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Cracking the Codes

Doctors, hospitals and insurance companies are making the switch to electronic health records. Lucy Pemoni/Associated Press

Feds 'listen' for sounds of Medicare billing abuse

By Fred Schulte

When news broke last September that some doctors and hospitals could be using electronic health records to overbill Medicare, top government officials swung into action.

U.S. Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder fired off a stern letter to five prominent medical groups threatening criminal prosecution for applying the technology to bill for more complex and costly services than merited — a practice is known as “upcoding.”

But the Centers for Medicare and Medicaid Services, which reports to Sebelius, is taking a much less confrontational stance as it opens a “listening session” this morning in Baltimore on the digital billing controversy.

The agency has lined up nearly a dozen health industry speakers representing mostly hospitals, doctors and the software industry to give their take on fair and honest billing and coding standards to impose as medicine wires up. No one at the meeting will represent patients or others who pay medical bills.

A CMS spokesman called the meeting "another step toward ensuring appropriate use" of electronic records, which are "critical to our efforts to reform the health care delivery system, lowering costs while improving the quality of care.”

Mystery in the Fields

Luis Asavedo, 37, hours before he died from chronic kidney disease in Nicaragua. His wife and 9-month-old sat with him in the final hours. Anna Barry-Jester

New urgency targets mysterious kidney disease in Central America

By Sasha Chavkin

SAN SALVADOR, El Salvador — Bringing new urgency to a mysterious kidney disease afflicting the region’s agricultural laborers, Central America’s health ministries signed a declaration Friday citing the ailment as a top public health priority and committing to a series of steps to combat its reach.

Over the last two years, the Center for Public Integrity has examined how a rare type of chronic kidney disease (CKD) is killing thousands of agricultural workers along Central America’s Pacific Coast, as well as in Sri Lanka and India. Scientists have yet to definitively uncover the cause of the malady, although emerging evidence points to toxic heavy metals contained in pesticides as a potential culprit.

Following years of official inaction in the U.S. and beyond, Friday’s San Salvador declaration — for the first time — formally recognized the disease and its unique characteristics.

“This disease fundamentally affects socially vulnerable groups of agricultural communities along the Pacific Coast of Central America, predominates among young men, and has been associated with conditions including toxic environmental and occupational risk factors, dehydration, and habits that are damaging to renal health,” said the declaration adopted by the Council of Health Ministers of Central America.

The ministers pledged potentially meaningful new steps, including more detailed statistical tracking of CKD, the development of national and regional plans to investigate and treat the disease, and promotion of stronger regulation of agrochemicals.

Wendell Potter

AP

OPINION: insurers hiding political spending

By Wendell Potter

If you have private health insurance, it’s almost certain that a portion of the premiums you pay every month is used to support political agendas that are not in your best interests. But good luck finding out how much of that premium money your insurance company spends to influence public opinion and public policy.

While all companies are required to report their federal lobbying and Political Action Committee expenditures, that money is just a fraction of what they often spend in the political arena to protect their profits. Millions more — probably billions more — are spent secretly every year by corporations and their trade associations to shape policy discussions and actions. Corporate America is determined to preserve that secrecy.

Among my responsibilities when I worked at Cigna was the administration of the company’s PAC. The money we doled out to state and federal candidates every year was not huge, but a lot of thought went into determining who got checks. The lion’s share each year would usually go to Republican candidates, but influential Democrats also benefited. In 2012, Cigna’s PAC reported contributing a total of $213,000 to 73 Republicans and 41 Democrats.

That’s pocket change compared to the $3.09 million Cigna says it spent lobbying lawmakers last year in both Washington and state capitals. And it’s also a fraction of what CIGNA probably spent through its trade associations and other groups to influence how you think about health care policy issues and how lawmakers vote on them. 

We don’t know how big the total is because there are no laws or regulations requiring corporations to report those expenditures. But there is a growing movement among shareholder groups to force companies to disclose this kind of spending because it may dwarf what they invest in lobbying and direct contributions to candidates.

Wendell Potter

A Vermont farm. Tim McCabe, USDA Natural Resources Conservation Service

OPINION: Vermont law illuminates claims statistics

By Wendell Potter

When you’re shopping for health insurance, wouldn’t it be great if you could find out every insurer’s claim denial rate? And how much each one spent on lobbying and advertising — and how much they paid their CEO?

