LOS ANGELES — They distribute GPS devices so they can track their homeless patients. They stock their street kits with glass pipes used to smoke meth, crack, or fentanyl. They keep company credit cards on hand in case a patient needs emergency food or water, or an Uber ride to the doctor.
These doctors, nurses, and social workers are fanning out on the streets of Los Angeles to provide health care and social services to homeless people — foot soldiers of a new business model taking root in communities around California.
Their strategy: Build trust with homeless people to deliver medicine wherever they are — and make money doing it.
"The biggest population of homeless people in this country is here in Southern California," said Sachin Jain, a former Obama administration health official who is CEO of SCAN Group, which runs a Medicare Advantage insurance plan covering about 300,000 people in California, Arizona, Nevada, Texas, and New Mexico.
"The fastest-growing segment of people experiencing homelessness is actually older adults," he said. "I said, ‘We've got to do something about this.'"
Jain's organization three years ago created Healthcare in Action, a medical group that sends practitioners onto California's streets solely to care for homeless people. It has grown rapidly, building operations in 17 communities, including Long Beach, West Hollywood, and San Bernardino County.
Since its launch, Healthcare in Action has cared for about 6,700 homeless patients and managed roughly 77,000 diagnoses, from schizophrenia to diabetes. It has placed about 300 people into permanent or temporary housing.
Street medicine in most of the country is practiced as a charitable endeavor, aimed at serving a challenging patient population failed by traditional medicine, its proponents say. Living transient, chaotic lives, homeless people suffer disproportionately from mental illness, addiction, and chronic disease and often don't have health insurance — or don't use it if they do.
That makes designing a business around caring for them a risk, insurance executives and health economists say.
"It's really innovative and entrepreneurial to take all this energy and grit to try and improve things for a population that is too often ignored," said Mark Duggan, a professor of economics at Stanford University who specializes in homelessness and Medicaid policy. "Financial incentives matter massively in health care. It's everything."
An estimated 181,000 people were homeless in California in 2023 — about 30% of the nation's total. The number living outside, more than two-thirds of California's total, increased 6.9% over the previous year.
The state's leaders, including Democratic Gov. Gavin Newsom, have struggled to make inroads against the mounting public health and political crisis — despite marshaling unprecedented taxpayer resources.
"We have a huge problem on our hands, and we have a lot of health plans and municipalities saying, ‘We need you,'" Jain said.
On the Streets
On a cloudy April morning in Long Beach, Daniel Speller navigated his mobile medical van among the tents and tarps that crowded residential streets, searching for a couple of homeless patients. A physician assistant for Healthcare in Action, Speller said he was particularly worried about the badly infected wounds they developed on their limbs after they used the street drug xylazine, an animal tranquilizer often mixed with fentanyl.
"These wounds are everywhere. It's really bad," Speller said. If infections progress, they can require toe, foot, or arm amputations.
"Man, this one is still so deep," Speller said as he peeled denim pants from the swollen leg of Robert Smith, 66.
After cleaning and wrapping Smith's leg, Speller asked him if he needed anything else. "I lost my food stamps," Smith replied.
Within the hour, Speller's team of social workers and nurses had summoned an Uber to take Smith to a state office, where he received a new CalFresh card.
Speller then turned his medical van onto a side street lined with more tents and cars-turned-shelters. Nick Destry Anderson, 46, was sleeping on the sidewalk and badly in need of wound care.
"I was so scared. I thought I was going to lose my leg before I met them," Anderson said, grimacing as Speller sprayed his leg with antibiotic mist. "These people saved my life."
Anderson reported feeling lightheaded, so Speller asked another team member to use the company credit card to get him a cheeseburger and a Sprite.
Many homeless people languish on the streets, so entrenched in mental health crises or addiction that they don't much care about seeing a doctor or taking their medication. Chronic diseases worsen. Wounds grow infected. People overdose or die from treatable conditions.
Part of street medicine is bandaging infected sores, administering antipsychotic injections, and treating chronic diseases. Street providers often hand out drug paraphernalia such as clean needles and glass pipes to reduce sharing and prevent infections. Perhaps more importantly, these workers build trust.
Getting homeless patients established with primary care doctors and nurses — who visit them on the streets, in parks, or wherever they happen to be — can prevent frequent and expensive emergency room trips and hospitalizations, potentially saving money for insurers and taxpayers, Jain argues. Even though shelter and housing are scarce, Healthcare in Action's goal is to get patients healthy enough to live stable, independent lives, he said.
But that's easier said than done. In West Hollywood that week in April, Healthcare in Action clinical coordinator Isabelle Peng found Lisa Vernon, a homeless woman, slumped over in her wheelchair at a busy bus stop. Vernon is a regular at nearby Cedars-Sinai Medical Center, Peng and her colleague David Wong said.
When Peng and Wong attempted to examine her swollen leg, Vernon shouted at them and declined aid. "Antibiotics aren't going to save my life!" Vernon yelled as a mouse scurried for the potato chip shrapnel at her feet.
They moved on to their next patient, a man they were tracking with a GPS device they sometimes affix to homeless people's belongings. Use of the devices is voluntary. They work better than cellphones because they less often get taken by law enforcement during encampment sweeps or stolen by thieves.
"Our patients really move around a lot, so this helps us go find them when we have to get them medication or do follow-up care," Wong said. "We have already developed rapport with these patients, and they want us to see them."
Growing Revenue
Street medicine teams are in demand, largely because of growing public frustration with homelessness. The city of West Hollywood, for instance, awarded Healthcare in Action a three-year contract that pays $47,000 a month. The nonprofit can also bill Medi-Cal, California's Medicaid program, which covers low-income people, for its services.
Mari Cantwell, a health care consultant who served as California's Medicaid director from 2015 until early 2020, said Medicaid reimbursements alone aren't enough to fund street medicine providers. To remain viable, she said, they need to take creative financial steps, like Healthcare in Action has.
"Medicaid is never going to pay high margins, so you have to think about how to sustain things," she said.
Healthcare in Action brought in about $2 million in revenue in its first year, $6 million in 2022, and $15.4 million in 2023, according to Michael Plumb, SCAN Group's chief financial officer.
Healthcare in Action and SCAN's Medicare Advantage insurance plan generate revenue by serving homeless patients in multiple ways:
Both are tapping into billions of dollars in Medicaid money that states and the federal government are spending to treat homeless people in the field and to provide new social services like housing and food assistance.
For instance, Healthcare in Action has received $3.8 million from Newsom's $12 billion Medicaid initiative called CalAIM, which allows it to hire social workers, doctors, and providers for street medicine teams, according to the state.
It also contracts with health insurers, including L.A. Care and Molina Healthcare in Southern California, to identify housing for homeless patients, negotiate with landlords, and provide financial help such as covering security deposits.
Healthcare in Action collects charitable donations from some hospitals and insurers, including CalOptima in Orange County and its own Medicare Advantage plan, SCAN Health Plan.
Healthcare in Action partners with cities and hospitals to provide treatment and services. In 2022, it kicked off a contract with Cedars-Sinai to care for patients milling outside the hospital.
It also enrolls eligible homeless patients into SCAN Health Plan because many low-income, older people qualify for both Medicaid and Medicare coverage. The plan had revenue of $4.9 billion in 2023, up from $3.5 billion in 2021.
"There's been an incredible market fit, unfortunately," Jain said. "You can't walk or drive down a street in Los Angeles, rich or poor, and not run into this problem."
Jim Withers, who coined the term "street medicine" decades ago and cares for homeless people in Pittsburgh, welcomed the entry of more providers given the enormous need. But he cautioned against a model with financial motives.
"I do worry about the corporatization of street medicine and capitalism invading what we've been building, largely as a social justice mission outside of the traditional health care system," he said. "But nobody owns the streets, and we have to figure out how to play nice together."
Just after lunchtime on June 18, Massachusetts' leaders discovered that the statewide 911 system was down.
A scramble to handle the crisis was on.
Police texted out administrative numbers that callers could use, Boston Mayor Michelle Wu gave outage updates at a press conference outlining plans for the Celtics' championship parade, and local officials urged people to summon help by pulling red fire alarm boxes.
About 7 million people went roughly two hours with no 911 service. Such crashes have become more of a feature than a bug in the nation's fragmented emergency response system.
Outages have hit at least eight states this year. They're emblematic of problems plaguing emergency communications due in part to wide disparities in the systems' age and capabilities, and in funding of 911 systems across the country. While some states, cities, and counties have already modernized their systems or have made plans to upgrade, many others are lagging.
911 is typically supported by fees tacked on to phone bills, but state and local governments also tap general funds or other resources.
