The Theranos story, ch. 17: closing the barn door after the horse

July 26, 2016 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /] And it may work, though the horse is in the next county. Late last week, with American eyes elsewhere, Theranos announced that they hired two executives with regulatory responsibility–a chief compliance officer and an VP regulatory and quality–and formed a new board committee focused on same. The CCO is Dave Guggenheim, the former assistant general counsel for regulatory law at HIT/medical distribution giant McKesson. The VP, Daniel Wurtz, comes from a similar senior director position at biotech Thermo-Fisher Scientific.

The country maxim, ‘closing the barn door after the horse has bolted’, applies. In fact, the horse is in town and having a growler of beer at the local tavern. The Newark, California lab is shut and the principals, including the CEO Ms Holmes, are technically prohibited from operating a lab for at least two years (that means you, Ms Holmes) starting in a month. Messrs Guggenheim and Wurtz (or similar) should have been on board years ago. Even small companies in our field realize they HAVE to do this!

This also doesn’t affect the interesting interest that DOJ and SEC have in Theranos. [TTA 10 July]

However, this Editor will take the contrarian view that somehow, some way, the ‘fix’ is being worked out, if not in. Don’t make reservations for the fire sale quite yet. The ban on Ms Holmes won’t take place for another month, minimum. That gives time for David Boies, their legal supremo, and his firm to stall for more time, and time for some calls to ask favors from friends, of which he has many in this administration. More than likely, Boies on behalf of Theranos will appeal the CMS rulings to an administrative judge. Ms Holmes may take the hit, but may get a handsome payday to depart despite her reported control, if the investors can salvage something out of the company.

At HQ, they may be rehearsing saying ‘mea culpa, mea culpa, mea maxima culpa’ three times, kneeling deeply, in preparation to Going Forth And Sinning No More.

The Object Lessons taught by the Theranos Troubles, to us in healthcare tech, continue.

WSJ, Theranos Hires Compliance, Regulatory Executives  (more…)

Theranos denouement: CMS closes lab, fine, 2-year ban on Holmes (breaking)

July 8, 2016 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Breaking News. Theranos has been slapped very soundly by the Centers for Medicare & Medicaid Services (CMS) for violations arising from operations at their Newark, California laboratory. The fine is not disclosed. CMS has revoked the lab’s certificate and also prohibits the owners and operators of the lab from operating a lab for at least two years. That means that Elizabeth Holmes, the CEO, her management and anyone immediately involved with the Newark lab is effectively out of a job.

As the Theranos press release was issued well after hours Thursday night US Eastern Time, there’s no mention of the board actually removing her, but that is another shoe that this Editor expects to drop sooner, not later. COO Sunny Balwani was removed in May [TTA 19 May] Who is not tainted who can actually run the company? Is there a capable person in the industry who wants to touch it? As has been revealed, Ms Holmes still controls the company [TTA 27 Apr].

The revocation will be in effect in 60 days, according to the Wall Street Journal*, but the Newark lab has been closed. There is no mention of the Palo Alto lab which was also under scrutiny [TTA 20 Apr].

The details appear to be lifted or nearly lifted from the CMS order, and are quoted directly from the Theranos release: (more…)

A weekend potpourri of health tech news: mergers, cyber-ransom, Obama as VC?

July 1, 2016 | by

As we approach what we in these less-than-United States think of as the quarter-mile of the summer (our Independence Day holiday), and while vacations and picnics are top of mind, there’s a lot of news from all over which this Editor will touch on, gently (well, maybe not so gently). Grab that hot dog and soda, and read on….

Split decision probable for US insurer mergers. The Aetna-Humana and Anthem-Cigna mergers will reduce the Big 5 to the Big 3, leading to much controversy on both the Federal and state levels. While state department of insurance opposition cannot scupper the deals, smaller states such as Missouri and the recent split decision from California on Aetna-Humana (the insurance commissioner said no, the managed care department said OK) plus the no on the smaller Anthem-Cigna merger are influential. There’s an already reluctant Department of Justice anti-trust division and a US Senate antitrust subcommittee heavily influenced by a liberal think tank’s (Center for American Progress) report back in March. Divestment may not solve all their problems. Doctors don’t like it. Anthem-Cigna have also had public disagreements concerning their merged future management and governance, but the betting line indicates they will be the sacrificial lamb anyway. Healthcare Dive today,  Healthcare Dive, CT Mirror, WSJ (may be paywalled) Editor’s prediction: an even tougher reimbursement road for most of RPM and other health tech as four companies will be in Musical Chairs-ville for years.

