All posts by Jason White

Tennessee-Based Pain Management Group To Close Clinics Amid Financial Turmoil

One of the largest pain management groups in the Southeast is closing multiple clinics amid worsening financial troubles and a federal criminal investigation that targeted its former chief executive.

This week, Tennessee-based Comprehensive Pain Specialists advised patients and employees about clinic closures, leaving patients scrambling to find new doctors willing to prescribe them opioids, according to a report on WSMV television.

Based in the Nashville area, CPS opened in 2005 and quickly grew into a powerhouse, which has treated as many as 48,000 pain patients a month, at more than 50 clinics in Tennessee and other states.

CPS did not respond to numerous requests for comment.

The doctor-owned company has endured a series of recent setbacks, including earlier clinic closures, pending lawsuits over alleged debts and the criminal case against former CEO John Davis.

In April, a federal grand jury in Tennessee indicted Davis on criminal kickback charges. He has pleaded not guilty. CPS also has faced nearly a dozen civil lawsuits from contractors alleging unpaid debts, including suits brought by two of its former doctors. A Justice Department official said the closure was not related to the criminal case against Davis.

The shutdown of the clinics comes amid growing backlash against the use of opioids for treating chronic pain. The opioid crisis has cost the U.S. economy more than $1 trillion since 2001, estimates Altarum, an economic research firm. Since 1999, at least 200,000 people have died nationwide from overdoses, according to the Centers for Disease Control and Prevention.

According to the company’s website, CPS now operates 40 clinics in eight states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, North Carolina, Ohio and Tennessee. Half are in Tennessee. The Tennessean reported Tuesday that all 21 clinics in the state would be closing by the end of the month.

CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers. One nurse practitioner at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billing that year, according to Medicare records analyzed by KHN.

(Courtesy of Comprehensive Pain Specialists)

Peter Kroll, an anesthesiologist and one of CPS’ founders, said at the time that the tests were justified to monitor patients against risks of addiction or reduce chances the pills might be sold on the black market. Kroll, who is the company’s current CEO and medical director, billed Medicare $1.8 million for urine tests in 2015, agency records showed.

Kroll took charge of the business when Davis left the company abruptly last summer. He could not be reached for comment Tuesday.

Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.

“As CEO, Davis oversaw the substantial expansion of CPS, recruiting new physicians and clinics to join CPS, as well as directing various aspects of the company’s overall treatment of patients,” prosecutors wrote in a May court filing.

Davis has pleaded not guilty. The U.S. attorney’s office has said in court filings that CPS and its employees are “victims” in the case.

The company also has been hit with civil suits. Anesthesiologist Donald E. Jones sued the company in May 2017, alleging that it failed to honor his employment contracts.

Jones said he joined the firm in 2012 to staff three Tennessee clinics at a salary of $30,000 a month plus a percentage of fees from laboratory and other services. Jones argued that he generated collections in excess of $9 million. In 2016, the clinics served 41,364 patients, the busiest of all the clinics, according to the suit.

But in April 2016, according to the suit, CPS quit paying him and in February 2017 the company began transferring his patients to other clinics and “making disparaging remarks” about him to patients.

CPS countered that Jones failed to deliver “safe and effective medical care, which CPS in court filings attributed to an “ongoing compensation dispute.” The suit is pending.

(Courtesy of Comprehensive Pain Specialists)

Pain specialist William Wagner also is suing the company. He said he relocated from New Mexico to open a CPS clinic in Anderson, S.C., lured by the promise of $30,000 a month in salary and a share of the profits from urine tests and other services.

Instead, according to Wagner, CPS failed to collect bills for services he rendered and then closed the clinic. CPS denies Wagner’s claims and says it fulfilled its obligations under the contract. In a counterclaim, CPS argues that Wagner owes it $190,000. The case is pending.

Several contractors, including companies that leased office space and medical software, also have taken CPS to court alleging unpaid bills and leases, according to court filings. The cases are pending.

Kroll told KHN last year that he and fellow anesthesiologist Steve Dickerson came up with the idea for CPS in August 2005, over a cup of coffee at a Nashville Starbucks. At the time, Tennessee was confronting an emerging opioid epidemic.

Kroll, raised in North Carolina, had moved to Nashville to launch a career in anesthesiology, a specialty he chose after watching his older brother die from an agonizing disease with little help from pain specialists.