"Now there are haves and have-nots," said Jonathan Gilad, vice president of government affairs at the National Emergency Number Association, which represents 911 first responders. "Next-generation 911 shouldn't be for people who happen to have an emergency in a good location."
Meanwhile, federal legislation that could steer billions of dollars into modernizing the patchwork 911 system remains waylaid in Congress.
"This is a national security imperative," said George Kelemen, executive director of the Industry Council for Emergency Response Technologies, a trade association that represents companies that provide hardware and software to the emergency response industry.
"In a crisis — a school shooting or a house fire or, God forbid, a terrorist attack — people call 911 first," he said. "The system can't go down."
The U.S. debuted a single, universal 911 emergency number in February 1968 to simplify crisis response. But instead of a seamless national program, the 911 response network has evolved into a massive puzzle of many interlocking pieces. There are more than 6,000 911 call centers to handle an estimated 240 million emergency calls each year, according to federal data. More than three-quarters of call centers experienced outages in the prior 12 months, according to a survey in February by NENA, which sets standards and advocates for 911, and Carbyne, a provider of public safety technology solutions.
In April, widespread 911 outages affected millions in Nebraska, Nevada, South Dakota, and Texas. The shutdown was blamed on workers' severing a fiber line while installing a light pole.
In February, tens of thousands of people in areas of California, Georgia, Illinois, Texas, and other states lost cellphone service, including some 911 services, from an outage.
And in June, Verizon agreed to pay a $1.05 million fine to settle a Federal Communications Commission probe into a December 2022 outage that affected 911 calls in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee.
The fires that raced across the Hawaiian island of Maui last August highlighted the critical importance of 911 systems. Dispatchers there fielded more than 4,500 contacts, meaning calls and texts, on Aug. 8, the day the fires broke out, compared with about 400 on a typical day, said Davlynn Racadio, emergency services dispatch coordinator in Maui County.
"We're dying out here," one caller told 911 operators.
But some cell towers faltered due to widespread service outages, according to county officials. Maui County in May filed a lawsuit against four telecommunications companies, saying they failed to inform dispatchers about the outages.
"If 911 calls came in with no voice, we would send text messages," Racadio said. "The state is looking at upgrading our system. Next-generation 911 would take us even further into the future."
Florida, Illinois, Montana, and Oklahoma passed legislation in 2023 to advance or fund modernized 911 systems, according to the National Conference of State Legislatures. The upgrades include replacing analog 911 infrastructure with digital, internet-based systems.
Instead of just fielding calls, next-generation systems can pinpoint a caller's location, accept texts, and enable residents in a crisis to send videos and images to dispatchers. While outages can still occur, modernized systems often include more redundancy to minimize the odds of a shutdown, Gilad said.
Lawmakers have looked at modernizing 911 systems by tapping revenue the FCC gets from auctioning off the rights to transmit signals over specific bands of the electromagnetic spectrum.
But the U.S. Senate, in March 2023, for the first time allowed a lapse of the FCC's authority to auction spectrum bands.
Legislation that would allocate almost $15 billion in grants from auction proceeds to speed deployment of next-generation 911 in every state unanimously passed the House Energy and Commerce Committee in May 2023. The bill, HR 3565, sponsored by Rep. Cathy McMorris Rodgers (R-Wash.), would also extend the FCC's auction authority.
Other bills have been introduced by various lawmakers, including one in March from Sen. Ted Cruz (R-Texas) and legislation from Sen. Maria Cantwell (D-Wash.) to extend the auction authority. For now, neither effort has advanced. Nine former FCC chairs wrote lawmakers in February, urging them to make 911 upgrades a national priority. They suggested Congress tap unspent federal covid-19 money.
"Whatever the funding source, the need is urgent and the time to act is now," they wrote.
Ajit Pai, who served as chair of the FCC from 2017 to 2021, said outages often occur in older, legacy systems.
"The fact that the FCC doesn't have authority to auction spectrum is a real hindrance now," Pai told KFF Health News. "You may never need to call 911, but it can make the difference between life and death. We need more of an organized effort at the federal level because 911 is so decentralized."
Meanwhile, some safety leaders are making backup plans for 911 outages or conducting investigations into their causes. In Massachusetts, a firewall designed to prevent hacking led to the recent two-hour outage, according to the state 911 department.
"Outages bring to everyone's attention that we rely on 911 and we don't think about how we really rely on it until something happens," said April Heinze, chief of 911 operations at NENA.
Mass General Brigham, a health system in the Boston area, sent out emergency alerts when the outage happened letting clinics and smaller practices know how to find their 10-digit emergency numbers. In the wake of the outage, it plans to keep the backup numbers next to phones at those facilities.
"Two hours can be a long time," said Paul Biddinger, chief preparedness and continuity officer at the health system.
The largest private company that brokers use to enroll people in Affordable Care Act health plans said it's joining with insurers to thwart unauthorized Obamacare sign-ups and plan switches.
HealthSherpa, which has its own sales team, announced the new initiative — called "Member Defense Network" — July 16. It will cut off commissions for unscrupulous insurance brokers believed to be signing up thousands of Americans for health plans they don't need or switching their coverage without express consent.
Amy Shepherd of Georgia said that while the carrier of her ACA plan has remained the same, the agent who collects the commission has been switched three times — all people she doesn't know and without her consent. Even worse, she said, are the multiple calls she gets daily, at all hours, from other agents apparently trying to persuade her to switch plans.
"These spam calls are stressing me beyond words," said Shepherd, who wants to remain in her current plan and has enlisted the help of a friend, who happens to be an insurance agent, to help.
Whether the network would help in situations like Shepherd's remains to be seen. When duplicative enrollments are identified, it will use automation to check whether agents have filed written or recorded consent by the consumer, something they are supposed to do under federal rules. But agents say they are rarely asked to provide those documents by regulators.
If there's no valid consent on file, or if an agent is caught submitting fake consents, they're not going to get paid commissions while the situation is investigated, said George Kalogeropoulos, CEO of HealthSherpa. The firm has set up a website separate from its enrollment platform to run the network, and it may spin it off to another organization, he added.
HealthSherpa is one of more than a dozen private sector web brokers allowed by federal regulators to directly link to the federal health insurance marketplace, healthcare.gov, to sign people up for ACA coverage. Other web brokers can join the new program, Kalogeropoulos said.
But there are already doubts about HealthSherpa's plan. Without all health insurers participating, some agents said, fraudulent enrollment may shift to those remaining outside HealthSherpa's program. At its launch this week, the network included health insurers Ambetter, Molina Healthcare, and Highmark Blue Cross Blue Shield, representing about half the people who selected coverage during the ACA's most recent open-enrollment period, said Kalogeropoulos, and more may follow.
Smaller brokerages worry that HealthSherpa's algorithms may incorrectly flag transactions with their customers as suspicious.
"This could disrupt the market," said Ronnell Nolan, president of Health Agents for America, a trade group. "This could put good agents out of business."
Federal regulators say they are working on several regulatory and technical ways to address unauthorized sign-ups and switches but have released few details. Last week, the Centers for Medicare & Medicaid Services quietly put in place new rules requiring agents to log in to their own ACA enrollment accounts every 12 hours, instead of every 30 days, as a security measure.
CMS knows of the network initiative and said it will be required to conform to security and privacy standards.
"We expect and encourage all of our partners, including issuers, direct enrollment partners, and agents and brokers, to take steps to detect and prevent fraudulent actions against consumers," said Jeff Wu, deputy director for policy at the Center for Consumer Information and Insurance Oversight, in a written statement.
Under HealthSherpa's plan, participating Obamacare insurers will each day submit data on all plan changes and new enrollments. Then the network's software will look for duplicate enrollments or other suspicious patterns across carriers — which can't currently be done by the private sector — and automatically verify that agents have filed proof of consumer consent.
Most situations would be resolved without the need for human intervention, said Kalogeropoulos — unless the system discovers fake consent. Those cases would be reported to federal and state regulators.
Private sector enrollment sites like HealthSherpa help millions of people legitimately in ACA plans each year. Most brokers use such platforms as an alternative to what they consider the more clunky healthcare.gov site, yet they also complain that the private enrollment websites make fraud too easy. Armed with nothing more than a name, date of birth, and state of residence, unscrupulous insurance agents can switch healthcare.gov customers' insurance plans or change the authorized agent on their policies to collect commissions from insurers.
"No other industry works this way," said Arthur Barlow, CEO and president of Utah-based Compass Insurance Advisors. His firm, which includes 500 independent agents, supports the ideas behind HealthSherpa's Member Defense Network, which he called "a step in the right direction to have a third party validate consent."
More efforts to address the problem of easy access to healthcare.gov accounts are needed, said Aaron Arenbart, the ACA/Medicare director at DigitalBGA, an Austin, Texas-based firm that assists brokers.
