Medicare payment policies encourage hospital gaming

Readmissions of Medicare patients has declined. Celebrating too soon?

Readmissions of Medicare patients has declined. Celebrating too soon?

Care providers often struggle with whether a patient should be admitted as an inpatient hospitalization or under an “observation” status. What’s the difference?

According to the Medicare Payment Advisory Commission (MedPac) [page 57]:

“If a Medicare patient does not initially meet the criteria for inpatient admission but the attending physician concludes the patient should be observed in the hospital for a period of time before being sent home, the patient can remain in the hospital in observation status. Observation stays are billed as outpatient services rather than inpatient admissions.”

For the inpatient care team, whether someone should be admitted as an inpatient or under observation rests on the judgment of whether the patient needs hospital treatment or is, in fact, just in need of short-term observation. 

Patients admitted for “observation” most often go to a regular inpatient bed, receiving the same level of care as other inpatients. However, Medicare treats the admission as outpatient care, which means the patient picks up a larger share of the costs. In addition, a patient on observation status doesn’t qualify for Medicare coverage of rehab or skilled nursing facility care upon discharge. “Observation,” therefore, isn’t such a great deal for patients.

Turns out, however, that observation status is a good deal for the federal government and hospitals. The U.S. Department of Health and Human Services has touted the drop in hospital readmissions as an improvement in patient safety. However, a large percentage of this drop is attributable merely to a shifting of readmissions to observations, which aren’t counted by Medicare as admissions. Between 2006 and 2013, observation stays increased by 96 percent, accounting for more than half of the apparent decline in total Medicare admissions during that 7-year period (see page 55).

Hospitals are calling increasing numbers of stays “observation.” Following a wave of disallowed payments to hospitals for brief inpatient admissions, hospitals began increasing observation stays. Although such observation stays pay less than an inpatient admission, less payment is preferred over no payment at all! 

Moreover, Medicare instituted new penalties for readmissions, which also incents hospitals to shift patients returning within 30 days of a prior discharge to observation status. Remember, a patient stay under “observation” is outpatient care, not an inpatient hospitalization, and, means the hospital avoids a penalty for readmission on such a patient. 

According to the Centers for Medicare and Medicaid Services (CMS), about 10 percent of all hospital stays occurring within 30 days of discharge are now classified as “observation.” A quarter of hospitals classified 14.3 percent or more of all repeat stays as “observation,” and between 2010 and 2013, 36 percent of the claimed decrease in readmissions was actually just a shift to observation stays.

So, the hoopla around the decline in hospital readmissions may be overblown. Hospitals are meeting Medicare metrics for quality (and avoiding fines) with some improvement in care — and some gaming.

Monday, September 21st, 2015 at 09:57
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Worst states in the USA for African Americans

"Down South is anywhere south of the Canadian border.

“Down South is anywhere south of the Canadian border.

Racial inequality in economic, social, and health terms is rampant across the United States. African Americans suffer from twice the level of unemployment attributed to whites. Poverty is twice as prevalent among African Americans as among whites. When we find employment, African Americans, on average, make 62 cents for every dollar earned by whites. African Americans have twice the incidence of and mortality from stroke, diabetes, kidney disease, and many cancers. We get sick early in life, suffer more morbidity, and die at a younger age. This bleak picture for African Americans is true nationally.

That being said, some states are worse than others. Some would think, immediately, that the worse states are in the South. Here, we ought to remember Malcolm X’s observation that “Down South is anywhere south of the Canadian border.” In a recent examination of conditions for African Americans in all the states in the Union, the newsletter 24/7 Wall St. found these states to be the worst:

1. Wisconsin

2. Minnesota

3. Rhode Island

4. Illinois

5. Pennsylvania

6. Michigan

7. Connecticut

8. New Jersey

9. Kansas

10. Arkansas

Turns out none of these states are in the South. What they tend to have in common is widespread racial residential segregation. As I’ve pointed out in the past, residential segregation is still as prevalent in this country as it was in the 1950s and 60s. Six of the 10 states in 24/7 Wall St’s list are home to almost half of the 30 most segregated cities in the U.S., according to a University of Michigan study on racial segregation. Residential segregation results in the herding of African Americans into areas with few jobs. These ghettoes are systematically denied adequate investment in housing, schools. good food sources, and most other services.

These social and economic inequities are what underlies the racial health inequities. To address racial health disparities, we must deal with the social inequities that spawn them. New York City Health Commissioner, Mary Bassett, agrees. In a recent interview with Politico, she explained that racist discrimination is an important social determinant of health. “Neighborhoods that are disadvantaged need [to] correct a historic injustice,” Bassett said to Politico. “The framing matters.”

