Friday, March 31, 2017
Thursday, March 30, 2017
Wednesday, March 29, 2017
Tuesday, March 28, 2017
Monday, March 27, 2017
Cherry-picking patients may be business as usual for not-for-profits like Mayo
Cherry-picking patients may be business as usual for not-for-profits like Mayo
By Elizabeth Whitman | March 23, 2017 | Modern Healthcare
Updated on March 24
When the CEO of Mayo Clinic said the world-renowned, not-for-profit health system would prioritize caring for privately insured patients over publicly insured ones, it triggered an inquiry from the Minnesota Health Department and dismay and criticism from researchers and ethicists.
“We're asking ... if the patient has commercial insurance, or they're Medicaid or Medicare patients and they're equal, that we prioritize the commercial insured patients enough so ... we can be financially strong at the end of the year to continue to advance, advance our mission,” CEO Dr. John Noseworthy told staff, according to a transcript obtained by the Minneapolis Star Tribune.
It's unclear whether Noseworthy's statements represent an explicit change in policy for the health system or if Mayo, acting up that statement, would violate any laws, including federal civil rights statutes, legal experts said. But whatever the outcome, the faux pas reflects—to a significant degree—business as usual for not-for-profit hospitals, which make up more than three-quarters of the nation's hospitals.
Even if Mayo is picking and choosing its patients based on insurance, it may not be significantly different from the policies and practices of many other hospitals, said Mary Crossley, a law professor at the University of Pittsburgh School of Law whose research focuses on inequality in healthcare delivery.
“It's part of a system where we ration healthcare based on who can pay. When you have a system like that, you have hospitals and other providers making these kinds of choices,” Crossley said, suggesting that other hospitals simply manage to be more subtle than Mayo recently was. “I certainly don't commend the practice.”
In a subsequent statement, Noseworthy said that medical need would always be the "primary factor" in making patient appointments. "In an internal discussion I used the word 'prioritized' and I regret this has caused concerns that the Mayo Clinic will not serve patients with government insurance," he said. "Nothing could be further from the truth."
Not-for-profit hospitals are exempt from federal, state and local taxes that, by one estimate, added up to $24.6 billion in 2011. In theory, they receive these exemptions in return for providing benefits to the community , at the core of which is caring for the publicly insured, uninsured or indigent.
But the extent to which hospitals actually offer community benefits varies substantially, and their status as tax-exempt has come under scrutiny in recent years.
The IRS does not set a minimum of community benefits that hospitals must provide to gain tax exemptions. In 2013, a study published in the New England Journal of Medicine found that not-for-profit hospitals in 2009 spent on average 7.5% of their operating costs on community benefits and charity care.
A 2009 IRS study of not-for-profit hospitals shed light on imbalances within the sector, showing that community benefits were concentrated in a relatively small number of hospitals. About 9% of the hospitals accounted for 60% of the aggregate community benefit expenditures, it found, using data from 2006.
Meanwhile, not-for-profit hospitals with annual revenue in excess of $500 million—36 hospitals, or 7% of those surveyed—saw much higher proportions of privately insured patients than did hospitals with revenue less than $25 million—85 hospitals, or 17% of those surveyed—the IRS found.
Noseworthy's remarks, made before staff at the end of last year but broken to the public in mid-March, offer more ammunition to those who question whether not-for-profit hospitals deserve the tax breaks they've long received, especially when their community contributions appear paltry by comparison.
“Tax-exempt hospitals, tax-exempt organizations, are perceived by the publi to have this higher social standard. They're expected to behave in ways that are not profit-driven,” said Gary Young, director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston, who was the lead author of the 2013 NEJM study.
Those expectations often conflict with reality. “We look at not-for-profit hospitals and say, 'Wow, these are major corporations.' They have revenues that are in the billions, in some cases, and they have highly paid executives,” Young said.
The Mayo Clinic's net operating income in 2016 was $475 million on revenue of $11 billion, giving it an operating margin of 4.3%, the health system reported. It provided care worth $629.7 million to “people in need,” including $83.3 million in charity care and $546.4 million in Medicaid shortfalls or unpaid portions of other indigent-care programs.
