5 January 2012

California Edition
Calendar
January 12-14
:"64;2%#4"!:7"<=/%!2;!=7/!:266/8/!2;! >?/%8/#@&!.7&04@4"#0!A'=7!"##$"6! >?/%8/#@&!B/54@4#/!4#!C20/?4=/! @2#;/%/#@/D!E7F"#//!G2=/6(!C20/?4=/! H"=42#"6!."%ID!E!540@$0042#!2;!=%/#50!"#5! =%/"=?/#=0!";;/@=4#8!>J!@"%/D!KAL'MKLN*D ! :64@I!G/%/!;2%!B2%/!O#;2%?"=42#

Providers Win Round One On Cuts

Federal Court Stays Medi-Cal Payment Reductions
Californias hospitals and pharmacists won a signicant victory over state policymakers late last month, convincing a federal judge to stay hundreds of million of dollars to cuts to the Medi-Cal program approved by the federal government last fall. Preliminary injunctions issued Dec. 28 by U.S. District Court judge Christina Snyder ruled that the cuts would have deprived MediCal beneciaries of skilled nursing care in rural areas of the state and put undue nancial duress on hospitals providing such care. Enrollees would have also suffered hardships in trying to ll their prescriptions. Snyders rulings also strongly suggested providers would prevail in eventually restoring full payments. From a healthcare services perspective, this ruling is important because the cuts very likely would have caused many rural facilities, including entire hospitals, to close, said Lloyd Bookman, the Los Angeles attorney representing the California Hospital Association. The CHA sued the state Department of Health Care Services and the U.S. Department of Health and Human Services to block the cuts. Groups representing physicians, pharmacists and dentists led their own suits shortly after the hospitals took legal action. From a legal perspective, this ruling is signicant because the court stopped a rate cute that had been approved by federal Medicaid regulators, Bookman said, noting that such decisions are usually extremely difcult to overrule. The cuts had been approved by the Legislature and signed into law by Gov. Jerry Brown last spring as a means of addressing ongoing budget decits, but required federal approval to take effect. The Centers for Medicare and Medicaid Services approved the rate reductions last October. The 10% cuts were intended to be retroactive to July 1 the start of the scal year and was expected to save California $623 million annually. The cuts targeted payments to skilled nursing facilities in hospitals, physicians and pharmacists, among others. DHCS spokesperson Norman Williams said the department strongly disagrees with Snyders ruling and intends to appeal to the U.S. Ninth Circuit Court of Appeals. A timeline for the appeal was not immediately available from the agency. According to Williams, an access survey undertaken by DHCS concluded that the care of Medi-Cal enrollees would not be greatly impacted by the cuts. The survey results were submitted to CMS as part of the approval process.
Continued on Next Page

January 19
!S2$=7/%#!:"64;2%#4"!."=4/#=!S";/=&! :2662T$4$?D!J2$-6/=%//!G2=/6(!U#="%42D! V/&#2=/!0</"I/%!!"?/0!W/4#/%=0/#!"#! 2=7/%0!F466!540@$00!F"&0!=2!-/#@7?"%I! T$"64=&!"#5!0";/=&D!KXXMK+Y'D

:64@I!G/%/!;2%!B2%/!O#;2%?"=42#

January 23-24
./%02#"64P/5!B/54@4#/!Q2%65!:2#;/%/#@/! )*+)D!:2?<$=/%!G40=2%&!B$0/$?(! B2$#="4#!R4/FD!E!;2@$0!2#!</%02#"6! ?/54@4#/!2#!=7/!?26/@$6"%!6/3/6D!K+()**M KL('**D ! :64@I!G/%/!;2%!B2%/!O#;2%?"=42#

A NEW WEBINAR! Friday, January 20, 2012 10 A.M. PST

Hospital C-Suite Compensation: How Much Is Too Much?

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.

