On Wednesday, members of CUPE Local 4777 — which represents area health-care workers — held their final barbecue in front of City Hall, serving up burgers while educating residents on the spectre of looming privatization. Over the course of a dozen area barbecues so far this summer, public interest in the issue has steadily grown, according to CUPE Local 4777 president Helen Sawatsky. …. CUPE has identified numerous threats from privatization. Aside from the threat to members’ livelihoods, union officials argue that contracting out health care services to private firms would cost taxpayers more money while lowering the quality of health care.
…Research demonstrates that there are differences between for-profit and nonprofit healthcare providers, and we should expect to see some of these differences play out in Connecticut should the proposed conversions take place. This report outlines some of that research, with a particular focus on hospitals, and extrapolates what the potential impact would be to Medicare as a result of further hospital conversions in Connecticut and across the nation.
● There has been substantial growth in the number of for-profit hospitals in recent years. A decade ago, only 14 percent of all hospitals in the United States were for-profit. Today, one in five community hospitals are investor-owned.
● For-profit hospitals are more likely to offer financially profitable services. For example, for-profits were 7 percent more likely to provide open-heart surgery than non-profits and 8 percent less likely to offer psychiatric emergency services. Tests for more than thirty other services yielded similar results. The study also found that for-profits were more responsive to rapid changes in profitability than the other types of hospitals.
● There has been a substantial increase in the number of for-profit long-term care hospitals (LTCHs) and the increase has occurred predominantly in states that already had this specialized level of care. On average, Medicare accounts for two-thirds of all LTCH discharges and pays these hospitals almost $39,000 per case. From 2003-2011, there was a 60 percent increase in for-profit long-term care hospitals, which corresponded with a 46 percent increase in total spending for these hospitals.
● States with higher percentages of for-profit hospitals spend more per Medicare beneficiary than states with high percentages of non-profit hospitals. In general, for-profit dominant states spend 3 percent more per Medicare enrollee than non-profit dominant states. Many of these states lack a regulatory framework to prevent excessive healthcare facilities and services. This “build it and they will come” mentality not only applies to for-profit hospitals but also to other for-profit operators in these states.
● If per-enrollee spending was at the same rate in the top non-profit states as in the top for-profit states, the Medicare program would have spent nearly $2 billion more in 2009. If Connecticut’s per-enrollee spending was the same as for-profit spending, Medicare would have spent $173 million more in that same year for Connecticut beneficiaries.
● Non-profit hospital behavior changes when for-profits are in the same market. This “spillover” effect could be problematic for the existing network of non-profit hospitals in Connecticut that plan to stay non-profit.
● Research has found that, the more for-profit hospitals that are in a city, the more nonprofit hospitals in that area (1) respond aggressively to revenue-increasing opportunities, (2) adopt profitable services, (3) discourage admissions of unprofitable patients, and (4) reduce resources devoted to treating the patients they do admit. Conversely, the presence of nonprofits in a community is associated with increased quality of care in for-profit nursing homes, reduced mortality rates in for-profit dialysis facilities, and increased trustworthiness of for-profit health plans….
Source: Associated Press, August 8, 2014
Oracle Corp. is suing Oregon in a continuing fiasco over the state’s health insurance exchange, saying Oregon is continuing to use the technology company’s software despite $23 million in disputed bills. Oracle’s breach-of-contract lawsuit against Cover Oregon was filed Friday in federal court in Portland. It alleges that state officials repeatedly promised to pay the company but have not done so.
All individuals or organizations (providers) who deliver health services or goods to Medicaid recipients must apply through an application process. The application review process investigates the providers’ past and verifies all licenses and credentials. Without approval, the providers cannot receive Medicaid payments for provided services.
The screening and enrollment of Medicaid providers is required by federal laws and regulations implemented to help prevent fraud, waste and abuse. Federal laws instruct the states on screening providers based on categories of risk for fraud and abuse. High risk providers receive the highest level of scrutiny.
Federal laws do not set standards or criteria to determine a provider’s enrollment qualifications. That decision is left to the state Medicaid agency.
The Department of Health and Human Services’ Division of Medical Assistance (Division) is responsible for setting qualification requirements and enrolling providers. Within the Division, the Provider Relations Section is directly responsible for ensuring that approved Medicaid providers meet qualification requirements.
The Division outsources the application review process to Computer Sciences Corporation, Inc. (Contractor). The Office of Medicaid Management Information Systems Services oversees the contract with the Contractor. The portion of the contract that covers provider enrollment accounted for $4.6 million in fiscal year 2012 and $5.3 million in fiscal year 2013.
