Wake Forest Medical Center in North Carolina Proposes 8-OR ASC

Wake Forest University Baptist Medical Center in Winston-Salem, N.C., is asking for state permission to build a $38.7 million ASC next to its main campus, according to a report by the Business Journal Serving the Greater Triad Area.

Wake Forest University, which runs a medical school, wants to build an eight-OR facility, adding seven rooms to its total inventory and relocating one existing room to the new center.

The facility would also include two teaching rooms to simulate operating and robotic surgery techniques for medical students.

Read the Business Journal Serving the Greater Triad Area’s report on Wake Forest University Baptist Medical Center.

Chuck Lauer: 10 Points on Leadership

1. Leading is not the same as managing. There is a huge difference between managing and leading. “Leaders do the right thing and managers do things right,” it has been said. While managers focus on working toward the organization’s goals, orchestrating resources in an effective and efficient manner, leaders need to engage in strategic thinking. They need to pay less attention to details and focus on the big picture.

2. Don’t live in a bubble. Great leaders listen to their people, obtaining a variety of perspectives from a variety of sources. This helps them distill their own decision-making. They ask employees what they think and probe them on the pros and cons of a proposal. This not only shows employees that they are valued but also gets the leader closer to the best solution.

3. Cherish and respect employees. Leaders function as enablers, helping employees perform their jobs to the nth degree. A leader can only get work done through other people. Employees who get respect will produce at their highest capacity and make the leader look good. Make sure people have the tools to do their jobs — and the freedom to make mistakes!

4. Choose a clear mission. Leaders make sure the mission of their organization is plainly articulated and followed day in and day out. A mission statement can sound nice and look really good, but it has to be more than a bunch of words. It should be the very heart and soul of what the organization is about. It should inspire and direct.

5. Demonstrate integrity. Successful leaders recognize that the way they behave reflects the principles and ethics of the organization. Integrity and ethics are essential for any leader. A leader cannot just be “one of the boys.” Leaders need to stand above the rest and show the way.

6. Be transparent. Great leaders don’t believe in secrecy or closed-door meetings. They must conduct themselves with transparency and openness so that rumors don’t start and employees don’t feel shut out. Leaders who are frank rather than evasive — even about difficult issues — will be able to win employees’ trust.

7. Embrace responsibility. Outstanding leaders come in all shapes and sizes, from a variety of backgrounds, but what really sets them apart is their enjoyment in taking on responsibility and willingness to make tough decisions when necessary. Leaders don’t waffle or equivocate. They make sure their decisions are fair-minded and balanced.

8. Share credit. Leaders know the value of giving credit to others, even as they step forward immediately to take the blame for losses, so that their people are protected and valued. “A leader is best when people barely know he exists,” the Chinese philosopher Lao Tzu said. “When his work is done, his aim fulfilled, they will say, ‘We did it ourselves.’ ”

9. Leadership isn’t for everyone. Not all that many people want to take the hard hits that leaders have to absorb, regardless of whether they run a hospital, a clinic or a restaurant. A study of graduate students several years ago showed that well over 60 percent did not want the responsibility of being a leader. While there are many talented people, only a select few will embrace a leadership role.

10. Have courage. Leadership requires courage. Leaders have to go beyond just taking care of their own careers. They need to engage in calculated risks that will secure the future of the whole organization. This is especially important in these trying times, when healthcare is faces so many enormous challenges.

Chuck Lauer ( chuckspeaking@aol.com ) was publisher of Modern Healthcare for more than 25 years. He is now an author, public speaker and career coach who is in demand for his motivational messages to top companies nationwide.

Massachusetts Report Finds Hospitals’ Negotiating Clout With Insurers Drives Up Costs

Massachusetts hospitals and physician groups with market clout negotiate rates that are twice as high as for other hospitals, and such clout is the main cause of healthcare inflation in the state, according to a release by State Attorney General Martha Coakley.

Ms. Coakley’s office based the findings on a year-long study of the Massachusetts market, finding that about 10 hospitals enjoy reimbursements 10-100 percent higher, for similar work, than reimbursements for the other 55 hospitals in the state.

The office’s report says the 10 favored hospitals had brand-name recognition or few competitors in their markets, but it did not name any provider or insurer, saying its aim was to identify systemic problems and not blame individual organizations.

Based on its findings, the report recommended against establishing global payments covering a patient’s entire medical care for an illness, an approach recommended by a state commission.

The study concluded that higher healthcare costs are basically caused by rising prices, not increased demand for new services. One major insurer reported provider price increases accounted for 80 percent of the growth of medical expenses from 2006-2009.