Please join Mike Rosenbaum, Partner, Drinker Biddle Reath, Claudia Wyatt-Johnson, Co-Founder, Partners in Performance, and Ron Shinkman, Publisher of Payers & Providers, to discuss trends in compensation in California and elsewhere.

http://www.healthwebsummit.com/pp012012.htm
a HealthcareWebSummit Event
co-sponsored by

PAYERS & PROVIDERS

!"#$"%&!'(!)*+)!,!)*++!-&!."&/%0!1!.%2345/%0!.$-64074#8(!99:

Payers & Providers

Top Placement... Bottomless Potential

NEWS
Ruling (Continued from Page One)
However, Snyders ruling regarding hospitals noted that the agency overlooked the likelihood nursing home patients transferred to another facility due to a closure would be traumatized or injured. In both rulings, Snyder concluded that DHCSs ongoing monitoring of access issues would not prevent service disruptions and loss of

Page 2

Advertise Here
(877) 248-2360, ext. 2

In Brief
CDPH Fines Nursing Homes $190,000 For Patient Deaths
The California Department of Public Health issued citations to two nursing homes in Orange County and a combined $190,000 in nes stemming from preventable patient deaths that occurred at the facilities. The Newport Nursing and Rehabilitation Center in Newport Beach was ned $100,000 and received the severest citation under state law for leaving a woman patient at risk for falls unattended in a bathroom. She fell and later died. The Emeritus at Yorba Linda nursing home was ned $90,000 and also received the most severe citation when it failed to properly prepare food for a patient whose history of strokes had led to problems swallowing. The patient choked on a sandwich and died in an acute care facility six days later.

services to enrollees. Williams said the injunctions would not immediately impact the departments nances. The DHCS had notied providers in early December that it would take action to recoup the retroactive portion of the reductions, but the injunctions had put that action on hold for now.

Prime Disclosed Patients Record

Executives Shared Data to Dispute Media Report
The Los Angeles Times reported that Prime Healthcare Services deliberately disclosed the medical records of a 64-year-old patient admitted to Shasta Regional Medical Center last year to rebut allegations about the treatment she received raising questions as to whether the Ontario-based hospital chain violated federal law. The allegations were reported by business columnist Michael Hiltzik on Wednesday. Hiltzik reported that Prime executives including Shasta Chief Executive Ofcer Randall Hempling and Chief Medical Ofcer Marcia McCampbell, M.D. had shared the patients name and medical records with the local newspaper, the Redding Searchlight-Record. Prime also forwarded the records to Hiltzik even though he did not request them. According to Hiltzik, the patient, Darlene Courtois, had never authorized Prime to release her medical records. The Health Insurance Portability and Accountability Act bars the sharing of personal medical records with parties not directly involved in that patients care without the written authorization of the patient. Prime has claimed that the patient lost that right when she disclosed them to the investigative journalism website California Watch. (Shasta) was informed and believed that the patient waived her HIPAA rights and that in fact she wanted her medical information to be disclosed and examined, Prime said in a statement issued Wednesday. In December, California Watch reported that Courtois had been treated at Shasta in January 2010 after a serious fall. During her stay, she had allegedly been treated for kwashiorkor, a state of malnutrition rarely seen outside of developing countries. However, Courtois, described in her medical records as well-nourished, claimed she never received such treatment, even though Prime billed Medicare for those services. A resident of Shasta County, Courtois does not have a listed phone number or e-mail address and could not be reached for comment. Prime has been the subject of state and federal scrutiny following numerous California Watch reports that it billed Medicare for treating septicemia and kwashiorkor at rates far higher than state or national averages. It has vigorously denied the reports, and questioned California Watchs credibility.

