D.C.’s Medicaid upheaval puts health-care providers in a tight spot

D.C.’s Medicaid upheaval puts health-care providers in a tight spot

By Mike DeBonis, Washington Post, Published: May 25

The letter faxed to Gloria A. Wilder’s Anacostia medical practice was short and to the point: D.C. Chartered Health Plan, the Medicaid contractor that insured roughly three-fourths of her patients, would no longer be paying its claims, effectively immediately.

That meant Wilder would not be getting paid anytime soon for hundreds of office visits she had already handled, as well as dozens more she had scheduled for the coming week.

“The breath got sucked out of me,” she said of the April 19 letter. “Here it was, payroll day, and you hear no money’s coming.”

Until this month, Chartered Health Plan was the city’s dominant Medicaid contractor, managing the health care of more than 100,000 low-income city residents. The company’s collapse has raised questions about its politically connected owner, its precarious finances and government oversight of a key component of the city’s health-care system. But for small medical providers, Chartered’s demise has presented a more urgent question: How to make ends meet?

Wilder said that Chartered owes her practice, Core Health and Wellness, about $45,000, that she has cut back hours to save on utility bills, and that she’s been forced to dip into her retirement account to make payroll in recent weeks. “We run a fiscally sound practice, but it still means you need to have revenue coming in,” she said.

The D.C. government has promised that help is on the way, but pending litigation and negotiations with federal Medicaid officials have greatly complicated the task of making providers whole.

Chartered’s messy dissolution is an outgrowth of legal and financial troubles besetting Jeffrey E. Thompson, the firm’s owner. Thompson was thrust into the public spotlight last year after being implicated in the financing of a “shadow campaign” that supported Vincent C. Gray’s successful 2010 run for mayor. As Thompson became associated with political corruption, his health-care firm edged toward a financial precipice, and insurance regulators forced the company into receivership in November.

Thompson is the subject of a federal grand jury investigation, but he has not been charged with a crime. His attorneys have declined repeatedly to comment on the probe or on Chartered’s problems.

This year, receiver Daniel L. Watkins sold Chartered’s subscriber rolls and other assets to AmeriHealth Caritas, a Philadelphia company that assumed responsibility for Chartered’s members as of May 1 and is poised to start a new contract with the city in July. But the proceeds from the sale were not nearly enough to cover the leftover claims.

$60 million owed

Watkins estimates that the company owes providers at least $60 million for services rendered to Chartered enrollees. About 70 percent of that figure, Watkins said, is owed to hospitals, with large clinics and practices accounting for nearly all the rest.

Small practices such as Wilder’s are owed only a sliver of the total, but their survival is most threatened by the company’s decision to freeze payments in the final days of its contract. Meanwhile, larger providers are nervous that what is, for them, still a manageable problem could grow into something more serious if a resolution isn’t found soon.

Christopher A. Warner, an obstetrician-gynecologist who practices in Northwest Washington’s West End neighborhood, said the Chartered crisis has put a nearly $100,000 hole in his practice’s books. He blamed not only the April 19 payment freeze but also a slowdown in payments before the freeze.

Warner, who was treating about 130 pregnant women covered by Chartered when payments were halted, said he has stopped taking new Medicaid patients. He has also stopped paying salaries to himself and his wife, the office manager, and they have been negotiating with vendors for payment extensions.

Wilder and Warner say they feel betrayed by government officials. They say officials talk about expanding primary care to the District’s poorest residents but have allowed front-line providers to bear the brunt of the Chartered debacle.

“We decided a long time ago that we wanted to take care of all patients, whether it be by Medicaid or private-payer [insurance] — that was our focus,” Warner said. “But things have been harder and harder to maintain.”

Until Warner closed his office at Ward 8’s United Medical Center this year, he was the only obstetrician-gynecologist in private practice east of the Anacostia River. He remains one of a very few private OB-GYNs anywhere in the city who accept Medicaid patients, and those patients account for about 55 percent of his practice.

Wilder said the current upheaval helps explain why so few private doctors serve the city’s low-income communities and why most residents of those communities are treated at community clinics and emergency rooms.

