28 January 2010
California Edition
Calendar
February 10
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
State Links Hospital Errors to Nurses
Four Citations at One Facility Alone; Union Reacts
Reports released this week by the until eight hours after being admitted, at
California Department of Public Health which time she had developed a 106-
degree fever. That oversight was linked to
chronicle a series of nurse-related hospital
mishaps that led to the deaths of four a traveling nurse assigned to the
patients, including an infant. The head of emergency department who had recently
the state’s largest union blamed the errors graduated from nursing school and was
in part on hospital not qualified for
executives ER work.
mismanaging their January 27 Administrative Penalties In another
nursing staffs. incident at JFK, an
John F. Kennedy Number Levied: 16 87-year-old patient
Memorial Medical Hospitals cited: 13 received a dose of
Center in Indio Patient Deaths involved: 4 the blood thinner
received four Physician/staff-involved errors cited: 4 heparin 10 times
administrative Nurse-involved errors cited: 12 larger than
penalties totaling prescribed. An
investigation
$100,000 – the most
ever levied by the CDPH at once. found that seven nurses assigned to JFK’s
According to CDPH documentation, all of ER were not specifically trained for the
the incidents were linked to issues with the assignment.
145-bed facility’s nursing staff. All occurred Deborah Burger, president of the
in 2008. California Nurses Association and
The most serious incident involved a 2- National Nurses United, among the
day-old boy who died of sepsis, meningitis nation’s most influential nurse unions,
and acute hypoglycemia within hours of claims it’s fairly common for hospitals to
being admitted. Although the child showed place nurses in positions where they
signs of sepsis when brought to the ER, no don’t have specific clinical
testing was immediately performed, his competencies.
vital signs were not closely monitored, and “There are some facilities that have a
it was more than two hours before high number of traveling nurses. They
antibiotics were administered. Another
child did not have its full vital signs taken Continued on Next Page
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In Brief
City of Angels Civil
Charges Settled For
$10M
Two former executives of City of
Angels Medical Center in Los
Angeles will pay $10 million as
part of a consent judgment to
satisfy state and federal civil
charges over their operation of a
Medicare fraud scheme.
Prosecutors alleged that
between 2004 and 2007, Robert
Bourseau and Rudra Sabaratnam,
M.D., recruited homeless persons
for $500 apiece to undergo
unnecessary treatments and
procedures. The pair in turned
billed Medicare and Medi-Cal at
least $4 million. They pled guilty to
federal criminal charges last year.
“Performing unnecessary
medical procedures just to take
money from taxpayers' pockets is
bad enough, but to prey on
homeless people struggling to
survive day to day is particularly
reprehensible,” says Tony West,
Assistant Attorney General for the
Civil Division of the Department of
Justice. “We won't tolerate illegal
conduct and we will continue to
hold companies, institutions and
individuals accountable for
healthcare
fraud.”
Bourseau will be sentenced on
February 22, and Sabaratnam on
April 5.
Molina Offers Full 2010
Guidance
Medi-Cal managed care insurer
Molina Healthcare has issued
earnings guidance for the full 2010
calendar year that are moderately
above its 2009 earnings.
The Long Beach-based Molina
issued a forecast $39 million in net
Continued on Page 3
NEWS
Nurses (Continued from Page One)
may have difficulty recruiting nurses to
work at those facilities because of
working conditions,” Burger says. “But if
they’re using travelers, they need to give
them a proper orientation, and make sure
they’re competent to work in the unit
where they’re assigned.”
JFK’s executives agreed to intensively
retrain portions of its nursing staff,
particularly in the ED, to address the
violations. “We’ve implemented the
training, and have reduced the number of
traveling nurses we use,” says hospital
spokeswoman Linda Evans. She adds that
no further incidents have occurred.
Aside from JFK, only one other
hospital has racked up four administrative
penalties – Los Angeles County-Harbor
UCLA Medical Center, according to
CDPH spokesman Ralph Montano.
In other incidents, Santa Clara Valley
Medical Center in San Jose was fined
$25,000 for a patient death linked to an
improper triage performed by its ER
nurse. The nurse had claimed that the
patient’s hemoglobin count appeared to
A Boost to Medi-Cal In L.A. County
Health Net, L.A. Care Stretch on Dental Coverage
As part of a cost saving measure last year
to close a huge budget decit, California
eliminated the Denti-Cal program for adults,
limiting coverage only to tooth extractions.
In response, the two major health plans
that cover Medi-Cal enrollees in Los Angeles
County have tried to provide dental care on
their own. This week, Woodland Hills-based
Health Net announced it would extend basic
dental coverage to its adult Medi-Cal enrollees
in Los Angeles County through the
commercial dental plan it operates. The
coverage includes routine checkups, x-rays
and cleanings. Other procedures, such as
llings, are discounted by as much as two-
thirds.
The move follows on the heels of L.A.