In 2015, Noseworthy took home $1,960,565 in base salary, plus $481,459 in other compensation, $59,031 in retirement and other deferred compensation, and $20,103 in nontaxable benefits, for a total of more than $2.5 million, tax records show.
In 2014, the estimated market value of the Mayo Clinic's properties in Minnesota's Olmsted County was approximately $820 million. The $16.6 million it paid in property taxes that year covered about half of the value of its properties.
The Mayo Clinic's mission, according to its website, is “to inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.” It adds, “The needs of the patient come first.”
But Noseworthy's comments strike some as a stark contrast to that mission.
“I have never seen in modern times anything like this,” said Sara Rosenbaum, a professor health policy at the George Washington University in Washington, D.C. “Where a hospital of the status and wealth of Mayo simply comes out and says that it's going to start rationing care to poor people on Medicaid—it really made me sit up and take notice.”
If the Mayo Clinic were to prioritize commercially insured over publicly insured patients, it could potentially violate several state and federal laws. Possible repercussions remain unclear, but rarely have hospitals had their federal tax-exempt status revoked for failing to provide sufficient community benefits, although that has happened occasionally at the municipal level, experts said.
In 2011, Illinois stripped three hospitals of their property tax exemptions for failing to provide adequate charity care. And in 2013, the city of Pittsburgh demanded that the University of Pittsburgh Medical Center compensate it for six years of property taxes for spending less than 2% of its revenues on charity care.
After reading about Noseworthy's comments in the Star Tribune, Emily Piper, commissioner of the Minnesota Department of Human Services, sent a letter, dated March 16, to Noseworthy. She said the department was reviewing its managed care, fee-for-service and Integrated Health Partnership contracts with the Mayo Clinic.
When the CEO of Mayo Clinic said the world-renowned, not-for-profit health system would prioritize caring for privately insured patients over publicly insured ones, it triggered an inquiry from the Minnesota Health Department and dismay and criticism from researchers and ethicists.
“We're asking ... if the patient has commercial insurance, or they're Medicaid or Medicare patients and they're equal, that we prioritize the commercial insured patients enough so ... we can be financially strong at the end of the year to continue to advance, advance our mission,” CEO Dr. John Noseworthy told staff, according to a transcript obtained by the Minneapolis Star Tribune.
It's unclear whether Noseworthy's statements represent an explicit change in policy for the health system or if Mayo, acting up that statement, would violate any laws, including federal civil rights statutes, legal experts said. But whatever the outcome, the faux pas reflects—to a significant degree—business as usual for not-for-profit hospitals, which make up more than three-quarters of the nation's hospitals.
Even if Mayo is picking and choosing its patients based on insurance, it may not be significantly different from the policies and practices of many other hospitals, said Mary Crossley, a law professor at the University of Pittsburgh School of Law whose research focuses on inequality in healthcare delivery.
“It's part of a system where we ration healthcare based on who can pay. When you have a system like that, you have hospitals and other providers making these kinds of choices,” Crossley said, suggesting that other hospitals simply manage to be more subtle than Mayo recently was. “I certainly don't commend the practice.”
In a subsequent statement, Noseworthy said that medical need would always be the "primary factor" in making patient appointments. "In an internal discussion I used the word 'prioritized' and I regret this has caused concerns that the Mayo Clinic will not serve patients with government insurance," he said. "Nothing could be further from the truth."
Not-for-profit hospitals are exempt from federal, state and local taxes that, by one estimate, added up to $24.6 billion in 2011. In theory, they receive these exemptions in return for providing benefits to the community , at the core of which is caring for the publicly insured, uninsured or indigent.
But the extent to which hospitals actually offer community benefits varies substantially, and their status as tax-exempt has come under scrutiny in recent years.
The IRS does not set a minimum of community benefits that hospitals must provide to gain tax exemptions. In 2013, a study published in the New England Journal of Medicine found that not-for-profit hospitals in 2009 spent on average 7.5% of their operating costs on community benefits and charity care.
