'When compared with non–safety net hospitals, safety-net hospitals were confronted with more concentrated financial losses,' report says.
California's 348 hospitals booked "highly variable” financials during the first 18 months of the COVID-19 pandemic, with many maintaining positive margins despite a virtual shutdown of profitable elective surgeries and procedures.
However, the state's safety net hospitals (SNH) did not fare well and lost more than $3.2 billion between January 2020 and June 2021, a new study in JAMA Health Forum shows.
"When compared with non–safety net hospitals, safety-net hospitals were confronted with more concentrated financial losses,” the report says.
For all hospitals, the operating margin decreased from 2.8% in 2019 to 0.4% in 2020 then rebounded to 1.3% in the first 6 months of 2021. However, safety net hospital margins did not recover in 2021 and were negative in 2020 and 2021. A similar pattern was found for total margin.
"For non-SNHs, operating margin was negative only in the first and second quarters of 2020 and quickly returned to positive levels comparable to pre–COVID-19 quarters,” the report says. "In comparison, operating margin for SNHs decreased substantially from the first quarter of 2020 to the second quarter of 2020 and remained lower than pre–COVID-19 quarters for the sample periods.”
Using state-compiled Hospital Quarterly Financial and Utilization Data, researchers from Cal State Fullerton and UNC-Wilmington focused on operating income and net income and found that non-SNHs saw reduced profits at the onset of the pandemic but were able to "mitigate more detrimental fiscal consequences” thanks largely to federal COVID-19 relief funding and strong equities market investments.
The early months of the pandemic saw a virtual lock-down in care delivery nationwide as hospitals cancelled or postponed elective surgeries and other acute and non-emergency care, which generally account for nearly two-thirds of revenues.
Increased admissions for COVID patients might have partially offset lost revenue from other procedures, but the American Hospital Association estimated a total loss of $202.6 billion by U.S. hospitals between March and June 2020.
To soften the blow, the federal Provider Relief Fund in April 2020 advanced hospitals serving Medicare 2% of their previous year's patient revenue and targeted $10 billion for safety-net hospitals and providers serving a high proportion of Medicaid patients.
The Feds also provided a 20% increase in Medicare payments for patients with COVID-19, loans through the Medicare Accelerated and Advance Payment Programs and the Paycheck Protection Program, state-funded increases in Medicaid payments in many states, and reimbursements to health care organizations for testing, treatment, and vaccination of uninsured patients.
Auditors say the increase coincided with an overall increase in Medicaid enrollment during the first year of the pandemic.
The value of improper Medicaid capitation payments made by states to managed care providers for beneficiaries who were already enrolled in Medicaid programs in other states increased by 60% between 2019 and 2020, the first year of the coronavirus pandemic, federal auditors say.
The Department of Health and Human Services Office of the Inspector General found that 47 state Medicaid agencies made improper capitation payments for beneficiaries enrolled in Medicare and living in other states totaling $117 million in August 2020, compared with $73 million in August 2019.
Volume-wise, OIG says capitation payments to MCOs were made for 208,254 concurrently enrolled beneficiaries in August 2019 and 327,497 concurrently enrolled beneficiaries in August 2020.
"The significant increase in these payments from August 2019 to August 2020 coincided with an overall increase in Medicaid enrollment during that time, and new federal requirements and flexibilities that were available to states during the COVID-19 public health emergency," OIG says.
Auditors compared Centers for Medicare and Medicaid Services' Transformed Medicaid Statistical Information System (T MSIS) data from 45 States, the District of Columbia, and Puerto Rico and identified all August 2019 and August 2020 capitation payments made by two states for the same beneficiary. The audit covered $145.7 million and $234.2 million in Medicaid capitation payments for August 2019 and August 2020, respectively, made by states for beneficiaries who were concurrently enrolled in Medicaid managed care in two states during July through September 2019 and July through September 2020.
"Two states often made capitation payments for the same Medicaid beneficiary in part because states did not have full access to data they needed to identify beneficiaries who were concurrently enrolled in another state," the audit says. "Therefore, CMS does not take all available steps, either directly or through the states, to identify and prevent state capitation payments for non-resident beneficiaries."
Auditors recommend that CMS monitor beneficiaries' concurrent Medicaid MCO enrollments, rather than rely upon individual states to do so and provide states with T-MSIS national enrollment data to help them check their rolls for redundancies.
CMS acknowledge the problem with the double payments, but did not concur with the recommendations and says that T-MSIS monitoring could prove "redundant, inefficient, and confusing to states." Instead, the agency said it will continue to rely on states and provide guidance and technical help as needed.
The soon-to-be shuttered hospitals in southeastern Pennsylvania, owned by Prospect Medical Holdings, Inc., will reopen as outpatient and behavioral health venues by the end of 2022.
Citing "post-pandemic operational realities," Crozer Health on Wednesday said it will close two acute-care hospitals – including emergency departments -- in southeastern Pennsylvania within 60 days and transition the venues into new care roles.
Delaware County Memorial Hospital in Drexel Hill, PA, will transition into a behavioral health hospital with more than 100 inpatient beds. Springfield Memorial Hospital in Springfield, PA, will transition to outpatient only services, including imaging, urgent care, and minor surgeries, and will house physician offices. Those transitions are expected to be completed sometime in 2023.
Taylor Hospital in Ridley Park and Crozer-Chester Medical Center in Upland will remain acute-care hospitals.
"What we've done is assess what those needs are in partnership with physicians, the community, and local leaders," Crozer Health CEO Anthony Esposito said in a media release. "Through this engagement, we determined that access to community-based, high-quality, safe, and effective services are key to being responsive to the community while also addressing the changing nature of healthcare today."
Wednesday's announcement comes one month after Crozer, a for-profit system owned by LA-based Prospect Medical Holdings, Inc., cancelled merger talks with Wilmington, DE-based ChristianaCare Health System, Inc. The two systems at the time blamed a shifting "economic landscape" for healthcare services.
Crozer says it will also continue its previously announced systemwide transition to not-for-profit status.
"We've looked at how we can provide better access to care for our patients, especially the most vulnerable, while not ignoring the pressures hospitals are facing in this post-pandemic world," said Crozer CMO Dina Capalongo, DO. "We will refine alternate care models and technology to enhance this access."
The affiliation builds on existing services provided by both health systems in Tangipahoa Parish and the Northshore region, and which are provided now by Children's at North Oaks Medical Center in Hammond, including neonatology, pediatric hospitalist coverage and pediatric cardiology services.
The expanded affiliation will explore new expansion opportunities for Children's Hospital specialty pediatric services at North Oaks, which the two systems say willl improve access for patients and their families in the area north of New Orleans.
Michele Kidd Sutton, president and CEO of North Oaks, says the affiliation can "fulfill our mission of improving lives, every time, with each touch for children of the Northshore."
"We intend to build upon our existing relationship and enhance our pediatric service line through the addition of pediatric subspecialists and development of new pediatric services at North Oaks Medical Center and in the surrounding communities across multiple phases," she says.
"We intend to build upon our existing relationship and enhance our pediatric service line through the addition of pediatric subspecialists and development of new pediatric services at North Oaks Medical Center and in the surrounding communities across multiple phases."
In addition to managing North Oaks' pediatric service line, Children's Hospital will take on staff and management of pediatric hospitalist services at North Oaks that support a pediatric acute care unit and newborn examinations, along with neonatology and other sub-specialty services to support the NICU.
Hammond-based North Oaks includes a 330-bed acute care hospital, a Level II trauma center, a stroke center, a 27-bed medical rehab hospital, a freestanding surgical center, two diagnostic centers and the most comprehensive multispecialty provider clinic in the region.
Children's recently completed $300 million in capital improvements on its 257-bed, academic pediatric medical center in New Orleans. The system has partnership with LSU Health New Orleans and Tulane University School of Medicine and operates outpatient clinics across Louisiana and the Gulf South, including 12 primary care clinics and nine specialty clinics from Lake Charles to Bay St. Louis, Mississippi.
The clinic says it will also ensure that employees will get their pay and benefits.
With Medi-Cal suspending payments at the end of the month, Borrego Community Health Foundation has filed for Chapter 11 protection with a federal bankruptcy court in the Southern District of California, the Borrego Springs-based clinic has announced.
The filing comes after the August 19 notification from the California Health and Human Services Agency – Department of Health Care Services that it will reimpose its 100% payment suspension on all Borrego Health Medi-Cal services beginning Sept. 29.
The Chapter 11 process prevents the DHCS action from taking effect as the non-profit Federally Qualified Health Center contends with ongoing state and federal investigations.
In the interim, Borrego Health will continue operations and patients will have the same access to providers and services with no interruption of care. The clinic says it will also ensure that employees will get their pay and benefits.
“Unfortunately, the misguided action by DHCS jeopardizes patients and has led us to make a difficult decision to protect our patients and their access to care,” Borrego Health CEO Rose MacIsaac says. “Our mission to provide high-quality local access to those most in need drives us forward and this filing with the court will allow us to continue to provide care as we do today while we secure the future of healthcare for our patients.”
Borrego clinics include Centro Medico in several cities, Palm Springs Family Health, Stonewall Medical Center in Cathedral City and the new Coachella Valley Community Health Center.
Borrego has seen a lot of turmoil within the past two years, as it contends with fraud and abuse allegations. In October 2020 state and federal agents seized computers and medical records after local media raised questions about the clinic’s business practices and exorbitant salaries of more than $100,000 for more than 200 employees, including a $1.9 million retirement bonus for former CEO Bruce Hebets. Medi-Cal temporarily suspended payments to the clinic in December 2020 while state regulators conducted a fraud investigation.
In August, the Borrego foundation board filed suit in federal court in San Diego against several former executives, board members and contractors for allegedly engaging in racketeering.
Shannon Bradley will develop strategies to recruit a diverse workforce and ensure culturally sensitive care for patients.
Former HCA Healthcare executive Shannon Bradley has been named Keck Medicine USC's first chief diversity and inclusion officer, effective Sept. 26.
Previously, Bradley was the assistant vice president/division director of diversity, equity and inclusion for HCA's Gulf Coast Division in Houston, where she increased the diversity of the health system’s board members for Asian and Black members by 45% and 24% respectively.
At Keck, Bradley will develop strategies to recruit a diverse workforce and ensure culturally sensitive care for patients, and will lead diversity, equity and inclusion efforts already in progress at the health system and create and track metrics to measure these efforts, the health system says.
"With Bradley onboard, we are confident that Keck Medicine can progress even further on its journey to inclusion," says Smitha Ravipudi, MPH, CEO of USC Care Medical Group and chair of Keck Medicine's Diversity & Inclusion Steering Committee. "Together, we will create a lasting road map for change."
The House Subcommittee on Oversight raises concerns about the for-profit health system's billing practices and reports of chronic understaffing.
A House subcommittee wants federal watchdogs to investigate questionable emergency department admissions by HCA Healthcare hospitals that may have cost Medicare $1.8 billion.
"In light of reports that there may be misconduct and potentially the improper shifting of taxpayer dollars, I ask that HHS launch an investigation into the allegations leveled against HCA regarding its emergency department admissions practice, including its joint venture with EmCare," Pascrell says in his letter to Becerra. "As HCA is the largest health system in America, transparency and oversight are essential to ensuring that hospitals, like those in HCA's system, are honest stewards of taxpayer dollars."
HCA pressed for admissions policies
In a separate, four-page, footnoted letter this week to HCA CEO Samuel Hazen, Pascrell raised concerns about "alleged fraud and staffing issues at HCA facilities."
"As HCA is the largest health system in America, transparency and oversight are essential to ensuring that hospitals like those in your system are appropriate stewards of taxpayer dollars," Pascrell says in his letter to Hazen. "Recent reports of systematic unnecessary inpatient admissions intended to draw higher and more profitable reimbursement rates, in addition to severe understaffing issues, raise questions about HCA's corporate policies and practices."
Pascrell notes that HCA – the largest health system in the nation – "sets the pace for both for-profit and not-for-profit hospitals in the United States."
"HCA's profits in 2021 were almost $7 billion, up nearly 100% in one year. This is welcome news for your shareholders, since HCA repurchased $8.2 billion worth of its shares in 2021 and recently authorized an additional $8 billion of share repurchases, all during the COVID-19 pandemic. Yet this single-minded focus on profits might be bad news for patients, families, workers, Americans taxpayers, and the Medicare program."
Pascrell cites recent media reports that patients in HCA emergency departments are being admitted for inpatient stays "regardless of medical necessity."
"One recent report estimates that these unnecessary admissions by HCA may have charged $1.8 billion in excess amounts to the Medicare program from 2008-to-2019," Pascrell says.
"I am especially alarmed by these findings given HCA's history of healthcare fraud settlements with both federal and state authorities," Pascrell says, pointing to a $1.7 billion settlement in the early 2000s to resolved criminal counts and civil fraud allegations that occurred when now U.S. Sen. Rick Scott was CEO. It was at the time the largest health care fraud in U.S. history.
There have also been allegations that HCA sets corporate admission targets and threatens retaliation against staff if those targets are not met, Pascrell says.
The congressman also raised concerns that HCA was in cahoots with its contracted physician staffing firm EmCare, a subsidiary of the private-equity-owned Envision Healthcare, in setting and meeting admissions targets.
He asked Hazen to provide by Sept. 27 explanations of several HCA practices including:
Incentives for physicians practicing in HCA hospitals relating to the admission or referrals of inpatients, including value-based measures, job termination policies or loss of admitting privileges for all employed and contracted physicians.
Performance data for all employed and contracted physicians, including the volume or value of referrals or admissions and value-based measures.
Details of HCA internal reviews to ensure that care is medically necessary, and that Medicare is not being billed for unnecessary services, including the scope and frequency of reviews, the identity the HCA official overseeing the reviews, and any memorandum describing specific compliance failures.
To address reports of chronic understaffing at HCA hospitals, Pascrell asked Hazen to describe: how the number of physicians, nurses, and other staff needed to provide medically necessary care to patients is determined; any role that financial metrics or financial targets play in the setting of staffing levels; the extent to which the cost of employees' salaries, wages, and benefits factor into the determination of bonus compensation for corporate, regional, and hospital executives, and how that compares with the role of other cost centers considered in that determination; whether decisions about how many and which employees are assigned for shifts are made at the hospital department level, hospital level, regional level, or corporate level; and which measures of staffing are monitored by HCA corporate staff.
HCA Responds
HCA issued a statement saying it was "reviewing Congressman Pascrell's letter and will respond to his requests for information."
"The issues raised in the letter appear to be similar to ones we addressed previously and publicly," HCA says. "HCA Healthcare operates more than 180 hospitals in a variety of communities throughout the country. Our hospitals are staffed by physicians, clinicians and nurses who work tirelessly to ensure our patients receive medically necessary care in the appropriate clinical setting. We believe that our operational processes and procedures are working well and that we are meeting the healthcare needs of our patients and communities."
"We are proud of our response to the pandemic, during which we cared for more COVID-19 patients than any other health system," HCA says. "We were one of the only, if not the only, health system to return all of our portion of the federal CARES Act funding to the government, which was approximately $6 billion. We are grateful to our colleagues who show up in every way to serve the healthcare needs of our communities."
The health systems says it spent $250 million on programs to ensure that none of our employees would be furloughed or laid off due to the pandemic, that it was again named one of Ethisphere's Most Ethical Companies for the 11th time and was recognized on the 2021 LinkedIn Top Companies rankings
A former physician at the prestigious health system endangered patients when he unnecessarily replace batteries for implanted difibrillators.
New York-Presbyterian/Queens Hospital will pay more than $2.5 million after the prestigious health system self-reported that it billed Medicare for medically unnecessary replacements of batteries powering implanted defibrillators, the Department of Justice says.
According to federal regulators, a former physician -- who was not named in the DOJ’s media notice -- repeatedly replaced patients’ implantable cardioverter defibrillator batteries before they reached the elective replacement interval (ERI) that is determined by dedicated computer monitors.
“Such batteries were functioning normally. He therefore subjected his patients to unneeded and risky surgical procedures. New York-Presbyterian/Queens then submitted claims for payments to federal health care programs for these procedures,” DOJ says. “Physicians closely monitor the functioning of ICD batteries so that they replace the batteries when they are nearing the end of their lives, but no earlier. That way, physicians can balance the risks associated with a failing ICD battery against the risk of the procedure needed to replace that battery.”
When New York Presbyterian billed Medicare for the unneeded procedures it violated the False Claims Act, DOJ says.
After an internal investigation, New York-Presbyterian/Queens voluntarily self-disclosed the infractions to the Department of Health and Human Services, Office of Inspector General.
New York Presbyterian did not return HealthLeaders' request for comment. The health system was recently placed among the nation's Top 10 hospitals in 2022-23 by U.S. News & World Report.
OIG auditors were unable to determine if an additional $112 million in non-emergency medical transportation claims complied with state and federal requirements.
Federal auditors say New York City should refund $84.3 million to Medicaid after inspectors uncovered widespread noncompliance and sloppy documentation in claims for non-emergency medical transportation.
The audit examined 4,768,858 payments totaling $269,584,249 (federal share) for NEMT services in 2018 and 2019. Inspectors found that only 17 of the 100 payments picked in a random sampling complied with state and federal requirements. Forty-one samples did not comply and auditors could not determine compliance for the remaining 42 samples.
"On the basis of our sample results, we estimated that New York improperly claimed at least $84,329,893 in Federal Medicaid reimbursement for payments to NEMT providers that did not comply with certain Federal and State requirements," OIG says. "In addition, we estimated that New York claimed $112,028,279 in Federal Medicaid reimbursement for payments to NEMT providers that may not have complied with certain Federal and State requirements.
The auditors recommend that New York City refund $84,329,893 to the federal government for the noncompliant payments and further audit the $112,028,279 in questionable payments and refund any money that was inappropriately billed.
In a written response to the audit, New York Department of Health Acting Executive Deputy Commissioner Kristen M. Proud did not comment on the specific recommendations but asked auditors to withdraw the refund request and provide additional documentation for 28 sampled payments.
"Because of the enormous number of people transitioning transportation managers, and the state's moral obligation to ensure that there would be no interruptions in the delivery of medical services, the department directed the new transportation managers to accept the level of transportation previously established for each enrollee," Proud says in a letter to HHS Regional Inspector General Brenda Tierney.
"Neither State statute nor regulation defines a specific period of time for which the written order specifying the appropriate mode is valid," Proud writes. "Based on the foregoing information and the details below, the Department requests that the repayment request be withdrawn from the audit report.
The LA hospital identified 15 cancer disparities in the county and are designing interventions to address them.
Los Angeles County residents experience varying cancer risks and survival rates based on race/ethnicity, gender, sexual orientation, geographic location and socioeconomic status, according to a new study from Cedars-Sinai Cancer.
Investigators at the Los Angeles hospital identified 15 cancer disparities in the county and are now designing and initiating interventions to address them.
The study, published in Frontiers in Oncology, found that: Latinos have higher rates of some cancers, including liver cancer and late-stage melanoma than non-Latino whites. Rates of breast cancer among Korean women have grown more faster than among other groups. Black people have higher rates of prostate cancer, triple-negative breast cancer and pancreatic cancer. Filipinos have higher rates of thyroid cancer. Self-described LBGTQ+ people have higher rates of "well-known risk factors" for lung cancer and HPV-related cancers (i.e., smoking, low HPV vaccination). Low-income whites have an increasing rate of late-stage melanoma.
The study is part of a two-year initiative to define and identify Cedars-Sinai's patient mix and develop effective strategies to reduce cancer care disparities.
Investigators reviewed cancer data from national, statewide and county sources, and created a survey asking county residents about their cancer screening behaviors, medical history and healthcare access. So far, 3,200 people have completed the surveys.
"These surveys help us understand barriers that people in L.A. County face that prevent them from getting screened for cancer," said Zul Surani, director of Community Outreach and Engagement and Operations at the Cancer Research Center for Health Equity at Cedars-Sinai. "By creating relationships with churches, health clinics, nonprofits and other community organizations, we are learning how to help people overcome these barriers."
For example, investigators discovered that mammography rates among Korean women in L.A. are low and that not having health insurance and not feeling sick were top barriers to getting screened. Their analysis of cancer registry data revealed that L.A. County's Koreatown neighborhood has one of the densest concentrations of late-stage breast cancer in the county.
"The next step is to increase the inclusion of people who identify with racial and ethnic groups who are underrepresented in cancer clinical trials," said senior author of the study Robert W. Haile, DrPH, MPH, director of the Cancer Research Center for Health Equity and the Cedars-Sinai Chair in Population Health Sciences. "By making our study populations more diverse, we'll have a better understanding of the effectiveness of cancer treatments."