Joined by two other doctors, Kroll and Dickerson opened with a single storefront in suburban Hendersonville. Dickerson, who was elected to the Tennessee Senate in 2012, remains at CPS, according to its website. Calls to Dickerson’s office were not returned.


KHN’s coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation.

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Take charge, get tested for HIV

Did you know that 1 in 7 of the more than 1.1 million Americans living with Human Immunodeficiency Virus (HIV) don’t know they have it?

Getting medical care, support, and maintaining safe behaviors can help improve the health and lives of people living with HIV. Medicare can help.

Medicare covers HIV screenings for people with Medicare of any age who ask for the test, pregnant women, and people at increased risk for the infection (such as gay and bisexual men, injection drug users, or people with multiple sexual partners).

HIV is the virus that can lead to Acquired Immunodeficiency Syndrome, or AIDS. There have been many advances in treatment, but early testing and diagnosis play key roles in reducing the spread of the disease, extending life expectancy, and cutting costs of care.

Get tested. Take charge. Visit Health & Human Services’ HIV.gov website to learn more about National HIV Testing Day, June 27, and watch our video.

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‘Holy Cow’ Moment Changes How Montana’s State Health Plan Does Business

Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, recalls thinking “holy cow” when she got an urgent directive from state legislators in late 2014: “You have to get these costs under control, or else.”

Increasing health care costs in the state workers’ health plan were helping hold down workers’ wages. The plan’s financial reserves were dwindling, heading for negative territory.

So began Barlett’s high-stakes game of chicken designed to change how the state did business with its 60 hospitals, which accounted for 43 percent of employee health care costs, turning the normal purchasing process on its head.

Instead of starting with the hospital’s list price and negotiating down for discounts, the state began telling these facilities how much it was willing to pay — a “reference price” — for each type of hospitalization. State officials used generally conservative Medicare rates as a baseline and starting point for the discussion.

Before the plan took effect, hospital charges for state employees for the same service had varied widely, with some hospitals charging three to six times the Medicare rate for some services.

To even out the disparities and save money, the state decided it would pay an average of 234 percent of Medicare rates — a level of payment that hospitals indicated they would accept and an amount the state calculated would allow an efficient hospital to deliver high-quality care and still profit.

While other states and some private employers have set prices they are willing to pay for some standardized procedures — such as a colonoscopies or hip replacements — Montana’s experiment is more sweeping, covering all hospital services, and it uses Medicare as a common yardstick.

Two years in, the state calls the effort a success, saving $15.6 million this year over the estimate of what it would have paid without the change. Meanwhile, its reserve fund has grown and is so healthy the state dipped into it for other needs.

Did The State Get The Payments Right?

“A centralized price-setting model has danger. It can overpay or underpay,” said Glenn Melnick, director of the Center for Health Policy and Management at the University of Southern California.

Lawmakers directed Marilyn Bartlett, the director administrator of Montana’s Health Care and Benefits Division, to get employee health costs under control, so she changed the way the state pays hospitals.(Courtesy of Marilyn Bartlett)

Like some other cost-control efforts, the Montana approach might lead to smaller numbers of hospitals that agree to participate in the state plan, he noted.

So far, there’s been no sign of that, said Bartlett: “No hospital has gone broke.”

But resistance is natural, said Damon Haycock, head of Nevada’s public employees’ benefits plan, because, ultimately, money saved for state workers is money hospitals don’t get.

There could be a ripple effect, as others in the community will want parity.

“If a state takes a hard line and says, we’re not paying more than X, then cities and counties and large employers would want the same deal,” he said. “And that becomes a massive political hurdle.”

To get buy-in, the state settled on the 234 percent, which many economists consider a relatively generous mark-up from standard Medicare payments.

Medicare doesn’t negotiate prices with hospitals or use hospital-set charges in its calculations. Instead, Medicare sets reimbursement through a complex formula that includes the cost of providing the service and the type of diagnoses. By its calculations, the government program pays hospitals enough to cover their services as well as a small profit.

Hospital officials, including many of those in Montana, disagree.

“When you look at total costs, Medicare probably pays 75 to 80 percent,” said Jay Doyle, president of St. James Healthcare in Butte. The facility, part of the SCL Health system, reported losing $9 million on its Medicare patients in 2016, the latest data available.