A 2009 IRS study of not-for-profit hospitals shed light on imbalances within the sector, showing that community benefits were concentrated in a relatively small number of hospitals. About 9% of the hospitals accounted for 60% of the aggregate community benefit expenditures, it found, using data from 2006.
Meanwhile, not-for-profit hospitals with annual revenue in excess of $500 million—36 hospitals, or 7% of those surveyed—saw much higher proportions of privately insured patients than did hospitals with revenue less than $25 million—85 hospitals, or 17% of those surveyed—the IRS found.
Noseworthy's remarks, made before staff at the end of last year but broken to the public in mid-March, offer more ammunition to those who question whether not-for-profit hospitals deserve the tax breaks they've long received, especially when their community contributions appear paltry by comparison.
“Tax-exempt hospitals, tax-exempt organizations, are perceived by the publi to have this higher social standard. They're expected to behave in ways that are not profit-driven,” said Gary Young, director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston, who was the lead author of the 2013 NEJM study.
Those expectations often conflict with reality. “We look at not-for-profit hospitals and say, 'Wow, these are major corporations.' They have revenues that are in the billions, in some cases, and they have highly paid executives,” Young said.
The Mayo Clinic's net operating income in 2016 was $475 million on revenue of $11 billion, giving it an operating margin of 4.3%, the health system reported. It provided care worth $629.7 million to “people in need,” including $83.3 million in charity care and $546.4 million in Medicaid shortfalls or unpaid portions of other indigent-care programs.
In 2015, Noseworthy took home $1,960,565 in base salary, plus $481,459 in other compensation, $59,031 in retirement and other deferred compensation, and $20,103 in nontaxable benefits, for a total of more than $2.5 million, tax records show.
In 2014, the estimated market value of the Mayo Clinic's properties in Minnesota's Olmsted County was approximately $820 million. The $16.6 million it paid in property taxes that year covered about half of the value of its properties.
The Mayo Clinic's mission, according to its website, is “to inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.” It adds, “The needs of the patient come first.”
But Noseworthy's comments strike some as a stark contrast to that mission.
“I have never seen in modern times anything like this,” said Sara Rosenbaum, a professor health policy at the George Washington University in Washington, D.C. “Where a hospital of the status and wealth of Mayo simply comes out and says that it's going to start rationing care to poor people on Medicaid—it really made me sit up and take notice.”
If the Mayo Clinic were to prioritize commercially insured over publicly insured patients, it could potentially violate several state and federal laws. Possible repercussions remain unclear, but rarely have hospitals had their federal tax-exempt status revoked for failing to provide sufficient community benefits, although that has happened occasionally at the municipal level, experts said.
In 2011, Illinois stripped three hospitals of their property tax exemptions for failing to provide adequate charity care. And in 2013, the city of Pittsburgh demanded that the University of Pittsburgh Medical Center compensate it for six years of property taxes for spending less than 2% of its revenues on charity care.
After reading about Noseworthy's comments in the Star Tribune, Emily Piper, commissioner of the Minnesota Department of Human Services, sent a letter, dated March 16, to Noseworthy. She said the department was reviewing its managed care, fee-for-service and Integrated Health Partnership contracts with the Mayo Clinic.
In a follow-up letter, Assistant Commissioner Nathan Moracco asked specific questions about how the Mayo Clinic would meet the obligations of those agreements and those of state and federal law, and asked the clinic to respond within two weeks.
He pointed out that in 2015, the Mayo Clinic had signed an agreement with Minnesota Health Care Programs, publicly subsidized programs that include Medicaid as well as coverage for immigrants and refugees. Per that agreement, Mayo promised to “render to recipients services of the same scope and quality as would be provided to the general public.” The agreement also required providers to comply with Title VI of the 1964 Civil Rights Act, which bars discrimination.
Minnesota's population is 82% white, 6% black, 5% Hispanic, 3% Asian and 2% American Indian/Alaska Native, according to the Census Bureau. Nonwhites are disproportionately on public insurance or have none at all. Of those on Medicaid in 2015, 67% were white and 18% were black. Of the non-elderly uninsured, 44% were white, 17% Hispanic, and 25% “other,” defined as Asian, Native Hawaiian and Pacific Islander, American Indian, Aleutian, Eskimo or multiracial.
Overall, 7% of Minnesotans do not have insurance, according to an analysis by the Kaiser Family Foundation. But only 4% of whites were uninsured, while 20% of Hispanics and 24% of people categorized as “other” lacked coverage.
Minnesota does not explicitly require not-for-profit hospitals to offer a minimum of community benefits, although state law does require them to report annually the benefits it does provide.
If Mayo did cut back on care to Medicaid or Medicare patients or others who are not commercially insured, “minorities would be disproportionately affected,” Rosenbaum said.
Because it receives federal funding by participating in Medicare and Medicaid, the Mayo Clinic is prohibited from discriminating by race. Title VI bans not just overt discrimination but also the adoption of policies that might appear neutral but in reality disproportionately affect certain racial groups. How this could play out for Mayo Clinic remains to be seen.
Ultimately, even at not-for-profit hospitals, revenue has to exceed operating expenses, said Crossley, the University of Pittsburgh law professor.
“It's not unusual to hear about hospital management trying to adjust patient mix by adjusting the services they offer, to maximize revenue,” Crossley added. They might try to figure out which services have the best profit margins, for instance, and lure patients to those more lucrative units while closing down services that attract Medicaid patients and cause the hospital to lose money.
Young, who saw Noseworthy's comments as market-level and not patient-specific, said that although the remarks were in poor taste, the sentiments behind them were “commonplace.”
“We've asked them to compete,” Young said of not-for-profit hospitals. “They do think about how they have to market their services, and how they want to focus on the commercial population versus government.”
He pointed out that in 2015, the Mayo Clinic had signed an agreement with Minnesota Health Care Programs, publicly subsidized programs that include Medicaid as well as coverage for immigrants and refugees. Per that agreement, Mayo promised to “render to recipients services of the same scope and quality as would be provided to the general public.” The agreement also required providers to comply with Title VI of the 1964 Civil Rights Act, which bars discrimination.
Minnesota's population is 82% white, 6% black, 5% Hispanic, 3% Asian and 2% American Indian/Alaska Native, according to the Census Bureau. Nonwhites are disproportionately on public insurance or have none at all. Of those on Medicaid in 2015, 67% were white and 18% were black. Of the non-elderly uninsured, 44% were white, 17% Hispanic, and 25% “other,” defined as Asian, Native Hawaiian and Pacific Islander, American Indian, Aleutian, Eskimo or multiracial.
Overall, 7% of Minnesotans do not have insurance, according to an analysis by the Kaiser Family Foundation. But only 4% of whites were uninsured, while 20% of Hispanics and 24% of people categorized as “other” lacked coverage.
Minnesota does not explicitly require not-for-profit hospitals to offer a minimum of community benefits, although state law does require them to report annually the benefits it does provide.
If Mayo did cut back on care to Medicaid or Medicare patients or others who are not commercially insured, “minorities would be disproportionately affected,” Rosenbaum said.
Because it receives federal funding by participating in Medicare and Medicaid, the Mayo Clinic is prohibited from discriminating by race. Title VI bans not just overt discrimination but also the adoption of policies that might appear neutral but in reality disproportionately affect certain racial groups. How this could play out for Mayo Clinic remains to be seen.
Ultimately, even at not-for-profit hospitals, revenue has to exceed operating expenses, said Crossley, the University of Pittsburgh law professor.
“It's not unusual to hear about hospital management trying to adjust patient mix by adjusting the services they offer, to maximize revenue,” Crossley added. They might try to figure out which services have the best profit margins, for instance, and lure patients to those more lucrative units while closing down services that attract Medicaid patients and cause the hospital to lose money.
Young, who saw Noseworthy's comments as market-level and not patient-specific, said that although the remarks were in poor taste, the sentiments behind them were “commonplace.”
“We've asked them to compete,” Young said of not-for-profit hospitals. “They do think about how they have to market their services, and how they want to focus on the commercial population versus government.”
