18 February 2010
California Edition
Calendar
February 25-26
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
Inland Empire Inches Toward A RHIO
10 Bidders Interested, But Funding Remains Big Issue
Providers in the Inland Empire are moving Green says that an IT contractor
toward the formation of a regional health typically charges implementation fees of
$200,000 to $500,000, plus an ongoing
information organization (RHIO) to better
provide coordinated patient care to the far- operational fee that is usually several
flung area, but raising money for the effort dollars each month for each patient
could prove a formidable obstacle. being cared for by the providers
The Inland Empire involved.
Health Information “It’s millions of dollars,”
Technology Coalition has Inland Empire RHIO Bidders says Christina Bivona-
solicited ten potential Axolotol Corp.
Tellez, regional vice
bidders from a recently- Medicity president for the Hospital
issued request for Carefix Association of Southern
proposals, attracting Excita California, which has been
attention from some
Long Beach Health Network
convening meetings of all
Health Access Solutions
powerhouse IT firms such IntelliChart the coalition members.
as Microsoft. Information Corp. of America The potential payoff is
UAI immense, however. An
However, the
Microsoft Corp. integrated data exchange
coalition, which was
formed about a year ago network between providers
and includes 22 hospitals in the nation’s two largest
and 27 medical groups in Riverside and counties – where some hospitals are
San Bernardino Counties, may take a step nearly 200 miles apart – could reduce
back first and hire a consultant to ponder costs significantly. Bivona-Tellez says
its options for raising capital. that most providers are investing in
“What we hope to do is to be able to electronic health records, but have no
hire a consultant that has successfully way of sharing them with other hospitals
implemented a health information or physician groups.
exchange in other communities,” says “It’s a very valuable tool in terms of
Dolores Green, executive director of the primary care,” says Green, noting that
Riverside County Medical Association. “We being able to exchange patient records
need to be able to get to a model that is
self-sustaining.” Continued on Next Page
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In Brief
Anthem Blue Cross
Delays Rate Increases
Anthem Blue Cross of California
has agreed to delay a rate increase
of as much as 39% for its individual
health plan enrollees.
The increase, which was to
have gone into effect on March 1,
will be stayed 60 days in order to
be reviewed by the California
Department of Insurance, Anthem
said late last week.
Anthem has come under fire
for the rate increases. Both state
and federal officials have asked for
reviews.
“Our decision to agree to
postpone the rate adjustment does
not change the underlying issue. All
health plans are in the same
situation in trying to deal with the
steadily increasing medical costs in
the delivery system, which are not
sustainable,” said Brian Sassi,
President of Anthem’s consumer
business unit, in a prepared
statement. “We are also
experiencing a higher proportion of
healthy individuals choosing not to
enroll, leaving an insured pool that
utilizes significantly more services.”
OSHPD Grants $1.7M
For Nurse, PA Training
The Office of Statewide Health
Planning and Development has
awarded $1.7 million in grants to
15 universities statewide to fund
training programs for nurse
practitioners and physician
assistants.
The grants, which were given
to both public and private
universities, ranged from $25,530
to $170,000. Recipients of the
largest grants were Cal State Long
Continued on Page 3
NEWS
Inland Empire (Continued from Page One)
would eliminate services that are often
duplicated when an Inland Empire
resident has to travel between providers.
Bivona-Tellez says startup funds for
the project could be raised by imposing a
fee on all the RHIO participants, or by
soliciting grant funds. One potential area
of capital might be stimulus funds from
the Obama Administration, which has
been encouraging the use of electronic
medical records and electronic
exchanges. The California e-Health
Collaborative (CAEHC) is the likeliest
conduit for such funds, she adds.
RHIOs, also known as health
information exchanges, have been
struggling in California to remain
Physical Therapists Criticize Anthem
Claim Payment Changes Will Hurt Practices, Care
Under re in recent weeks for attempts to
increase individual policyholder premiums as
much as 39%, Anthem Blue Cross of
California is now drawing criticism from
physical therapists for potentially cutting their
payments by as much as half.
According to the California Physical
Therapy Association and other sources,
Anthem will move on March 1 from a
discounted fee-for-service model for physical
therapists participating in its PPO network to
$75 per visit. As a result, therapists expect
average payments for their work to drop
signicantly.