The report called on the state to:

• Discourage or prohibit contract provisions that perpetuate market disparities;
• Increase transparency and standardization in payment and quality;
• Reform payments to account for market distortions; and
• Encourage development of a “value-based” healthcare market.

Read the Massachusetts Attorney General’s release on health insurance reimbursements.

Gov. Paterson proposes bill to require disclosure from PBM

New York Governor David A. Paterson has proposed legislation that would increase transparency and promote competition among pharmacy benefit managers (PBMs) by requiring them to disclose additional drug information to health plans, doctors, and patients.
“PBMs perform a valuable service, but there is little oversight of their practices and little competition,” said New York State Health Commissioner Richard Daines, M.D., in the release. “The three largest PBMs—Medco, Caremark, and Express Scripts—manage pharmacy benefits for 200 million Americans, 95% of those who have prescription drug coverage.”

Under Paterson’s bill, PBMs would be required to disclose the actual use of drugs by the health plan’s participants, any conflict of interest that the PBM might have with the health plan, any increase in the net price to the health plan for a covered drug and the reason for the increase, and all contracts entered into by the PBM with a network pharmacy or pharmaceutical manufacturer. The bill would also notify patients and disclose any relevant clinical and financial information to prescribers before a PBM could switch a patient to a more expensive drug, the governor said in the press release.

11 Things to Know About the False Claims Act

1. Initial development of the False Claims Act. The False Claims Act, also known as the “Lincoln Law” after its primary proponent, President Abraham Lincoln, was initially developed during the Civil War. The Act was a response to war profiteering by military contractors who attempted to defraud the government, for example, by sending boxes of sawdust instead of guns or selling the same cavalry horse to the armed forces multiple times. The Act remained in its original form from its initial passage in 1863 until 1943, at which point various amendments de-incentivizing qui tam actions made the statute nearly obsolete. In 1986, the Act was amended again with greater incentives for private citizens to report fraud on the government. The Act has become an increasingly active mechanism to combat fraud and false claims submitted to the federal government ever since. For additional background information, see http://www.all-about-qui-tam.org/fca_history.shtml.

2. Overview of Qui Tam concepts. Qui Tam means “in the name of the king”. The concept of a Qui Tam action is similar to a whistleblower action and allows a private person, referred to as a “relator,” to file suit on behalf of the United States against those who have falsely or fraudulently claimed federal funds. Incentives are built in so that the qui tam relator is able to receive a part of the proceeds of a victory on behalf of the government. Further, the portion of an award amount that the relator retains is greater if the government does not join in the suit and therefore he or she does not receive the help of the government. Alternatively, if the government joins or “intervenes” in the lawsuit, the relator retains a lesser portion of any judgment or settlement obtained.

False Claims Act qui tam actions run the gamut of federally funded programs, from Medicare and Medicaid to defense and other government procurement contracts, federally insured mortgage and other federal housing programs, disaster assistance loans, agricultural subsidies and more. Persons who knowingly make false claims for federal funds are liable for three times the government’s loss plus a civil penalty of $5,500 to $11,000 for each claim. Relators recover 15 to 25 percent of the proceeds of a successful suit if the United States intervenes in the qui tam action, and up to 30 percent if the United States declines to intervene and the relator pursues the action alone. During fiscal year 2009 alone, relators were awarded $255 million. (This figure does not include relator shares awarded after Sept. 30, 2009.)

3. Top hospital recoveries. To see a list of the top 20 False Claims recoveries to date, go to www.taf.org/top20. Several hospitals and hospital companies have paid massive settlements to resolve false claims actions against them, including St. Barnabas Hospitals, a non-profit hospital chain in New Jersey, which paid $265 million in 2006 to settle allegations related to improperly claiming “outlier” Medicare payments (additional payments for particularly difficult or complex procedures). Also in 2006, Tenet Healthcare, a national hospital system, agreed to pay the federal government $900 million for billing violations also involving manipulation of outlier payments, as well as kickbacks, upcoding and bill padding. Similarly, in 2000, Columbia HCA, the largest for-profit hospital chain in the country paid more than $731 million to settle False Claims Act allegations against it. Currently, Toumey Healthcare System in South Carolina is involved in a False Claims litigation based on physician self-referral law violations that resulted in the submission of false claims, a legal theory that proved successful against a medical practice management company in the 2008 case U.S. v. Rogan in the Seventh Circuit Court of Appeals.