Kaiser Receives Top Medicare Scores

Oakland-based Kaiser Permanente had among the nations highest scores in the National Committee for Quality Assurances Medicare dataset. Kaiser received the top ratings in nine out of 37 measures rating effectiveness of care, the most of any health plan surveyed. It received the top ratings for comprehensive diabetes care, breast cancer screening and cholesterol management, among other categories. These ratings demonstrate that our doctors and care teams excel in proactive prevention of illness, early detection of disease, and better treatment of ongoing conditions, said Amy Compton-Phillips, M.D., Kaisers associate executive director of quality. We are greatly honored that our

HEALTHCARES BEST ADVERTISING VALUE

]

PAYERS & PROVIDERS reaches 5,000 hospital, health plan and nonprot executives statewide. There is no better venue for marketing your organization or conference, or recruiting new staff.

Continued on Page 3

CALL (877) 248-2360, ext. 2 OR CLICK HERE

!"#$"%&!'(!)*+)!,!)*++!-&!."&/%0!1!.%2345/%0!.$-64074#8(!99:

Payers & Providers

Longer ALOS!*

NEWS

Page 3

Advertise Here
(877) 248-2360, ext. 2
*For our ads, not your hospital

Blue Shield Reaches $2M Settlement

Promises L.A. it Will Reform How it Rescinds Coverage
San Francisco-based insurer Blue Shield of California has paid $2 million to settle a lawsuit brought by the City of Los Angeles regarding its past rescissions of individual healthcare policies. The settlement, announced by late last month by Los Angeles City Attorney Carmen Trutanich, was for a fraction of the $1 billion sought when his predecessor Rocky Delgadillo led suit in 2008, claiming the plan had engaged in unfair business practices and false advertising. Blue Shield did not admit any wrongdoing. The litigation claimed that the not-forprot Blue Shield had rescinded the policies of more than 850 individual health plan enrollees for capricious reasons. As a result of the settlement, Blue Shield agreed to revise its health insurance application form to comply with federal regulations, restrict its gathering of healthcare information from applicants to what is reasonable and necessary, and agreed to no longer pay provide nancial incentives to its investigators for rescinding coverage. Blue Shield also agreed to not rescind any policies unless it can prove the applicant committed fraud or misrepresented facts in order to obtain coverage. Company ofcials said it chose to settle in order to avoid the cost and distraction of prolonged litigation. It also agreed to pay the City Attorneys legal costs. The settlement will be split between L.A. city and county governments. Los Angeles also sued two companies afliated with for-prot insurer Anthem Blue Cross. That suit is still pending.

In Brief
Medicare plans have received such excellent ratings.

Anthem Blue Cross Spends $3.4 Million on Charity Efforts

Anthem Blue Cross of California reported that its health plan, nonprot foundation and employees spent $3.4 million on healthcare-related charity causes during 2011. Among the recipients of Anthems contributions included the Boys & Girls Club of America for programs to ght obesity; the March of Dimess prenatal care toolkit; the Governors Council on Physical Fitness and Sports; and HealthCorps, a mentoring program created by television personality Mehmet Oz, M.D. I'm proud to lead a company that contributed millions of dollars and whose associates have volunteered thousands of hours to charities and community causes in 2011," said Anthem Blue Cross of California President Pam Kehaly.

New Studies Show Insurance Erosion

PHI, CHCF Surveys Document Coverage Losses
Nearly a quarter of Californias women lack healthcare insurance and the overall numbers of those with employer-based coverage statewide continues to drop in a weak economy, according to new studies by the Public Health Institute and the California Health Care Foundation. The study by Oakland-based PHI concluded that the percentage of Californias women lacking insurance climbed from 21% in 2007 to 24% in 2009 an increase of more than 30% in two years. The overall total of uninsured women reached 2.8 million. The disparities hew closely to age, income and race. Thirty-four percent of women between the ages of 18 and 29 lack coverage, and only 37% in that age group have employment-based coverage. Among those in the lowest income brackets, 48% lacked coverage, compared to just 8% among the wealthiest women. Two-thirds of white women had employment-based coverage, versus just 38% of Latinas and 49% of African-American women. Single mothers also had a hard time getting coverage: 32% of them lacked insurance in 2009, compared to 14% of married women with children. Meanwhile, the CHCFs annual Employer Health Benets Survey concluded that employers offering healthcare coverage dropped to 63% from 73% between 2009 and 2011. Premiums for family coverage have climbed 153% between 2002 and 2011. One of the studys researchers said that the impending implementation of healthcare reform could allay some of the trends. The implementation of the Affordable Care Act is coming at a crucial time for California women," said Roberta Wyn, lead author of the PHI study and an afliate of the UCLA Center for Health Policy Research. "These are challenging times, and it is important to move forward in expanding coverage and access."