Yes, the historic injustice of racial discrimination must be corrected in order to improve the health and well being of African Americans.




Tuesday, September 8th, 2015 at 09:13
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Obamacare: An Insurance Card, but No Guarantee of Healthcare Service

President Obama signs Affordable Care Act into law on March 23, 2010.

President Obama signs Affordable Care Act into law on March 23, 2010.

The Affordable Care Act, passed into law in 2010, expanded health insurance coverage through establishing health insurance exchanges and establishing a mechanism for states to expand Medicaid eligibility. As I’ve noted before (see and, this law was a boondoggle for the insurance industry, netting these businesses billions in extra profit.

Unfortunately, having an insurance card doesn’t mean you have access to healthcare.

The ACA’s standards for “network adequacy” are so loose that people who now hold health insurance cards obtained through the exchanges find that only a very limited number of physicians and hospitals accept their insurance. This state of affairs adds insult to injury, as people who obtain health insurance through the exchanges are paying exorbitantly high premiums — premiums that the insurance companies threaten to raise if they are forced to include more services in their coverage.

The same problem exists for those with Medicaid. Since passage of the ACA, 27 states have expanded Medicaid eligibility. Most states hire insurance companies or healthcare providers such as hospital systems to manage the clinical care of patients enrolled in their Medicaid plans. Federal regulations require the states to provide adequate access to all services covered. However, the states are allowed to determine what’s “adequate.”

As a result, even the limited federal oversight of health insurance exchanges (itself inadequate to ensure access to care) is lacking with respect to state Medicaid programs. Medicaid patients find themselves with extremely small numbers of physicians willing to care for them, and these patients often must travel long distances in order to find these services.

We need to take profit out of the equation for delivering healthcare services. Let’s get rid of insurance companies who limit services to ensure higher profits. Let’s get rid of the fee-for-service payment system in which physicians limit or refuse to care for Medicaid (or Medicare) patients because the fees are low.

We need a national healthcare system based on universal health insurance coverage. Healthcare is a right, not a privilege.

Sunday, August 23rd, 2015 at 20:26
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African-American Men: Missing Persons in Medicine

African-American men are a rarity in medicine

African-American men are a rarity in medicine

“Hey, Doc!”

“Morning, Joey!”

Joey is one of the regulars at the gym. I try to go to the gym every morning. I’ve been doing so for years, and I’ve actually made a whole cohort of friends like Joey, who go to the gym at the same time as I do. Among them are several other physicians. However, I’m the only one that Joey and several others call “Doc.” Why is that?

It’s because I’m Black. There are very few African-American physicians — less than 7% of the physician workforce. There are even fewer African-American males who are physicians. Joey, who is a European-American, isn’t racist. He’s very explicitly anti-racist. However, implicit racial biases are still held by the majority of whites (and a large minority of African-Americans). (See this New York Times article, or test yourself at Project Implicit.)  The biases against and stereotypes of Black men make criminal, delinquent, poor student, and illiterate (among other things) seem fitting; whereas, physician doesn’t quite make sense. Hence, my being a physician becomes my most salient feature. An African-American male physician. Wow!

“Hey, Doc!”

The dearth of African-American physicians in the workforce is an issue that many of us have worked to correct. Now, many are turning their attention to the more particular issue of the scarcity of African-American men in medicine. Marc Nivet, the Chief Diversity Officer for the Association of American Medical Colleges (AAMC), notes in a recent AAMC report that “While the demographics of the nation are rapidly changing and there is a growing appreciation for diversity and inclusion as drivers of excellence in medicine, one major demographic group—black males—has reversed its progress in entering medical school. In 1978, there were 1,410 black male applicants to medical school, and in 2014, there were just 1,337. The number of black male matriculants to medical school over more than 35 years has also not surpassed the 1978 numbers. In 1978, there were 542 black male matriculants, and in 2014, we had 515. No other minority group has experienced such declines.”

The problem begins early. Poor housing, high unemployment, unhealthy environments make African-American children less school-ready. Once in school, they’re thrown into under-resourced educational institutions, which makes them less able to matriculate into college. If lucky enough to get into college, they’re not as prepared for the work and are less likely to go on to graduate work. I’d say the entire educational system is designed to reproduce poor, impoverished working-class African Americans. The U.S. educational system needs a revolutionary overhaul.