But economists say the prices are adequate if the hospitals spend the money wisely.

“Hospitals will say Medicare pays 90 cents on the dollar,” said Zack Cooper, an assistant professor of health policy and economics at Yale, which makes their argument sympathetic “for the first 15 seconds.”

In fact, for most hospitals, Medicare covers their costs, he added.

Reaching Out To The Holdouts

The Montana effort took aim at hospital-set prices, often called “chargemaster rates,” which to Bartlett were seemingly “going up and up.” She and the third-party administrator the state hired gathered data and dove into the new negotiations.

At some hospitals, Montana was shelling out more than three times what Medicare paid for inpatient care. Outpatient services showed an even wider range. Some hospitals were paid more than six times the Medicare rates.

When Bartlett’s team settled on paying an average of 234 percent of Medicare for inpatient and outpatient care, the decision involved a delicate balance: Set the bar too high and some hospitals would raise prices; too low, and some could cut back services or refuse to sign on.

As the July 1, 2016, deadline approached, five hospitals were holding out — and the state didn’t want huge gaps in its hospital network.

“I was absolutely freaking,” said Bartlett.

Four of the five remaining agreed before the deadline. The last major holdout was Benefis Health System in Great Falls, which argued that it was already one of the lower-cost hospitals in the state and that it should save its biggest discounts for its biggest customers.

Benefis declined requests for an interview.

At the time, state workers and their unions began a classic public relations arm-twisting campaign. Workers were told they might get hit with out-of-network bills from Benefis if it did not sign on. Such bills represent the balance between what the state pays and what hospitals charge.

Employee unions urged members and other interested groups to call or write Benefis, urging it to get on board.

The hospital is “kind of a monopoly, used to calling their own tune,” because it is the only major hospital within 90 miles, recalls Keith Leathers, an investigator with Montana’s Department of Public Health and Human Services. He was among those employees who picked up the phone, left messages and wrote notes.

By the end of July, Benefis finally signed on.

Will Others Follow Suit?

“A lot of states could learn from Montana,” said William Kramer, executive director for National Health Policy with the Pacific Business Group on Health, a coalition of employers. Within the state, companies and cities in the state are watching the experiment as well.

There are discussions underway about expanding Montana’s program beyond 35,000 state workers to cover city, county and university employees.

“If you want to get at pricing abuse by hospitals, why wouldn’t every single employer do that,” said Francois de Brantes, an independent benefits consultant and former director of the Center for Payment Innovation at Altarum, a Washington, D.C.-based nonprofit research and consulting firm.

That, of course, makes hospitals nervous since they have traditionally compensated for low reimbursement from some insurers by charging others more.

“If [that] happened, it would have huge economic impact,” including layoffs at his hospital, said Doyle of St. James Healthcare.

But Cooper, the Yale economist, suggested that hospitals paid based on multiples of Medicare will be fine if they deploy their earning wisely rather than on duplicative services, additional MRI machines or gleaming, marble-filled lobbies.

For many, he said, “it’s a function of investment decisions, not that Medicare doesn’t pay enough.”

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Medicare Takes Aim At Boomerang Hospitalizations Of Nursing Home Patients

“Oh my God, we dropped her!” Sandra Snipes said she heard the nursing home aides yell as she fell to the floor. She landed on her right side where her hip had recently been replaced.

She cried out in pain. A hospital clinician later discovered her hip was dislocated.

That was not the only injury Snipes, then 61, said she suffered in 2011 at Richmond Pines Healthcare & Rehabilitation Center in Hamlet, N.C. Nurses allegedly had been injecting her twice a day with a potent blood thinner despite written instructions to stop.

“She said, ‘I just feel so tired,’” her daughter, Laura Clark, said in an interview. “The nurses were saying she’s depressed and wasn’t doing her exercises. I said no, something is wrong.”

Her children also discovered that Snipes’ surgical wound had become infected and infested with insects. Just 11 days after she arrived at the nursing home to heal from her hip surgery, she was back in the hospital.

The fall and these other alleged lapses in care led Clark and the family to file a lawsuit against the nursing home. Richmond Pines declined to discuss the case beyond saying it disputed the allegations at the time. The home agreed in 2017 to pay Snipes’ family $1.4 million to settle their lawsuit.

While the confluence of complications in Snipes’ case was extreme, return trips from nursing homes to hospitals are far from unusual.