Class Action Suit Filed in UCLA Data Breach

The University of California Board of Regents has been served with a class action suit stemming from a breach of patient data that occurred last summer. The suit, led in Los Angeles Superior Court, seeks $16 million in damages, or $1,000 for every patient whose data was exposed. Under California law, damages do not need to proven to collect such a nominal sum for a plantiff. The breach stems from the Sept. 6 theft of a hard drive from the home of a physician working with the UCLA Faculty Group. The hard drive contained encrypted patient information, but also taken was a piece of paper containing an access password.

CORRECTION - It was reported in the Dec. 15 edition of Payers & Providers that the CalOptima board of trustees was increased from 11 to 13 seats. The correct number was nine to 11. It was also reported that CEO Richard Chambers paid himself a $73,000 bonus. The bonus was agreed to and approved by the CalOptima board.

!"#$"%&!'(!)*+)!,!)*++!-&!."&/%0!1!.%2345/%0!.$-64074#8(!99:

Payers & Providers

OPINION

Page 4

;26$</!=(!>00$/!+
."&/%0!1!.%2345/%0!40! ?$-6407/5!/3/%&!@7$%05"&!-&! ."&/%0!1!.%2345/%0!.$-64074#8(! 99:A!B#!"##$"6!4#54345$"6! 0$-0C%4?D42#!40!EFF!"!&/"%! GE+=F!4#!-$6H!$?!D2!+*! 0$-0C%4-/%0IA!>D!40!5/643/%/5!-&! /J<"46!"0!"!.KL!"DD"C7</#D(! 2%!"0!"#!/6/CD%2#4C!#/M06/DD/%A
B66!"53/%D404#8(!0$-0C%4-/%!"#5! /54D2%4"6!4#N$4%4/0O
GPQQI!)=PJ)RS* 4#T2U?"&/%0"#5?%2345/%0AC2<