In the meanwhile, we can build support networks (mentors, advisors, peer support) for African-American men; we can provide young African-American boys with information; we can, and should, bend the rules and act affirmatively to get African-American men into medicine. Increasing diversity in medicine is imperative. It will bring new ideas, new energy, creativity, and innovation to the profession. And, it’s the right thing to do.

Monday, August 17th, 2015 at 01:10
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Family Medicine: A dying breed, or a lifeline for U.S. healthcare?

I think a lot of national leaders in family medicine are pondering this very question right now. Just check out the discussion around the future of family medicine in the “Family Medicine for America’s Health” campaign. Here’s the link to a special issu

Family physician offices need to provide comprehensive care

e of the Annals of Family Medicine on FMAHL

I believe the U.S. healthcare system is broken. I also believe that, unfortunately, family medicine, as a specialty, is in crisis. To fix the healthcare system, we need integrated, comprehensive, coordinated, high-quality, evidence-based, and safe care provided to all. The payment system for healthcare must be revolutionized to make such care delivery possible. Fee-for-service needs to be abolished. It needs to be replaced by a national health program that provides universal coverage for all. We need clinicians and clinics who not only provide excellent care for the patients who show up in our exam rooms, but that reach out to those who don’t and develop plans for taking care of them, as well. We need clinicians and clinics who also look beyond the healthcare needs of their patient panels and work to improve the health and well being of whole communities.

I firmly believe that providing such care was part of the original vision of family medicine when it was founded as a specialty nearly 50 years ago. The crisis we face is that, after living for two generations in a specialist-dominated, fee-for-service world, our comprehensivist, whole-person perspective has been eroded. We still train family medicine residents to provide comprehensive care; however, market pressure drives them into limited-scope practices. Our residents leave our programs to take on high-paying jobs that do not use much of what we teach in family medicine residency – no inpatient medicine, no call, no pediatric care, no obstetrical care, no gynecologic care, and no procedures. American Academy of Family Physician and American Board of Family Medicine surveys report that about 65% of FPs do not do office gynecology; 50% do no pediatrics; 80% do no office procedures; 60% do no inpatient; and some 93% do no obstetrics.

I’m not arguing that every family physician needs to “do it all.” The breadth of medical knowledge and skill sets needed to provide such comprehensive service is too vast for any one clinician. What I am saying is that a family medicine practice should provide such comprehensive care, which means that their should be clinicians in that practice who provide women’s health services, obstetrics, see children, do procedures, and take care of patients who are hospitalized. Our crisis is that – the way things are going – such practices won’t exist. Moreover, graduates of our residency programs have to replace not only the aging physicians in the community, but they must replace the equally aging population of academic family physicians. Will they teach future generations of family physicians to provide comprehensive care if they, themselves, have chosen not to do so?

Bottom line: Unless there is a dramatic and fundamental shift in the direction that family medicine is headed, I believe it will die as a specialty within the next generation.

Pretty grim statement. However, I do think there’s hope. Current economic realities make the argument for comprehensive primary care more compelling. Employers, state and federal governments, and insurers are reeling from the astronomical and unsustainable costs of health care. I think the time is right for pushing for payment reform in healthcare. Campaigning for payment reform needs to be our number one priority.

So, to answer the question in the headline of this post, here’s my list of critical initiatives family medicine practices should be taking in the next 2-to-5 years to become a lifeline for U.S. healthcare:

  1. Join with others in campaigning for payment reform (pay for comprehensive, coordinated care)
  2. Build team-based, comprehensive practices that provide wrap-around service to children, adults, men, and women – including obstetrical and procedural care
  3. Integrate behavioral health care into our clinical practices
  4. Provide increased and convenient access to health care services (early-morning, evening, and weekend service)
  5. Develop programs to improve the health of our patients with chronic illnesses – not only for those who come to clinic, but for all those under our care
  6. Collaborate with other sectors in the community – such as health departments, schools, businesses, local government, and community organizations – to improve the health and well being of the entire community
  7. Ensure that gains in health and well being occur for all, i.e., work to reduce or eliminate health inequities

I hope you’ll join me in working toward this reality.

Sunday, August 9th, 2015 at 19:18
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Martin Luther King, Jr’s dream not yet reality; continue the stuggle!

kingToday marks the 50th anniversary of the 1963 civil rights march on Washington, D.C. at which Martin Luther King, Jr., delivered his famous “I Have a Dream” speech. As a family medicine researcher interested in understanding, explaining, and fighting against racial health inequalities, I also think it’s important to note that Martin Luther King also noted the injustice of racial health inequities. In a speech in 1966, King said that “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” Racial health inequities are a special instance of social inequities and social injustice in general.