The provider enrollment process is the first step in program integrity efforts to help prevent fraud and abuse in North Carolina’s Medicaid Program. Currently, Medicaid spends about $13.5 billion annually in federal and state funds.
The results of our audit disclosed deficiencies in internal control that are considered reportable under Government Auditing Standards. Specifically, the Division did not have adequate documentation and evidence to support approving 65% of higher risk providers during calendar year 2012. In addition, the Division’s Contractor’s enrollment review procedures allowed a 30% error rate in performing and documenting mandatory verification checks. These deficiencies in the Medicaid Provider enrollment process increase the risk of unqualified providers participating in the Medicaid Program. Further, the contract for provider enrollment lacks adequate performance measures to hold the Contractor accountable for processing applications accurately and reliably. The Department of Health and Human Services generally agreed with our findings and recommendations, however, an auditor’s response was necessary to clarify certain statements in the Department’s response. Details about each item are provided in the Audit Findings, Recommendations and Responses section of the report.
• Deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid Program.
• Documentation to support higher risk provider applications is often not available or insufficient to support the application approval.
• The Contractor’s enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the NC Medicaid program.
• The Contractor does not always have evidence to support that mandatory verification checks were completed.
• Quality assurance reviews were not conducted or were ineffective.
• Contract lacks adequate performance measures to hold the Contractor accountable for processing applications accurately and reliably.
Town Supervisor Joseph D. Gray said Tuesday that he feels like the town should enter into a relationship with the firm that owns and operates both Canton-Potsdam Hospital and Gouverneur Hospital. In a letter to the editor Tuesday afternoon, Mr. Gray wrote, “St. Lawrence Health Systems (SLHS) is setting a new standard for care in St. Lawrence County and I believe the town of Massena should immediately seek to establish a relationship with this corporation. That relationship could take several forms, but it seems that making SLHS an affiliation consultant to MMH would enable us to collectively look at ways to quickly improve Massena Memorial’s financial performance and assure its standard of care remains high and even possibly improves.” … Gray added that entering into a relationship with SLHS was not a step toward privatization. …Kotzin suggested the town and hospital boards needed to look at all potential avenues before making a decision to privatize or maintain the hospital’s current status. …
Jersey City Medical Center, Barnabas Health partnership is finalized
Source: Jersey Journal, June 2, 2014
A deal that makes Jersey City Medical Center part of the Barnabas Health system was formalized today, officials said. The partnership, made public last May, makes JCMC the first Hudson County hospital in the Barnabas system, which includes Clara Maass in Belleville and Saint Barnabas Medical Center in Livingston. …. JCMC is one of two nonprofit hospitals remaining in Hudson County (the other is Palisades Medical Center in North Bergen).
Federal report: N.J. overbilled Medicaid by $22M in 2007, including $19M to Jersey City hospital
Source: Terrence T. McDonald, Jersey Journal, April 07, 2014
New Jersey health officials in 2007 overbilled Medicaid by $22 million in charity care payments that they gave to four hospitals serving low-income or uninsured patients, including $19 million to the Jersey City Medical Center, according to a new federal audit report. New Jersey health officials in 2007 overbilled Medicaid by $22 million in charity care payments that they gave to four hospitals serving low-income or uninsured patients, including $19 million to the Jersey City Medical Center, according to a new federal audit report. JCMC, a Downtown Jersey City hospital that recently joined the Barnabas Health system, should only have been paid $55 million in charity care in the fiscal year ending June 30, 2007, but the state authorized $38.8 million in what the report calls “overpayments” to the program. $19 million of that came from the federal government, which the report says should be reimbursed. The alleged overpayments include $3 million the state gave to three hospitals in Newark, Perth Amboy and Trenton, according to the report. …. JCMC CFO Paul Goldberg told The Jersey Journal that the report is really an issue between the federal and state governments, and not the hospital. Goldberg noted the hospital’s current management was not in place in 2006 and 2007….