Prime: The Story That Keeps On Giving

Chains Unique Corporate Conduct is Unpredictable
Whenever I think Ive been in the same documented how a 64-year-old patient profession for too long, Prime Healthcare claimed she had never been treated for Services reminds me why it may be the malnutrition during a January 2010 stay at the greatest gift ever given to healthcare hospital even though Medicare was billed for journalists. doing so. They shared the patients medical I always get a chuckle from the steady records with the newspaper to prove their ow of press releases from the Ontario-based point. The problem was it was done so without hospital chain slamming the investigative the patients express written consent. And as website California Watch. Its massive Hiltzik reported, this was likely in violation of reportorial effort showing that the Prime has federal law. billed Medicare for cases of septicemia and The irony made me shake my head. malnutrition at far higher levels than average is Anyone whos been around journalism long probably the best ongoing documentation of enough knows Hiltzik wound up exiled to the healthcare malfeasance Timess business section nearly since the Los Angeles 20 years ago for hacking into Times won a Pulitzer Prize the emails of his co-workers. for reporting on the He was suspended and his institutional dysfunction column temporarily taken occurring at Martin Luther away back in 2006 for posting King-Drew Medical bogus responses to critiques of Center. That hospital his blog. Hes pretty much a eventually shut its doors. Prime doppleganger. By contrast, Prime never Nevertheless, Hiltziks shuts its mouth. lapses are those of ethics The Prime releases rather than accuracy, so Im have a tone I have never going to presume his reporting seen in nearly 20 years of was correct. Hempling and covering healthcare McCampbell have therefore entities: defensive, testy if committed a blatant violation not downright hostile. of the Health Insurance Sometimes they go beyond Portability and Accountability Act. By spinning the truth: as Payers & Primes claim that the patient waived Ron Shinkman Providers reported in 2009, her right to keeping her patient Prime issued a release stating it records condential by sharing them reopened the gerio-psychiatric with California Watch is dead wrong. ward at Sherman Oaks Hospital after it had Federal regulations governing HIPAA explicitly state all authorizations to release medical been closed down by the prior owner. If you records for non-medical purposes must be ignore that the California Attorney General obtained in writing from the patient or their sued Prime for closing the unit in violation of representative. a covenant it made to keep it open after it took Although this may be the beginning of the over, that assertion was completely true. end of Hempling and McCampbells hospital Aside from making me wonder whos careers, I suspect the Prime story will keep on getting paid to write these releases, they going. Sometimes this publication will be a suggest Prime will never hire the type of PR part of it, and sometimes it wont. Either way, rm that specializes in (mostly) straight talk it will always be interesting. And everyone will and making nice with the media. want to know what happens next. Michael Hiltziks column in yesterdays L.A. Times attested to that. It reported that two Prime executives Shasta Regional Medical Ron Shinkman is the publisher of Payers & Center Chief Executive Randall Hempling and Providers. Chief Medical Ofcer Marcia McCampbell, M.D. showed up on the doorstep of the local Op-ed submissions of up to 600 words are newspaper to persuade it to not to publish welcomed. Please e-mail proposals to another California Watch report. This one
editor@payersandproviders.com

V"464#8!"55%/00O
P+P!WA!X266&M225!Y"&(!Z$4D/![ [$%-"#H(!:B!F+'*'

Y/-04D/
MMMA?"&/%0"#5?%2345/%0AC2<

L"C/-22H
MMMAT"C/-22HAC2<\?"&/%0?%2345/%0

@M4DD/%
MMMADM4DD/%AC2<\?"&/%0?%2345/%0

]54D2%4"6![2"%5
ZD/3/#!@A!;"6/#D4#/(!.%/045/#D(! @7/!:"<5/#!^%2$? _200!^265-/%8(!><</54"D/!."0D! .%/045/#D(!920!_2-6/0!X20?4D"6! "#5!V/54C"6!:/#D/% V"%H!L4#$C"#/(!V"#"84#8! K4%/CD2%(!B63"%/`!1!V"%0"6 X/#%&!92$-/D(!:74/T!ZD%"D/8&! aTT4C/%(!b//#"# B#D72#&!Y%487D(!]c/C$D43/! K4%/CD2%(!X/"6D7!BCC/00!:"64T2%#4"

.$-6407/%\]54D2%
_2#!Z74#H<"#
?$-6407/%U?"&/%0"#5?%2345/%0AC2< >T!&2$!52!#2D!%/C/43/!&2$%!400$/!2T! ."&/%0!1!.%2345/%0!-&!+!.AVA!2#! @7$%05"&(!?6/"0/!C"66!GPQQI)=PJ)RS*A

!"#$"%&!'(!)*+)!,!)*++!-&!."&/%0!1!.%2345/%0!.$-64074#8(!99:

Payers & Providers

MARKETPLACE/EMPLOYMENT

Page 6

SEEKING A NEW POSITION?

CAN HELP.
We publish advertisements for those seeking new career opportunities for just $1.25 a word. If you prefer discretion, well handle all responses to your ad. Call (877) 248-2360, ext. 2, or e-mail advertise@payersandproviders.com.

!"#$"%&!'(!)*+)!,!)*++!-&!."&/%0!1!.%2345/%0!.$-64074#8(!99: