Payers & Providers Midwest Edition – Issue of May 17, 2011

8/6/2019 Payers & Providers Midwest Edition Issue of May 17, 2011

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Theres a baby shower scheduled on June 23at the 16th Street Community Center inMilwaukee. The guests mothers, newborns,and mothers-to-be -- will receive goodies like

infant formula, cribs, and diapers, plusinstruction on feeding, sleeping and safe careof their babies, all courtesy ofMolinaHealthcare of Wisconsin, which is hosting theevent.

The shower is part of an incentive programfor young mothers in the African-Americancommunity in southeast Wisconsin to improvebirth outcomes and reduce an infant mortalityrate that runs more than three times higherthan it does for white babies.

Molina is one of four Medicaid managedcare plans that the state of Wisconsin hascontracted with to execute a comprehensive

plan to educate new mothers how to bringhealthy babies into the world. The others areChildrens Community Health Plan, UnitedHealthcare, and Community Connect HealthPlan.

Infant mortality is an awful thing, saidStephanie Robert, who studies the issue at theUniversity of Wisconsin School of SocialWork. We all dont like infant mortality, andwe especially dont like disparities in infantmortality.

Infant mortality is a barometer usedaround the world to determine the health of acommunity, usually dened as the number of

infant deaths in the rst year of life per

thousand live births. The rate in the U.S. hasnot been a source of pride to the medical orpublic health communities, as it exceeds thatof many countries.

And in Milwaukee, noted Bevan K. Baker,the city commissioner of health, The infantmortality rate is worse than in almost anyother developed country. Indeed, the rate forblack infants is worse than that of the RussianFederation and is roughly on a par withRomania.

From 2005 to 2008, there were 807 fetaland infant deaths in Milwaukee, of whom 687were infants of color, mostly African-American. More than 53% died fromcomplications of prematurity, and 19% died ofsudden infant death syndrome, overlays, oraccidental suffocations. The mortality rate for

black infants was 15.7 per thousand vs. 6.4 forwhite infants.

For the 308 stillbirths in the four-yearperiod, the leading causes were diabetes,hypertension, maternal infection, andcongenital abnormalities.

The main issues for infant mortality, Robertsaid, are low birth weight and prematurity.These cause poor outcomes for children in thelong run, as they may be born with healthproblems that follow them throughout life, at

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In Brief

Illnois ChiropractorIs Sentenced to 70Months for Fraud

A suburban Chicago chiropractorwas sentenced to 70 months inprision for healthcare fraud. Darwin Minnis, 56, whooperated a clinic in Maywood, Ill.,pleaded guilty last year tosubmitting falst claims for servicesthat were not provided, andinflating claims for services thatwere provided, costing victims $1.4million.

Minnis owned the Spine andJoint Rehabilitation Center from2000 to 2009. Most of the patientswere employees of the U.S. PostalServices who qualified for benefitsfrom the U.S. Labor Departments

Office of Workers Compensationprogram.Minnis was indicted in March

2010, along with a physician and abilling employee.

Former MedCath SouthDakota Hospital nowPart of Avera Health

Avera Health, a regional healthcareorganization in the upper Midwest,has acquired the one MedCathhospital in this region as part of thedissolution ofMedCath Corp., oncea high-flying for-profit specialty

hospital operator.Now called Avera Heart

Hospital in Sioux Falls, S.D., thehospital has 55 critical care beds,three surgical suites, and fourcatheterization labs.

MedCath listed 13 hospitals and27 cardiac diagnostic facilitiesamong its assets. The company hada loss from operations of $30.5million in the year ended Sept. 30,2010.

Continued on Page 3

NEWS

Infant Mortality in Wisconsin (Continued from Page One)

great expense to society, the educationalsystem, and the healthcare system.

A report commissioned by the

University of Wisconsin School of Medicineand Public Health explained that infantmortality is considered a sentinel indicatorof a communitys overall well-being. Theneighborhoods in Wisconsin with the highestrates of black infant mortality arecharacterized by hyper-segregation,unemployment, economic hardship andinadequate housing, the UW report said.Systems that serve children and families inthese communities are often fragmented,burdensome, culturally and linguisticallydisrespectful and decit-based.

The state and the city have developed an

aggressive action plan to combat theproblem.Last week, on May 11, the city health

department sponsored its second annualinfant mortality summit, with a focus onpreventing premature babies. Janice Whitty,M.D., an expert on managing complicatedpregnancies from Meharry Medical Collegein Nashville, was the featured speaker, withnearly 350 providers in attendance. A panelof local doctors and nurses talked about stepsthey were taking in their practices to bringpregnancies to full term.

Were collaborating with the other three

health plans that were awarded the statecontract last year, said Bruce Kruger,director ofeld operations for CommunityConnect Health Plan, a division ofWellPoint,Inc. The key is nding those providers thatgive services not only to the Medicaidpopulation, but the uninsured andparticularly those individuals who had poorbirth outcomes in the past, or are at risk forpoor outcomes.