He's skeptical that HealthSherpa's network is the answer, however. He'd rather see federal regulators require the private platforms use some form of two-factor authentication before agents can log in to consumers' accounts.
"I can't see it working at all," Arenbart said of the network. "A lot of carriers are not even on board." Rogue agents "will just move to those carriers," he said.
Kalogeropoulos said that not all the unauthorized enrollments and plan switches are necessarily fraud. Some may be the result of confusion among agents as to whether they represent certain clients, he said — particularly when agents buy contact information from lead-generating firms that may sell the same names to multiple brokerages.
"In the most extreme example, we saw one member submitted 70 times by five different agents," he said. HealthSherpa's new system, he said, would determine which agent had the most valid consent.
It's a multistep process that, in some cases, would be decided by which agent can first get a client to complete a third-party identity-proofing process using a driver's license or other official documents.
One concern with HealthSherpa's network, Barlow said, is the possibility that some cases won't be resolved automatically, and consumers who are switched may have to remain in new plans while conflicts between agents are adjudicated.
Another problem, said Washington, D.C.-based attorney James Napoli, is that the network's solution to check for consent "is one that occurs after the horse has left the barn."
Napoli's clients include Nelson's group, Health Agents for America. "The fix ought to be much easier on the front end," he said. "For example, two-factor authentication. There are ways to stop this fraud before it's already occurred."
OSKALOOSA, Iowa — Rural regions like the one surrounding this southern Iowa town used to have a lot more babies, and many more places to give birth to them.
At least 41 Iowa hospitals have shuttered their labor and delivery units since 2000. Those facilities, representing about a third of all Iowa hospitals, are located mostly in rural areas where birth numbers have plummeted. In some Iowa counties, annual numbers of births have fallen by three-quarters since the height of the baby boom in the 1950s and '60s, when many rural hospitals were built or expanded, state and federal records show.
Similar trends are playing out nationwide, as hospitals struggle to maintain staff and facilities to safely handle dwindling numbers of births. More than half of rural U.S. hospitals now lack the service.
"People just aren't having as many kids," said Addie Comegys, who lives in southern Iowa and has regularly traveled 45 minutes each way for prenatal checkups at Oskaloosa's hospital this summer. Her mother had six children, starting in the 1980s, when big families didn't seem so rare.
"Now, if you have three kids, people are like, 'Oh my gosh, are you ever going to stop?'" said Comegys, 29, who is expecting her second child in late August.
These days, many Americans choose to have small families or no children at all. Modern birth control methods help make such decisions stick. The trend is amplified in small towns when young adults move away, taking any childbearing potential with them.
Hospital leaders who close obstetrics units often cite declining birth numbers, along with staffing challenges and financial losses. The closures can be a particular challenge for pregnant women who lack the reliable transportation and flexible schedules needed to travel long distances for prenatal care and birthing services.
The baby boom peaked in 1957, when about 4.3 million children were born in the United States. The annual number of births dropped below 3.7 million by 2022, even though the overall U.S. population nearly doubled over that same period.
West Virginia has seen the steepest decline in births, a 62% drop in those 65 years, according to federal data. Iowa's births dropped 43% over that period. Of the state's 99 counties, just four — all urban or suburban — recorded more births.
Births have increased in only 13 states since 1957. Most of them, such as Arizona, California, Florida, and Nevada, are places that have attracted waves of newcomers from other states and countries. But even those states have had obstetrics units close in rural areas.
In Iowa, Oskaloosa's hospital has bucked the trend and kept its labor and delivery unit open, partly by pulling in patients from 14 other counties. Last year, the hospital even managed the rare feat of recruiting two obstetrician-gynecologists to expand its services.
The publicly owned hospital, called Mahaska Health, expects to deliver 250 babies this year, up from about 160 in previous years, CEO Kevin DeRonde said.
"It's an essential service, and we needed to keep it going and grow it," DeRonde said.
Many of the U.S. hospitals that are now dropping obstetrics units were built or expanded in the mid-1900s, when America went on a rural-hospital building spree, thanks to federal funding from the Hill-Burton Act.
"It was an amazing program," said Brock Slabach, chief operations officer for the National Rural Health Association. "Basically, if you were a county that wanted a hospital, they gave you the money."
Slabach said that in addition to declining birth numbers, obstetrics units are experiencing a drop in occupancy because most patients go home after a night or two. In the past, patients typically spent several days in the hospital after giving birth.
Dwindling caseloads can raise safety concerns for obstetrics units.
A study published in JAMA in 2023 found that women were more likely to suffer serious complications if they gave birth in rural hospitals that handled 110 or fewer births a year. The authors said they didn't support closing low-volume units, because that could lead more women to have complications related to traveling for care. Instead, they recommended improving training and coordination among rural health providers.
Stephanie Radke, a University of Iowa obstetrics and gynecology professor who studies access to birthing services, said it is almost inevitable that when rural birth numbers plunge, some obstetrics units will close. "We talk about that as a bad event, but we don't really talk about why it happens," she said.
Radke said maintaining a set number of obstetrics units is less important than ensuring good care for pregnant women and their babies. It's difficult to maintain quality of care when the staff doesn't consistently practice deliveries, she said, but it is hard to define that line. "What is realistic?" she said. "I don't think a unit should be open that only delivers 50 babies a year."
In some cases, she said, hospitals near each other have consolidated obstetrics units, pooling their resources into one program that has enough staffers and handles sufficient cases. "You're not always really creating a care desert when that happens," she said.
The decline in births has accelerated in many areas in recent years. Kenneth Johnson, a sociology professor and demographer at the University of New Hampshire, said it is understandable that many rural hospitals have closed obstetrics units. "I'm actually surprised some of them have lasted as long as they have," he said.
Johnson said rural areas that have seen the steepest population declines tend to be far from cities and lack recreational attractions, such as mountains or large bodies of water. Some have avoided population losses by attracting immigrant workers, who tend to have larger families in the first generation or two after they move to the U.S., he said.
Katy Kozhimannil, a University of Minnesota health policy professor who studies rural issues, said declining birth numbers and obstetric unit closures can create a vicious cycle. Fewer babies being born in a region can lead a birthing unit to shutter. Then the loss of such a unit can discourage young people from moving to the area, driving birth numbers even lower.
In many regions, people with private insurance, flexible schedules, and reliable transportation choose to travel to larger hospitals for their prenatal care and to give birth, Kozhimannil said. That leaves rural hospitals with a larger proportion of patients on Medicaid, a public program that pays about half what private insurance pays for the same services, she said.
Iowa ranks near the bottom of all states for obstetrician-gynecologists per capita. But Oskaloosa's hospital hit the jackpot last year, when it recruited Taylar Swartz and Garth Summers, a married couple who both recently finished their obstetrics training. Swartz grew up in the area, and she wanted to return to serve women there.
She hopes the number of obstetrics units will level off after the wave of closures. "It's not even just for delivery, but we need access just to women's health care in general," she said. "I would love to see women's health care be at the forefront of our government's mind."
Swartz noted that the state has only one obstetrics training program, which is at the University of Iowa. She said she and her husband plan to help spark interest in rural obstetrics by hosting University of Iowa residency rotations at the Oskaloosa hospital.
Comegys, a patient of Swartz's, could have chosen a hospital birthing center closer to her home, but she wasn't confident in its quality. Other hospitals in her region had shuttered their obstetrics units. She is grateful to have a flexible job, a reliable car, and a supportive family, so she can travel to Oskaloosa for checkups and to give birth there. She knows many other women are not so lucky, and she worries other obstetrics units are at risk.
"It's sad, but I could see more closing," she said.
An acute staffing shortage in the nation's nearly 15,000 nursing homes is at the root of many of the most disturbing shortfalls in care for the 1.2 million Americans who live in them.
This article was published on Friday, July 12, 2024 in KFF Health News.
For hours, John Pernorio repeatedly mashed the call button at his bedside in the Heritage Hills nursing home in Rhode Island. A retired truck driver, he had injured his spine in a fall on the job decades earlier and could no longer walk. The antibiotics he was taking made him need to go to the bathroom frequently. But he could get there only if someone helped him into his wheelchair.
By the time an aide finally responded, he'd been lying in soiled briefs for hours, he said. It happened time and again.
"It was degrading," said Pernorio, 79. "I spent 21 hours a day in bed."
Payroll records show that during his stay at Heritage Hills, daily aide staffing levels were 25% below the minimums under state law. The nursing home said it provided high-quality care to all residents. Regardless, it wasn't in trouble with the state, because Rhode Island does not enforce its staffing rule.