4. 2009 recoveries. In 2009, the U.S. government recovered $2.4 billion dollars under the False Claims Act. This was the second highest annual collection amount recorded in history, thanks in large part to an enormous settlement between the government and Pfizer Inc. The Department of Justice made the following statement regarding the Pfizer settlement in Sept. 2009:

American pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. hereinafter together “Pfizer”) have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products, the Justice Department announced today.

Pharmacia & Upjohn Company has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs.

5. Healthcare fraud — Top industry for False Claims recovery. Healthcare fraud represents the largest and most profitable industry for Qui Tam false claims collections. Healthcare fraud recoveries accounted for approximately $1.6 billion, more than two-thirds of the $2.4 billion dollars collected under the False Claims Act in total during 2009. Numerous federal agencies shared in these recoveries, including the Department of Health and Human Services, in connection with its Medicare and Medicaid programs; the Office of Personnel Management, which administers the Federal Employees Health Benefits Program; the Department of Defense for its TRICARE insurance program; and the Department of Veterans Affairs.

6. Pharmaceutical and medical device companies – Main targets. The largest qui tam settlements in 2009 came from pharmaceutical and medical device companies, including Pfizer, Sanofi-Aventis, Bayer HealthCare, Quest Diagnostics and Eli Lilly, amongst others. The DOJ reported that pharmaceutical and device companies accounted for $866.7 million in settlements for federal recoveries, in addition to $402 million being returned to state Medicaid programs.

7. Retention of overpayments now can be considered a False Claims Act violation. In 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 which implemented significant changes to the False Claims Act, including the expansion of prohibited conduct under the False Claims Act to include not just the improper filing to collect monies, but also the known retention of overpayments by hospitals or other health care providers. The 2009 amendments also make clear that false claims submission to a state Medicaid program, although not directly submitted to the federal government, does constitute a violation of the False Claims Act.

8. Hospital sample False Claims policy. All health care providers and businesses submitting claims to the government for payment should have health care regulatory and false claims policies in place to educate its employees and agents and minimize the submission of false claims and the potential liability attached thereto. A good sample policy is available online at www.centralcommunityhospital.com. This sample policy is particularly designed to address a community hospital’s approach to false claims and other policies, and may need to be modified depending on the size of the entity, breadth of practice, or type of industry or provider submitting the claims.

9. Plaintiff’s law firms focus on Qui Tam. Over the past several years, there has been a dramatic increase in the number of Qui Tam suits. As a result, there are now law firms that focus exclusively on qui tam actions. One such firm, Warren Benson Law Group, states on its website, www.warrenbensonlaw.com/medicare-fraud.com:

In recent years, Medicare fraud and Medicaid fraud have been the two most active areas of qui tam litigation, outnumbering qui tam cases involving defense contractor fraud. It is estimated that Medicare fraud and other fraud cost the federal government billions of dollars each year.

There are numerous frauds Medicare and other healthcare providers and companies have devised to cheat the Government…[such as:]

- Services not rendered
- Upcoding schemes and Unbundling
- Kickbacks and Self Referrals
- Falsely Certifying and Giving False Information
- Lack of Medical Necessity
- Fraudulent Cost Reports
- Grant or Research Fraud

These firms generally take qui tam cases on a contingency fee basis, making it enticing for potential relators to come forward and initiate litigation against the alleged wrong-doers.

10. Broad provider responsibility – Scope of liability. In the face of the increasing scrutiny of claims and the relatively new era of Recovery Audit Contractors, parties should understand the broad scope of what can be considered a false claim and their obligations to properly bill for services. A good discussion of the breadth of the provider’s responsibility is set forth in an article by Charlie Artz, a well-regarded healthcare attorney. See False Claims Act Implications in Physician’s News Digest www.physiciansnews.com/law/805artz.html. A few of the key concepts discussed by Mr. Artz are excerpted below:

In Re: Cardiac Devices Qui Tam Litigation, the U.S. District Court in Connecticut refused to dismiss a whistleblower’s case against health care providers who submitted claims for services that were not covered by Medicare, held that the health care providers had a duty to familiarize themselves with all requirements for reimbursement, and allowed the False Claims Act case to proceed exposing the health care providers to millions of dollars in refunds and civil fines.