With hospitals pushing patients out the door earlier, nursing homes are deluged with increasingly frail patients. But many homes, with their sometimes-skeletal medical staffing, often fail to handle post-hospital complications — or create new problems by not heeding or receiving accurate hospital and physician instructions.

Patients, caught in the middle, may suffer. One in 5 Medicare patients sent from the hospital to a nursing home boomerang back within 30 days, often for potentially preventable conditions such as dehydration, infections and medication errors, federal records show. Such rehospitalizations occur 27 percent more frequently than for the Medicare population at large.

Nursing homes have been unintentionally rewarded by decades of colliding government payment policies, which gave both hospitals and nursing homes financial incentives for the transfers. That has left the most vulnerable patients often ping-ponging between institutions, wreaking havoc with patients’ care.

(Story continues below)

“There’s this saying in nursing homes, and it’s really unfortunate: ‘When in doubt, ship them out,’” said David Grabowski, a professor of health care policy at Harvard Medical School. “It’s a short-run, cost-minimizing strategy, but it ends up costing the system and the individual a lot more.”

In recent years, the government has begun to tackle the problem. In 2013, Medicare began fining hospitals for high readmission rates in an attempt to curtail premature discharges and to encourage hospitals to refer patients to nursing homes with good track records.

Starting this October, the government will address the other side of the equation, giving nursing homes bonuses or penalties based on their Medicare rehospitalization rates. The goal is to accelerate early signs of progress: The rate of potentially avoidable readmissions dropped to 10.8 percent in 2016 from 12.4 percent in 2011, according to Congress’ Medicare Payment Advisory Commission.

“We’re better, but not well,” Grabowski said. “There’s still a high rate of inappropriate readmissions.”

The revolving door is an unintended byproduct of long-standing payment policies. Medicare pays hospitals a set rate to care for a patient depending on the average time it takes to treat a patient with a given diagnosis. That means that hospitals effectively profit by earlier discharge and lose money by keeping patients longer, even though an elderly patient may require a few extra days.

But nursing homes have to hospitalize patients. For one thing, keeping patients out of hospitals requires frequent examinations and speedy laboratory tests — all of which add costs to nursing homes.

Plus, most nursing home residents are covered by Medicaid, the state-federal program for the poor that is usually the lowest-paying form of insurance. If a nursing home sends a Medicaid resident to the hospital, she usually returns with up to 100 days covered by Medicare, which pays more. On top of all that, in some states, Medicaid pays a “bed-hold” fee when a patient is hospitalized.

None of this is good for the patients. Nursing home residents often return from the hospital more confused or with a new infection, said Dr. David Gifford, a senior vice president of quality and regulatory affairs at the American Health Care Association, a nursing home trade group.

“And they never quite get back to normal,” he said.

‘She Looked Like A Wet Washcloth’

Communication lapses between physicians and nursing homes is one recurring cause of rehospitalizations. Elaine Essa had been taking thyroid medication ever since that gland was removed when she was a teenager. Essa, 82, was living at a nursing home in Lancaster, Calif., in 2013 when a bout of pneumonia sent her to the hospital.

When she returned to the nursing home — now named Wellsprings Post-Acute Care Center — her doctor omitted a crucial instruction from her admission order: to resume the thyroid medication, according to a lawsuit filed by her family. The nursing home telephoned Essa’s doctor to order the medication, but he never called them back, the suit said.

Deborah Ann Favorite holds a photograph of her mother, Elaine Essa. The nursing home and Essa’s primary care practice settled a lawsuit brought by the family. (Heidi de Marco/KHN)

Without the medication, Essa’s appetite diminished, her weight increased and her energy vanished — all indications of a thyroid imbalance, said the family’s attorney, Ben Yeroushalmi, discussing the lawsuit. Her doctors from Garrison Family Medical Group never visited her, sending instead their nurse practitioner. He, like the nursing home employees, did not grasp the cause of her decline, although her thyroid condition was prominently noted in her medical records, the lawsuit said.

Three months after her return from the hospital, “she looked like a wet washcloth. She had no color in her face,” said Donna Jo Duncan, a daughter, in a deposition. Duncan said she demanded the home’s nurses check her mother’s blood pressure. When they did, a supervisor ran over and said, “Call an ambulance right away,” Duncan said in the deposition.