An acute shortage of nurses and aides in the nation's nearly 15,000 nursing homes is at the root of many of the most disturbing shortfalls in care for the 1.2 million Americans who live in them, including many of the nation's frailest old people.
California, Florida, Massachusetts, New York, and Rhode Island have sought to improve nursing home quality by mandating the highest minimum hours of care per resident among states. But an examination of records in those states revealed that putting a law on the books was no guarantee of better staffing. Instead, many nursing homes operated with fewer workers than required, often with the permission of regulators or with no consequences at all.
"Just setting a number doesn't mean anything if you're not going to enforce it," said Mark Miller, former president of the national organization of long-term care ombudsmen, advocates in each state who help residents resolve problems in their nursing homes. "What's the point?"
Now the Biden administration is trying to guarantee adequate staffing the same way states have, unsuccessfully, for years: with tougher standards. Federal rules issued in April are expected to require 4 out of 5 homes to boost staffing.
The administration's plan also has some of the same weaknesses that have hampered states. It relies on underfunded health inspectors for enforcement, lacks explicit penalties for violations, and offers broad exemptions for nursing homes in areas with labor shortages. And the administration isn't providing more money for homes that can't afford additional employees.
Pay remains so low — nursing assistants earn $19 an hour on average — that homes frequently lose workers to retail stores and fast-food restaurants that pay as well or better and offer jobs that are far less grueling. Average turnover in nursing homes is extraordinarily high: Federal records show half of employees leave their jobs each year.
Even the most passionate nurses and aides are burning out in short-staffed homes because they are stretched too thin to provide the quality care they believe residents deserve. "It was impossible," said Shirley Lomba, a medication aide from Providence, Rhode Island. She left her job at a nursing home that paid $18.50 an hour for one at an assisted living facility that paid $4 more per hour and involved residents with fewer needs.
The mostly for-profit nursing home industry argues that staffing problems stem from low rates of reimbursement by Medicaid, the program funded by states and the federal government that covers most people in nursing homes. Yet a growing body of research and court evidence shows that owners and investors often extract hefty profits that could be used for care.
Nursing home trade groups have complained about the tougher state standards and have sued to block the new federal standards, which they say are unworkable given how much trouble nursing homes already have filling jobs. "It's a really tough business right now," said Mark Parkinson, president and chief executive of one trade group, the American Health Care Association.
And federal enforcement of those rules is still years off. Nursing homes have as long as five years to comply with the new regulations; for some, that means enforcement would fully kick in only at the tail end of a second Biden administration, if the president wins reelection. Former President Donald Trump's campaign declined to comment on what Trump would do if elected.
Persistent Shortages
Nursing home payroll records submitted to the federal government for the most recent quarter available, October to December 2023, and state regulatory records show that homes in states with tougher standards frequently did not meet them.
In more than two-thirds of nursing homes in New York and more than half of those in Massachusetts, staffing was below the state's required minimums. Even California, which passed the nation's first minimum staffing law two decades ago, has not achieved universal compliance with its requirements: at least 3½ hours of care for the average resident each day, including two hours and 24 minutes of care from nursing assistants, who help residents eat and get to the bathroom.
During inspections since 2021, state regulators cited a third of California homes — more than 400 of them — for inadequate staffing. Regulators also granted waivers to 236 homes that said workforce shortages prevented them from recruiting enough nurse aides to meet the state minimum, exempting them from fines as high as $50,000.
In New York, Gov. Kathy Hochul declared an acute labor shortage, which allows homes to petition for reduced or waived fines. The state health department said it had cited more than 400 of the state's 600-odd homes for understaffing but declined to say how many of them had appealed for leniency.
In Florida, Gov. Ron DeSantis signed legislation in 2022 to loosen the staffing rules for all homes. The law allows homes to count almost any employee who engages with residents, instead of just nurses and aides, toward their overall staffing. Florida also reduced the daily minimum of nurse aide time for each resident by 30 minutes, to two hours.
Now only 1 in 20 Florida nursing homes are staffed below the minimum — but if the former, more rigorous rules were still in place, 4 in 5 homes would not meet them, an analysis of payroll records shows.
"Staffing is the most important part of providing high-quality nursing home care," said David Stevenson, chair of the health policy department at Vanderbilt University School of Medicine. "It comes down to political will to enforce staffing."
The Human Toll
There is a yawning gap between law and practice in Rhode Island. In the last three months of 2023, only 12 of 74 homes met the state's minimum of three hours and 49 minutes of care per resident, including at least two hours and 36 minutes of care from certified nursing assistants, payroll records show. One of the homes below the minimum was Heritage Hills Rehabilitation & Healthcare Center in Smithfield, where Pernorio, president of the Rhode Island Alliance for Retired Americans, went last October after a stint in a hospital.
"From the minute the ambulance took me in there, it was downhill," he said in an interview.
Sometimes, after waiting an hour, he would telephone the home's main office for help. A nurse would come, turn off his call light, and walk right back out, and he would push the button again, Pernorio reported in his weekly e-newsletter.
While he praised some workers' dedication, he said others frequently did not show up for their shifts. He said staff members told him they could earn more flipping hamburgers at McDonald's than they could cleaning soiled patients in a nursing home.
In a written statement, Heritage Hills did not dispute that its staffing, while higher than that of many homes, was below the minimum under state law.
Heritage Hills said that after Pernorio complained, state inspectors visited the home and did not cite it for violations. "We take every resident concern seriously," it said in the statement. Pernorio said inspectors never interviewed him after he called in his complaint.
In interviews, residents of other nursing homes in the state and their relatives reported neglect by overwhelmed nurses and aides.
Jason Travers said his 87-year-old father, George, fell on the way to the bathroom because no one answered his call button.
"I think the lunch crew finally came in and saw him on the floor and put him in the bed," Travers said. His father died in April 2023, four months after he entered the home.
Relatives of Mary DiBiasio, 92, who had a hip fracture, said they once found her sitting on the toilet unattended, hanging on to the grab bar with both hands. "I don't need to be a medical professional to know you don't leave somebody hanging off the toilet with a hip fracture," said her granddaughter Keri Rossi-D'entremont.
When DiBiasio died in January 2022, Rhode Island was preparing to enact a law with nurse and aide staffing requirements higher than anywhere else in the country except Washington, D.C. But Gov. Daniel McKee suspended enforcement, saying the industry was in poor financial shape and nursing homes couldn't even fill existing jobs. The governor's executive order noted that several homes had closed because of problems finding workers.
Yet Rhode Island inspectors continue to find serious problems with care. Since January 2023, regulators have found deficiencies of the highest severity, known as immediate jeopardy, at 23 of the state's 74 nursing homes.
Homes have been cited for failing to get a dialysis patient to treatment and for giving one resident a roommate's methadone, causing an overdose. They have also been cited for violent behavior by unsupervised residents, including one who shoved pillow stuffing into a resident's mouth and another who turned a roommate's oxygen off because it was too noisy. Both the resident who was attacked and the one who lost oxygen died.
Bottom Lines
Even some of the nonprofit nursing homes, which don't have to pay investors, are having trouble meeting the state minimums — or simply staying open.
Rick Gamache, chief executive of the nonprofit Aldersbridge Communities, which owns Linn Health & Rehabilitation in East Providence, said Rhode Island's Medicaid program paid too little for the home to keep operating — about $292 per bed, when the daily cost was $411. Aldersbridge closed Linn this summer and converted it into an assisted living facility.
"We're seeing the collapse of post-acute care in America," Gamache said.
Many nursing homes are owned by for-profit chains, and some researchers, lawyers, and state authorities argue that they could reinvest more of the money they make into their facilities.
Bannister Center, a Providence nursing home that payroll records show is staffed 10% below the state minimum, is part of Centers Health Care, a New York-based private chain that owns or operates 31 skilled nursing homes, according to Medicare records. Bannister lost $430,524 in 2021, according to a financial statement it filed with Rhode Island regulators.
Last year, the New York attorney general sued the chain's owners and investors and their relatives, accusing them of improperly siphoning $83 million in Medicaid funds out of their New York nursing homes by paying salaries for "no-show" jobs, profits above what state law allowed, and inflated rents and fees to other companies they owned. For instance, one of those companies, which purported to provide staff to the homes, paid $5 million to the wife of Kenny Rozenberg, the chain's chief executive, from 2019 to 2021, the lawsuit said.
The defendants argued in court papers that the payments to investors and owners were legal and that the state could not prove they were Medicaid funds. They have asked for much of the lawsuit to be dismissed.
Jeff Jacomowitz, a Centers Health Care spokesperson, declined to answer questions about Bannister, Centers' operations, or the chain's owners.