Care Health Plan’s provision for dental
benets last year.
Health Net ofcials say the need to
provide dental care had become obvious,
particularly in light of studies linking oral
health to overall health. “It’s not one of the
!!!"#$#!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
Page 2
be crossed out, rather than underlined,
prompting him to disregard it.
Another patient death case at St. Jude
Medical Center in Fullerton occurred after a
nurse ignored a lack of vital signs on a
patient’s cardiac monitor. The nurse had
noted the patient had left his bed a couple
of times during the evening, and thought
the monitor leads were disconnected.
Nurses were also linked to surgical
errors at San Francisco General Hospital
and Western Medical Center in Santa Ana
when they did not conduct a proper post-
surgical count of sponges. In the San
Francisco General case, the error was not
discovered until the sponge was removed
from the patient during an ER visit more
than three months later. San Francisco
General was fined $25,000 for the incident;
Western Medical $50,000.
Burger claims the surgeons involved are
also normally involved in tracking sponges
before a procedure is completed. “All of
them are responsible for the count,” she
says.
The CDPH declined comment on any
trends involving nurses.
higher cost services overall, and we were
getting a negative response from many of our
enrollees,” says Sean O’Brien, Health Net’s
director of dental operations. The decision
affects about 70,000 Medi-Cal beneciaries in
L.A. County who are over the age of 21, he
adds. It covers about 450,000 Medi-Cal
beneciaries in L.A. County.
Last September, Health Net began offering
dental benets to the approximately 10,000
adult Medi-Cal beneciaries it covers in
Sacramento County. In response, it signed on
about 2,000 new enrollees this month, about
double the average, according to O’Brien.
Whereas Health Net is using its existing
infrastructure, L.A. Care, which covers about
785,000 Medi-Cal enrollees countywide, is
mostly paying providers to offer dental
coverage. Its small health plan for dual-
eligibles – with 700 Medicare and Medi-Cal
enrollees – began offering dental benets in
early 2009. But the plan granted more than
Continued on Next Page
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In Brief
income, or $1.50 per share for
calendar 2010, about 20% above
its projected 2009 earnings of
$1.12 to $1.26 per share it issued
earlier this month.
Molina officials had said 2009
earnings were put under pressure
due to additional expenses treating
enrollees who had contracted the
H1N1 swine flu virus.
The 2010 earnings forecast
does not take into account any
dilutive effect for its recently
announced acquisition of the
health information management
unit from Unisys, Inc., the
company announced.
Loubet Joins Payers &
Providers Board
Henry Loubet, chief strategy officer
for Keenan & Associates, has
joined the Payers & Providers
Editorial Board.
Loubet, who is based in
Oakland, is the first Northern
Californian representative on the
Payers & Providers board. He will
regularly contribute to its Opinion
page. Keenan is the largest
independent insurance brokerage
and consultant in California.
Prior to joining Keenan,
Loubet held senior executive
positions at some of California’s
largest health plans. He served as
chief executive officer of
UnitedHealthCare’s western
region, was president of the former
Foundation Health Plan, and was a
senior vice president with Health
Net.
Loubet holds master’s degrees
from the University of Pittsburgh
and University of San Francisco,
and a bachelor’s degree from Rider
University, New Jersey.
“Henry’s deep knowledge of
the payer side of healthcare is an
enormous benefit to the
publication,” says Payers &
Providers publisher Ron Shinkman.
NEWS
Medi-Cal (Continued from Page Two)
$700,000 to 10 community clinics
countywide to provide dental care to its
approximately 200,000 adult Medi-Cal
enrollees. L.A. Care spokesperon Andrea Van
Hook also conrmed that it is considering
offering dental coverage to its adult Medi-Cal
enrollees, but that it would require approval
from the California Department of Health
Care Services, which oversees the Medi-Cal
program. “Those plans have not yet
solidied,” she says.
That two health plans have stretched on
AIDS Provider Challenges Merck
Bars Sales Force Over Claim of Price Gouging
Claiming price-gouging by Merck & Co. Inc.
for its antiretroviral drug, the AIDS Healthcare
Foundation has banned sales representatives
from the pharmaceutical giant at its clinics.
The move came after ofcials with the Los
Angeles based AHF claimed Merck did not
lower the price of its drug Isentress after it was
repositioned as a rst-line defense for patients
ghting HIV. Isentress was initially introduced
as a “salvage” drug to treat patients who were
not responding to other forms of antiretroviral
therapy. Typically, salvage drugs are priced
considerably higher than rst-line drugs
because the lower demand cannot cover
research costs.
According to AHF data, Merck recently
raised the wholesale price of Isentress from
$12,150 per year to $12,868, rather than
cutting the price. AHF ofcials say many
antiretrovirals cost less than $9,000 per year
wholesale.