“We’re here because we chose to be here,” said Wilder , who held high-level positions at Georgetown University Medical Center and Children’s National Medical Center before opening her practice.

“We could leave at any moment and make four times what we’re making, but we’re choosing to stay because this is the right thing. There’s a need here, and it’s real and it’s palpable.”

Obstacles to relief

It is not clear whether Warner or Wilder will see relief soon. A week after the April 19 letter was sent, Gray (D) issued a statement saying he would “be taking steps to protect the District’s health care provider network,” focusing on providers who would “not be able to sustain large losses.”

But in the ensuing month, no additional plans have been announced. Mayoral spokesman Pedro Ribeiro said last week that officials are “working with both the providers and CMS on a solution,” referring to the federal Centers for Medicare and Medicaid Services, but he declined to elaborate.

According to city officials who were not authorized to speak publicly and provider representatives who have attended meetings on the matter, a satisfactory resolution hinges on the outcome of a dispute over whether the city paid Chartered unfairly low rates from 2010 to 2012. Chartered is seeking $60 million, enough to make good on most of the unpaid claims; the city has proposed settling for about $18 million, in which case providers could receive less than 30 cents of every dollar owed.

Also at issue is whether CMS will agree to chip in the usual 70 percent federal share of any future payment to Chartered. D.C. officials are waiting for a decision, because if the city were to pay providers directly, it would likely forfeit any chance of federal reimbursement. But CMS is unlikely to contribute until the rate dispute is settled, something that may not happen for months.

Larger providers appear anxious — though not in a panic — about unresolved claims. The city’s hospitals, owed tens of millions of dollars combined, “provided care to the patients, and they all deserve to be paid,” said Robert Malson, president of the D.C. Hospital Association. Malson added that “if something is not done soon, some will have to take drastic measures in order to survive.”

Unity Health Care, the city’s largest chain of clinics serving low-income communities, has a hole approaching $1 million, said Vincent A. Keane, the nonprofit group’s president and chief executive. That amounts to a “cash- flow issue” in the context of a $100 million budget, he said, “but to have a million dollars of receivables with one vendor, that’s pretty significant. . . . Ultimately, you have to find it somewhere.”

For the smaller providers, the missing payments are a matter of greater urgency. Warner said the upheaval could force him to close his practice. Wilder said the payment freeze has posed some hard questions for her practice: Should a 5-year-old girl with early-onset puberty delay critical hormone injections until her AmeriHealth coverage begins? Should a new mother wait a week before bringing her baby in for a postnatal checkup?

“That’s why a lot of providers stop taking Medicaid,” Wilder said. “For me, I’m not going to stop. . . . The reason I went into medicine was to serve this community. But I’m going to speak. We’re not going to stand silent and watch this crumble.”


DC Health Benefit Exchange Authority: Private Insurers Submit 293 Health Insurance Policies for Approval to Offer to Individuals, Small Businesses on DC Exchange

Friday, May 17, 2013

Private Insurers Submit 293 Health Insurance Policies for Approval to Offer to Individuals, Small Businesses on DC Exchange

The plans include 259 policies for small businesses and 34 for individual purchasers.

Four major health insurance companies intend to offer nearly 300 different health insurance policies for sale on the DC Exchange Marketplace, a new online portal that will allow individuals, families, and small businesses to shop for coverage that fits their needs and budgets. This robust choice of plans means, for the first time, that residents and employers in the District will be able to compare dozens of plans side-by-side when the Marketplace opens for enrollment on October 1, 2013 for coverage that becomes effective January 1, 2014.

Earlier this month, the four insurers – Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente, and United Healthcare – committed to participating in the Marketplace. Because they sell coverage in today’s market, their participation in the Marketplace ensures all currently insured in the small group and individual markets will not have to change insurers unless they choose to do so.

“This is wonderful news for the residents and local businesses, which will have more choices and better choices than they have today,” said Mayor Vincent C. Gray. “I’m pleased to see our strategy for improving the health and financial security of our residents is working.”

The four insurers have filed a total of 259 small group products and 34 individual products. These include health maintenance organizations (HMOs) and preferred provider organizations (PPOs) health insurance policies. All policies must cover, at a minimum, a set of essential health benefits that include doctor and hospital visits, prescription drugs, pre-natal and maternity care, prevention, lab tests, and vision and dental care for children. A detailed list of plan offerings by insurer is listed below.

“This shows that insurance companies serving the District’s insurance consumers are committed to offering good options for businesses and people here. I thank the insurance companies for their commitment to helping the District’s Marketplace Exchange be successful. As a result, we will have a strong, competitive market where individuals and small businesses will have a wide variety of options when buying high-quality health insurance,” said Mila Kofman, J.D., the Executive Director of the DC Health Benefit Exchange.

Insurers have until May 31 to file their proposed rates with the Insurance Department. Actuaries will review the rates to determine whether they are set at appropriate levels. Once health insurance policies and rates are approved, the Exchange will provide additional information. Many DC residents will be eligible for significant financial help in the form of federal tax credits to reduce the cost of insurance for them.

“For coverage to be meaningful, it must be affordable,” said William P. White, commissioner of the District’s Department of Insurance, Securities and Banking, whose agency is responsible for the rate review process. “Insurers have an obligation to charge premiums that cover the cost of paying claims and maintaining a reasonable reserve to protect against uncertainties. With thousands of uninsured DC residents waiting to gain coverage, it is crucial that 2014 rates are reasonable and justified. We will work with insurers to accomplish that result.”

Health Insurance Policies for the Exchange Filed for Approval With DISB

Carrier Total Plans Individual Plans SHOP Plans
CareFirst BlueChoice, Inc. 50 11 39
Group Hospitalization and Medical Services, Inc. (GHMSI) 27 4 23
Optimum Choice, Inc. 88 0 88
United Healthcare Insurance Company 89 0 89
Aetna Life Insurance Company 12 9 3
Aetna Health Inc. 3 0 3
Kaiser Foundation of the Mid-Atlantic States, Inc 24 10 14
Total 293 34 259

Tommy Wells discusses his mayoral run

Inova president: Health systems entering ‘new normal’ of fewer patients

May 14, 2013, 1:54pm EDT

Inova president: Health systems entering ‘new normal’ of fewer patients

Ben Fischer

Staff Reporter- Washington Business Journal

Thanks to its profitable suburban locations and strong credit rating, Inova Health System has rarely encountered "business problems" as a non-health care provider might define them. But in a wide-ranging conversation Tuesday, Chief Operating Officer Mark Stauder said times are changing.

Inova’s overall patient load has declined 3.5 percent so far in 2013, year over year, and executives think it’s not a short-term blip. In fact, to a great extent it’s by design, a.k.a. health care reform. Read on for his thoughts on what that means for the system, its patients and business partners.

How is health care utilization at Inova this year? Let me step back and talk a little bit about Inova’s perspective on the evolution on what’s happening within health care today. We think this is really a beginning of a new normal, or a tipping point in the change within health care. For decades, this country has lived in a fee-for-service environment, and over the last several years, we are moving towards a value-based health care system, moving away from volume and moving toward value.

I think this is exemplified in the federal government’s movement around [accountable care organization] demonstration projects. I think it’s exemplified in employers making significant changes in their health plan design around consumer-based health plans, around high-deductible health plans and really encouraging patients and families to share in the cost of health care, so it becomes a very personal decision around the consumption of health care. For many decades, individuals and families have been insulated from the cost of health care, and we think that’s changing now with new health plans that employers seem to be adopting at a very very rapid pace.

With that evolution, with those changes, we actually believe we’re at a tipping point and we’re going to see consistently lower volumes over time. And that’s consistent with moving away from a fee-for-service environment and moving toward a value-based environment where physicians are being more cautious about ordering tests, [and] individuals and families are being more cautious about using health care, especially services that are elective.

Is Inova seeing fewer patients in real time, or do you mean over the coming years? We measure things in what we call equivalent admissions, and that’s a combination of inpatient care, observation care and outpatient testing. First quarter, we’re down about 3.5 percent, year over year. And that’s pretty consistent with what we’re reading from (publicly traded health care companies) Health Management Associates, Universal Health Services other national providers, including commercial health care businesses such as Johnson & Johnson, Abbott Laboratories or St. Jude Medical. I think we are seeing a tipping point in national health care across the country, and we believe this is just the beginning of that future trend.

Local and state governments have long counted on health care to lead their economic development efforts. Are they overestimating its future? This is Mark Stauder‘s opinion, this is not Inova’s opinion, this is my opinion, but my sense is that overall utilization across the country and in this region will trend down over time. And the only offset is going to be if population growth grows faster than the utilization declines. And I think given the state of this economy across the country, I think there will be very few markets where populate grows enough and quick enough to offset utilization decline.

What about the aging of the population? That’s another trend, but you’ve got to realize that the federal government is really [incentivizing] and asking providers to come together, hospitals [to] come together and form [accountable care organizations], to really manage for that triple aim: higher quality, higher service, lower utilization and lower costs. So even in the Medicare population the national focus is on that triple aim.

Do you believe Virginia will expand Medicaid? We are very hopeful and very supportive of expanding the Medicaid program. The state legislature voted to have a two-step model: medicaid reform and then Medicaid expansion, as it’s reviewed and affirmed by the bipartisan commission. We’re very hopeful. We think it is the right public policy to have everyone covered, and everyone insured to make sure we’re driving wellness, we’re driving prevention and driving health.

Is Medicaid expansion a material factor in the performance of your hospitals, or do you approach this as a general public policy position? Inova is the largest nonprofit health care provider in Northern Virginia, and we’ve got a mission to take care of everybody. Today, we provide $350 million in charitable services to underinsured and uninsured patients at cost. So clearly, if the state decides to reform and expand Medicaid, there will be funding for a portion of that group of patients that is currently receiving charitable services or free services as part our nonprofit mission. From a public policy perspective, we believe we can have a healthier population if everybody’s insured.

How’s development of your cancer center? Things are moving ahead briskly. We’re going through the site development, the architectural development, its going to be about 250,000 square feet of cancer services, cancer research and academic services, and we hope to have the planning done here and the drawings complete, and we hope to begin construction in 2014. And hopefully then we’ll occupy in late 2016 or early 2017.

What about the required certificates of need? Will those be difficult? That’s moving in parallel. No, this region needs a significant comprehensive cancer program. This will be the dominant comprehensive cancer program in the northern Virginia/D.C. region. And with the population aging, you know, cancer is going to continue to be one of the most significant diseases we’re going to have to deal with, and that’s where our genomic research and clinical trials will hopefully discover new and productive approaches in prevention and cancer management.

Will you pursue National Cancer Institute designation? That’s something that’s under study at this time.

Inova has committed or spent more than $1.7 billion to rebuild its hospitals, install a major new computerized patient record system, launch its Translational Medicine Institute and the cancer center. Will this pace of development and spending continue, or have we reached the downside of a cycle? I think we’re continuing to invest in the region, to continue to be the significant leader in health care provision, new clinical services, and innovation within the Northern Virginia region. Everything we’re investing in, we believe is going to be accretive long term. Patients are seeking new accommodations, they’re seeking wellness, comfort-oriented confidential environments for receiving health care services. Information technology is critical — we’re really in the information management business, and our clinical effectiveness is only as good as our information systems. We believe that these are all fundamental elements of maintaining building, and evolving a world-class health care system.

But is more coming? We’re just continuing to focus on kind of this new normal. We don’t have any major announcements we’re planning. We’re continuing to think through the evolution of health care, and making sure we are a world-class provider of health care services, that we are integrating, that we’re leveraging our intellectual knowledge within the system.

Are you still working to acquire doctors’ practices as a strategy? We are careful and thoughtful about physician acquisition. We are acquiring practices — primary-care practices and select subspecialties. I would say it’s a thoughtful, careful and measured approach.

How many primary-care doctors do you have employed now? We have about 50 physicians. In Northern Virginia, our medical community is still probably 85 percent private-practice physicians. Again, I think our physicians have had a very good place to practice here, and I think they’re satisfied working in small groups, and that’s worked well for them.There’s a number of different alignment approaches. No. 1 is the traditional medical staff relationship, No. 2 is an employment model. and No. 3 is a narrow-network partnership model, which we are currently developing called Signature Partners. That is a model to begin to take risk together, to enter relationships with insurance companies together and to manage care together without necessarily requiring employment.

Ben Fischer covers health care and law.

DISB Press Release: Rehabilitator for D.C. Chartered Health Releases Fourth Status Report

For Immediate Release
May 17, 2013
Contact: Mike Flagg, (202) 442-7756 michael.flagg

Rehabilitator for D.C. Chartered Health Releases Fourth Status Report

Uber wars threaten to reignite over new regulations

Uber wars threaten to reignite over new regulations

By Mike DeBonis, Updated: May 17, 2013

Six months after city officials and Uber settled conflicts over regulation of the app-based transportation service and jointly declared peace in our time, conflict again threatens to erupt — this time, over new sets of regulations being considered by the D.C. Taxicab Commission that Uber claims could severely impact its business.

Regulations passed last week by the commission — the same one requiring all city taxicabs to accept credit-card payments — also include requirements that payments be processed through “payment service providers” that are integrated with the cab’s on-board meter system. That requirement, Uber said in a May 3 letter to the commission, “is not practical for a software-only company like Uber.”

Uber CEO Travis Kalanick said Thursday that the new rules, “as far as we can tell, require us to shut down Uber Taxi” — the part of the Uber app that hails a traditional taxi cab rather than the luxury black cars the company is best known for. The rules, he said, would require Uber to associate with payment providers who are integrated with the taxi hardware in order to maintain Uber’s model of processing payments entirely via smartphone app.

And Kalanick says another set of regulations now in development affects the sedan service in significant ways — including a ban on cars weighing under 3,200 pounds, which he says would encompass most “eco-friendly” vehicles. Also troublesome, he says: a requirement that companies would have to share ride data with the commission for analysis and planning purposes, creating what he feels is a “substantial privacy problem” for Uber customers.

“Do you trust the D.C. Taxicab Commission with your whereabouts?” he asked.

The company has submitted comments on the taxi regulations to the commission, with comments on the sedan regulations likely forthcoming. Company reps have also taken their case direct to D.C. Council members, who have a limited to nonexistent role in the rulemaking process.

Uber D.C. general manager Rachel Holt and company lobbyist Jon Bouker met with D.C. Council member Mary M. Cheh (D-Ward 3), the transportation company chairman, on Wednesday to discuss the company’s concerns. David Grosso (I-At Large) said he’s also gotten involved and is considering introducing emergency legislation if the matter isn’t resolved in the rulemaking process. “I have a draft ready to go, but I’m not going to put anything in till we work through this,” he said.

Cheh said she’s hoping the council can stay out of it. “I think whatever their concerns are … we’ll get them resolved,” she said, adding that she is not pleased that Kalanick has yet again gone public with his displeasure with the city’s regulatory efforts: “I do wish they would at least give me a chance to sort this out.”

Taxicab Commission Chairman Ron M. Linton was more direct, saying he would not let the rulemaking process be taken hostage by Uber’s threats. Other companies, he said, have offered similar comments which will be considered by the commission in due course.

“As regulators we don’t negotiate with individual parties when we’re dealing with regulations that affect multiple parties,” he said. “We’re not trying to twist anyone here. We have a process, a system which allows us to monitor and protect the consumer that makes sure everything is done under the law.”

Update, 8:20 p.m.: In case there was any doubt, yes, Uber is now rallying its customers to oppose the regulations, something that has proven quite successful for them in the past.

Linton added this statement:

There is nothing in the proposed Modern Taximeter System regulations that would require Uber or any other digital reservation system to shut down. As a matter of fact, no other digital reservation service providers have indicated any plans to cease operations. The regulations have been designed to prevent potential credit card fraud. All data transmitted is done anonymously without identifying anyone. It is patently false that fuel efficient vehicles would not meet the sedan class regulations. As examples both the Camry Hybrid and Avalon Hybrid would comply with the standards. The provisions to be implemented are what Uber agreed to last year when the DC City Council passed the Taxicab Innovation Act. Without the regulatory protection the DC market would be open to unscrupulous operators who would be able to engage in widespread credit card fraud. If Uber follows through on their threat to shut down it would be their decision and not the result of any regulation.