Miller, the District of Columbia's long-term care ombudsman, said many nursing home owners could pay better wages if they didn't demand such high profits. In D.C., 7 in 10 nursing homes meet minimum standards, payroll records show.
"There's no staffing shortage — there's a shortage of good-paying jobs," he said. "I've been doing this since 1984 and they've been going broke all the time. If it really is that bad of an investment, there wouldn't be any nursing homes left."
The new federal rules call for a minimum of three hours and 29 minutes of care each day per resident, including two hours and 27 minutes from nurse aides and 33 minutes from registered nurses, and an RN on-site at all times.
Homes in areas with worker shortages can apply to be exempted from the rules. Dora Hughes, acting chief medical officer for the U.S. Centers for Medicare & Medicaid Services, said in a statement that those waivers would be "time-limited" and that having a clear national staffing minimum "will facilitate strengthened oversight and enforcement."
David Grabowski, a health policy professor at Harvard Medical School, said federal health authorities have a "terrible" track record of policing nursing homes. "If they don't enforce this," he said, "I don't imagine it's going to really move the needle a lot."
Methodology for Analysis of Nursing Home Staffing
The KFF Health News data analysis focused on five states with the most rigorous staffing requirements: California, Florida, Massachusetts, New York, and Rhode Island.
To determine staffing levels, the analysis used the daily payroll journals that each nursing home is required to submit to the federal government. These publicly available records include the number of hours each category of nursing home employee, including registered nurses and certified nursing assistants, worked each day and the number of residents in each home. We used the most recent data, which included a combined 1.3 million records covering the final three months of 2023.
We calculated staffing levels by following each state's rules, which specify which occupations are counted and what minimums homes must meet. The analysis differed for each state. Massachusetts, for instance, has a separate requirement for the minimum number of hours of care registered nurses must provide each day.
In California, we used state enforcement action records to identify homes that had been fined for not meeting its law. We also tallied how many California homes had been granted waivers from the law because they couldn't find enough workers to hire.
For each state and Washington, D.C., we calculated what proportion of homes complied with state or district law. We shared our conclusions with each state's nursing home regulatory agency and gave them an opportunity to respond.
This analysis was performed by senior correspondent Jordan Rau and data editor Holly K. Hacker.
Registered nurses play a key role in the healthcare workforce and contribute to the health and well-being of millions of Americans, working in hospitals, nursing homes, physician's offices, and home health services. The profession has been experiencing shortages, which were exacerbated by the COVID-19 pandemic and are predicted to continue over the next decade as the 65 and older population in the U.S. grows, increasing healthcare needs. Demand for nurses will also likely increase to meet new requirements for nurse staffing levels in nursing facilities.
Immigrant workers could help address these needs. As of 2022, there were about 500,000 immigrant nurses in the U.S., accounting for about one in six of the close to 3.2 million RNs.1 However, immigration remains a hot-button political issue with ongoing anti-immigrant rhetoric and recent actions and proposals to limit immigration and immigrants' role in the workforce. These actions include the federal government extending its pause on the processing of new visa applications for international nurses in June 2024. The pause has been in place since April 2023 and, at this time, the government is only processing applications submitted on or before December 2021. Legislation has been proposed to increase employment-based visas for nurses, although it has remained stalled since 2023. Visa opportunities for nurses could also potentially be expanded through administrative action, for example via H-1B visas, though they would have limitations.
These visa restrictions could exacerbate existing shortages in the nursing workforce and negatively impact the U.S. labor market and economy more broadly, particularly given the growing role of foreign-educated nurses in U.S. hospitals. KFF analysis of data from the American Hospital Association (AHA) Annual Survey shows that the overall share of hospitals reporting hiring foreign-educated RNs has nearly doubled between 2010 and 2022, and a growing share of hospitals report hiring an increasing number of foreign-educated RNs to fill vacancies over time.
Overall, 32% of hospitals accounting for nearly half (45%) of all hospital beds say they hired foreign-educated RNs in 2022, twice the share in 2010, when 16% of hospitals accounting for about a quarter (23%) of all hospital beds said they hired foreign-educated RNs. In addition, between 2010 and 2022, the share of hospitals saying they hired more foreign-educated nurses to help fill RN vacancies compared to the previous year rose from 2% of hospitals representing 3% of hospital beds to 14% of hospitals representing 22% of hospital beds.
The U.S. Supreme Court has again overturned longstanding precedent, this time getting rid of a 40-year- old standard for decision making that required federal courts to defer to reasonable agency decisions where federal law is silent or unclear. This "Chevron deference" standard is now gone, ushering in a new era where courts will not have to accept agency expertise in their review of challenged regulations. While the details of the rules that define administrative law often garner little attention, this decision, like the decision that overturned Roe v. Wade, will have profound effects for health care. This issue brief examines the decision and assesses what is ahead.
What the Court Said
As explained in the KFF briefUpcoming SCOTUS Case Could Weaken the Impact of Regulation on Key Patient and Consumer Protection, the Supreme Court took up two cases to review the question of whether Chevron deference should be overruled or changed. The two cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, decided jointly, relate to federal regulations affecting the fishing industry, but the decision will shape how courts review legal challenges to all regulations that interpret issues where a federal law is ambiguous or silent, including health care.
In a 6-3 decision, with Justice Roberts writing for the majority, the Court concluded that Chevron deference should never have been used to begin with, overturning the Chevron decision. The Court made the following major points:
Courts must use independent judgment to determine the meaning of federal statutes. It cannot defer to agency regulation just because the issue is not clear in a statute. According to the majority opinion the Chevron decision runs counter to the Administrative Procedure Act (APA) which incorporated prior practice that "courts decide legal questions by applying their own judgement." The APA is a 1946 law that sets parameters for how agencies function.
On the question of deferring to agency expertise to resolve an issue, the Court said that "…agencies have no special competence in resolving statutory ambiguities. Courts do." While courts can "respect" agency regulation and expertise and look to it to inform them on technical issues, "Congress expects courts to handle technical statutory questions."
While federal courts must generally follow prior Supreme Court decisions (a legal concept called stare decisis), the majority opinion said that the 1984 Chevron decision is flawed and "unworkable," because there can be different interpretations of what makes a statute ambiguous. As a result, the Court concludes that there is not "any reason to wait helplessly for Congress to correct our mistake."
The opinion notes that it does not implicate prior cases that relied on Chevron to uphold agency actions because those decisions are still subject to "statutory stare decisis" and can still be upheld even though the deference standard has changed.
Of note is a 33-page dissent by Justice Kagan (joined by Justices Sotomayor and Jackson) stating that, contrary to the majority, the APA includes no reference to how courts should review agency regulations—with or without deference to agency decisions—when courts use their authority to interpret the law. In addition, she rebukes the majority for disrupting use of a method of review (Chevron deference) that is the "cornerstone of administrative law" and "subverting every known principle of stare decisis," with no particularly significant reason "above and beyond thinking it wrong." She questions the majority’s conclusion that the decision will not implicate prior cases that have upheld agency regulations based on Chevron deference, questioning why courts would respect those prior decisions when this Court is not respecting precedent in this case. She predicts that some existing federal regulations never challenged under Chevron before will now be challenged. One quote from Justice Kagan’s dissent best sums up her opinion:
"In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law. As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar."
Implications for Health Policy
Criticism of the authority of administrative agencies has been an ongoing theme of commentary from some organizations concerned with overregulation of industry. Some have encouraged changes to "dismantle the administrative state," with a particular focus on the U.S. Department of Health and Human Services—the agency with most of the administrative authority over Medicare, Medicaid, the Affordable Care Act and other health statutes, and that houses key public health organizations such as the Centers for Disease Control and Prevention and the National Institutes of Health.
The decision will likely impede the ability of executive agencies to implement laws passed by Congress. As explained in the previous KFF brief, while agency final rules will still have the force of law, there will be more of an incentive to challenge these rules in a court that now will not have to give any weight to agency decisions and expertise where statutes are not clear. More regulations will be overturned, placing a real barrier on implementing key health care protections such as prescription drug affordability in Medicare, eligibility rules for Medicaid beneficiaries, infectious disease control and public safety standards, as well as consumer protections for those in self-insured private employer-sponsored plans.
A natural result will mean less agency regulation. No law passed by Congress can include every possible nuance needed to implement the law. Limitation on the ability of regulators to fill in those gaps could result in impacts to health care consumer and patient protections. Technical requirements for how plans and providers bill and code for patient service, for example, are important in executing new health care standards, from free preventive care to surprise billing protections. Without regulations to fill in technical gaps, it will be more difficult to operationalize requirements to carry out the intent of Congress.