According to the BadgerCare Plus HealthyBirth Outcomes Initiative, 40% of WisconsinMedicaid births are in six counties aroundMilwaukee. Disparities in health outcomes

are greatest in that part of the state.In 2009 the state contract required

Medicaid HMOs to submit a detailed plansfor addressing the needs of high-risk women.The contract went into effect Jan. 1, 2011. Itruns through the end of 2013.

A major element of the pilot for high-riskpregnant women is the assignment of amedical home. Plans must recruit 100women in 2011, 200 in 2012, and 300 in2013 to participate.

We have found with the population in

greatest need, and those that have hadhistorically poor birth outcomes, theirinterface with health system has occurred late

in their pregnancy, Kruger said. If youcannot get enrolled early in the pregnancy,opportunities for healthy outcome may bediminished.

Therefore plans work with providers toconnect earlier with women who may bepregnant. Women in the rst 20 weeks ofpregnancy may be identied in the emergencydepartment of local hospitals, at community-based agencies, or by the health department.Once linked to a medical home, theyllreceive services through 60 days post-partum.

The health plans receive enhancedpayments of $1,000 per birth to each eligible

member in the pilot, with an additional$1,000 for a good birth outcome. Payments tothe HMO must pass through to the provider omedical home.

There are 12 pilot sites in Milwaukee andone in Kenosha, and for each case there isextensive evaluation, qualitative andquantitative. A chart review is performed incase of poor birth outcomes to determinewhether the woman received satisfactory careThe incentives for plans to avoid pooroutcomes are real and painful: The HMO ispenalized $2,000 per birth for each memberwith a poor birth outcome that didnt receive

proper care. Stephen Harris, president of MolinaHealthcare Wisconsin, one of the fourMedicaid plans, said the incentives in theprogram extend to the mothers themselves. Toencourage the mothers to make their 10required prenatal visits, they will receive a giftcard. At the end, theyll get a baby shower,where more gifts are bestowed.

Theres plenty of instruction along the wayThis is how you hold the baby, burp the babyfeed it. A lot of these women are reallyyoung, Harris said. Many of them are under18, and have gestational diabetes, or

hypertension, or are smokers, all of whichadversely affect birth outcomes.

Molina has worked on improvingpregnancy outcomes in other Medicaidmarkets, Harris said. Whats great about theprogram in southeast Wisconsin, its properlyaligned incentives and focus betweenproviders and plans. We all have the sameobjective.

Even if the issues and barriers still exist, headded, there is a platform for discussionacross the delivery chain about how to


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NEWS

In Brief

Most MedCath hospitals are inthe South and Southwestern states.The company decided to liquidateafter the failure of its growth modeland a moratorium imposed onspecialty hospital construction byCongress. In addition, the cardiaccare marketplace has altered, as

stents have taken share from openheart surgeries and lengthyhospitalizations.

CIGNAs Profits Swell inFirst Quarter, Matching

Competitors Results

CIGNA Corp, the last majornational health insurance companyto post first-quarter earnings,reported a 52% surge in netincome. It raised its profitprojection for the year.

As was the case for other

insurers, the earnings exceededanalysts estimates. Shares rose2.4% on the day.

CIGNA and the other insurers,including UnitedHealth GroupInc., WellPoint Inc., Humana Inc.,and Aetna Inc., said that peopleare not using services as frequentlyor as intensely as they used to.United reported that in certaincases hospital stays decreased thisyear.

Mirroring the trend reportedby others in the industry, CIGNAsbottom line outperformance wasprimarily a result of lower-than-expected medical utilization, said

Chris Rigg, an analyst withSusquehanna Financial Group.CIGNA net income rose to

$429 million, or $1.57 a share,from $283 million a year earlier, or$1.02 a share. Revenue hit $5.41billion, up 4%.

CIGNAs book of business tendsto run more toward fee-based plansfor large-group employers, insteadof risk-bearing plans. These plansare less profitable, as the employerholds the risk. But they are alsoless vulnerable to some of the legalchanges brought by the healthreform law passed last year.

Healthcare employment continues to beone of the few bright spots in the U.S.economic picture. The complete healthcaresector created 112,100 new positions in therst four months of the year, compared with80,500 in the comparable period of 2010,according to preliminary number from theBureau of Labor Statistics. Hospitals created31,500 new jobs in the rst four months of the

year, compared with 8,900 in the rst fourmonths of 2010.

Physicians ofces added 31,500 newjobs, vs. 8,900 last year. Ambulatory servicecontributed 59,800 jobs, slightly higher thanthe period last year.

There are 4.7 million jobs at hospitals, 6million in ambulatory care, and 2.3 million physicians ofces, bringing the total for therst time over 14 million in healthcare.

