Singularity Health Law Blog

“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 REELS IN “STATE ACTION” ANTITRUST IMMUNITY DEFENSE

The United States Supreme Court, in a unanimous opinion written Justice Sotomayor, overturned an Eleventh Circuit Court of Appeals and Georgia District Court finding “state action” antitrust immunity in the case of FTC v. Phoebe Putney Health System, Inc. et al, No. 11-1160. Had they ruled otherwise there would have opened a huge whole in the FTC’s ability to regulate anticompetitive conduct by state sub-entities under a general grant of state authority. Georgia like many states has a hospital authorities law that permits counties and or municipalities to create quasi governmental entities with broad grants of powers to operate health care facilities.

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.

 

A COMPREHENSIVE REPUBLICAN HEALTH CARE PLAN

 To those who are struggling to understand what any of the Republican candidates embrace as to principles of health care reform other than the mantra of repeal of Obamacare: here is a Republican Plan that merits consideration.

HUMANA DOES MEDICARE

According to the Wall Street Journal Humana’s earnings topped 13% in the third quarter based largely on a managed care strategy. The economy apparently had a major impact on earnings with fewer people seeking medical care due to financial stress. Humana’s medical-cost ratio or the percentage of premium actually used to provide health care services dropped from 81.6% to 80.7% resulting a greater profit margin for Humana.

MEDICARE SHARED SAVINGS PROGRAM: TWO ACO TRACKS

The final Accountable Care Organization (“ACO”) rules to be published next months continue to provide two alternative ACO “tracks” for participation, but have made one of the options more user friendly.  The Medicare Shared Savings Program (“MSSP”) is a new conceptual provision of the Obama Administration’s Accountable Care Act (“ACA”) that permits physicians and hospitals who are serving Medicare patients on a fee for service basis to band together to achieve greater efficiency and accountability through the opportunity to benefit from any cost savings to the program.

To qualify for the MSSP program ACOs must agree to take at least 5000 patients for a period of three years.  They must also select one of two tracks for providing care. The first track originally provided for a sharing of savings only for the first two years with a risk sharing for losses in the third year. The purpose of this track was to provide a level of protection for fledgling ACOs to get acclimated to the program before going at risk.  The final rules extend this option for all there years of the initial contract.

The second track if for those ACOs who already have experience with clinically integrated systems who are “spade ready” and prepared to undertake both benefits and risk for the entire program.  Second track participants have the opportunity to share in a greater amount of the savings (60%) than track one ACOs (50%).  The amounts of the savings bonuses to be paid are to some extent performance driven by 4 categories of quality measurements that the ACOs must report to the government.

For a comparison of the draft rule and final rule see below.

http://www.cms.gov/aco/downloads/Appendix-ACO-Table.pdf

 

CONCIERGE MEDICINE | MEDICARE OVERLAP TRAP

According to a GAO report in 2005 approximately seventy five percent of those physicians providing concierge medicine services do not opt out of Medicare, but provide some services either as a participating or non-participating physician. Those physicians must be very careful to assure that they do not charge concierge customers for any service that might be otherwise covered by Medicare which can create a potential claim for over-billing for medicare services in violation of the False Claims Act.

MEDICARE PROVIDERS | THE “OPT OUT” OPTION.

There is a fair amount of confusion afoot concerning the obligation or not of physicians to accept Medicare patients.  There is no requirement that any physician accept Medicare patients or refrain from limiting the number of Medicare patients accepted into the physician’s practice. There are circumstances when it may be in the best interest of a physician to “opt out” of Medicare.  The growth of concierge medicine  in some respects makes it safer for physicians to “opt out” of Medicare in order to avoid stepping afoul of the Medicare fee limitations by charging for services that might be construed by CMS or the OIG as being extra contractual charges which might implicate the federal false claim statute. According to 2005, General Accounting Office Survey of providers of concierge medicine, only about 25% of them had opted out and were practicing on the cash only high wire without the Medicare safety net.

 

INTEGRATED HEALTH SYSTEMS MODEL: BACK TO THE FUTURE.

In the not so distant past there was an health care industry trend toward the merger of the insurance and health care delivery systems which lowered costs at the expense of consumer choice.  Consumers ultimately balked at the choice limitation and the trend dissipated back toward the customary separation of insurance and delivery along the fee for service model. With the rise of Accountable Care Organizations under the Patient Protection and Accountable Care Act, the past is back as the future. Recently Steward Health Care System, LLC (successor to the six hospital system, Caritas Christi, in Massachusetts) announced that it will provide an new insurance plan built around the restriction that all consumer routine health care needs with be provided by Steward physicians. Cerebus Capital Management LP owns Steward.  

 

FDA TO REGULATE MINOR SUBSET OF SMARTPHONE MEDICAL DEVICE APPLICATIONS.

The FTC has dipped its toe in the water of smartphone and ipad technology by announcing that it intends to regulate a “narrow subset” of smartphone medical devices that meet the definition of a “device” under Section 201(h) of the FD&C Act, 21 U.S.C. 321.  In a recent news release it indicated that it intended to regulate those applications meeting the definition of device and 1) used as an accessory to an already regulated medical device or 2) that transforms a mobile platform into a regulated medical device. See 76 Fed. Reg. 43689. In its news release the FDA noted a study that indicated that 500 million smartphone users will be using health care applications in the near future. The FDA indicated that it intended to regulate those applications that create great risk when they do not work as intended. An example of a device that would be regulated is a smart phone that is converted to an ECG heart monitor.(i.e. Smartheart,  a self service heart monitor).