Richard Katz, who operates physical
therapy practices in both Los Angeles and the
Bay Areas, estimates that the average
reimbursement has been close to $100 per
visit. “If you get into specialty care, such as
hand therapy, it goes much higher. This
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Page 2
operational in the long-term. The California
RHIO all but disbanded last year after being
in operation since 2005. Although it was
named as a co-finalist to act as a conduit
for federal funds, it could not reach an
agreement with CAEHC, the other co-
finalist, on how such an arrangement would
operate.
According to the CAEHC website, only
five of 14 planned RHIOs in California are
currently operating. Two others, in Santa
Barbara and San Jose, have ceased
operations.
“The price tag is so big to get started up
that we don’t want to make a mistake,”
Green says.
payment (from Anthem) will be regardless of
care,” he says.
Physical therapy provided via medical
groups or in hospitals will be excluded from
the payment change, according to Katz, who
sits on the CPTA board.
Katz also claims that Anthem dropped a
longtime provider of networked physical
therapsists, Calabasas-based PTPN, and will
network with individual practices directly.
PTPN ofcials were not immediately available
for comment.
Anthem conrmed the changes in
reimbursement through a written statement,
but would not comment further. “Under the
new structure if the amount paid to the
therapist is reduced then the member will
experience a corresponding decrease in their
out of pocket expense,” read a portion of the
statement.
Continued on Next Page
Payers & Providers
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In Brief
Beach, UC Davis, Cal State Fresno
and Sonoma State University.
“Each of these programs have
shown ongoing commitments in
training and preparing healthcare
professionals with the knowledge
and skills necessary to provide
culturally competent healthcare
that meets the needs of California’s
underserved populations,” says
OSHPD Director David Carlisle.
Three colleges – including
USC’s Keck School of Medicine –
also received grants of nearly
$100,000 apiece to provide
students with specific training in
mental health services.
SDSU Partners in $5M
Biotech Training Grant
San Diego State University and
three other partners have received
a $5 million grant from the U.S.
Department of Labor for a new
initiative to help grow the region’s
life sciences industry.
The Biotechnology Readiness,
Immersion, Certification and
Degrees for Gainful Employment
(BRIDGE) project will provide
education, training, and
placement services to more than
1,000 veterans and unemployed
workers in the San Diego area. The
program will work on enhancing
the number of clinical laboratory
scientists, medical laboratory
technicians, medical physicists,
and
professional scientists.
Along with SDSU, grantees
include the San Diego Workforce
Partnership, the Southern
California Biotechnology Center at
Miramar College and the trade
group Biocom.
The money is part of the
federal government’s nearly $800-
billion effort to stimulate the
economy.
NEWS
Physical Therapists (Continued from Page Two)
Physical therapists provide rehabilitative
care to patients with constricted motion,
particularly after spinal and limb surgeries, or
strokes.
Although Katz says he has a minimal
number of patients insured by Anthem Blue
Cross, he notes many practices rely on the
insurer for as much as 60% of their income.
He estimates that Anthem has contracts with
a network of about 1,000 physical therapists
statewide.
“This is going to have a huge impact on
literally hundreds of practitioners,” Katz says.
He adds that only PaciCare and United
HealthGroup have a per diem payment, but
those insurers often negotiate rates with
individual therapists. The CPTA, which
represents about 5,000 therapists statewide,
claims Anthem has refused to negotiate.
Christina Kauk, who is chief nancial
ofcer of a practice in Sonoma County, notes
Kaiser Reports Strong Rebound
Investment Bounce Puts it Back in the Black
Citing a bounceback of the nancial markets,
Kaiser Permanente’s health plan and hospital
system were able to return to the black during
2009.
The Oakland-based Kaiser posted fourth
quarter net income of $490 million on
revenues of $10.6 billion. That compares to a
loss of $996 million on revenues of $10
billion for the fourth quarter of 2008.
Aiding Kaiser’s bottom line was net non-
operating income of $276 million for the
quarter, compared to a net non-operating loss
of $1.1 billion in the fourth quarter of 2008.
Kaiser ofcials attribute that to a rebound of
the nancial markets.
“We are…pleased that our non-operating
income beneted from the partial recovery of
the nancial markets, and returned to a level
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Page 3
that many therapists dropped PaciCare and
United due to reimbursement issues, but given
that Anthem Blue Cross covers some 6 million
Californians, it is a much more difcult
decision.
“Anthem has a lot more clout than many
of the other plans,” she says, adding that her
practice would operate at a loss if it accepted
the per diem rate.
In addition to the nancial burden on
therapists, the CPTA suggests that it may also
affect patient care.
“Physical therapists are concerned that
Anthem's dramatic and unilateral reduction in
payment will have a substantial effect on the
quality of care being provided, as well as the
ability of therapists to continue to participate
in Anthem's network,” says CPTA President
Cheryl Resnick, a professor of biokinesiology
at the University of Southern California.
that more appropriately supports our
investments in our care delivery
infrastructure,” says Kathy Lancaster, Kaiser’s
executive vice president and chief nancial
ofcer. “Given the volatility in the nancial
markets and ongoing governmental actions
related to Medicare Advantage payment rates,
we are continuing to take prudent measures
to manage our operations and investments in
a responsible way.”
For calendar 2009, net income was $2.1
billion, compared to a $794 loss for calendar
2008. Of that, $524 million came from gains
in investments. That compares to an
investment loss of $2.3 billion in 2008.
Kaiser’s capital spending totaled $2.6
billion in 2009, compared to $2.9 billion in
2008.
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www.rfsconsult.com
Payers & Providers
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OPINION
A New Life For The Process Of Dying
To Address Subject, we Must Overcome Our Fears
Google “end-of-life care” and you will find
193 million entries. So surrounded by all
this information, why is the subject still
taboo for otherwise educated people to
discuss?
Increasingly the public is demanding
candor when it comes to their
healthcare so they can make
informed decisions about
everything from whether to get a
flu shot to various cancer
treatment options. But when it
comes to arguably the most
important decision they will ever
make -- how to live out their
final days -- there is a deafening
hush in the discussion. ! It
doesn’t need to be this way and it’s
time for all of us in the healthcare
arena to do something about it.
Let’s begin by openly
acknowledging that death is a part of
the natural life-cycle. Our patients and
members are best served by making sure
that they are prepared both logically and
emotionally and have the information
needed to make informed decisions on this
important topic.
It is an indisputable fact that education
trumps ignorance. A study published
January 10 in the Journal of Clinical
Oncology found that cancer patients who
watched a six-minute video explaining
lifesaving procedures, hospice care and
palliative care made far different choices
than those who didn’t watch.
By not addressing this issue openly we
are failing in our duties to truly provide
patient-centered care. For too long, there
has been a paralysis in discussing end of
life issues for reasons ranging from not
wanting to dash patients’ hopes (a false
belief) to the outdated incentives in
continuing to provide care to sincerely
believing that patients simply don’t want
to hear about these things.! But patients
want to understand their illness and how it
is likely to progress because only then can
they make knowledgeable choices. I
believe everyone who is part of the health
care system has a moral obligation to
speak with patients and families about
their goals of care, what modern medicine
realistically can and can’t achieve and
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Page 4
what options are available to each patient at
this time in their life.
A good place to start would be educating
more healthcare professionals on palliative
care so as to make the subject less queasy to
confront.! In 2005 70 percent of large
hospitals in the United States
reported having some palliative
care program in place, but most
of these programs are very small
and require primary care
physicians to make the referral,
which not enough are willing to
do.
Health plans can play an
important role by encouraging
members to have advance
By directives, designate a durable power
of attorney and have frank discussions
Dave with their doctors.! At SCAN Health
Schmidt Plan, we also make available the “Five
Wishes” which has become America’s
most popular living will and which is a
positive step in changing the way Americans
plans for care at the end of life.
!!!!!!In addition, we’ve embraced POLST
(Physician Orders for Life Sustaining
Treatment), a tool for patients with advanced
illness which captures one’s values and
preferences for treatment and facilitates
discussion between patients and doctors.! We
are working to train our case managers to
present POLST to appropriate members and
are also utilizing our website, our annual
Geriatric Symposium and other means to
engage physicians in this process.
There is mounting evidence that end of
life discussions lead to more contented
patients as such conversations help
individuals feel a sense of empowerment
rather than hopelessness.! Such a feeling
allows people to spend their last days with
the dignity and compassion that a lifetime of
living deserves.
Dave Schmidt is President and CEO of SCAN
Health Plan, the fourth-largest not-for-profit
Medicare Advantage Plan in the United States.
Op-ed submissions of up to 575 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com, or call
(877) 248-2360, ext. 3.
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