The executive branch will not necessarily be the only place where there are implications. Congress will be challenged to be more specific in its legislation, making it more difficult to reach consensus on a range of matters. This may be a particular concern where the issue being addressed in legislation is itself a black box—such as prescription drug pricing and the role of pharmacy benefit managers—where Congress itself and the public may lack access to reliable information about a highly technical subject.
Those seeking to access the judicial branch could see barriers as lower federal courts become more crowded or backlogged with administrative actions. Also, the decision-making itself will require more technical and scientific knowledge from judges, perhaps expanding the time it takes to resolve disputes.
What Happens Now
The decision does not immediately change any specific health care policy, but over time all health care stakeholders will see the impact of the reduced significance of notice-and-comment rulemaking in areas where federal law is silent or unclear. Some argue that the rulemaking process is already "captured" by industry in some areas, such that industry players can influence regulation to their advantage. This will affect these stakeholders as they may no longer have an easy avenue to get their concerns heard and addressed. The decision could also impede reforms meant to help health care consumers navigate an increasingly complex and unaffordable health system, particularly in cases where agencies stretch their regulatory authority beyond the specifics in a statute.
The decision does not affect agency ability to enforce health care statutes using existing tools including audit, data collection, and administrative agency proceedings where those are available. It could mean a shift in agency resources from drafting and defending regulations to enforcement actions based on the text of a statute or a renewed focus on helping consumers recognize and act on activity that violates federal law. This could mean more informal guidance from agencies on best practices to inform consumers and monitor stakeholder activity instead of courting industry and setting new standards. Whether these actions take place, however, will be largely dependent on the priorities of the President.
Congress will still have the ability to specifically delegate to administrative agencies in legislation the task of developing regulations in certain areas. Chevron deference does not implicate this scenario. However, regulations resulting from this delegation can still be reviewed by courts without deference to the agency or could be subject to constitutional challenges claiming that Congress does not have the authority to delegate (nondelegation doctrine). The "major questions doctrine" is another legal framework courts have increasingly applied in recent years to invalidate agency regulation.
Short of unlikely Congressional action to restore Chevron deference, the Supreme Court in a single decision has shifted many policy decisions from agency technical experts to federal judges, with implications for health policy that will reverberate for years to come.
With the national shortage of primary care physicians projected to worsen, more Americans are paying for the privilege of seeing a doctor.
This article was published on Monday, July 1, 2024 in KFF Health News.
"You had to pay the fee, or the doctor wasn't going to see you anymore."
That was the takeaway for Terri Marroquin of Midland, Texas, when her longtime physician began charging a membership fee in 2019. She found out about the change when someone at the physician's front desk pointed to a posted notice.
At first, she stuck with the practice; in her area, she said, it is now tough to find a primary care doctor who doesn't charge an annual membership fee from $350 to $500.
But last year, Marroquin finally left to join a practice with no membership fee where she sees a physician assistant rather than a doctor. "I had had enough. The concierge fee kept going up, and the doctor's office kept getting nicer and nicer," she said, referring to the décor.
With the national shortage of primary care physicians reaching 17,637 in 2023 and projected to worsen, more Americans are paying for the privilege of seeing a doctor — on top of insurance premiums that cover most services a doctor might provide or order. Many people seeking a new doctor are calling a long list of primary care practices only to be told they're not taking new patients.
"Concierge medicine potentially leads to disproportionately richer people being able to pay for the scarce resource of physician time and crowding out people who have lower incomes and are sicker," said Adam Leive, lead author of a 2023 study on concierge medicine and researcher at University of California-Berkeley's Goldman School of Public Policy.
Leive's research showed no decrease in mortality for concierge patients compared with similar patients who saw non-concierge physicians, suggesting concierge care may not notably improve some health outcomes.
A 2005 study showed concierge physicians had smaller proportions of patients with diabetes than their non-concierge counterparts and provided care for fewer Black and Hispanic patients.
There's little reliable data available on the size of the concierge medicine market. But one market research firm projects that concierge medicine revenue will grow about 10.4% annually through 2030. About 5,000 to 7,000 physicians and practices provide concierge care in the United States, most of whom are primary care providers, according to Concierge Medicine Today. (Yes, the burgeoning field already has a trade publication.)
The concierge pitch is simple: More time with your doctor, in-person or remotely, promptly and at your convenience. With many primary care physicians caring for thousands of patients each in appointments of 15 minutes or less, some people who can afford the fee say they feel forced to pay it just to maintain adequate access to their doctor.
As primary care providers convert to concierge medicine, many patients could face the financial and health consequences of a potentially lengthy search for a new provider. With fewer physicians in non-concierge practices, the pool available to people who can't or won't pay is smaller. For them, it is harder to find a doctor.
Concierge care models vary widely, but all involve paying a periodic fee to be a patient of the practice.
These fees are generally not covered by insurance nor payable with a tax-advantaged flexible spending account or health savings account. Annual fees range from $199 for Amazon's One Medical (with a discount available for Prime members) to low four figures for companies like MDVIP and SignatureMD that partner with physicians, to $10,000 or more for top-branded practices like Massachusetts General Hospital's.
Many patients are exasperated with the prospect of pay-to-play primary care. For one thing, under the Affordable Care Act, insurers are required to cover a variety of preventive services without a patient paying out-of-pocket. "Your annual physical should be free," said Caitlin Donovan, a spokesperson for the National Patient Advocate Foundation. "Why are you paying $2,000 for it?"
Liz Glatzer felt her doctor in Providence, Rhode Island, was competent but didn't have time to absorb her full health history. "I had double mastectomy 25 years ago," she said. "At my first physical, the doctor ran through my meds and whatever else, and she said, ‘Oh, you haven't had a mammogram.' I said, ‘I don't have breasts to have mammography.'"
In 2023, after repeating that same exchange during her next two physicals, Glatzer signed up to pay $1,900 a year for MDVIP, a concierge staffing service that contracts with her new doctor, who is also a friend's husband. In her first couple of visits, Glatzer's new physician took hours to get to know her, she said.
For the growing numbers of Americans who can't or won't pay when their doctor switches to concierge care, finding new primary care can mean frustration, delayed or missed tests or treatments, and fragmented health care.
"I've met so many patients who couldn't afford the concierge services and needed to look for a new primary care physician," said Yalda Jabbarpour, director of the Robert Graham Center and a practicing family physician. Separating from a doctor who's transitioning to concierge care "breaks the continuity with the provider that we know is so important for good health outcomes," she said.
That disruption has consequences. "People don't get the preventive services that they should, and they use more expensive and inefficient avenues for care that could have otherwise been provided by their doctor," said Abbie Leibowitz, chief medical officer at Health Advocate, a company that helps patients find care and resolve insurance issues.
What happens to patients who find themselves at loose ends when a physician transitions to concierge practice?
Patients who lose their doctors often give up on having an ongoing relationship with a primary care clinician. They may rely solely on a pharmacy-based clinic or urgent care center or even a hospital emergency department for primary care.
Some concierge providers say they are responding to concerns about access and equity by allowing patients to opt out of concierge care but stay with the practice group at a lower tier of service. This might entail longer waits for shorter appointments, fewer visits with a physician, and more visits with midlevel providers, for example.
Deb Gordon of Cambridge, Massachusetts, said she is searching for a new primary care doctor after hers switched to concierge medicine — a challenge that involves finding someone in her network who has admitting privileges at her preferred hospitals and is accepting new patients.
Gordon, who is co-director of the Alliance of Professional Health Advocates, which provides support services to patient advocates, said the practice that her doctor left has not assigned her a new provider, and her health plan said it was OK if she went without one. "I was shocked that they literally said, ‘You can go to urgent care,'" she said.
Some patients find themselves turning to physician assistants and other midlevel providers. But those clinicians have much less training than physicians with board certification in family medicine or internal medicine and so may not be fully qualified to treat patients with complex health problems. "The expertise of physician assistants and nurse practitioners can really vary widely," said Russell Phillips, director of the Harvard Medical School Center for Primary Care.
Deloitte pulls in billions of dollars from states and the federal government for supplying technology it says will modernize Medicaid. So far, that hasn't gone very well.
Deloitte, a global consultancy that reported revenue last year of $65 billion, pulls in billions of dollars from states and the federal government for supplying technology it says will modernize Medicaid.
The company promotes itself as the industry leader in building sophisticated and efficient systems for states that, among other things, screen who is eligible for Medicaid. However, a KFF Health News investigation of eligibility systems found widespread problems.
The systems have generated incorrect notices to Medicaid beneficiaries, sent their paperwork to the wrong addresses, and been frozen for hours at a time, according to findings in state audits, allegations and declarations in court documents, and interviews. It can take months to fix problems, according to court documents from a lawsuit in federal court in Tennessee, company documents, and state agencies. Meanwhile, America’s poorest residents pay the price.
Deloitte dominates this important slice of government business: Twenty-five states have awarded it eligibility systems contracts — with 53 million Medicaid enrollees in those states as of April 1, 2023, when the unwinding of pandemic protections began, according to the Centers for Medicare & Medicaid Services. Deloitte’s contracts are worth at least $5 billion, according to a KFF Health News review of government contracts, in which Deloitte commits to design, develop, implement, or operate state systems.
State officials work hand in glove with Deloitte behind closed doors to translate policy choices into computer code that forms the backbone of eligibility systems. When things go wrong, it can be difficult to know who’s at fault, according to attorneys, consumer advocates, and union workers. Sometimes it takes a lawsuit to pull back the curtain.
Medicaid beneficiaries bear the brunt of system errors, said Steve Catanese, president of Service Employees International Union Local 668 in Pennsylvania. The union chapter represents roughly 19,000 employees — including government caseworkers who troubleshoot problems for recipients of safety-net benefits such as health coverage and cash assistance for food.
“Are you hungry? Wait. You sick? Wait,” he said. “Delays can kill people.”
KFF Health News interviewed Medicaid recipients, attorneys, and former caseworkers and government employees, and read thousands of pages from contracts, ongoing lawsuits, company materials, and state audits and documents that show problems with Deloitte-operated systems around the country — including in Arkansas, Colorado, Florida, Georgia, Kentucky, Pennsylvania, Rhode Island, Tennessee, and Texas.
In an interview, Kenneth Smith, a Deloitte executive who leads its national human services division, said Medicaid eligibility technology is state-owned and agencies “direct their operation” and “make decisions about the policies and processes that they implement.”
“They’re not Deloitte systems,” he said, noting Deloitte is one player among many who together administer Medicaid benefits.
Alleging “ongoing and nationwide” errors and “unfair and deceptive trade practices,” the National Health Law Program, a nonprofit that advocates for people with low incomes, urged the Federal Trade Commission to investigate Deloitte in a complaint filed in January.
“Systems built by Deloitte have generated numerous errors, resulting in inaccurate Medicaid eligibility determinations and loss of Medicaid coverage for eligible individuals in many states,” it argued. “The repetition of the same errors in Deloitte eligibility systems across Texas and other states and over time demonstrates that Deloitte has failed.”
FTC spokesperson Juliana Gruenwald Henderson confirmed receipt of the complaint but did not comment further.
Smith called the allegations “without merit.”
The system problems are especially concerning as states wade through millions of Medicaid eligibility checks to disenroll people who no longer qualify — a removal process that was paused for three years to protect people from losing insurance during the covid-19 public health emergency. In that time, nationwide Medicaid enrollment grew by more than 22 million, to roughly 87 million people. At least 22.8 million have been removed as of June 4 , according to a KFF analysis of government data.
Advocates worry many lost coverage despite being eligible. A KFF survey of adults disenrolled from Medicaid during the first year of the unwinding found that nearly 1 in 4 adults who were removed are now uninsured. Nearly half who were removed were able to reenroll, the survey showed, suggesting they should not have been dropped in the first place.
“If there is a technology challenge or reason why someone can’t access health care that they're eligible for, and we're able to do something,” Smith said, “we work tirelessly to do so.”
Deloitte’s contracts with states regularly cost hundreds of millions of dollars, and the federal government pays the bulk of the cost.
“States become very dependent on the consultant for operating complex systems of all kinds” to do government business, said Michael Shaub, an accounting professor at Texas A&M University.
Georgia’s contract with Deloitte to build and maintain its system for health and social service programs, inked in 2014, as of January 2023 was worth $528 million. This January, state officials wrote in an assessment obtained by KFF Health News that its eligibility system “lacks flexibility and adaptability, limiting Georgia’s ability to serve its customers efficiently, improve the customer and worker experience across all programs, ensure data security, reduce benefit errors and fraud, and advance the state’s goal of streamlining eligibility.”
Deloitte and the Georgia Department of Community Health declined to comment.
“State Medicaid leaders and policymakers are hungry to know what the future of health care holds,” the company said. “Deloitte brings the innovative tools, subject matter expertise, and time-tested experience to help states.”
Trouble in Tennessee
When Medicaid eligibility systems fail, beneficiaries suffer the consequences.
DiJuana Davis had chronic anemia that required iron infusions. In 2019, the 39-year-old Nashville resident scheduled separate surgeries to prevent pregnancy and to remove the lining of her uterus, which could alleviate blood loss and ease her anemia.
Then Davis, a mom of five, received a shock: Her family’s Medicaid coverage had vanished. The hospital canceled the procedures, according to testimony in federal court in November.
Davis had kept her insurance for years without trouble. This time, Tennessee had just launched a new Deloitte-built eligibility system. It autofilled an incorrect address, where Davis had never lived, to send paperwork, an error that left her uninsured for nearly two months, according to an ongoing class-action lawsuit Davis and other beneficiaries filed against the state.
The lawsuit, which does not name Deloitte as a defendant, seeks to order Tennessee to restore coverage for those who wrongly lost it. Kimberly Hagan, Tennessee Medicaid’s director of member services, said in a court filing defending the state’s actions that many issues “reflect some unforeseen flaws or gaps” with the eligibility system and “some design errors.”
Hagan’s legal declaration in 2020 gave a view of what went wrong: Davis lost coverage because of missteps by both Tennessee and Deloitte during what’s known as the “conversion process,” when eligibility data was migrated to a new system.
Tennessee’s Medicaid agency, known as “TennCare, along with its vendor, Deloitte, designed rules to govern the logic of conversion,” Hagan said in the legal declaration. She also cited a “manual, keying error by a worker” made in 2017.
Davis’ family was “incorrectly merged with another family during conversion,” Hagan said.
Davis regained coverage, but before she could rebook the surgeries, she testified, she became pregnant and a serious complication emerged. In June 2020, Davis rushed to the hospital. A physician told her she had preeclampsia, a leading cause of maternal death. Labor was induced and her son was born prematurely.
“Preeclampsia can kill the mom. It can kill the baby. It can kill both of you,” she testified. “That’s like a death sentence.”
Deloitte’s Tennessee contract is worth $823 million. Deloitte declined to comment on Davis’ case or the litigation.
Speaking broadly, Smith said, “data conversion is incredibly challenging and difficult.”
Hagan called the problems one-time issues: “None of the Plaintiffs’ cases reflect ongoing systemic problems that have not already been addressed or are scheduled to be addressed.”
States leverage Deloitte’s technology as part of a larger push toward automation, legal aid attorneys and former caseworkers said.
“We all know that big computer projects are fraught,” said Gordon Bonnyman, co-founder of the nonprofit Tennessee Justice Center. “But a state that was concerned about inflicting collateral damage when they moved to a different automated system would have a lot of safeguards.”
TennCare spokesperson Amy Lawrence called its eligibility system “a transformative tool, streamlining processes and enhancing accessibility.”
When enrollees seek help at county offices, “you don’t get to sit down across from a real human being,” Bonnyman said. “They point you to the kiosk and say, ‘Good luck with that.’”
A Backlog of 50,000 Cases
As part of the Affordable Care Act rollout about a decade ago, states invested in technological upgrades to determine who qualifies for public programs. It was a financial boon to Deloitte and such companies as Accenture and Optum, which landed government contracts to build those complex systems.
Problems soon emerged. In Kentucky, a Deloitte-built system that launched in February 2016 erroneously sent at least 25,000 automated letters telling people they would lose benefits, according to local news reports. State officials manually worked through a backlog of 50,000 cases caused by conflicting information from newly merged systems, the reports say.
“We know that the rollout of Benefind has caused frustration and concern for families and for field staff,” senior Deloitte executive Deborah Sills said during a March 2016 news conference alongside Gov. Matt Bevin and other senior officials after Kentucky was bombarded with complaints. Within two months, roughly 600 system defects were identified, found a report by the Kentucky state auditor.
In Rhode Island, a botched rollout in September 2016 delayed tens of thousands of Social Security payments, The Providence Journal reported. Advocacy groups filed two class-action lawsuits, one related to Medicaid and the other to food stamp benefits. Both were settled, with Rhode Island officials denying wrongdoing. Neither named Deloitte as a defendant.
A 2017 audit by a top Rhode Island official prepared for Gov. Gina Raimondo found that Deloitte “delivered an IT system that is not functioning effectively” and had “significant defects.” “Widespread issues,” it said, “caused a significant deterioration in the quality of service provided by the State.”
“Deloitte held itself out as the leading vendor with significant experience in developing integrated eligibility systems for other states,” the audit read. “It appears that Deloitte did not sufficiently leverage this experience and expertise.” Deloitte declined to comment further about Rhode Island and Kentucky.
