Category Archives: Healthcare Costs

Two Sides of the Same Health Care Coin

Recently two articles were sent to me by Cliff Frank, a colleague and friend. If you know anything about Cliff, you’ll know that 1) if he’s sending something, it’s worth reading, and 2) he doesn’t mince words. In this case, with regard to the first article, it was one short line:

“Fascinating article about Crap in our own state (Florida).”

After reading it and sending an email in which I discussed the historical basis of this behavior, his response became three short lines:

  • “Just more recycling of S.O.S.”
  • “How much good care could be provided if we got rid of this garbage.”
  • “Shaking my head.”

The Mother Jones article – “Mom, When They Look at Me, They See Dollar Signs” – was an unbelievable read about the abuses being done by substance abuse treatment centers in Florida and around the country. Well, I really shouldn’t have considered it unbelievable. In the early 90’s I got out of that industry quickly after arriving at one of a two psychiatric/substance abuse hospital system whose owners were doing some things that just weren’t ethical or possibly legal, although not to the extent of this article. The examples cited in this article were way beyond the pale:

  • Putting the people up in hotels after being discharged from the treatment center and providing them with drugs so they can then test positive and be readmitted,
  • Paying the patient for coming to the facility and while they are there, paying huge bonuses to patient recruiters, and
  • Charging exorbitant fees.

This and much more was done in an effort to continue to get more admissions and readmissions and to make money. I would expect that most if not all of these patients had some form of commercial insurance, which paid the $3,000 lab fee or $22,000 per day rates that were discussed in the article.

I wondered how many of the insurers or TPAs picked up on the issue or sought to intervene and get the person help at an alternative, better facility. Uncovering things like this or monitoring multiple admissions would be something one would expect from an administrator providing admission reviews, pre-certifications and claims audits. Unfortunately, none of that was discussed in the article.

Cliff’s second article discussed the recent California Federal Court ruling against United Health Care’s Optum Behavioral Health. In the case, Wit v. United Behavioral Health and Alexander v. United Behavioral Health (UBH), the plaintiffs alleged “that they were improperly denied benefits for treatment of mental health and substance use disorders because UBH’s Guidelines do not comply with the terms of their insurance plans and/or state law.”

The Plaintiffs “asserted “two claims: 1) breach of fiduciary duty and 2) arbitrary and capricious denial of benefits.” Specifically, the plaintiffs claimed that UBH breached these duties by:

  1. Developing guidelines for making coverage determinations that are far more restrictive than those that are generally accepted even though Plaintiffs’ health insurance plans provide for coverage of treatment that is consistent with generally accepted standards of care; and
  2. Prioritizing cost savings over members’ interests.

There were all sorts of interesting findings throughout the ruling including that the court found one witness for the Plaintiff to be “…particularly persuasive” and the other “generally credible.” That said, with regard to the UBH witnesses, “The Court found that with respect to a significant portion of their testimony each of them was evasive – and even deceptive – in their answers when confronted with contrary evidence. Therefore, the Court discounts the testimony of UBH’s expert witnesses …”

The Court also found numerous issues in UBH’s claims review and its denial process. Most important, they documented how UBH focused on the acute portion of the incident and not the broader psychiatric or substance abuse issues and their underlying causes, as an evidence based approach would have been expected to do.

The court also found that United had a structural conflict of interest in applying its own restrictive coverage rules because it felt pressure to keep benefit expenses down so it could offer competitive rates to employers.

The Full Court Findings are here.

Mental health and substance abuse care are important components of our healthcare system, with diseases and conditions that impact millions of Americans to varying degrees. These diseases and conditions also are associated with tremendous stigma which causes individuals to not seek care, to wait to access care, and to sometimes even deny a condition. At the same time, the impact of untreated or poorly managed mental illness has a profound effect not just on the person but also on employers. Numerous studies document the powerful impact of mental health on presenteeism, absenteeism and increased medical costs. To get a sense of the magnitude of the problem, check out the costs of substance abuse for your company at the National Safety Council’s Substance Use Cost Calculator for Employers.

The linkages between these two stories extend beyond the fact that they both have to do with mental health; they are examples of why our healthcare system struggles so. On the one hand, the rehab centers sensed an opportunity, based upon expanded Mental Health and Substance Abuse coverage from the Mental Health Parity and Addiction Equity Act and the Affordable Care Act. Which was further amplified by the opioid epidemic, also created by our health care system, to take advantage of a vulnerable population and to maximize the revenues that could be extracted from it.

On the other side a large payer, per the court’s findings, took advantage of a population by denying services and again maximizing their revenue.

I couldn’t help but wonder about the health plans’ and TPAs’ roles in all this. Shouldn’t they be on the lookout for just these abusive cases and doing everything possible to get rid of the vendor behaviors? Shouldn’t they find high quality mental health providers and help their members? Do they not also have some culpability there? While at the same time shouldn’t they be providing needed, evidence based and legally required care? And if the two met wouldn’t we have a better system that rooted out the bad apples and ensured people got the care they needed?

What might you as an employer do about this?  Consider asking your health plan or TPA the following questions or the following recommendations. Be sure to maintain appropriate confidentiality, which may require a third party to conduct the review.

