indicates that it is again considering compensating physicians for discussions and advice with patients concerning end of life decisions. The American Medical Association requested consideration of the issue last fall. 

SCOTUS AND OBAMACARE II: WINDS OF KATRINA

The Affordable Care Act as adopted contains 906 pages. It is a complex statute made necessarily so by industry and congressional efforts to block provisions that would have simplified it such as a move to a single payer option. To satisfy all of the various stakeholders including insurance and pharmaceutical companies and their minions, it became strategically necessary to make complex what would otherwise be simple by creating a system of state insurance exchanges and low income subsidies to increase enrollment.

The case of King v. Burwell pending in the Supreme Court of the United States is an effort to scuttle the Act by focusing on four words out of the 906 pages. Part of the changes to the tax code contained in the Act provides for a calculation of a tax credit that depends upon the number of months that the taxpayer has been enrolled in a health insurance plan purchased on an insurance exchange “established by the State.”

States, under the Act have the option to establish their own exchange or to rely on exchanges set up by the federal government. 34 states have opted to use the federal exchanges.  

The argument goes that if a state fails to set up its own exchange and relies on the federal default exchange those states have not utilized an exchange established by the State and therefore there can be no tax credits provided for those subsidized insureds living in the 34 federal option states. If successful, the plaintiffs in King will have engineered the loss of $29 Billion dollars in tax credits in those states impacting primarily poor and middle income people on subsidies.

 Interestingly, the proponents of the abrogation of the Act provide no specific alternatives for the federal government to deal with what appears likely to be the largest public service and human suffering disaster since Katrina.  In order for the Supreme Court to kill the Act on these grounds it would need to abandon any semblance of judicial restrain and proceed on strictly political grounds. The country be damned.

Federal exchanges adopted by a state in lieu of one created by the state is one established by the state in the context of the Act as a whole.

SHAM PEER REVIEW BOOK INTERVIEW: Greg Piche´

Those that are interested can find an interview of the author of Sham Peer Review by the Denver Press Club at the following link.

http://denver.granicus.com/MediaPlayer.php?view_id=96&clip_id=5585

HEALTH INSURANCE EXECUTIVE COMPENSATION - A CASE IN POINT

Wendell Potter is a former health care PR Director for Cigna who quit in disgust following CIGNA’s refusal to timely agree to provide a liver  transplant for a 17 year old girl in 2007, Nataline Sarkisyan, who died without the procedure. He now works for the Center for Public Integrity as an analyst. Yesterday, in his blog, he called out the objection by one of the shareholders of CIGNA to the company’s increasing his compensation by 25% to an annual total compensation of about $20,000.  The 46 year old, David Cordani, who looks a lot like the Russian New Jersey Nets owner Mikhail Prokhorov, is frequently sought out on the speaking circuit including Davos, Switzerland where he rails against rising health care costs as being unsustainable. On his departure earlier in the year the Hartford Courant quoted him as saying “ when you take the cost of sickness, its at an elevated level and its growing.”

 

BACK TO THE FUTURE IF THE INSURANCE MANDATE FAILS.

 

If the Supreme Court decides to tank the Affordable Care Act and returns us to the past system, James Carville may just be right that it will be a long term boon for Democrats.   Health Care costs rose from 12% to 17% of GNP from the 1970s to the present.  An estimated 45,000 uninsured die each year over inadequate health care.  The uninsured population is approaching 50,000,000.  People with pre-existing conditions will continue to be uninsurable.  Insurance companies will continue to make money but denying coverage to keep their medical loss  ratios low and their stock prices and bonuses high. 

 Cost shifting will continue to be the major financing vehicle for hospitals and physicians to cover deficits in service shortfalls in funding from Medicare, Medicaid and the uninsured care.  Medical bankruptcy’s will continue to grow from the current 60% of bankruptcy’s.  The cost of private insurance will continue to climb as the consolidation of hospitals exercise increasing leverage to cover their costs and gain a tidy profit. The number of uninsured will continue to rise as employers continue their effort to shift the cost increases to individual employees.

WHAT HEALTH INSURANCE COMPANIES DO FOR US.

The writer and curmudgeon Ambrose Bierce once described a banker as a person who wants to sell you an umbrella on a sunny day.  A former judge and friend recently described an insurance company in similar terms as selling you coverage for everything except loss. One of the strange anomaly's of health insurance companies is that they make their money by not providing you the coverage you think that you are paying for. Health insurance companies have grown so big and powerful that in about half of the states there is little or no competition beyond two major providers. They make billions of dollars a year, but they do little for the price beyond providing a largely unnecessary financial load on the most expensive health care system by half in the world.

 

UTAH PRESCRIBES NEW PRESCRIBER LIABILITY DUTY

The Utah Supreme Court last month held that a prescriber of drugs has a duty to third parties injured by the conduct of the patient following the consumption of the medication.  In the case of B.R., a Minor Child and C.R., a Minor Child, through their Conservator, William M. Jeffs v. Trina West, Hugo Rodier and John Does I-X, (Utah, 2012), the Court overturned a lower court dismissal of a case for lack of duty.  The Plaintiffs are the two surviving children of David Ragsdale, who killed their mother after taking the medication prescribed by Ms. West, a nurse practitioner.  The drugs prescribed were Concerta, Valium, Doxepin, Paxil, pregnenelone and testosterone.

EIGHT REFORMS TO MEDICAL PEER REVIEW

The fundamental problem with medical peer review today is that there are large segments of medical practice that are more art than science and that all professionals are human beings and occasionally make mistakes. The system of peer review provided under the Health Care Quality Improvement Act of 1986 (“HCQIA”) sets up an intensely adversarial system in which those privileged to review their peers are not accountable for bias, bad faith or malice if there is any colorable justification for complaint about the judgment or quality of care provided by the reviewed physician. Further, the results can destroy a peer reviewed physician who may up with a “record” in the National Practitioner Data Bank.

 

10 CRITICAL PRO IMMUNITY PEER REVIEW CASES: Number 2.

This is a series describing the ten important pro-immunity peer review cases where court have granted immunity to peer reviewers under the Health Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11112 (“HCQIA”).

No. 2: Singh v. Blue Cross and Blue Shield, Inc. of Massachusetts, 308 F. 3d 25 ( 1st Cir., 2002) 

Dr. Singh, an internist, filed suit against the Blues of Massachusetts and an independent consultant over a recommendation for his exclusion from insurance plans based on concerns over the allegedly excessive use of pain medication for chronic problems and usually lengthy regimens of antibiotics for his patients. He sued for breach of contract, tortious interference with business relationships with patients, defamation and violation of state consumer protection statutes. After a “fair hearing” his exclusion was reversed and he was reinstated as a provider in the insurer’s system.