In commemorating the historic 1963 March on Washington and the movement that it was a part of, we need to be mindful of the fact that much work is left to be done to achieve the goals of the civil rights movement.

Yes, de jure racial segregation was defeated; however, de facto racial segregation continues to this very day. The conditions of life for the Black community improved some in the wake of the civil rights movement led by Dr. King. However, we still have a long way to go, as our communities remain plagued by segregated, low-quality schools, racially segregated neighborhoods, devastating unemployment, and poor housing.  Below, for example, is a map depicting racial segregation in U.S. schools today. Municipalities throughout the U.S. enforced racial segregation in the schools since the founding of public education systems. Their constitutional right to do so was upheld by the U.S. Supreme Court in Plessy v. Ferguson, 163 U.S. 537 (1896). However, in the landmark case, Brown v. Board of Education, 347 U.S. 483 (1954), the Supreme Court overruled Plessy and forbad state and local governments from practicing racial segregation. Despite this legal change, some public schools today are more racially segregated today than when Brown was decided in 1954. School segregation even increased in the 1990s. (Jeffrey Rosen, “The Lost Promise of School Integration”, New York Times, April 2, 2000, A1, 5.) As the 2000 map of school segregation below illustrates, black/white segregation is highest in counties with high black populations. (Compare with the 2000 census map of the distribution of blacks in the United States.)

Racial segregation still plagues U.S. schools
















Why has the law failed to undo the segregation that was originally caused by the law? The most obvious reason is that racial segregation of neighborhoods remains the norm in the U.S., as demonstrated in the city maps on this site. To the extent students attend neighborhood schools, they are likely to have few classmates of other races. But the courts, too, have played a role–initially by acquiescing in state resistance to desegregation, more recently by attacking the tools states use to achieve integration.

A couple of months prior to the August 28th March on Washington, King spoke at a massive rally of hundreds of thousands in Detroit. I did not attend that demonstration; however, as a young junior high school student in Detroit, the march had a huge impact on me nevertheless. King’s speech in that Detroit rally ring as true now as they did then:

“And so we must say, now is the time to make real the promises of democracy. Now is the time to transform this pending national elegy into a creative psalm of brotherhood. Now is the time to lift our nation from the quicksands of racial injustice to the solid rock of racial justice. Now is the time to get rid of segregation and discrimination. Now is the time.

“And so this social revolution taking place can be summarized in three little words. They are not big words. One does not need an extensive vocabulary to understand them. They are the words ‘all,’ ‘here,’ and ‘now.’ We want all our rights, we want them here, and we want them now.”

Wednesday, August 28th, 2013 at 09:58
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Forty years after Roe v. Wade: Abortion rights under attack

Last week marked the 40th anniversary of the Roe v. Wade decision in the U.S. Supreme Court, which declared laws prohibiting abortion violated a woman’s constitutional rights. The Supreme Court justices also ruled that states could regulate abortion in the interests of women’s health or to protect a “potential human life” starting at the end of the pregnancy’s first trimester.
Seven out of 10 people in the United States support a woman’s right to an abortion. However, right-wing and liberal opponents of this right have used the states’ ability to regulate abortions to eat away at abortion rights over the last four decades. According to the Guttmacher Institute, states enacted more than 43 new restrictions on access to abortion in 2012. These restrictions came on top of the previous year’s record-high 92 restrictions.
Legal challenges, alone, will not keep abortion safe and legal. Supporters of women’s rights need to mobilize to defend women’s constitutional rights and reproductive health.

Tuesday, January 29th, 2013 at 11:30
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Gun violence a public health threat; biggest danger is U.S. government

U.S. drone attacks killed more than 176 children in Pakistan

Gun violence is a public health danger. We need to do something about it. However, all the pundits are barking up the wrong tree. In the debate on gun control laws and regulations broiling since the tragic and horrific murders in Newtown, Connecticut, one very important point gets ignored in the major media: the biggest, most dangerous, and deadliest perpetrator of gun violence in the world is the U.S. government. According to the Bureau of Investigative Journalism, U.S. drones have murdered 176 children in Pakistan alone. That’s more than 9 times the number of children murdered in Newtown. (Upwards of 1,005 civilians in Pakistan, Yemen, and Somalia have been brutally cut down by U.S. drone strikes.) Why hasn’t there been a public outcry over these killings?