Deloitte invokes the phrase “no-touch” to describe its technology — approving benefits “without any tasks performed by the State workers,” it wrote in documents vying for an Arkansas contract.
In practice, enrollee advocates and former government caseworkers say, the systems frequently have errors and require manual workarounds.
As it considered hiring Deloitte, Arkansas officials asked the company about problems, particularly in Rhode Island.
In response, the company said in 2017, “We do not believe Deloitte Consulting LLP has had to implement a corrective action plan” for any eligibility system project in the previous five years.
Arkansas awarded Deloitte a $345 million contract effective in 2019 to develop its system.
“It had a lot of bugs,” said Bianca Garcia, a program eligibility specialist for the Arkansas Department of Human Services from August 2022 to October 2023.
Garcia said it could take weeks to fix errors in a family’s details and Medicaid enrollees wouldn’t receive the state’s requests for information because of glitches. They would lose benefits because workers couldn’t confirm eligibility, she added.
The enrollees “were doing their part, but the system just failed,” Garcia said.
Arkansas Department of Human Services spokesperson Gavin Lesnick said: “With any large-scale system implementation, there occasionally are issues that need to be addressed. We have worked alongside our vendor to minimize these issues and to correct any problems.”
Deloitte declined to comment.
‘Heated’ Negotiations
In late 2020, Colorado officials were bracing for the inevitable unwinding of pandemic-era Medicaid protections.
Colorado was three years into what is now a $354.4 million contract with Deloitte to operate its eligibility system. A state-commissioned audit that September had uncovered widespread problems, and Kim Bimestefer, the state’s top Medicaid official, was in “heated” negotiations with the company.
The audit found 67% of the system notices it sampled contained errors. Notices are federally required to safeguard against eligible people being disenrolled, said MaryBeth Musumeci, an associate teaching professor in public health at George Washington University.
“This is, for many people, what’s keeping them from being uninsured,” Musumeci said.
The Colorado audit found many enrollee notices contained inaccurate response deadlines. One dated Dec. 19, 2019, requested a beneficiary return information by Sept. 27, 2011 — more than eight years earlier.
“We’re in intense negotiations with our vendor because we can’t turn around to the General Assembly and say, ‘Can I get money to fix this?’” Bimestefer told lawmakers during the 2020 legislative audit hearing. “I have to hold the vendor accountable for the tens of millions we’ve been paying them over the years, and we still have a system like this.”
She said officials had increased oversight of Deloitte. Also, dozens of initiatives were created to “improve eligibility accuracy and correspondence,” and the state renegotiated Deloitte’s contract, said Marc Williams, a state Medicaid agency spokesperson. A contract amendment shows Deloitte credited Colorado with $5 million to offset payments for additional work.
But Deloitte’s performance appeared to get worse. A 2023 state audit found problems in 90% of sampled enrollee notices. Some were violations of state Medicaid rules.
The audit blamed “flaws in system design” for populating notices with incorrect dates.
In September, Danae Davison received a confusing notice at her Arvada home stating that her daughter did not qualify for coverage.
Lydia, 11, who uses a wheelchair and is learning to communicate via a computer, has a seizure disorder that qualifies her for a Medicaid benefit for those with disabilities. The denial threatened access to nursing care, which enables her to live at home instead of in a facility. Nothing had changed with Lydia’s condition, Davison said.
“She so clearly has the need,” Davison said. “This is a system problem.”
Davison appealed. In October, a judge ruled that Lydia qualified for coverage.
The notice generated by the Deloitte-operated system was deemed “legally insufficient” because it omitted the date Lydia’s coverage would end. Her case highlights a known eligibility system problem: Beneficiary notices contain “non-compliant or inconsistent dates” and are “missing required elements and information,” according to the 2023 audit.
Deloitte declined to comment on Colorado. Speaking broadly, Smith said, “Incorrect information can come in a lot of forms.”
Last spring in Pennsylvania, Deloitte’s eligibility role expanded to include the Children’s Health Insurance Program and 126,000 enrollees.
Pennsylvania’s Department of Human Services said an error occurred when converting to the state’s eligibility system, maintained by Deloitte through a $541 million contract. DHS triaged the errors, but, for “a small window of time,” some children who still had coverage “were not able to use it.”
These issues affected 9,269 children last June and 2,422 in October, DHS said. A temporary solution was implemented in December and a permanent fix came through in April.
Catanese, the union representative, said it was another in a long history of problems. Among the most prevalent, he said: The system freezes for hours. When asked about that, Smith said “it's hyperbole.”
Instead of the efficiency that Deloitte touted, Catanese said, “the system constantly runs into errors that you have to duct tape and patchwork around.”
KFF Health News senior correspondent Renuka Rayasam and correspondents Daniel Chang, Bram Sable-Smith, and Katheryn Houghton contributed to this report.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
Americans would no longer have to worry about medical debts dragging down their credit scores under federal regulations proposed Tuesday by the Consumer Financial Protection Bureau.
If enacted, the rules would dramatically expand protections for tens of millions of Americans burdened by medical bills they can’t afford.
The regulations would also fulfill a pledge by the Biden administration to address the scourge of health care debt, a uniquely American problem that touches an estimated 100 million people, forcing many to make sacrifices such as limiting food, clothing, and other essentials.
“No one should be denied access to economic opportunity simply because they experienced a medical emergency,” Vice President Kamala Harris said Tuesday.
The administration further called on states to expand efforts to restrict debt collection by hospitals and to make hospitals provide more charity care to low-income patients, a step that could prevent more Americans from ending up with medical debt.
And Harris urged state and local governments to continue to buy up medical debt and retire it, a strategy that has become increasingly popular nationwide.
Credit reporting, a threat traditionally used by medical providers and debt collectors to induce patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis has shown.
Although a single unpaid bill on a credit report may not hugely affect some people, the impact can be devastating for those with large health care debts.
There is growing evidence, for example, that credit scores depressed by medical debt can threaten people’s access to housing and fuel homelessness. People with low credit scores can also have problems getting a loan or can be forced to borrow at higher interest rates.
“We’ve heard stories of individuals who couldn’t get jobs because their medical debt was impacting their credit score and they had low credit,” said Mona Shah, a senior director at Community Catalyst, a nonprofit that’s pushed for expanded medical debt protections for patients.
Shah said the proposed regulations would have a major impact on patients’ financial security and health. “This is a really big deal,” she said.
Administration officials said they plan to review public comments about their proposal through the rest of this year and hope to issue a final rule early next year.
CFPB researchers have found that medical debt — unlike other kinds of debt — does not accurately predict a consumer’s creditworthiness, calling into question how useful it is on a credit report.
The three largest credit agencies — Equifax, Experian, and TransUnion — said they would stop including some medical debt on credit reports as of last year. The excluded debts included paid-off bills and those less than $500.
Those moves have substantially reduced the number of people with medical debt on their credit reports, government data shows. But the agencies’ voluntary actions left out many patients with bigger medical bills on their credit reports.
A recent CFPB report found that 15 million people still have such bills on their credit reports, despite the voluntary changes. Many of these people live in low-income communities in the South, according to the report.
The proposed rules would not only bar future medical bills from appearing on credit reports; they would also remove current medical debts, according to administration officials.
Officials said the banned debt would include not only medical bills but also dental bills, a major source of Americans’ health care debt.
Even though the debts would not appear on credit scores, patients will still owe them. That means that hospitals, physicians, and other providers could still use other collection tactics to try to get patients to pay, including using the courts.
Patients who used credit cards to pay medical bills — including medical credit cards such as CareCredit — will also continue to see those debts on their credit scores as they would not be covered by the proposed regulation.
Hospital leaders and representatives of the debt collection industry have warned that restricting credit reporting may have unintended consequences, such as prompting more hospitals and physicians to require upfront payment before delivering care.
But consumer and patient advocates continue to call for more action. The National Consumer Law Center, Community Catalyst, and about 50 other groups last year sent letters to the CFPB and IRS urging stronger federal action to rein in hospital debt collection.
State leaders also have taken steps to expand consumer protections. In recent months, a growing number of states, led by Colorado and New York, have enacted legislation prohibiting medical debt from being included on residents’ credit reports or factored into their credit scores. Other states, including California, are considering similar measures.
Many groups are also urging the federal government to bar tax-exempt hospitals from selling patient debt to debt-buying companies or denying medical care to people with past-due bills, practices that remain widespread across the U.S., KFF Health News found.
About This Project
“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.
The series draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country.
Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.
The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers’ balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability.
KFF Health News journalists worked with KFF public opinion researchers to design and analyze the “KFF Health Care Debt Survey.” The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.
Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