You can now find all of that information and more if you live in Vermont, thanks to a law that was enacted last year at the urging of the Vermont Public Interest Research Group.

In compliance with that law, the insurers that do business in Vermont have just disclosed data they’ve been able to keep secret for years. And that information should come in handy when Vermonters begin shopping for coverage at the state’s online health insurance exchange in October.

With just 626,000 residents, Vermont is the second smallest state in terms of population (only Wyoming has fewer people), and it has only three major health insurers — Blue Cross Blue Shield of Vermont, MVP Health Care and Cigna, the company I used to work for.

Blue Cross Blue Shield of Vermont is by far the biggest and the only one based in the Green Mountain State. MVP is headquartered in New York, and Cigna, the for-profit company among the three, is based in Connecticut. 

Which of the trio do you think denied the most claims on a percentage basis in 2012?

If you guessed the for-profit company, as I did, you would be right. But even I was shocked to see how Cigna compared with its competitors, especially Blue Cross.

Of all the claims submitted to it last year by health care providers and policyholders, Blue Cross denied 7.6 percent. Cigna denied 21 percent. MVP was in the middle at 15.5 percent.

Cracking the Codes

Health care providers are switching from print to electronic health records. Emma Schwartz/iWatch News

GOP senators call for overhaul of electronic health records program

By Fred Schulte

Six U.S. Senators are calling for an overhaul of the federal government’s $35 billion plan for doctors and hospitals to switch from paper to electronic medical records, citing concerns from patient privacy to possible Medicare billing fraud.

The report issued Tuesday by the half-dozen Republicans concedes that many lawmakers and medical experts believe the digital systems can reduce health care costs and improve the quality of care by reducing duplicative testing and cutting down on medical errors.

But the report asserts that the Obama administration’s push to use billions of dollars in stimulus money helping doctors and hospitals buy digital systems needs to be “recalibrated.”

“Now, nearly four years after the enactment…and after hundreds of pages of regulations implementing the program,” the document says, “we see evidence that the program is at risk of not achieving its goals and that $35 billion in taxpayer money is being spent ineffectively in the process.”

Wendell Potter

Aetna's headquarters in Hartford, Conn. AP

OPINION: 'limited benefit' plans are no real bargain

By Wendell Potter

Among insurance executives, Aetna CEO Mark Bertolini has been among the most vocal in warning of “premium rate shock” when major provisions of Obamacare kick in on January 1.  

"We've done all the math, we've shared it with all the regulators, we've shared it with all the people in Washington that need to see it, and I think it's a big concern," Bertolini told his company’s big shareholders and Wall Street financial analysts in New York last December.

If Aetna does, in fact, hike premiums by more than 100 percent for some of its customers, as Bertolini suggested at the meeting, no doubt part of that money will go to covering his shockingly lucrative paycheck.

While many Aetna employees were lucky to get two percent raises last year, Bertolini’s compensation nearly quadrupled. That’s right, quadrupled.

Aetna disclosed in a filings last week with the U.S. Securities and Exchange Commission that Bertolini’s total compensation in 2012 was $36.36 million, up from $9.7 million in 2011. If you include the $11.1 million in stock awards he was given that will vest later, his 2012 total jumps $47 million.

Bertolini’s “pay shock” so angered many current and former Aetna workers that several of them posted scathing comments on the Hartford Courant’s website.

“All Aetna employees should be picketing outside the office building in protest of this disgrace,” a former Aetna employee wrote. “What kind of leader gives his employees 2% while his earnings nearly quadruple???? Totally selfish.”

One of the reasons Bertolini mentioned “premium rate shock” to his company’s investors undoubtedly is that Aetna won’t be able to continue selling some of its most profitable health plans next year—the ones that have relatively low premiums but such limited benefits that they’ll actually be banned next year.

Wendell Potter

Federal tax forms 1040 at a post office in Palo Alto, Calif. Paul Sakuma/AP

OPINION: Obamacare's help for small business

By Wendell Potter

With April 15 approaching, some small business owners who provide health coverage to their workers are not going to be as indebted to Uncle Sam as they have in years past, thanks to Obamacare. That’s right, thanks to Obamacare.

