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From the category archives: healthcare

New Report: Hospitals Using Observation Status to Avoid Medicare Fines

For years, patients and advocates have been warning of the increasing use of the patient classification status known as “observation stays.”  A growing number of patients covered by Medicare, have spent days in the hospital, only to be surprised with large out-of-pocket costs and an inability to access long-term care because they were totally unaware the hospital never actually admitted them as a patient.  Legislation signed by President Obama this summer was designed to limit the use of “observation stays.”

“The Notice of Observation Treatment and Implication for Care Eligibility Act would require hospitals to notify beneficiaries receiving observation services for more than 24 hours of their status as an outpatient under observation. The written notification would have to explain that because the beneficiary is receiving outpatient rather than inpatient services, they will be subject to cost-sharing requirements that apply to outpatient services. The notice also must say that the beneficiary's outpatient stay will not count toward the three-day inpatient stay required for a beneficiary to be eligible for Medicare coverage of subsequent skilled-nursing facility services.” ...Modern Healthcare

Now, a new analysis by the Wall Street Journal shows that observation stays have been used even more than previously documented.  In fact, the WSJ reports observation stays at hospitals have increased 156% and explains why many hospitals have lowered their readmissions and thus the fines that come from too many Medicare patients returning to the hospital.  

“...at hospitals around the country, more patients are entering or re-entering hospitals under something called “observation status”—a category that keeps them out of the readmission tallies. Patients on observation status can remain in the hospital for days, and typically receive care that is indistinguishable from inpatient stays, experts say. But under Medicare billing rules, the stays are considered outpatient visits, and as such, don’t trigger penalties under the health law.

The Journal’s analysis of Medicare billing data shows that increases in observation stays can skew the readmission numbers, letting hospitals avoid penalties even if patients continue to have complications and return for repeat visits. Observation stays generally are cheaper for the government, but in some cases they can lead to big bills that are the patient’s responsibility.”

In other words, rather than managing care to reduce the costs of readmission, many hospitals are relying on an administrative sleight of hand to avoid penalties.

Across the roughly 3,500 short-term acute-care hospitals—often referred to as general hospitals—that face the penalty program, the Journal identified a drop in readmission rates of about 9% from 2010 to 2013 for penalty-program conditions. Follow-up observation-stay rates increased about 48%. The rise in observation stays accounted for about 40% of the decline in readmissions, by the Journal’s measure.

So while hospitals avoid paying penalties and Medicare pays less to beneficiaries, we all know who ends up footing the bill again -- seniors and their families. 

Congress Investigates Skyrocketing Rx Drug Prices

It’s certainly no surprise to Medicare beneficiaries that America’s prescription drug industry continues to take a growing share of the average American’s health care costs. A new survey by Kaiser Family Foundation shows drug expenses actually takes an even bigger bite than experts previously thought.   

“High drug prices have been in the news because of costly drugs to treat Hepatitis C, among other illnesses, and because elected officials and political candidates have been talking about drug costs. Rising drug prices, expanded coverage of the uninsured under the Affordable Care Act, and an improving economy have also contributed to an uptick in the rate of increase in health spending. But depending on what you count and how you count, drug spending may be an even larger problem than many thought. It clearly is for employers, who foot a large share of the nation’s health-care bills.”...Drew Altman, Kaiser Family Foundation

The Senate Special Committee on Aging has launched an investigation into recent cases in which pharmaceutical companies acquired a decades-old drug and then increased the price significantly.

The committee singled out four companies: Turing, Valeant, Rodelis and Retrophin.  USA Today detailed some of the outrageous price hikes and their impact on Americans who needed life-saving prescription drugs:

Spiraling costs for two heart drugs owned by drugmaker Valeant Pharmacueticals International increased the Cleveland Clinic's total drug budget by $8.6 million, hearing testimony showed.

