payers & providers midwest edition – issue of november 6, 2012

7/31/2019 Payers & Providers Midwest Edition Issue of November 6, 2012

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In Brief

Saint Anthony HospitalChallenges Illinois

Regulators

Chicago-based Saint AnthonyHospital is butting heads with theIllinois Department of Healthcareand Family Services , claiming theagency is unlawfully holding backsupplemental Medicaid payments.

According to hospital officials,Saint Anthony has had itssupplemental payments withheldbecause it lacked a contract with aintegrated care program contractor.The requirement was part of a newlaw intended to toughen upMedicaid guidelines passed by thestate Legislature earlier in the year.

However, hospital officialsclaim that its current contracts withhealth plans suffice for theintegrated care program contractorsuffices and the agency ismisinterpreting the regulations.

The democratic leadership inthe State of Illinois has suggestedthat it understands the plight of those challenged in these tougheconomic times, and theimportance of providing fair accessto health care for all," said SaintAnthony Chief Executive OfficerGuy A. Medaglia . Yet the actionsby the HFS speak to the contrary,prioritizing state budget goals overhealthcare for its citizens byenacting and enforcing unfair andpunitive policies targeting safety-net hospitals.

Michigan Blues GrantMore Than $1 Million To

Clinics

Blue Cross Blue Shield of Michigan has awarded more than $1 million ingrants to safety net clinics throughout

Continued on Page 3

NEWS

MEET YOUR FELLOW READERSNeed to promote a conference? Or your brand? Payers Provider ! s e-mail list for all editions is available for yourmarketing needs. Reach out to more than 12,000healthcare professionals who read our publications. Callour advertising director Claire Thayer at (503) 226-9850,or e-mail her at [email protected] .

Blues (Continued from Page One)

We dont want to be a for-pro tcompany co-owned by stockholders, he said.Hetzel said the companys main complaint is

its inability to expediently set rates in theindividual market. The organization currentlyhas to submit rate requests for the individualmarket to the insurance commissioner, wherethey are subject to a public hearing andreview. The process can take up to 18 months,and is generally slower for the Blues than forits competitors.

The Blues rate-setting process is a hugecompetitive disadvantage, Hetzel said. It iscumbersome to set pricing effectively andef ciently.

Hetzel said the legislation is notcontentious and received overwhelming

bipartisan support in the Senate. But there area handful of dissenters outside of theLegislature including AARP, the Center forInsurance Research , a nonpro t public policyand advocacy association, and the MichiganAssociation of Health Plans . Bill Schuette , the states attorney general,has spoken publicly about the need for anindependent consulting rm to analyze theassets and value of the company before thelegislation is signed by Snyder and enacted.This step, which traditionally occurs when anot-for-pro t company converts to a for-pro tor undergoes a radical shift to another

corporate form, is not required under thislegislation.Schuette may sue if the legislation is

passed as-is and he feels it is does not presetvethe interests of the states residents.

Brendan Bridgeland , director for theCambridge, Mass.-based Center for InsuranceResearch , agreed with the need for animpartial evaluation of the company. Heestimates BCBSMIs market value could bemore than double its $3.2 billion book value.

You only get a chance to do this once and if conversions happen and paymenttransfer werent made or assets werent valued,if you try to recapture them later through

litigation, you only got pennies on the dollar.,he said. They need to value it right now.

MAHP called a meeting last week with

the media detailing their opposition to thelegislation. Rick Murdock , the groupsexecutive director, said it has been advocatingthe Blues make the transition for a number ofyears. His concern, however, is to truly makeit a level playing eld.

It may sound equal, but it isnt, said JAoun, an attorney representing Aetna at theMAHP media session. They say want to beregulated like everyone else and it soundsgood, but there should be a differentregulation when someone has that large aportion of the market.

Could Cause Medigap Issues Mary Ablan , executive director for theMichigan Area Agencies on AgingAssociation, said the bills eliminate the Bluesstatus as the insurer of last resort for Medigapthe states Medicare supplemental insurance.

Under the Patient Protection andAffordable Care Act, there are no directregulations for this kind of insurance. Sopeople who need it the most the disabledelderly may not be able to get policies fromcommercial insurers because they wouldntmeet underwriting standards.