At the hospital, a physician said tests showed “zero” thyroid hormone levels, Deborah Ann Favorite, a daughter, recalled in an interview. She testified in her deposition that the doctor told her, “I can’t believe that this woman is still alive.”

Essa died the next month. The nursing home and the medical practice settled the case for confidential amounts. Cynthia Schein, an attorney for the home, declined to discuss the case beyond saying it was “settled to everyone’s satisfaction.” The suit is still ongoing against one other doctor, who did not respond to requests for comment.

Dangers In Discouraging Hospitalization

Out of the nation’s 15,630 nursing homes, one-fifth send 25 percent or more of their patients back to the hospital, according to a Kaiser Health News analysis of data on Medicare’s Nursing Home Compare website. On the other end of the spectrum, the fifth of homes with the lowest readmission rates return fewer than 17 percent of residents to the hospital.

Get The Data

Safely Home Or Back To The Hospital?

Download the data to see how skilled nursing homes in the U.S. performed on two metrics of quality.

Many health policy experts say that spread shows how much improvement is possible. But patient advocates fear the campaign against hospitalizing nursing home patients may backfire, especially when Medicare begins linking readmission rates to its payments.

“We’re always worried the bad nursing homes are going to get the message ‘Don’t send anyone to the hospital,’” said Tony Chicotel, a staff attorney at California Advocates for Nursing Home Reform, a nonprofit based in San Francisco.

Richmond Pines, where Sandra Snipes stayed, has a higher-than-average rehospitalization rate of 25 percent, according to federal records. But the family’s lawyer, Kyle Nutt, said the lawsuit claimed the nurses initially resisted sending Snipes back, insisting she was “just drowsy.”

After Snipes was rehospitalized, her blood thinner was discontinued, her hip was reset, and she was discharged to a different nursing home, according to the family’s lawsuit. But her hospital trips were not over: When she showed signs of recurrent infection, the second home sent her to yet another hospital, the lawsuit alleged.

Ultimately, the lawsuit claimed that doctors removed her prosthetic hip and more than a liter of infected blood clots and tissues. Nutt said if Richmond Pines’ nurses had “caught the over-administration of the blood thinner right off the bat, we don’t think any of this would have happened.”

Snipes returned home but was never able to walk again, according to the lawsuit. Her husband, William, cared for her until she died in 2015, her daughter, Clark, said.

“She didn’t want to go back into the nursing home,” Clark said. “She was terrified.”


KHN’s coverage of these topics is supported by
John A. Hartford Foundation and
Gordon and Betty Moore Foundation

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Travelling abroad? Check your health coverage first!

If you’re travelling abroad, there’s a lot to do before you leave. There are suitcases to pack, an itinerary to plan, and perhaps a passport to renew. We want you to have a fun, relaxing trip—so don’t forget to include health coverage on your to-do list.

If you have Original Medicare, Medicare covers your health care services and supplies when you’re in the U.S., which includes Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

But, if you plan to travel overseas or outside the U.S. (including to Canada or Mexico), it’s important to know that in most cases, Medicare won’t pay for health care services or supplies you get outside the U.S. (except in these rare cases).

That doesn’t mean you have to travel without coverage. There are several ways you can get health coverage outside the U.S.:

  1. If you have a Medigap policy, check your policy to see if it includes coverage outside the U.S.
  2. If you get your health care from another Medicare health plan (rather than Original Medicare), check with your plan to see if they offer coverage outside the U.S.
  3. Purchase a travel insurance policy that includes health coverage.

Check with your policy or plan before traveling and make sure you understand what’s covered outside the U.S. For information on other foreign travel situations (like a cruise, dialysis, or prescription drugs) you can watch this video.

Taking the time to plan out your health coverage before you travel abroad will help you to have a more enjoyable and relaxing trip. For more information on how to stay healthy abroad, visit the Centers for Disease Control’s Traveler’s Health page.

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Podcast: KHN’s ‘What The Health?’ Health Care Politics, Midterm Edition

The 2018 midterm elections were supposed to be a referendum on President Donald Trump, not about issues such as health care. Still, voters, Democrats and, to a lesser extent, Republicans seem to be keeping health care on the front burner.

The news from Medicare’s trustees that its hospital trust fund is on shakier financial footing than it was last year, hefty premium increases being proposed in several states and activity on Medicaid expansion all take on a political tinge as the critical elections draw closer.