Despite the ongoing public ire aimed at executives at not-for-profit healthcare systems because of their multimillion-dollar pay packages, their salaries and total cash compensation continued to rise at a far faster clip than average worker salaries in 2012—the most recent year with full data available. Boards and compensation consultants continue to cite market forces—the need to keep up with peers to hold onto skilled healthcare leaders—as the main reason for the increases. Total cash compensation grew an average of 24.2% from 2011 to 2012 for the 147 chief executives included in Modern Healthcare’s analysis of the most recent public information available for not-for-profit compensation. Of those 147 CEOs, 21, or 14.3%, saw their total cash compensation rise by more than 50%. …. The average 2012 cash compensation for the CEOs was $2.2 million in 2012. But that figure masks a wide disparity in packages. At the low end of that range was Tom Sebastian of Compass Health, a mental health and chemical dependency services provider in Everett, Wash. Sebastian’s 2012 total cash compensation was $178,810. On the other end stood Joseph Trunfio of three-hospital Atlantic Health System in Morristown, N.J., whose total cash compensation was $10.7 million in 2012, a 201.9% increase over his prior year compensation. That was largely due to payouts for a retention bonus and other deferred compensation. A similar scenario took place at another system in New Jersey, where Barnabas Health CEO Ronald Del Mauro received $21.6 million in deferred retirement compensation in 2012 even though he no longer worked at the system. Del Mauro was excluded from Modern Healthcare’s analysis to avoid skewing the overall calculations. The former CEO at the West Orange, N.J., system reported total compensation of about $3 million, much closer to the group average. …
With a nod to the dire financial straits of St. Clare’s Health System, the New Jersey State Health Planning Board on Thursday unanimously recommended that the Catholic hospital be sold to California-based Prime Healthcare Services, a for-profit company. …. In its recommendations, the board cited Prime’s financial health, specifically revenues of $1.6 billion in 2012. It also acknowledged that the transfer of ownership carries the potential of “promoting the sharing of services and administrative efficiencies,” particularly given Prime’s recent acquisition of St. Mary’s Hospital in Passaic and its application to buy St. Michael’s Medical Center in Newark. But it also noted there may be risks involved with multiple acquisitions by Prime if the investigation results in criminal indictments against one of more of Prime’s principals. According to its website, Prime Healthcare Services, Inc. (PHSI) owns 26 hospitals in six states—California, Kansas, Nevada, Pennsylvania, Rhode Island and Texas. The board wrote that it had reviewed media reports of accusations, investigations and legal proceedings involving PHSI, its subsidiaries, and its healthcare facilities in California and other states. “There is an ongoing investigation by the U.S. Department of Justice of PHSI’s Medicare billings,” the board wrote. “The Department also is aware of a settlement payment made by PHSI involving alleged violations of federal patient confidentiality laws. PHSI took corrective action to ensure patient protections going forward.” …
A series of management failures at the Centers for Medicare and Medicaid Services led to the botched rollout of Healthcare.gov and $840 million in costs, according to a new report from the Government Accountability Office. … The GAO report prepared for the committee will be released Wednesday afternoon and comes after a long probe into last year’s rollout of ObamaCare’s online enrollment system. HealthCare.gov was plagued by technical problems, leading to low initial enrollment figures, and left the administration scrambling to repair the site and reach their sign up targets.
In his testimony, Woods said that pressure to have the site up led CMS to turn to outside contractors. Officials and contractors, though, never developed an understanding of what the website would need to function properly, leading to cost increases and constant changes. …
Report: Obamacare contractors paid to do nothing
Source: CBS News, May 14, 2014
The British-based private contractor Serco was awarded a contract worth up to $1.25 billion to process Obamacare applications, but its employees have practically nothing to do on the job, according to a report from St. Louis CBS affiliate KMOV. An unidentified whistleblower told KMOV that workers hired to process Obamacare applications at Serco’s Wentzville, Missouri processing center “have hardly any work to do.” “They’re told to sit at their computers and hit the refresh button every 10 minutes- no more than every 10 minutes,” the Serco employee said. “They’re monitored to hopefully look for an application. Their goals are set to process two applications per month, and some people are not even able to do that.”
Creators Still in Demand on Health Care Website
Source: Robert Pear and Ian Austen, New York Times, February 11, 2014
After denigrating the work of CGI and replacing it as the largest contractor on the federal health care website, the Obama administration is negotiating with the company to extend its work on the project for a few months. And the new prime contractor, Accenture, is trying to recruit and hire CGI employees to work under its supervision. …
Healthcare.gov’s new contractor has history of problems
Source: Gabrielle Levy, UPI, February 10, 2014
The consulting firm selected last month to take over the maintenance of Healthcare.gov has faced a slew of questions over its practices and its record. Accenture, which was tapped by the Obama administration to take over the $91 million Affordable Care Act contract for one year, has been criticized by both federal officials and private interests over “troubled projects and allegations of ethical lapses.” A report by the Washington Post highlighted some 30 Accenture projects over the past decade that have run into problems, including failure to meet cost targets and technical failures. A June memo from the U.S. Postal Service Inspector General’s Office that said Accenture “demonstrated an absence of business ethics” while under more than $200 million in contracts, and cited a $63 million payout to the Justice Department in 2011 in a settlement over “kickbacks and bid-rigging” in federal contracts.