This is a lifeline for those individuals,Ablan said.

Michigan is one of the only states whereMedigap is subsidized keeping the cost of premiums well below market rates.

Under the current law, an assessment of up to 1% of BCBSMs revenues can be used tsubsidize Medigap coverage which Hetzelsaid covers about 210,000 bene ciaries. Thlegislation also eliminates subsidies for

Continued on Next Page


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Page 3Payers & Providers

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NEWS

In Brief

the Wolverine State as part of itsStrengthening the Safety Netprogram.

Fifty clinics received grants of $15,000 apiece. Eight clinics alsoreceived an additional $50,000 toaddress gaps in the local safety netsystem. The larger grants were part of

a competitive bidding process.As part of our ongoing socialmission, our free clinic grant programcontinues to play a crucial role inMichigan's healthcare system, byproviding quality healthcare to theuninsured, serving as a safety net forpeople who need it the most, saidLynda Rossi, BCBSM senior vicepresident of public affairs.

One clinic that won both grants,St. Vincent de Paul in Detroit, said itwould use the money to expand thedental care it providers to cityresidents.

Judge In MichiganStays Contraception

Mandate

A federal lawsuit brought by aMichigan company that sellsoutdoor equipment has brought atemporary stay to a requirement inthat state that employers offerhealth plans with mandatorycontraceptive coverage.

U.S. District Court JudgeRobert Cleland ruled that althoughthe Weingartz Supply Co. had onlya modest chance of prevailing attrial, he would defer to thereligious beliefs of its owners fornow.

The harm in delaying theimplementation of a statute thatmay later be deemed constitutionalmust yield to the risk presented...of infringing the sincere exercise of religious beliefs, Cleland wrote.

Weingatzs owners designedits health benefits to adhere totheir Catholic faith. They claimednot providing contraceptivecoverage under the mandate of theAffordable Care Act would cost thecompany about $280,000 a year inpenalties.

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Blues (Continued from Page One)

Medigap in 2016. But Hetzel said this wonthave a huge impact on the market.

Over time, people have become

accustomed to subsidized Blue Cross plansbut there are much better options out there,he said. Even at subsidized prices, almost allof our Medigap subscribers would be betteroff buying a Medicare Advantage Plan.

Bridgeland and others dont necessarilyoppose a Blue Cross conversion, but wouldlike to see the process slowed. The guarantee

issue policy of the ACA doesnt go into effecuntil January 2014.

Another option, he said, would be to

evaluate the states insurance regulations tomake them fairer, in lieu of converting BlueCross.

We want a longer look and more publicdisclosure, Bridgeland said. This shouldntbe happening be hind closed doors and therehas to be the op portunity for the public toprovide input. TAMMY WORTH

Henry Ford, Beaumont To MergeDeal is Expected to Boost Efficiencies, Cut Costs

Henry Ford Health System and BeaumontHealth System have signed letters of intent tomerge their organizations and create apowerhouse hospital network in the greaterDetroit area.

The combined organization wouldinclude 10 hospitals and 200 other sites, suchas clinics and medical of ces, where patientsreceive care. The system would have revenuesof more than $6.4 billion a year and nearly40,000 employees.

Our shared vision is to form a neworganization that will develop improvedapproaches to patient care that will lead thenation in quality outcomes, service, accessand reliability, said Ford Chief ExecutiveOf cer Nancy M. Schlichting . It is a boldand exciting vision that will mean easier,more accessible and more integrated care forour patients. ! Coming together allows us tocreate a Pure Michigan community-basedsystem that will serve as an engine of innovation and economic development.

Of cials with both hospital systems say amerged entity would be able to provide bettercoordinated care, linked throughout by an

electronic medical record system (both partiesuse the EPIC platform). It is also expected tohelp cut costs, although of cials from both

organizations did not discuss speci cs at anews conference in Detroit last week.However, Schlichting indicated that somefacilities could close at an unspeci c date ithe future.

A merged system would also allow morbargaining power in negotiating with insureraccording to observers.