Also this week, an interview with Matt Eyles, president and CEO of America’s Health Insurance Plans, the health insurance industry trade group.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Stephanie Armour of The Wall Street Journal, Alice Ollstein of Talking Points Memo and Rebecca Adams of CQ Roll Call.

Among the takeaways from this week’s podcast:

  • Outside Washington, concerns about health care accessibility and prices remain a big issue.
  • Democrats, looking toward the midterm elections in the fall, think that health care can be a potent issue for them. But many also believe that they can’t just run on complaints that the Republicans are sabotaging the Affordable Care Act. They are seeking to find a message that looks to the future.
  • Republicans see the plans by the White House to implement new regulations that allow expansion of association health plans and short-term health plans as a strong action that will thwart complaints that they haven’t fixed the ACA.
  • The states are beginning to release the initial requests from health insurers for premium increases. They vary substantially, but many appear to be partly attributed to the decision last year by Congress to repeal the penalty for people who don’t get insurance.
  • The report this week by the Medicare trustees that the hospital trust fund is closer to insolvency has ignited Democratic criticism of changes in health care law that were part of the GOP tax cut last year.
  • Arkansas has begun implementing its work requirements for healthy adults covered by the Medicaid expansion. It’s the first state to do that. But critics point out that those adults will have to register their work hours online only — and many do not have access to computers.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

Julie Rovner: Mother Jones’ “’Behave More Sexually:’ How Big Pharma Used Strippers, Guns, And Cash To Push Opioids,” by Julia Lurie

Alice Ollstein: Politico’s “Trump Seeks to Reorganize the Federal Government,” by Helena Bottemiller Evich and Andrew Restuccia

Rebecca Adams: ProPublica’s “Hundreds of Illinois Children Languish in Psychiatric Hospitals After They’re Cleared for Release,” by Duaa Eldeib

Stephanie Armour: Kaiser Health News’ “Outsiders Swoop In Vowing To Rescue Rural Hospitals Short On Hope – And Money,” by Barbara Feder Ostrov

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunes, Stitcher or Google Play.

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Medicare Financial Outlook Worsens

Medicare’s financial condition has taken a turn for the worse because of predicted higher hospital spending and lower tax revenues that fund the program, the federal government reported Tuesday.

In its annual report to Congress, the Medicare board of trustees said the program’s hospital insurance trust fund could run out of money by 2026 — three years earlier than projected last year.

A senior government official briefing reporters attributed the worsened outlook for Medicare to several factors that are reducing funding and increasing spending.

He said the trustees projected lower wages for several years, which will mean lower payroll taxes, which help fund the program. The recent tax cut passed by Congress would also result in fewer Social Security taxes paid into the hospital trust fund, as some higher-income seniors pay taxes on their Social Security benefits.

The aging population is also putting pressure on the program’s finances.

In addition, he said moves by the Trump administration and the GOP-controlled Congress to kill two provisions of the Affordable Care Act are also harming Medicare’s future. Those were the repeal of the penalties for people who don’t have insurance and the repeal of an independent board charged with reining in spending if certain financial targets were reached.

Marc Goldwein, senior vice president for the nonpartisan Committee for a Responsible Federal Budget, said it was not surprising to see the three-year shift in Medicare’s solvency since the trust fund operates on a narrow margin between revenue and expenses.

He said the change to the ACA’s individual mandate penalties, which takes effect next year, is expected to lead to millions more people going without health insurance. That in turn will leave hospitals with higher rates of uncompensated care. Some of those expenses are covered by a special Medicare fund paid to hospitals with larger numbers of uninsured patients.

The Medicare Part A hospital trust fund is financed mostly through payroll taxes. It helps pay hospital, home health services, nursing home and hospice costs.

Medicare Part B premiums — which cover visits to physicians and other outpatient costs — should remain stable next year, the trustees said. About a quarter of Part B costs are paid for by beneficiary premiums with the rest from the federal budget.

In a separate report, the government said that Social Security would be able to pay full benefits until 2034, the same estimate as last year. The Social Security Disability Insurance Trust Fund was projected to have sufficient funds until 2032, four years later than forecast last year.

Treasury Secretary Steven Mnuchin downplayed any pending crisis, although he acknowledged Medicare faces many long-standing economic and demographic challenges.