Also, I’ve obtained an e-mail sent Tuesday to Bouker, Uber’s lobbyist, from a city hall lawyer who acknowledged “there is merit to Uber’s concern” and expressed willingness on the part of Linton and other officials to work with the company to address them.

“We’re eager to continue conversations on this issue and reach a solution that works for everyone,” wrote Barry Kreiswirth, senior counsel to City Administrator Allen Lew. “As Ron has previously stated, he is prepared to call a special meeting of the Commission for May 24 in order to vote on the changes on an emergency basis, so the quicker we can get these issue resolved the better. … The District values the innovation Uber and companies like it have brought to District sedan and taxi service – and the great service it’s provided to District residents.”

Unclear how that degenerated into today’s accusation that the city is “burdening DC tech startups with anti-consumer, anti-innovation regulations.”

CareFirst, other insurers back in D.C. Council’s crosshairs

May 15, 2013, 2:52pm EDT Updated: May 15, 2013, 3:19pm EDT

CareFirst, other insurers back in D.C. Council’s crosshairs

Ben Fischer

Staff Reporter- Washington Business Journal

D.C. Councilman David Catania, I-At large, an influential voice on health care issues, plans to introduce legislation forcing insurance regulators to take a closer look at large hikes in health insurance premiums.

When the full D.C. Council considers a controversial proposal to mandate use of a new health insurance exchange, Catania intends to propose an amendment requiring public review of exchange plans with rate hikes that exceed medical inflation rates.

His amendment, still being drafted, would require a 30-day public comment period and a public hearing for qualifying rate hikes, as well as an affirmative decision from the D.C. Department of Insurance, Securities and Banking.

Under current law, the department has some latitude in how it decides to review rates and often lowers them before approval, but rate hikes are deemed approved after 60 days if the department hasn’t taken action.

Catania cast his proposal as an olive branch to business groups that fear extraordinary growth in their health insurance premiums if they are forced into the exchange.

"The issue is how do we go forward in a way that eases some of the concerns raised — that are legitimate — about the unknown in terms of price increases, yet still be faithful to the Affordable Care Act," Catania said.

Catania’s chief of staff, Ben Young, said the councilman’s general goal is to shift intensive rate review from an option to a requirement for rates that grow more quickly than overall medical spending, as defined by the Centers for Medicare & Medicaid Services.

In early 2010, the D.C. Council approved an emergency law prohibiting rate hikes of more than 15 percent, but the la expired and its permanent version includes no bright-line thresholds for more intensive review. The new law, however, does require that the rate hikes be published online and that regulators make sure they are not excessive, inadequate or discriminatory.

"We take this seriously," said Associate Insurance Commissioner Phil Barlow. "We don’t just arbitrarily decide to look at filings or not. We give all filings scrutiny. Some — the filings that affect a lot of people or that have significant rate increases — we give them more."

CareFirst controls about three-quarters of the District’s insurance market. But three other insurance companies are expected to sell through the exchange, including Aetna Inc., Kaiser Permanente and UnitedHealthcare.

A CareFirst spokesman declined comment.

So far, the work to create the insurance exchange has unfolded with relative peace between the District government and insurance companies. Even though carriers are fighting mandatory use of the exchange, the rules are designed to foster maximum participation and flexibility. That strategy reflects the view of Executive Director Mila Kofman, who believes open competition within the exchange will serve to hold down rates.

But bringing up rate review could revive old disputes from several years ago, when rate regulation fever struck after double-digit hikes.

Does the extra review really lead to lower rates?

Georgetown University health policy professor Sabrina Corlette said the public hearings backed by Catania would make D.C. one of the most aggressively regulated jurisdictions in the country. Oregon has a similar procedure.

"I can tell you in Oregon, the folks out there definitely believe that having a public process, and a hearing, absolutely does lead to lower requested rates," Corlette said.

Ben Fischer covers health care and law.