A larger hospital entity prevents themanaged care plans from driving rates too fadown, hospital merger expert JoshuaNemzoff told Crains Detroit Business .Nemzoff added that he didnt expect adramatic amount of leverage from a merger.

Although Henry Ford is bringing seven the 10 hospitals to the deal, the mergedsystem would be governed by a single boardwith equal representation from both entities.The Detroit-based Henry Ford and and RoyalOak-based Beaumont will still use their brannames, but a single new name for the systemwill be agreed on in the near future.

The merger, pending regulatory approvais expected to be completed by mid-2013.

The two hospitals have created a websitewww.futurecareformichigan.com , to discu

the pending transaction in greater detail andanswer questions from consumers and otherstakeholders.
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Payers & Providers Page 4

Vivekanand Palavali , M.D., has it all. Aneurosurgeon who trained at the University of Chicago and practices in Flint, Mich., he is theembodiment of the Am erican Dream, someonewho has made more than good since heimmigrated from India in the mid-1980s.

Yet Palavali isnt satis ed. Despitemaking a comfortable living, he practices inone of the most economically battered cities inthe U.S. The automotiveindustry mostly pulled out of Flint in the 1970s, and theGreat Recession has caused thenumber of uninsured patientshe treats to about double.

I began asking myself,isnt anyone ashamed?America is the richest,powerful nation in the world,he said. It spends close to $3trillion a year on healthcare.Where is the money going to?

To nd out, Palavali puthimself behind the two digitalcameras he owns.

The end result is a documentarycalled Bitter Pill: America &Healthcare In America .

Given Palavali served as BitterPills director, writer, cameraman and narratorand is not a professional lmmaker, henonetheless created a remarkably clearindictment of the U.S. healthcare system.Bitter Pill is far closer to what you would seeon Frontline than YouTube.

Palavali traveled to ve countries for hisresearch, and interviewed everyone fromhealthcare policy experts to an exotic dancerin Las Vegas named Malibu. Sheacknowledged that she entertains spinalsurgeons and other physicians, compliments of the nations medical supply companies. That isamong the reasons, Palavali concluded, thatspinal fusion supplies cost about ve times asmuch in the U.S. than anywhere else in theworld.

He also discussed the disinformationdumped onto the American people bypoliticians who foment fears that anyexpansion of healthcare coverage is theequivalent of European-style socialism. Whichis how an uninsured patient of Palavalis who ison the business end of $100,000 in medicalbills after breaking her neck in a roller skating

accident was able to dismiss the Affordable CarAct as damaging to the country.As a matter of fact, one of the most

trenchant observations about the U.S. healthcaresystem came from a Swede Palavali interviewedSweden, of course, has guaranteed access tohealthcare.

Money makes the choice for them, shesaid of the Americans.

As a result, Palavaliconcluded that the U.S.system is much closer to thatof a developing country suchas his native India, wherethose with money have accesto decent hospitals andeverybody else is on theirown. Palavali makes thispoignant point by managing t

nd two homeless cancervictims one in India, andone just footsteps away fromHarvard University .

Palavalis lm has itsaws; it relies too much on the long-

faded Occupy movement for too muchsource material, and spends too muchtime visiting the ruined streets of citiesuch as Detroit and East St. Louis, Ill.

without tying them closely enough to his thesis.But overall, Bitter Pill is a better effort

than another lm about healthcare created by aresident of Flint: Michael Moores Sicko. Thaprimarily because Palavalis narrative is backedby facts and isnt gummed up with smugnessand stunts such as taking a bunch of Americansto Cuba for a checkup.

Bitter Pill is playing primarily in theatersin the Flint area. More information is available awww.bitterpilldoc.com .

If you are able to track a showing of itdown, I strongly suggest you watch it. You maynot agree with what it has to say, but itcohesively puts together many interesting factsabout the unique business of U.S. healthcaredelivery, and presents them in an engaging andinformative manner.

OPINION

A Neurosurgeon Turns Film AuteurHis Analysis of U.S. Healthcare is Worth Watching

Ron Shinkman is the publisher of Payers &Providers.

PJ*R(+A

ByRon

Shinkman

Op-ed submissions of up to 600 words arewelcomed. Please e-mail proposals to

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