“The fact that Merck recently obtained
FDA-approval for wider use of Isentress as a
rst line treatment, but kept it priced as if it
were a salvage drug is reprehensible,” says
AHF President Michael Weinstein.
Expert Healthcare Communications
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(818) 848-8510
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Page 3
providing dental care benets has pleased
some state healthcare advocates.
“It would be amazing if we could get
more plans to expand their dental coverage,”
says Maria Robles, President of Sacramento-
based Californians for Patient Care. The group
says its requests to nd both medical and
dental care for individuals has increased
twenty-fold over the past year. In one example,
the organization spent four months trying to
get dental care for someone with an abscessed
tooth, without success.
AHF operates 15 clinics throughout
California and in Florida and provides
antiretroviral drugs to about 8,000.Weinstein
says AHF spends about $180 million a year
on drugs, but could not estimate how much it
spends on Isentress.
The prohibition on Merck’s sales force
does not include a ban on Isentress,
according to Weinstein. However, AHF
ofcials note that its representatives have
made regular calls to the clinics, and often
provide its staff with lunches.
AHF enacted a similar ban a decade ago
on Glaxo representatives over objections
about how it prices its antiretroviral drugs for
the African market. The ban was in effect for
about four years before Glaxo relented on
pricing, according to Weinstein.
In a prepared statement, Merck defended
its pricing policies.
“The price of Isentress was determined
after consultation with respected leaders in
the HIV community, and is in line with
Merck's long-standing commitment to ensure
access,” says Merck senior vice president
Patrick Bergstedt.
!Newsletters
www.rfsconsult.com
Payers & Providers
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OPINION
A Reboot For Healthcare Reform
New Efforts Must be Focused on ACOs and Costs
Landmark federal healthcare reform
legislation which was nearly a done deal is
now a deal undone.!Due to the recent end
of a Democratic supermajority in the
Senate, the future of healthcare reform will
now be significantly altered.
Whatever strategy Congress chooses to
reform healthcare, it is essential that it
address the major areas in need of change,
including eliminating various unfair
insurance practices and fixing
our current healthcare delivery
model. Without reform the risk
is real that our economy will
continue on a downward spiral
as sky-rocking healthcare costs
crowd out other critical
expenditures.!
Part of the problem has been
our reluctance to transform an
antiquated fee-for-service
payment model – one that has
been entrenched for decades –
into a higher quality, more
accountable system of care.!The
existing fragmented structure makes it Donald spread across the nation.! !
very difficult for patients to receive
optimal care because the fee-for-
service model pays physicians for
treatment regardless of whether the care
provided is appropriate, beneficial, or
even warranted.! Additionally, within the
fee-for-service model, patients are obliged
to self navigate through a maze of
specialists who frequently have no
connection to each other.!!!
Previous healthcare reform measures
offered us the opportunity to transition
from this disorganized approach to one
that is more affordable, comprehensive,
and coordinated through the establishment
of Accountable Care Organizations (ACO).!
In fact, ACOs were one part of healthcare
reform nearly everyone agreed with. It is
vitally important that, in their quest to
transform America’s healthcare system,
Congress doesn’t “throw the baby out with
the bathwater.” Therefore, any future
healthcare reform proposal must include
the ACO model.
.! Think of Accountable Care
Organizations as “Healthcare 3.0” –
providing a system that is more
accountable, affordable, efficient,
!!!"#$#!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
Page 4
innovative, and user-friendly for both patients
and doctors. It will improve individual patient
care by providing health services through a
network of physicians who use the latest
health information technology to track patient
treatments and share intelligence to guide
patient care decisions.! The Congressional
Budget Office has estimated the savings from
a currently proposed national ACO “pilot
program” at $2.3 billion.
California’s physician groups are
among the few throughout the
country that have been
practicing within an accountable
care model for the past 20 years.
The California physicians who
have organized themselves into
Multi-Specialty Medical Groups
and Independent Practice
Associations (IPA) represent the
exact “Accountable Care
Organization” approach that the
now in-limbo House and Senate
bills have tasked the Center for
By Medicare and Medicaid Services to
Crane With the baby boomers scheduled to hit
The ACO model is best equipped to
handle the intense coordination of health
services required to meet the needs of an
aging patient population battling diabetes and
other chronic diseases. The ACO model will
also provide the infrastructure and cost
containment measures needed to insure 36
million more Americans in the next decade
without overwhelming our healthcare system.
!Even though broad healthcare reform
seems to be slipping away, we still have an
extraordinary and unique opportunity to make
a very real difference in the lives of millions
of people. Congress should seriously consider
the ACO experiences in California and use
them as a roadmap for any healthcare reform
measures proposed in the future.
Donald Crane is the President and CEO of the
California Association of Physician Groups, which
employs or contracts with nearly 60,000
physicians who provide care to 15 million
Op-ed submissions of up to 575 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com, or call
(877) 248-2360, ext. 3.
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