Health Care Bill Is Dead for the Year, Committee Leaders Say
Health Care Bill Is Dead for the Year, Committee Leaders Say
By Erin Mershon, CQ Roll Call, March 24, 2017
Committee chairmen who oversee health care acknowledged that legislative efforts to revise the 2010 law are over this year after House Speaker Paul D. Ryan abandoned the Republican bill Friday.
"This bill is dead," said Energy and Commerce Committee Chairman Greg Walden, R-Ore.
"The president has said he's moving on, and unless he changes his mind, we're moving on," said Ways and Means Committee Chairman Kevin Brady, R-Texas. "Obamacare is clearly still in place and it's continuing to collapse, and we worked very hard to avoid that."
Brady said he won't try to address some aspects of health care through the congressional tax overhaul that is expected to come up next on the House agenda.
Asked whether all legislative efforts on health care were really over, Brady said yes.
"This was the moment," he said. "We fought hard."
Pat Tiberi, R-Ohio, who chairs the Ways and Means Health Subcommittee, told CQ he's still thinking through exactly what he will do in his panel now that the repeal legislation has been axed.
"The challenge is, the president says he's done with it now, let it collapse," Tiberi said. "But even if you succeed at the challenge of getting things through the House and the Senate on the same page, if the president's not for it, I don't know how you do it."
The health care law and its marketplaces may face continued tumult. Republicans slammed Democrats for what they called sky-high premium increases, insurer bankruptcies and several major insurance companies' decisions to withdraw from the markets in which they participated.
Trump has suggested that will be the Democrats' fault and their political headache. At his press conference, he sought to blame Democrats for the nation's health coverage troubles.
"The losers are Nancy Pelosi and Chuck Schumer, because they own Obamacare. They 100 percent own it," Trump said. "They have Obamacare for a little while longer until it ceases to exist, which it will at some point in the near future.
"When they all become civilized and get together, and try to work out a great health care bill for the people of this country, we're open to it," Trump said.
Coverage Challenges Ahead
The policy issues up for consideration have high stakes. A lawsuit between the House of Representatives and the Trump administration threatens billions of dollars in subsidies that insurance companies have said are vital to the stabilization of the markets. Both parties agreed to freeze the court case last month, but the end of the subsidies could upend the entire market created by the health care law (PL 111-148, PL 111-152).
It's unclear whether House Republicans will agree to fund those subsidies and drop the lawsuit. The uncertainty about the subsidies and the administration's next steps will challenge insurance companies, who must submit their 2018 price requests to regulators by early May.
"Now instead of trying to improve our health care system and improve people's lives, it seems like President Trump is going to sit back and try to root for the system to fail," said Senate Minority Leader Charles E. Schumer, D-N.Y. "That is not what a president is supposed to do. He's supposed to help the people."
Democrats, at least, say they are ready to work together to fix the health care law.
"If they get off repeal and denounce repeal, say that they're not going to go for repeal, we'll sit and work with them on it," Schumer said.
Asked specifically about the cost-sharing subsidies, Tiberi said it was too early for those conversations.
But he suggested the House might be able to repeal some of the health law taxes during the chamber's work on a tax overhaul.
"Maybe," he said. "I think it's something to look at, particularly the taxes we're repealing, we believe have hurt economic growth, job development, creation. It's not something we were looking at, we were looking at doing it this way."
Walden suggested that the House effort is done, and it would be up to the Senate to revive the conversation.
"They are free to move their own reconciliation bill or bring their own health care bills forward," Walden said.
Senate Majority Leader Mitch McConnell, R-Ky., showed no desire to do that. He praised the unsuccessful attempts by Trump and Ryan.
"I share their disappointment that this effort came up short,” McConnell said.
Joseph Williams, Kerry Young, Andrew Siddons and John Bennett contributed to this report.
Friday, March 24, 2017
GOP Medicaid Plan Could Reduce Aid for Children, Experts Say
GOP Medicaid Plan Could Reduce Aid for Children, Experts Say
By Kerry Young, CQ Roll Call, March 21, 2017
The outlook for federal support for children's health care grew cloudier Monday night when House GOP leaders added a block grant option to their health care bill, experts said. The GOP Medicaid proposals are likely to reduce aid for children's coverage in the years ahead, and Congress is also likely to provide less generous terms to states when it renews the Children's Health Insurance Program later this year, experts said.
Republicans' anticipated actions this year would represent the first erosion of federal support for children's coverage since the creation of Medicaid, analysts said in interviews Tuesday.
The House GOP measure (HR 1628) proposes ending open-ended federal support of Medicaid through a switch to caps pegged to enrollment in the state-federal program, past spending and medical inflation rates. Federal spending on Medicaid would drop by $880 billion over a decade when compared to current law, according to the Congressional Budget Office, resulting in a 25 percent cut by 2026.
Some of those cuts would phase out the expansion of Medicaid under the health care law. About 10 percent of Medicaid spending goes for adults who gained coverage under the expansion, according to federal estimates.
In a bid to woo conservatives, House GOP leaders on Monday added an option for states to use a Medicaid block grant, which would give governors more leeway to reduce children's coverage. Diane Rowland, executive vice president at the Kaiser Family Foundation, said the GOP bill also would ease the rules on the services now mandated for children's care, including diagnosis and follow-up care.
"It is really a signal that many of the members up here are willing to cut back on the federal entitlement and coverage that has been expanded and a hallmark of our national policy," Rowland told CQ Roll Call Tuesday.
There's little doubt that a major reduction in Medicaid funding, such as the House proposes, may eventually affect children's care. Republicans have centered much of the discussion about their Medicaid plan around what they all the "able-bodied" population, or adults who qualified through the 2010 law's expansion of the program due to their low incomes. The amendments to be offered to the House bill at the Rules Committee tomorrow include a work requirement for adults.
Children made up nearly 50.5 percent of the combined December enrollment of Medicaid and CHIP, which stood at 74.2 million, noted Edwin Park, vice president for health policy at the liberal Center on Budget and Policy Priorities.
"Kids are being overlooked here," Park said. "Kids are half of the Medicaid program, and if you are imposing per capita caps, kids are going to be affected. They are going to fall off the program. It does deserve more attention."
With the election of President Donald Trump and a growing conservative tilt in GOP ranks, Republicans see this time as a "golden opportunity" to reshape health policy, said Frank Thompson, a professor at Rutgers University who studies federal programs. Republicans fell short in attempts to switch Medicaid to block grants in the 1980s, 1990s and 2000s. The idea has been championed by Speaker Paul D. Ryan, R-Wis., who skews more libertarian than some GOP lawmakers with a noted affection for the work of writer Ayn Rand, Thompson noted.
After Republicans finish their attempts to revise the 2010 health law (PL 111-148, PL 111-152), lawmakers will face a September deadline to renew funding for the CHIP.
Republican lawmakers may seek to ensnare CHIP reauthorization later this year in partisan health fights, and use Democrats' support for it as leverage to try to win other policy battles.
Some Republicans want to scale back federal funding to states for CHIP. The 2010 health care law boosted federal contributions, adding a 23 percentage point increase for states. Those higher payments are unlikely to continue in a fiscally conservative Congress and administration.
As a stand-alone effort intended for children, though, it may be more politically difficult to reduce CHIP funding than to reduce spending for the overall Medicaid program, said Thompson of Rutgers.
"Even the hardest of hard Ayn Rand enthusiasts would find it a little hard to get themselves worked up about the evils of giving health insurance to children," he said.
Thursday, March 23, 2017
Wednesday, March 22, 2017
Tuesday, March 21, 2017
Sunday, March 19, 2017
Friday, March 17, 2017
Thursday, March 16, 2017
Wednesday, March 15, 2017
Tuesday, March 14, 2017
Monday, March 13, 2017
Thursday, March 9, 2017
Wednesday, March 8, 2017
Tuesday, March 7, 2017
Monday, March 6, 2017
Sunday, March 5, 2017
Thursday, March 2, 2017
Wednesday, March 1, 2017
Subscribe to:
Posts (Atom)