Mike Roach, owner of Paloma Clothing, a women’s clothing store in Portland, Oregon, is among them. He is one of several hundred thousand small employers who have taken advantage of a provision of the reform law that provides a substantial tax credit to companies that offer health insurance to their employees. And not only is Roach able to save money, now that he’s offering coverage, he’s no longer losing valued employees to large department stores that have long provided benefits as a recruitment tool.

Roach had always wanted to offer coverage to his 12 employees but had found the premiums too steep. He said the message he kept getting from insurance companies was, “We don’t really want your business, but we will do business with you as long as we can gouge you.”

Small businesses like his have always had to pay considerably more for the same coverage as large employers. At big companies with hundreds or thousands of workers, insurers’ and employers’ risk is spread across a much larger “pool” of people. A few employees getting sick or injured in a given year at a big company would have a negligible effect on the risk pool.

Not so at a shop like Roach’s with just a dozen workers. Small business owners pay more because underwriters at insurance companies know that if just one worker at a small business gets sick, the insurer could wind up losing money on the account. Small businesses also lack the bargaining power of large firms.

As a consequence, more and more small companies have dropped coverage in recent years while big employers have continued to offer it.

Asbestos

Chrysotile asbestos, the only type imported to the United States. More than 2.3 million pounds entered the country from Brazil last year. Wikimedia Commons

U.S. asbestos imports condemned by health experts, activists

By Jim Morris

More than 50 countries have banned asbestos, a toxic mineral used in building materials, insulation, automobile brakes and other products.

The United States isn’t one of them. Last year, according to the U.S. Geological Survey, 1,060 metric tons — more than 2.3 million pounds — came into the country, all of it from Brazil. “Based on current trends,” the USGS says, “U.S. asbestos consumption is likely to remain near the 1,000-ton level …”

Public health experts and anti-asbestos activists find this distressing.

Linda Reinstein, who lost her husband to mesothelioma, an especially virulent form of cancer tied to asbestos exposure, said she’s “appalled and disgusted that the United States still allows the importation of asbestos to meet so-called manufacturing needs.

“We’ve known for decades that safer substitutes exist,” said Reinstein, president of the California-based Asbestos Disease Awareness Organization. “We’re facing a public health crisis where more than 30 Americans die every day from preventable, asbestos-caused diseases.”

To mark National Asbestos Awareness Week, Reinstein plans to hold a press conference in Washington today to highlight U.S. investment firms she says hold stakes in Brazilian asbestos mining and production. “It’s time we protect public health over the profits of these companies,” she said.

Wendell Potter

OPINION: industry pushes high-deductible insurance plans

By Wendell Potter

Those accustomed to obtaining health insurance through the workplace and choosing among different types of policies may be in for a rude surprise.

Increasingly, employers of all sizes are eliminating choice and offering only high-deductible plans — euphemistically referred to in the insurance world as consumer-directed health plans or HDHPs.

The looming shift has nothing to do with Obamacare or even the widely held belief that certain types of health plans will encourage people to give up costly bad habits like smoking. It is about profit.

The trend appears to be irreversible. Within the next few years, most Americans not only will find that the plans they’ve been enrolled in for years are no longer available, but that they will also have to pay much more out-of-pocket for medical care.

There were many reasons why I left my job in the insurance industry, but near the top of the list was the expectation that I be, for all practical purposes, a snake oil salesman. If I were still in the business, I would be part of an industry-wide campaign to persuade employers, policy makers and the general public that high-deductible plans are the new silver bullet.

Not only will HDHPs reduce health care costs, according to the campaign propaganda, forcing people into them will cause them to lead healthier lifestyles.

That’s the hype. And the hype is necessary to obscure the real reason insurers and employers are herding more and more of us into HDHPs: they’re perfect vehicles to shift more of the cost of care from them to us.

Even in 2008, the last year I worked for an insurance company, my colleagues in the sales division were encouraging employers to go “total replacement,” which means eliminating all choices except high-deductible plans. Insurers have long used proprietary “studies” supposedly proving that making people pay more out of pocket for medical care will “incentivize” them to lead healthier lives.

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Writers and editors

Joe Eaton

Reporter The Center for Public Integrity

Before he joined the Center’s staff in 2008, Joe Eaton was a staff writer at Washington City Paper and a reporter at&nbs... More about Joe Eaton