North Carolina doctors treating a baby for toxoplasmosis were unable to get the Daraprim medication that targets the parasitic disease because Turing Pharmaceuticals had raised the price 40 times beyond its original cost. The doctors instead had to use an alternative medication.

Erin Fox, director of the drug information service at the University of Utah Health System, testified that a price hike from $440 to $2,700 forced her to keep a Valeant heart drug locked up after removing it from medication carts where it previously had been available.

Sen. Claire McCaskill, D-Mo., the committee's ranking minority member, said the committee's continuing investigation had found a pharmaceutical industry "market failure."

"And when there's a market failure, the government has a role in addressing it," said McCaskill.

In Medicare’s case, the government also has the ability to address the high costs of prescription drugs, saving the program and seniors money. One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.

“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,”  NCPSSM Issue Brief


Americans Support Traditional Medicare – Say “NO” to CouponCare

A new Kaiser Foundation poll confirms (again) that the vast majority of Americans, of all political stripes, support Medicare and Medicaid and don’t want Washington to replace Medicare with CouponCare.  Kaiser reports:

“A strong majority (70%) say that Medicare should continue to ensure all seniors get the same defined set of benefits. Far fewer (26%) say that the program should be changed to instead guarantee each senior a fixed contribution to the cost of their health insurance – a system known as premium support that has been proposed to address Medicare’s long-term financing challenges.

By at least two-to-one margins, majorities of Democrats, Republicans and independents favor keeping Medicare as is rather than changing to a premium support program. Adults under 65 years old are somewhat more likely than seniors to favor premium support (28% compared to 18%), though large majorities in all age groups prefer Medicare’s current structure.”

In spite of the American people’s strong support of Medicare, Republicans in Congress continue their campaign to end traditional Medicare and replace it with a voucher program that gives seniors a coupon they then have to use to try and buy their own health coverage.  This plan would create a death spiral for traditional Medicare, make it harder for seniors to choose their own doctors while passing more costs to Americans so they’ll pay more for less coverage.  The Congressional Budget Office has predicted the Ryan CouponCare Plan could cost seniors $20,000 more each year. 

The Kaiser poll also found that Americans support reforms designed to improve Medicare’s long-term financial picture.  The most popular reform; however, has consistently been ignored by this Republican controlled Congress.

“By far the most popular change to Medicare is allowing the federal government to negotiate with drug companies. Overall, 87% of the public supports such an option, including majorities of Democrats, Republicans and independents and across generations.

 Smaller majorities favor increasing Medicare premiums for wealthier seniors (58%), which already occurs and was expanded earlier this year as part of Medicare’s physician payment reforms; and reducing payments to Medicare Advantage plans (51%). Fewer support raising Medicare’s age of eligibility from 65 to 67 (39%), raising premiums for all Medicare beneficiaries (31%), or increasing cost-sharing for future Medicare beneficiaries (24%).”

The vast majority of those polled (89%) want Medicare’s funding expanded or at least maintained.  Which is in stark contrast to ongoing efforts in Congress to use Medicare as an ATM by cutting the program to pay for other items such as the Trade Agreement.  

As we celebrate Medicare and Medicaid’s 50th Anniversary on July 30th it’s important we remain vigilant in support of these vital programs.  That means constantly reminding Congress Medicare and Medicaid should be strengthened not cut. 

It's Time to Expand Medicare

The National Committee to Preserve Social Security & Medicare celebrated Medicare’s anniversary at a Capitol Hill event today with Congresswoman Debbie Dingell (D-MI), Congresswoman Jan Schakowsky (D-IL), Johns Hopkins researcher, Dr. Frank Lin and Michigan senior, Ann Liming, who has hearing loss, urging Congress to allow Medicare to provide hearing aid coverage for millions of older Americans.