Although the opinion was close to 100 pages in length, the key facts can be summarized as follows. Then-HCFA published a manual over 1,000 pages in length containing literally hundreds of reimbursement rules and requirements. These billing guidelines were not statutes passed by Congress after the people had an opportunity to debate them. These were not regulations published with notice and comment by the general public or the health care community to make improvements or to object to certain clauses. These were purely interpretive guidelines published by the federal government. One of those several hundred billing guidelines contained a provision prohibiting reimbursement for any non-FDA approved device or service. The 40 hospital defendants in this massive federal court litigation submitted claims to Medicare and received payment for services provided to patients who participated in clinical trials involving several different investigational cardiac devices that had not been approved for marketing by the FDA.
One clause in the hospital payment manual stated that medical devices not approved for marketing by FDA are considered investigational by Medicare and are not reasonable and necessary for the diagnosis and treatment of illness or injury under the Medicare statutory definition of medical necessity. Apparently, the hospitals billed these services by mistake, believing that since the clinical trial was approved, the provider was allowed to bill Medicare for the device and related services.

A whistleblower realized many hospitals were billing Medicare for non-FDA approved cardiac devices and filed a civil false claims case in federal court. The federal government intervened and is now prosecuting the False Claims Act case against hospitals. The hospitals asked the federal court to dismiss the case for several reasons. One of the key defenses is that a simple violation of a statute or regulation does not, by itself, trigger False Claims Act liability. The federal court rejected that analysis and made the following key points that should guide your compliance efforts.
11. Heightened regulatory and enforcement environment – False Claims Act and Anti-kickback Statute. The government has looked to regulatory mechanisms like the False Claims Act to recover money spent improperly as a politically palatable way to attack healthcare providers and healthcare costs. Given the demonstrated success of this strategy, we expect more, not less, recovery of claims of this sort. As William Corr, Deputy Secretary of the U.S. Department of Health and Human Services, stated on October 28, 2009:
As a result of the priority given to combating health care fraud by President Obama, the government has been able to achieve a more rapid response to fraudulent schemes and increase its recovery of more funds lost to fraud than in previous years. For example, HHS Office of Inspector General investigations have resulted in $4.0 billion in receivables for FY 2009, increase from $3.2 billion in DIG investigative receivables in FY2008. Strike force cases typically are indicted and litigated faster than traditional criminal health care fraud cases.

Since March 2007 strike force cases that included HHS agents have obtained 189 convictions, 443 indictments, and total an estimated $227 million in expected recoveries. During this time, the Department of Justice also secured the largest health care fraud settlement in history against a pharmaceutical company for Medicare and Medicaid fraud and for violating the Food, Drug and Cosmetic Act. I refer to the $2.3 billion settlement with Pfizer to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products.

Anthem Blue Cross of California Raises Individual Premiums by 30-39%

Anthem Blue Cross, California’s largest for-profit health insurer, is raising premiums for individual insurance policies by 30-39 percent on March 1, according to a report by the Los Angeles Times.

Individual policies, which already tend to be more expensive than group policies, are a refuge for people who are uninsured, self-employed or have recently lost employer-based coverage.

Word of the increase, the largest in policyholders’ memory, has prompted the California Insurance Commissioner to order an actuarial study to determine if Anthem spends at least 70 percent of individual premiums on medical care, as required by state law.

The company, which provides individual coverage for 800,000 customers, said the increases “are merely the symptoms of a larger underlying problem in California’s individual market — rising healthcare costs.”

Read the Los Angeles Times’ report on insurance premiums.

8 Statistics About Anesthesiologist Compensation

Here is the median compensation of anesthesiologists for 2005-2008, according to the AMGA 2009 Medical Group Compensation and Financial Survey.

• 2008 — $366,640
• 2007 — $352,959
• Percent change 2007-2008 — 3.88 percent
• 2006 — $344,691
• Percent change 2006-2008 — 6.37 percent
• 2005 — $337,654
• Percent change 2005-2008 — 8.58 percent
• Dollar change 2005-2008 — $28,986

To order a copy of the complete 2009 Medical Group Compensation and Financial Survey, click here.

Reprinted with permission from the AMGA 2009 Medical Group Compensation and Financial Survey. ©2009,American Medical Group Association.

How the Cleveland Clinic uses IT to Help Anesthesiologists Improve Patient Safety

One example of the Cleveland Clinic’s increasing use of digital technology is the electronic reminders it sends to anesthesiologists to carry out a patient safety task, according to Marc Harrison, MD, chief medical operations officer at the clinic.

Research has shown that an antibiotic administered to a surgery patient within one hour before the operation can prevent surgical site infections. These infections lengthen hospital stays, cause readmissions and increase patient mortality. But Dr. Harrison says busy anesthesiologists can sometimes forget to carry out the task.

So a few years ago, patient safety personnel decided to set up the clinic’s IT system to monitor this task and send reminders those anesthesiologists not carrying it out.

Anesthesiologists at the clinic are regularly at a computer screen doing a variety of tasks, such as recording their tasks in the patient’s medical record. They tell the computer when they have administered antibiotics and the information goes into the clinic’s electronic database, Dr. Harrison says. A monitoring system queries the database in real time to determine if the antibiotic was administered and at what time, because poor timing affects potency of the dose. If the task is not carried out in a timely manner, a reminder automatically appears on the anesthesiologist’s computer screen.

For the alerts to work, Dr. Harrison says department heads have to meet with physicians, tell them about the system and explain why it’s important. “The physicians can self-manage because they want to do the right thing,” he says. “This works because physicians are data-driven, they are goal-oriented and competitive.

Since the reminder system was installed about two or three years ago, compliance with the safety directive has risen from 75-80 percent to 100 percent, Dr. Harrison says.

Last fall, the clinic introduced a similar electronic alert reminding caregivers to stop giving antibiotics within 24 hours after surgery, which is another patient safety measure. Compliance for that measure has risen from 90 percent to 100 percent.

Arkansas Physician Assistant Sentenced in Healthcare Fraud Scheme

Geffrey Alan Yielding of Jacksonville, Ark., was sentenced to 78 months imprisonment for his role in a healthcare fraud scheme, which in he was convicted of violating the healthcare anti-kickback statute and for falsifying document to conceal the fraud, according to a release from the Department of Justice.

Mr. Yielding was convicted in April 2009. According to the charges, Mr. Yielding and his now-deceased wife, Kelley Yielding, received commissions from the sales of Orthofix bone growth stimulators and Osteotech allograph bone to Baptist Health Medical Center – North Little Rock during the years 2003 and 2004. Those commissions, earned by Ms. Yielding through her company, Advanced Neurophysiology, which was a distributor for both companies, totaled in excess of $380,000. During this time period, Mr. Yielding was employed as a physician assistant for Richard Jordan, MD, a North Little Rock neurosurgeon, which enabled Mr. Yielding to dictate what products were ordered for use in surgeries performed by Dr. Jordan at Baptist NLR.

As part of the scheme, Mr. Yielding bribed Baptist NLR charge nurse Jordan Wall to order excessive amounts of the products for which Ms. Yielding would receive commissions, according to the release. When the nurse was terminated, Mr. Yielding created a fraudulent promissory note in an effort to disguise the bribes as a loan. Mr. Wall pleaded guilty to making a false statement to a federal agent and was sentenced to a term of probation and a fine, according to the release.

In imposing the sentence, the Court further considered the amount of monies paid by Baptist NLR for the products Mr. Wall ordered in exchange for the bribes as well as the loss to Baptist NLR’s insurer, Travelers Insurance, of $131,300 based on a claim it paid to Baptist NLR for fraud loss, according to the release. Finally, the Court held Mr. Yielding accountable for causing false claims to be filed with federal healthcare programs in an aggregate amount exceeding $740,000.

Mr. Yielding received sentence enhancements for both obstructing justice and for his aggravating role as a leader or organizer of the criminal activity. According to the release, Mr. Yielding’s obstruction of justice occurred in Dec. 2004 when he aided and abetted Mr. Wall in falsifying the promissory note.

As a part of Mr. Yielding’s sentence, he was ordered to make restitution in the amount of $944,995.84 to Baptist NLR, Travelers Insurance, Medicare, Medicaid and TriCare for their respective losses, according to the release. He will begin his sentence on March 8.

This investigation was conducted by the Little Rock Field Office of the Federal Bureau of Investigation and the Office of Inspector General for the Department of Health and Human Services. United States Attorney Jane Duke, Assistant United States Attorneys Laura Hoey and Karen Whatley represented the United States in this matter, with the assistance of legal intern, Josh Robles.

Read the DOJ’s release on Geffrey Alan Yielding (pdf).

Carilion Clinic Finds Buyer for Surgery Center

Carilion Clinic has reached an agreement with a group of Roanoke, Va., physicians to purchase the Center for Surgical Excellence in Roanoke, according to a report by the Roanoke Times.

The physicians, most of whom practice with Valley Nephrology Associates in Roanoke, will purchase the ASC under the newly formed company, Fairlawn Surgery Center, according to the report.

Carilion agreed to sell the center to resolve charges by the Federal Trade Commission that its acquisition of the center in Aug. 2008 violated anti-trust laws.

The sale must now be approved by the FTC.

Read the Roanoke Times’ report on the Carilion Clinic sale of the Center for Surgical Excellence.

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