Accenture, hired to help fix HealthCare.gov, has had a series of stumbles
Source: Jerry Markon and Alice Crites, Washington Post, February 9, 2014
Accenture, the contractor urgently tapped to help fix the federal health-insurance Web site, is a favorite of corporate America but has a record that includes troubled projects and allegations of ethical lapses, a review of the consulting giant’s history shows. At the University of Michigan, students and faculty members are protesting the school’s use of Accenture to help cut costs, citing a report by a committee of alumni and graduate students that said the firm has “a disturbing pattern of problematic past performance.” In North Carolina, glitches in an Accenture-configured computer system contributed to massive backlogs for food-stamp recipients, leading the Obama administration last month to threaten to withdraw the state’s food-stamp funding. Federal officials have also on occasion criticized the company’s integrity. … But during the past decade, nearly 30 Accenture projects in the United States and abroad have encountered problems, including technical malfunctions and cost overruns, according to interviews, media accounts, government audits and other records. …
HHS feared contractor would derail Obamacare
Source: Kyle Cheney, Politico, January 16, 2014
The White House spent December talking up its revamped and repaired HealthCare.gov website after the disastrous rollout. But health officials worried that the underperforming contractor could still derail Obamacare and destabilize the insurance industry, according to a new federal document. The concerns grew so acute that they decided to seek a new contractor.
Accenture named lead contractor for Obamacare website: government
Source: Reuters, January 11, 2014
Accenture has been chosen to replace CGI Federal as the lead contractor for the Obamacare enrollment website, which failed to work when it launched in October for millions of Americans shopping for health insurance, the U.S. Centers for Medicare and Medicaid Services said on Saturday. CGI Federal, a subsidiary of CGI Group, built the website, HealthCare.gov, which was plagued by error messages and slow speeds for weeks after the launch. The glitches created a political crisis for President Barack Obama, threatening the roll-out of his signature healthcare law and emboldening Republican foes to call for its repeal….
HealthCare.gov contract: Politics not a factor, but neither were firm’s ties to failed projects
Source: Jerry Markon and Alice Crites, Washington Post, December 22, 2013
CGI Federal, the company responsible for building the problem-plagued Web site for the Affordable Care Act, won the job because of what federal officials deemed a “technically superior” proposal, according to government documents and people familiar with the decision. Not considered in the 2011 selection process was the history of numerous executives at CGI Federal, who had come from another company that had mishandled at least 20 other government information technology projects more than a decade ago. But federal officials were not required to examine that long-term track record, which included a highly publicized failure to automate retirement benefits for millions of federal workers. …
Health-care Web site’s lead contractor employs executives from troubled IT company
Source: Jerry Markon and Alice Crites, Washington Post, November 15, 2013
The lead contractor on the dysfunctional Web site for the Affordable Care Act is filled with executives from a company that mishandled at least 20 other government IT projects, including a flawed effort to automate retirement benefits for millions of federal workers, documents and interviews show. CGI Federal, the main Web site developer, entered the U.S. government market a decade ago when its parent company purchased American Management Systems, a Fairfax County contractor that was coming off a series of troubled projects. CGI moved into AMS’s custom-made building off Interstate 66, changed the sign outside and kept the core of employees, who now populate the upper ranks of CGI Federal. They include CGI Federal’s current and past presidents, the company’s chief technology officer, its vice president for federal health care and its health IT leader, according to company and other records. More than 100 former AMS employees are now senior executives or consultants working for CGI in the Washington area….
Sebelius blames contractors for HealthCare.gov problems
Source: Stephanie Condon, CBS News, October 29, 2013
Health and Human Services Secretary Kathleen Sebelius plans to tell the House Energy and Commerce Committee on Wednesday that the private contractors who built HealthCare.gov are at fault for the site’s many problems. …
… Last week, three contractors responsible for building HealthCare.gov testified before the House Energy and Commerce Committee, and they blamed the botched rollout on HHS and CMS. The contractors confirmed that when the federal website was tested just days before its Oct. 1 launch, it crashed after just a few hundred people logged on. The decision to launch the site anyway rested solely with CMS, they said….
Meet CGI Federal, the company behind the botched launch of HealthCare.gov
Source: Lydia DePillis, Washington Post, Wonk blog, October 16, 2013
Over the past few weeks, if you’ve been paying attention at all to the unfolding disaster of people trying and failing to sign up for Obamacare online, one name keeps coming up: CGI Federal, the IT contractor that has orchestrated most of the Healthcare.gov Web site. By most accounts, it’s been a complete train wreck, for reasons both technical and bureaucratic. Here’s what you need to know about the company at the center of it all….
Some say health-care site’s problems highlight flawed federal IT policies
Source: Craig Timberg and Lena H. Sun, Washington Post, October 9, 2013
…They say most government agencies have a shortage of technical staff and long have outsourced most jobs to big contractors that, while skilled in navigating a byzantine procurement system, are not on the cutting edge of developing user-friendly Web sites.
These companies also sometimes fail to communicate effectively with each other as a major project moves ahead. Dozens of private firms had a role in developing the online insurance exchanges at the core of the health-care program and its Web site, working on contracts that collectively were worth hundreds of millions of dollars, according to a Government Accountability Office report in June….
…The result has been particularly stark when compared with the slick, powerful computer systems built for Barack Obama’s presidential campaigns, which in 2008 harnessed the emerging power of social networking and in 2012 relied on aggressive data-mining efforts to identify and turn out voters. For those, the campaign recruited motivated young programmers, often from tech start-ups….
…Even in the eyes of critics, federal procurement officials were innovative in hiring a small District-based tech firm, Development Seed, to build what developers call the “front end” of the Web site. That’s the part with the smiling young woman and the encouraging words “The Health Insurance Marketplace is Open!” It has worked with few glitches, earning praise for how easily it adapts to different devices, including the small screens of most smartphones. But the “back end” — the guts of the system, which required far more computing power and integration across other federal networks — was built by a traditional contractor, CGI Federal, a subsidiary of a global firm based in Montreal. The company, which has an office in Fairfax, has declined to comment on the problems with the site….
Health Exchange Delays Tied to Software Crash in Early Rush
Source: Michael D. Shear and Robert Pear, New York Times, October 7, 2013
The technical problems that have hampered enrollment in the online health insurance exchanges resulted from the failure of a major software component, designed by private contractors, that crashed under the weight of millions of users last week, federal officials said Monday. …. The contractors have sent reinforcements. They are working 24-7. We just wish there was more time in a day.” ….. White House officials declined to identify the private contractors who had built the account creation function, citing a decision to keep that information private. …. The prime contractor for the federal exchange — CGI Federal, a unit of the CGI Group, based in Montreal — and the company operating a “data services hub” for the government — Quality Software Services Inc., a unit of the UnitedHealth Group — told Congress at a hearing on Sept. 10 that they were ready for a surge of users when enrollment opened on Oct. 1.
Good enough for government work? The contractors building Obamacare
Source: Bill Allison, Sunlight Foundation, October 9, 2013
…Citing the government shutdown, the Health and Human Services Department will not release a list of the estimated dozen or more companies tasked with building the site. But Sunlight reviewed contract award information from USASpending.gov and FedBizOpps.gov, and found 47 organizations that won contracts from Health and Human Services or the Treasury Department to manage, support or service the implementation of the Affordable Care Act. Among them were top contractors like Northrop Grumman, Deloitte LLP, SAIC Inc. General Dynamics and Booz Allen Hamilton. All fiveof those companies provided information technology services to either the Centers for Medicare and Medicaid Services or the Internal Revenue Service, the two agencies tasked with building back components of the health insurance exchanges. …
The medical system charged with caring for Maryland’s veterans is seeking help from private physicians in the Baltimore region to address a primary-care backlog that has become one of the worst in the nation, federal officials said Monday. With Central Maryland’s veterans waiting months to schedule an initial visit with a primary-care doctor, the Veterans Affairs Maryland Health Care System is hoping to tap into whatever reserve capacity is available in the area’s extensive network of private clinics, according to a formal solicitation. While the agency’s move is unusual, it comes as lawmakers in Congress unveiled a bipartisan agreement Monday to spend $10 billion to expand access to medical care outside the traditional VA system for veterans who live more than 40 miles from a medical center or face long wait times….
As millions of Americans are added to the rolls of insured under the Affordable Care Act (ACA), the for-profit, publicly-traded hospital chains that care for them have gone on a roll of their own.
The ACA recently fattened the bottom lines of two big hospital chains: Universal Health Services, Inc. and LifePoint Hospitals Inc. Universal’s revenue is up 10 percent in the second quarter of 2014 compared to the second quarter of 2014, while LifePoint’s profit was up 44 percent compared to the year-ago quarter, the Wall Street Journal reported. LifePoint attributed between $12 million and $13 million of its income for the quarter to newly insured patients under the ACA–far higher than the $7 million to $8 million that the company originally projected. …