“Lackluster economic growth in previous years, coupled with an aging population, has contributed to projected shortages for both Social Security and Medicare,” he said in a statement. https://home.treasury.gov/news/press-releases/sm0404

Mnuchin vowed that the Trump administration’s efforts to cut taxes, ease federal regulations and improve trade deals would help both Medicare and Social Security survive over the long term.

“Robust economic growth will help to ensure their lasting stability,” he said.

Critics, however, doubt the economy will grow fast enough to fix Medicare.

The top Democrat on the House Ways & Means Committee, Rep. Richard Neal (Mass.), blamed the Trump administration for Medicare’s deteriorating outlook.

“Administration policies in President Trump’s first year have reduced the life of the Medicare trust fund by three years,” he said. “With their repeated efforts to sabotage the nation’s health care system, including their irresponsible tax law, congressional Republicans and President Trump are purposefully running Medicare into the ground.”

Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a statement the report should spur Congress to act on Trump’s budget plan to cut Medicare spending during the next decade, mostly by reducing payments to doctors, nursing homes and other providers.

“These proposals, if enacted, would strengthen the integrity of the Medicare program,” she said.

Breaking from tradition, none of the Medicare trustees — which include Mnuchin, Health and Human Services Secretary Alex Azar and Secretary of Labor Alexander Acosta — spoke to the press after releasing the report. A spokesman said they had “scheduling conflicts.”

The Medicare trustees said the trust fund will be able to pay full benefits until 2026 but then it will gradually decline to be able to cover 78 percent of expenses in 2039.

Medicare provides health coverage to more than 58 million people, including seniors and people with disabilities. It has added 7 million people since 2013.

Total Medicare expenditures were $710 billion in 2017.

Juliette Cubanksi, associate director of Kaiser Family Foundation’s Medicare Policy Program, cautioned that the report doesn’t mean Medicare is going bankrupt in the next decade but Part A will only be able to pay 91 percent of covered benefits starting in 2026. (KHN is an editorially independent program of the foundation.)

She noted that Congress has never let the trust fund go bankrupt. In the early 1970s, the program came within two years of insolvency. But the 2026 estimate marks the closest the program has come to insolvency since 2009, the year before the Affordable Care Act was approved.

Joe Baker, president of the Medicare Rights Center, said Congress still has plenty of time to act without making changes that harm beneficiaries.

“I worry about fear mongering and the need to do something radical to the program,” he said.

Update: This story was updated at 6:52 p.m. to add more details from the report and comments from experts.

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A Hospital ER Charges An ‘After-Hours’ Fee. Who Has To Pay It?

This week, I responded to readers who were unhappy with their health plan’s decision not to pay an emergency department surcharge for after-hours care and concerned about difficulties getting Medicare to cover claims unrelated to a workers’ compensation injury. Another reader asked about a recently announced hardship exemption from the requirement to have health insurance.

Q: I visited a local emergency room one night after I had a severe allergic reaction that caused intense itching, hives, swelling and blistering. Now I received an “explanation of benefits” notice from my insurer that I will be billed by the in-network hospital for “after-hours” service. My insurer does not cover that charge. I am so enraged. Is there anything I can do to get the hospital to remove the charge?

Tacking on an after-hours surcharge to an emergency department bill strikes some consumers as unfair, since the facilities are open 24 hours a day.

The practice is “pretty rare” but defensible, said Dr. Paul Kivela, an emergency physician in Napa, Calif., who is president of the American College of Emergency Physicians. He noted that the cost to staff an emergency department at night is higher than by day. The surcharge is typically modest, often less than $100, experts say.

But that’s neither here nor there. The extra charge should have been built into the overall rate, said Betsy Imholz, special projects director for Consumers Union, an advocacy group. “It’s infuriating,” she said. “I don’t blame [the patient] for being annoyed.”

Just because your health plan is balking now at paying the surcharge, that may not be the final word. Hospitals and insurers frequently sort out these surcharges between themselves, without holding patients responsible, said Richard Gundling, a senior vice president at the Healthcare Financial Management Association, an industry group.

“If it’s an in-network provider, an insurer is generally responsible for addressing the billing of that code under its negotiated contract with the providers,” Gundling said.

Medicare beneficiaries are not responsible for paying the surcharge.

If the hospital pursues the patient to pay the charge, Imholz recommended that consumers file an appeal with their health plan, noting that appeals on many issues are frequently successful.

Q: I fell in 2015 and my injuries are being covered by the workers’ compensation program. It pays only the claims that are related to my back and neck injuries. But Medicare has been refusing all the claims it receives, including a hospital stay for an acute asthma attack as well as routine visits to my primary care physician. The program states that these claims are the responsibility of workers’ comp. What can I do?

Your workers’ compensation insurer is the “primary payer” for medical bills that are related to your work-related injury. Medicare is responsible for your other medical care.

Without more information, it’s impossible to know exactly why Medicare is denying your claims for medical care that’s not related to your work injury.

However, the problem may be rooted in the mandatory data-reporting requirements that the federal Centers for Medicare & Medicaid Services put in place about a decade ago, said Darrell Brown, an executive vice president and chief claims officer at Sedgwick Claims Management Services.

Under the federal rules, insurers and plan administrators have to report claims data about Medicare beneficiaries who are also covered by a group health plan or who receive payments under workers’ compensation, among other things. The aim is to ensure that the Medicare program isn’t acting as a primary payer on some claims when another health plan or program should be doing so.

“My guess is that there’s something that went wrong with that reporting,” Brown said. “There’s so much data that they’re getting, and there’s so much room for error as well.”

Start by contacting the number or person on the notice you received from the Medicare program denying your claim, Brown said. You may also have to contact the workers’ compensation carrier. But your first step should be to find out why the Medicare program mistakenly believes that your asthma hospitalization and other care is related to your workers’ comp injury.

Q: Why is there a new exemption from the penalty for not having health insurance if you live in a bare county with no marketplace insurers? There aren’t any of those and next year there’s no penalty, so what’s the point? 

As you note, starting next year, people will no longer owe a penalty for not meeting the Affordable Care Act’s requirement of having health insurance.

People will, however, be able to apply to the marketplace for a hardship exemption if they live somewhere where there are no marketplace insurers. That may give them another option for coverage.

People who qualify for a hardship or affordability exemption can receive an “exemption certificate number,” often referred to as an ECN, which will allow them to buy a catastrophic plan that meets health law standards and is typically available only to people under age 30, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities.

These ACA-compliant plans may be purchased off the exchange, even if no insurers are selling marketplace plans in a particular area.

Catastrophic plans cover the essential health benefits. They often have lower premiums than plans on the health law’s marketplace, but their deductibles are comparatively very high and people can’t receive premium tax credits to pay for them. The high out-of-pocket costs may explain why they haven’t been popular. Fewer than 1 percent of marketplace enrollees picked one in 2018.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

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Even “healthy” guys need health screenings

Are you the type of guy who puts off doing a task and later wishes he’d just done it? Do you think that if you don’t feel ill, then everything must be fine? If you’re a man with Medicare, now’s the time to talk with your doctor about whether you should get screened for prostate cancer, colorectal cancer, or both. Screening tests can find cancer early, when treatment works best.

Don’t put off screenings if you’re worried about the cost—if you’re a man 50 or over, Medicare covers a digital rectal exam and a prostate specific antigen (PSA) test once every 12 months. Also, Medicare covers a variety of colorectal cancer screenings—like the fecal occult blood test, flexible sigmoidoscopy, or colonoscopy—and you pay nothing for most tests.

Prostate cancer is the most common cancer in men, second only to lung cancer in the number of cancer deaths. Not sure whether you should get screened? You’re at a higher risk for getting prostate cancer if you’re a man 50 or older, are African-American, or have a father, brother, or son who has had prostate cancer.

Colorectal cancer is also common among men—in fact, it’s the second leading cause of cancer-related deaths in the United States among cancers that affect both men and women. If everyone 50 to 75 got screened regularly, we could avoid as many as 60% of deaths from this cancer.

In most cases, colorectal cancer develops from precancerous polyps (abnormal growths) in the colon or rectum. Fortunately, screening tests can find these polyps, so you can get them removed before they turn into cancer. If you’re 50 or older, or have a personal or family history of colorectal issues, make sure you get screened regularly for colorectal cancer.

June is Men’s Health Month. It’s the perfect time for you to take the steps to live a safer, healthier life. Watch our video on how Medicare has you covered on colorectal cancer screenings, and visit the Men’s Health Network website on Men’s Health Month for more information.

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