The New York Times reported recently that President Obama personally orders these drone strikes. While Adam Lanza, the shooter in the Newtown murders, was clearly a sociopath, Barack Obama is portrayed as a completely sane, thoughtful – excuse me, brilliant – leader “defending U.S. interests.” Heck, the man even got the Nobel Peace Prize!

The U.S. government murders children and other civilians every day. I’m outraged by these killings, and you should be outraged, too. The lives of U.S. children are no more precious than those of Pakistani, Afghani, Yemeni, and Somalian youth.

U.S. culture is a culture of violence. If the man personally responsible for ordering attacks that killed hundreds of children gets the Nobel Peace Prize, should we be surprised that others find it reasonable to attempt to do the same? This culture of violence condones unspeakable crimes against humanity as the unfortunate consequences – “collateral damage” – of the just pursuit of “U.S. interests.” The U.S. government has a long, bloody history in which millions of civilians, including children, have been murdered – from the carpet-bombing of Germany, to the dropping of atomic bombs on Hiroshima and Nagasaki, to wars in Korea, Vietnam, Iraq, and Afghanistan.

The U.S. government metes out violence inside this country, as well. Let’s start with the genocide of the Native American population. U.S. troops have been used to crush workers’ strikes and put down uprisings in African-American communities. Local police forces are known for their deadly brutality, especially toward African-American and Latino communities.

The most important and effective gun control we could enact would be to disarm the U.S. government. Now, that would be a major advance for global public health. It would save millions of lives!

Monday, January 21st, 2013 at 05:24
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Racial disparities in AIDS incidence narrows — still large, especially for youth

Campaign to end AIDS epidemic in African-American community needs major social changes

Huge racial and ethnic disparities in the incidence of AIDS continue to exist, although there may be signs that the relative disparity in AIDS diagnoses (the ratio of minority to white diagnosis rates, for example) is narrowing. In a study published in the American Journal of Preventive Medicine last fall, researchers reported that, between 2000 and 2009, disparities in the rate of AIDS diagnoses decreased between all racial and ethnic groups except for those between African-American and white men aged 13-24. In this group, disparities increased.

Although racial and ethnic disparities in AIDS incidence are decreasing slightly, they still exist. Among 13-24 year-olds in 2009, non-Hispanic Blacks had an incidence of 22/100,000, Hispanics had a rate of 5.5/100,00, and whites had a rate of 1.2/100,000. For age 25-44, the comparable numbers are 79, 27, and 9. For age 45-64, 71,24, and 7. And for age 65 and older, 13, 6, and 1. Clearly, huge racial and ethnic disparities in AIDS incidence continue exist, and they seem to be widening among young men.

Monday, January 7th, 2013 at 05:35
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States slashing already scarce oral health services to poor

Dental care for rural, minority, and poor communities is hard to find

Very few state governments offer dental coverage in their Medicaid programs, and those that do are slashing those benefits. Recently, Governor Pat Quinn of Illinois cut $1.6 billion out of the state’s $15 billion Medicaid budget, reducing the state’s adult dental coverage to emergency tooth extractions only. In a further assault on Illinois’ poor, the state slapped a new co-payment on prescription drugs. About half the states in the country only cover dental emergencies and pain relief.

In the ramp up to broadening Medicaid coverage in 2014 under the Affordable Care Act (ACA), many state governments are looking for ways to cut their benefits. The ACA prohibits states from tightening eligibility for Medicaid coverage. However, there are no restrictions on cutting “optional” benefits such as dental, vision, and prescription coverage. State governments across the country  are using this loophole to deny billions of dollars in benefits to the nation’s poor.

Unfortunately, even in states where Medicaid pays for preventive (cleaning) and restorative (fillings and root canals) dental care, finding dentists who accept the government insurance is next to impossible. Here, in Charlottesville, no dentists take Medicaid. Poor working people are forced to go to the local free clinic, where the waiting list is months long, to obtain dental care. In many rural and minority communities, no dentists are even available. Access to oral health care is even more difficult than access to other physical health care.

Poor oral health leads to disease in the mouth, teeth, and gums; it also is a major cause of other systemic chronic illnesses. Poor oral health increases the risk of various lung diseases, has been linked to an increased incidence of diabetes, and is associated with an increased incidence of pre-term birth of low-weight babies (who are at increased risk of chronic illness in childhood).

We need more dentists and more dental hygienists. Physicians, nurse practitioners, and physician assistants should be trained to provide preventive dental services and emergency dental care. And, of course, provide health care — including oral health care — to everyone as a basic human right through establishing a federally funded, national health service.

Monday, September 10th, 2012 at 12:45
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