“The reality is that while Medicare provides critical health coverage to millions of beneficiaries there are very serious gaps which exist. We are working to address the hearing aid issue immediately. The Hearing Aid Coverage Act of 2015 is the first bill I’ve introduced because I think this is so important.  No one should feel isolated, confused or shut out from the world because they can’t afford the treatment they need.”...Rep. Debbie Dingell (D-MI)

“This is a really serious issue.  It costs thousands of dollars for hearing aids yet the vast majority of seniors who need them don’t have them because they simply can’t afford it.  That comes with a high cost to society and healthcare costs in Medicare.” ...Rep. Jan Schakowsky (D-IL)

The effects of hearing loss are devastating.  48 million Americans suffer some degree of hearing loss making it a serious public health threat behind heart disease and arthritis.  One out of three people over 65 has a hearing loss with more than 65% of those suffering a loss before retirement age. Research has shown older adults with hearing loss are 32% more likely to require hospitalization, face a 24% increased risk for cognitive impairment and increasingly suffer from isolation and depression.

“We are beginning to understand now that there are direct biological pathways through which age-related hearing loss, which all of us will experience to some degree, directly contributes to even more serious critical outcomes which are incredibly expensive. Hearing loss reaches far beyond quality of life issues.”...Dr. Frank Lin, M.D., Ph.D., Johns Hopkins School of Medicine and Bloomberg School of Public Health. 

As we celebrate Medicare’s 50th anniversary on July 30th, it’s important to note that one of Medicare’s most important hallmarks is the program’s long and successful history of evolving to address the changing demographic and health security needs of America’s seniors. It’s time for Congress to address the mounting evidence that hearing loss has wide implications for the Medicare program.

“Allowing Medicare to cover the cost of hearing aids would not only improve the health and independence of millions of seniors it makes good economic and policy sense by potentially preventing the costly effects of hearing loss through increased hospitalizations, cases of depression and cognitive decline. Not covering routine hearing exams, hearing aids, or exams for fitting hearing aids leaves far too many seniors vulnerable. Medicare covers testing strips for diabetics and wheelchairs for people who can no longer walk, there’s no reason people suffering from hearing loss should be denied coverage for hearing aids.” ...Max Richtman, NCPSSM President/CEO

NCPSSM has endorsed Congresswoman Dingell’s Medicare Hearing Aid Coverage Act and the National Committee to Preserve Social Security & Medicare Foundation has also issued a comprehensive Hearing Loss and Medicare Issue Brief detailing the research findings on hearing loss impacts and the policy prescriptions needed to address the challenges hearing loss poses for millions of seniors and the Medicare program itself.

Obamacare Court Ruling Is Good News for Medicare Too

You could literally hear the collective sigh of relief today as millions of Americans whose healthcare was in jeopardy found out today they can keep their coverage through Obamacare.  Today’s Supreme Court decision upholding federal exchange subsidies is also good news for millions of seniors in Medicare who stand to lose billions in new benefits if healthcare reform is dismantled. 

As we have said for years now, seniors in Medicare need the Affordable Care Act.  Today’s Supreme Court ruling helps preserve this vital reform.

"Today’s Supreme Court decision impacts so many more Americans than just those in federal health exchanges created by Obamacare.  Thankfully, the Court’s ruling today preserves the many benefits and savings that Americans have received through the Affordable Care Act and avoids the damage that could have been done to our entire American health care system.

Seniors in Medicare have a stake in this debate as they will save, on average, about $5,000 over the next 10 years due to lower drug costs, preventive services with no out-of-pocket cost and reductions in the growth of health spending.  Since passage of Obamacare, more than 8.2 million people with Medicare saved over $11.5 billion on prescription drugs.  These are real people who will face real threats to their health security if the quest to dismantle Obamacare is ever successful.  No doubt the enemies of health care reform will continue their zealous mission to roll back Obamacare’s successes but today we have reason to celebrate. Tomorrow we’ll resume our fight to ensure seniors continue to benefit from the enormous savings Obamacare provides them and their families.”...Max Richtman, NCPSSM President/CEO


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