Roughly 1.3 million residents of Illinois willget health insurance under the PatientProtection and Affordable Care Act, accordingto a new study by the RAND Corp. They willbecome insured by enrolling in Medicaid andbuying policies through the new stateinsurance exchange.

The increase in numbers of insured willboost state spending on healthcare by around10% in 2016, when the reform law is fullyimplemented. Most of those expenses willcome through higher Medicaid costs.

Illinois was one ofve states chosen for thestudy, which was sponsored by the Council of

State Governments, a group that advocatesinformation exchange by the states. The stateswere chosen for their wide distribution andvariety of size and population types. Otherstates are California, Connecticut, Montanaand Texas. Christine Eibner, a RAND economist andco-author of the study, said that states need

an adequate forecast of what is ahead. Theresearchers looked at the types of plans stateresidents are likely to enroll in, and how thiswill affect both private and public spending.

The study predicts that after fullimplementation of the reform law, 390,000people will remain uninsured in Illinois,compared to 1.75 million without the law.That would raise the insurance rate from 85%to 97%. About 11% of non-elderly stateresidents will get their insurance through thenew exchanges.

Enrollment in Medicaid will rise by 49%,encompassing 770,000 more Illinoisans. The

will cost the state about $700 million more 2016, and $1.3 billion in 2010. Thecumulative increase in costs from 2011 to2010 will be around $6.2 billion.

The study estimated that the proportion ofworkers offered health insurance through theemployer is not likely to change.

Reform to Boost Illinois Medicaid RollsFiscal Burden on State Likely to Grow by $1.3 Billion

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Healthcare Employment GainingJob Growth Pushes Total above 14 Million
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Theres a new PSA test in healthcare. Hopefullyit will prove more reliable than that other one.

In conjunction with the unveiling of thelong-awaited accountable care organizationregulation by the Department of Health andHuman Services, the Federal TradeCommission and Department of Justice issueda Joint Policy Statement setting forth theirstandards for conducting an expedited (90-day)antitrust review of applicants for ACOcertication.! The agencies explained that theywill evaluate applicants market powerbased on the ACOs share of services in

each participants Primary Service Area(PSA) dened as the lowest number ofcontiguous postal zip codes fromwhich the hospital or physician drawsat least 75% of its patients for itsservices. The statement summarizedthe antitrust implications of ACOsformed by hospitals or physiciangroups with large market shares:

ACOs with high PSA shares may posea higher risk of being anticompetitive andalso may reduce quality, innovation, andchoice for both Medicare andcommercial patients. High PSA shares

may reduce the ability of competing ACOs toform, and could allow an ACO to raise pricescharged to commercial health plans abovecompetitive levels.

The antitrust enforcers were properlyconcerned with the risk that ACOs couldbecome a vehicle for increasing or entrenchingprovider market power.! Studies by academics,health policy experts and state governmentshave documented the impact of providerconcen-tration on insurance premiums.Moreover, a post-reform merger wave may haveincreased the number of hospital and specialtyphysician markets, and many areas are already

served by dominant local providers.! Inasmuchas the success of the ACO concept depends onits ability to spur delivery system change, theintransigence of monopolistic providerspresents an important issue. It is heartening thatthe extended (and controversial) regulationdrafting process produced a result that willconstrain the growth and exercise of marketpower.

Notably, the policy statement also removedsome uncertainty that may have existed as tothe application of prior antitrust enforcementactions and advisory opinions in the ACO

context. !For example, the statement shouldprovide some comfort to those organizingphysician networks: ACOs that clear the CMSreview of their integration efforts will almostcertainly be regarded by the FTC and DOJ asclinically integrated and hence not subject the strict per se legal standard.

Market power, however, remains a majorsticking point in evaluating ACOs. Antitrustacionados may question whether the PSAapproach in the policy statement accurately

indenties markets or measures themarket power of providers. As the F

and DOJ themselves have found, zicode data gives a highly imperfectmeasure of healthcare markets.Moreover, there are signicantproblems in obtaining the necessarydata regarding the total volume ofservices in the providers markets,particularly their services provided commercial insurers and employers

However, it appears that the agenciewill use this measure as a rough andready starting point to identify potentproblematic ACOs and those that raisecompetitive problems.

An important and heartening aspect of thepolicy statement is the agencies insistence thapplicants with large market shares come forwwith justications and produce data anddocuments that would assuage competitiveconcerns. !This should help expedite the proc(Though, if past practice with mergers is a guithe 90-day clock will not start running until thACO completes its production of all requiredinformation). The agencies make it clear that twill solicit the views of payers and employersbefore making their determination. Finally theCMS ACO regulation makes it clear that high-ACOs will not be approved unless the FTC or

DOJ provides a clearance letter.Not unlike the inexact science of medicaldiagnosis, the antitrust agencies are making dwith the tools they have.

OPINION

How Much Market Power for ACOs?Regulators Want a Balance for Healthy Competitio

Thomas Greaney teaches healthcare antitr

law at St. Louis University.

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