MIAMI — Firms that are paid tens of millions of dollars to root out Medicare fraud are bidding on contracts to investigate companies they are doing business with — sometimes their own parent companies, according to a government report released Tuesday.
Two-thirds of the companies that bid on contracts over 18 months beginning in October 2010 had financial ties to claims processors and in some cases also processed claims themselves, according to the study by the Department of Health and Human Services’ inspector general. The report blames what it calls a flawed bidding system and an inadequate conflict-of-interest policy.

Health insurers' suits show they're not keeping a lid on costs

The admission that health insurers are doing a poor job of controlling costs underlies lawsuits filed by Aetna and United Healthcare against a Northern California chain of small surgical clinics.

Michael Hiltzik
July 11, 2012
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With federal healthcare reform still facing political head winds despite its validation by the Supreme Court, this probably isn't the best time for health insurers to admit their utter incompetence in handling their most important role under the reform, which is keeping a lid on healthcare costs.
But that admission underlies a couple of lawsuits filed by Aetna and United Healthcare earlier this year, alleging that a Northern California chain of small surgical clinics fraudulently overcharged them tens of millions of dollars by counting on the insurers being asleep at the cost-control switch.
The clinics have joined with 60 individual doctors and the medical associations of California and Los Angeles, Ventura and Santa Clara counties in what isbasically a countersuit against Aetna, filed last week in Los Angeles County Superior Court.
They say their main concern is that Aetna is preventing doctors who are themselves members of Aetna's contract network from referring Aetna members to out-of-network clinics, in violation of the patients' rights under their insurance policies. Don't you believe it.
The real issues at the heart of the case are different. One is who gets paid, and how much, for your medical care.
The other, perhaps more important, is whether unnecessary medical utilization increases, driving up costs, when doctors refer patients to clinics they own — such as the clinics at the center of this courthouse battle. Evidence from all over the country suggests that the answer is yes.
"These providers only make money when they do stuff," observes Jean Mitchell, a Georgetown University expert on physician-owned facilities. Some physician-owned clinics have profit margins of more than 25%, she says. "They're cash cows — it's why they've proliferated."
That's especially troubling in California, where physician-owned clinics are subject to such lax regulation that state authorities have almost no idea how their surgical outcomes match up to hospitals and other better-regulated facilities.







How to Avoid Avoidable Care–by George Lundberg



Below, a  guest-post by Dr. George Lundberg, Editor-at-Large of MedPageToday; Editor in Chief of Collabrx; President and Board Chair of the Lundberg Institute.  (Full disclosure: I am a member of the Lundberg Institute’s Board)
What Lundberg says is not meant to be news.  Today, physicians tend to agree that many of the tests that patients undergo are unnecessary. Three years ago, one hospitalist shared a story on HealthBeat, describing how he warned his residents about over-testing.  His hospital may not have been happy about his disclosure: tests boost revenues.
But in some cases, we have solid medical evidence showing that for certain patients, these tests do more harm than good– though vested interests may try to bury that evidence. (See Dr. Hoffman’s post below.)
Yet doctors continue to order the tests– why?  


LePage letters blast Pingree in dispute over Medicaid

It is "astounding that you would actively advocate for the federal government to overrule Maine decisions," LePage writes to Pingree.

By Kevin Miller kmiller@mainetoday.com
Washington bureau chief
WASHINGTON — Gov. Paul LePage blasted U.S. Rep. Chellie Pingree today, accusing the Democrat of becoming "part of the jet-setting Washington culture that keeps people dependent on government handouts" and representing bureaucrats over Maine residents.

Insurers Pay Big Markups as Doctors Dispense Drugs


By  and 


When a pharmacy sells the heartburn drug Zantac, each pill costs about 35 cents. But doctors dispensing it to patients in their offices have charged nearly 10 times that price, or $3.25 a pill.
The same goes for a popular muscle relaxant known as Soma, insurers say. From a pharmacy, the per-pill price is 60 cents. Sold by a doctor, it can cost more than five times that, or $3.33.
At a time of soaring health care bills, experts say that doctors, middlemen and drug distributors are adding hundreds of millions of dollars annually to the costs borne by taxpayers, insurance companies and employers through the practice of physician dispensing.
Most common among physicians who treat injured workers, it is a twist on a typical doctor’s visit. Instead of sending patients to drugstores to get prescriptions filled, doctors dispense the drugs in their offices to patients, with the bills going to insurers. Doctors can make tens of thousands of dollars a year operating their own in-office pharmacies. The practice has become so profitable that private equityfirms are buying stakes in the businesses, and political lobbying over the issue is fierce.
Doctor dispensing can be convenient for patients. But rules in many states governing workers’ compensation insurance contain loopholes that allow doctors to sell the drugs at huge markups. Profits from the sales are shared by doctors, middlemen who help physicians start in-office pharmacies and drug distributors who repackage medications for office sale.
Alarmed by the costs, some states, including California and Oklahoma, have clamped down on the practice. But legislative and regulatory battles over it are playing out in other states like Florida, Hawaii and Maryland.

Repeal of Health Care Law Approved, Again, by House


By 

WASHINGTON — Waging old battles with new zeal, the House passed a bill on Wednesday to repeal President Obama’s health care overhaul law less than two weeks after the Supreme Court upheld it as constitutional.
The bill was approved by a vote of 244 to 185, with five Democrats supporting repeal.
It has no chance of approval in the Senate and would face a veto from Mr. Obama if it ever got to him. But the House debate exposed the depth of passion over efforts to remake the health care system and suggested that the fight would continue next year, regardless of who wins the November elections for president and Congress.
House Republican leaders had many reasons for voting on another repeal bill. They detest the 2010 law. They see it as a winning issue for them. And they wanted to placate freshman Republicans like Representative Ben Quayle of Arizona, who described repeal as a way to protect constituents from “the tyranny of government overreach.”
The House has voted more than 30 times to repeal part or all of the 2010 law or to choke off money needed for various provisions, including coverage of more than 30 million uninsured people.
Democrats said the House was wasting time that would have been better spent trying to create jobs.

Obamacare is an unhealthy prescription

By Scott Walker, Thursday, July 12, 7:05 AM



Scott Walker, a Republican, is the governor of Wisconsin.
Since the Supreme Court upheld President Obama’s health-care mandate, there has been exhaustive discussion about the philosophical basis of this federal law. As Election Day approaches, debate will surely grow about the proper role of our federal government.
But while much attention has focused on Congress’s intention to repeal or replace the Affordable Care Act, too few are studying the law’s practical impact. The best place to see the effects of the law is in our nation’s laboratories, the states. Although the Supreme Court has ruled on the constitutionality of the act, Wisconsin shows that it is bad policy.

Republicans vote to repeal Medicare cuts they voted for and are campaigning against

By Jonathan Bernstein
That headline is not an exaggeration or a parody.
Just now, the House voted, one more time, to repeal the Affordable Care Act, by an almost straight-line party vote of 244-185, with every Republican voting for “full repeal” and all but five Democrats voting against it.


Medicaid expansion a tough sell to governors of both parties

By N.C. Aizenman and , Thursday, July 12, 8:12 AM

While the resistance of Republican governors has dominated the debate over the health-care law in the wake of last month’s Supreme Court decision to uphold it, a number of Democratic governors are also quietly voicing concerns about a key provision to expand coverage.
At least seven Democratic governors have been noncommittal about their willingness to go along with expanding their Medicaid programs, the chief means by which the law would extend coverage to millions of Americans with incomes below or near the poverty line.
“Unlike the federal government, Montana can’t just print money,” Gov. Brian Schweitzer (D) said in a statement Wednesday. “We have a budget surplus, and we’re going to keep it that way.”
The law would add an estimated 84,000 people to Montana’s Medicaid program, doubling its size, the governor said. Although the federal government would pay the vast majority of the additional costs, Montana’s health and human services department estimates the state’s share would reach $71 million in 2019. Outside groups say the costs would be far lower than that.
The range of state leaders expressing unease suggests that implementing the law could be rough going, with divisions not always breaking along party lines. The topic is likely to factor prominently in this week’s meeting of the National Governors Association in Williamsburg, Va. And it has been fueled by a long list of unanswered questions about the choice now before states.
In particular, it is unclear how the court’s pronouncement that states cannot be penalized for refusing to adopt the law’s more generous eligibility standards for Medicaid in 2014 changes the rules governing the expansion.
Will states that opt in have the option of scaling back in future years? If a state that opts out decides it wants to participate at some later point, will the federal government still pay nearly the full cost of covering those who become newly eligible for Medicaid? And can a state participate only partially — for instance, by raising the income cutoff for its program to a level lower than the ceiling envisioned in the law, which is set at 133 percent of the federal poverty line?