  1. How do they (the health plan or TPA) view themselves or their subcontracted vendor in managing mental health and substance abuse benefits for your employees? Get a feel for who they have working on these issues, their expertise, compassion, empathy; but you’ll need to do more than ask or review their language, you’ll need to dig deeper. As you can see, UBH claimed they had a good process and that it was evidence based etc.
  2. How do they handle denials? What is the process, who reviews the information, what information is submitted?
  3. How many denials have they made? For what services? What percentage of their reviews are denied, by service category?
  4. How many readmissions have there been? How many of your employees were admitted 2, 3, 4, 5 or more times for the same issue? To the same facility or to a facility owned by the same owners?
  5. Do they monitor facilities? How?
  6. How do they contract their network? Have they sub-capitated or carved out their mental and substance abuse care to a 3rd party? Might their payment mechanisms have an adverse impact on getting appropriate and quality care?
  7. What are the requirements for mental health and substance abuse facilities to be in the network?
  8. How do they ensure quality? What reports do they generate? Who looks at them? What are their responses to these reports? Have they ever dropped a facility from their network and if so, why? How many complaints have they had, what were the general nature of the complaints? How were they resolved? (I recall, when I was operating a health plan, our subcontracted mental health company was sending us monthly reports showing no member complaints. They were sending us these “perfect reports” even as our Director of Quality was forwarding patient complaint reports directly to them. We quickly called the mental health company in, after bringing this false reports issue up multiple times, and told them we’d found a new vendor.)
  9. How do they identify fraud, and how much fraud have they uncovered? What do they consider fraud?
  10. Hire a third party to survey your employees, and seek to find out if any are experiencing issues like these.
  11. Perhaps send out a notice to employees and ask them to call the Employee Assistance Program (EAP) if they are experiencing anything like the issues discussed in these two stories, and ask your EAP to be on the lookout for this.
  12. And if you’re really concerned, bring in a third party with expertise in this area to review just what you are getting for your employees.

For more information you can also look to The Kennedy Forum which is “working toward lasting change in the way mental health and addictions are treated in our healthcare system…”

 

 

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The Validation Institute – How they can Assist Employers

The vast majority of employers are continuing to experience rising health insurance costs. We know there are areas of healthcare from quality differences to the variation in utilization that can negatively impact an employer health plan and its estimated that 30% of healthcare is unnecessary, waste and/or fraud. To solve this there have been many solutions proposed including wellness, imaging management, PBMs, High Deductible Health Plans, Direct Primary Care, Value Based Care, direct contracting and many, many others. In each of these solutions there is typically some sound belief that the concept will work, but there are also a lot of vendors or healthcare providers out there claiming they have the answer and this is often filtered through a broker who may or may not have your best interest at heart (Read about some the egregious behavior here “Insurers Hand Out Cash and Gifts To Sway Brokers Who Sell Employer Health Plans“).

So how can one identify providers of services who can achieve results? Well that’s where the Validation Institute comes in. To get a sense of the why and what the Validation Institute can do for you, watch this short video:

 
 

For full disclosure I was involved early with this group and since then have assisted in various capacities. I currently serve as a Senior Advisor, Standards and Compliance and also serve as a Judge for the Health Value Awards which are given annually at the World Health Care Congress to companies, employers and brokers who can show that they demonstrably improve the outcomes for their employees and lower costs. The validated Health Value Awards are also reviewed by the Validation Institute.

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Ridiculous Healthcare Pricing

All over the country people are commenting on the ridiculous pricing from healthcare facilities and providers.  Here is a recent example I came across:

Lab Bill

You’ll note that the gross price for these lab tests is $837.74 and the person was told their out-of-pocket responsibility could be $109.85.  What is so amazing about this is I have heard of wellness companies that purchased lab services for their programs being charged $21 for a similar series, without the PSA, if the draw was done at a laboratory service center and $65 if the draws were done onsite at the employer.

So lets take out the PSA at $148.48/$19.47 and there you have it, gross pricing for these services is almost 33 times what they sell this service to wellness vendors on a wholesale basis (which obviously has a profit in it), and the person getting these tests could potentially pay four times that amount out of pocket with their PSA portion excluded.

I assume that the insurer, Continue reading

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Webinar on Health Literacy

Health Literacy is a critical issue in the United States. Jane Sarasohn-Kahn in a blog post discussed some of the the major issues identified in a recent report by Accenture which you can read here.

To get some real world insights and ideas on how to improve Health Literacy, join Drs. Russell Rothman from Vanderbilt and Brian Primack from University of Pittsburgh  October 3, 1-2 pm for a Webinar entitled Improving Health Literacy: What Works and Why   .

I’ll be your friendly, neighborhood moderator.

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The Health Value Awards -My Interview at WHCC 18.

This past spring I was interviewed at the World Health Care Congress 2018 by Mabel Jong.  We discussed the Health Value Awards.

 

The Health Value Awards recognizes health care vendors, brokers and purchasers who consistently deliver high value that can be replicated throughout the continuum of clinical and financial risk management. Validated categories are evaluated by the Validation Institute, an independent certifier for performance and methodologies and all categories are then reviewed by a panel of nationally prominent judges for market viability, impact and innovation. The Health Value Team: World Congress, Validation Institute and Health Rosetta Institute, showcase these organizations based on their performance and illumination of issues of national importance.

I’m honored to serve as a judge again for the 2019 Awards. You can learn more about the Health Value Awards and apply here.

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