‘thedarkoverlord’ allegedly holding 9.3 million insurance records for cyber-ransom. 750 bitcoins, or about $485,000 is the reputed price in the DeepDotWeb report. Allegedly the names, DOBs and SSNs were lifted from a major insurance company in plain text. This appears to be in addition to 655,000 patient records from healthcare organizations in Georgia and the Midwest for sale for 151 – 607 bitcoins or $100,000 – $395,000. The hacker promises ‘we’re just getting started’ and recommends that these organizations ‘take the offer’. Leave the gun, take the cannoli.  HealthcareITNews  It makes the 4,300 record breach at Massachusetts General via the typical unauthorized access at a third party, once something noteworthy, look like small potatoes in comparison. HealthcareITNews  Further reading on hardening systems by focusing on removing admin rights, whitelisting and endpoint security. HealthcareDataManagement

Should VistA stay or go? It looks like this granddaddy of all EHRs used by the US Veterans Health Administration will be sunsetted around 2018, but even their undersecretary for health and their CIO seem to be ambivalent in last week’s Congressional hearings. According to POLITICO’s Morning eHealth newsletter, “The agency will be sticking with its homegrown software through 2018, at which point the VA will start creating a cloud-based platform that may include VistA elements at its core, an agency spokesman explained.” Supposedly even VA insiders are puzzled as to what that means, and some key Senators are losing patience. VistA covers 365 data centers, 130 separate VistA systems, and 834 custom installations, and is also the core of many foreign government systems and the private Medsphere OpenVista. 6/23 and 6/24

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/01/Overrun-by-Robots1-183×108.jpg” thumb_width=”150″ /]Dr Eric Topol grooves on ‘The Fourth Industrial Revolution’ of robotics and AI. (more…)

Theranos–the drama and examination continues

April 27, 2016 | by

The latest chapters:

Theranos’ boards–the advisory board chock full of Blast From The Past political figures like George Shultz, Sam Nunn, Bill Frist and Henry Kissinger–and a governing board–are standing by CEO/founder Elizabeth Holmes. Of course, they have essentially no choice, because Ms Holmes utterly and completely controls the company in the Silicon Valley Manner. The governing board, split off from the advisory board after The Troubles started last October–consists of Ms. Holmes, COO Sunny Balwani, Riley Bechtel of the eponymous construction firm, retired Marine Corps General James “Warrior Monk” Mattis and David Boies, prominently featured in both articles below. Mr Boies is politically well wired and the kind of attorney you call in when you are facing Big Trouble and need Big Defense–or Offense. These boards of course bear responsibility for the governance of the company, including fiduciary, and the actions being taken by CMS, the US Attorney’s office in San Francisco and the Securities and Exchange Commission (SEC) may be making for some sleepless nights. New York Times, Vanity Fair (which overlaps the NYT article)

Trust But Verify is the extraordinarily apt ‘eyebrow’ on this ‘rise and fall’ Quartz article reviewing l’affaire Theranos by a professor of medicine at Dartmouth College. For the non-scientists among us, it gives a layman’s explanation on why venous blood for most tests is needed versus fingerpricks (the latter mixes blood and tissue fluid, and doesn’t accurately measure large molecules such as proteins and lipids–but fine for the smaller blood glucose molecules, as testing diabetics know). It also touches on the Icahn Institute/Mount Sinai study [TTA 26 April, see comment] and points to the Smoking Gun of boards largely not constituted of those with medical or biochemical expertise.

Update: Bloomberg explores a POV in an opinion piece that blood tests are inherently variable, and only one factor in a proper diagnosis. Theranos’ promises to run multiple blood tests on a tiny quantity of blood are not only suspect but also that the “assumption that succeeding in this quest would improve public health” is specious indeed. Theranos and the Blood Testing Delusion

The stakes are high, and getting higher, for Ms Holmes, indeed.

[Ed. Donna’s comment below our earlier article, Theranos’ triple whammy: CMS, DOJ and SEC, addresses some concerns our Readers may have about our coverage. While we are a website interpreting the news and the Editors generally refer to multiple published sources in an article to supply various points of view, we also express our opinions. We try our level best to be fair, to stay in good humor and buttress our points. When you the Reader has a point to add, differs with our interpretation, or believes that your Editors are hanging too far out on that swaying limb, please feel free to comment. We do have a Comments policy which isn’t onerous…it’s posted here.]

Unspinning the Theranos scientific advisory board communications spin

April 9, 2016 | by | 1 Comment

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Spinning oh so flatly…..As reported in MedCityNews (and here) yesterday, Theranos has made a Radio City Rockettes-showy move in opening at least part of its scientific books to a prestigious group of eight academic researchers from top-flight institutions. The Theranos press release is a masterpiece of positive spin to counter the negative results of the CMS report released last Thursday. However, when the fine-spun web is picked apart by Matthew Herper, a staff reporter for Forbes, it embarrassingly falls apart. The clues are all there, of course, in the elided language, the lack of specificity on numbers, the over-the-top quotes from the CEO and one of the advisory board members….

Upon interviewing three members of the scientific and medical advisory board, the glowing statement of Dr Helfet–who had been a co-chair of Theranos’ existing scientific board–was revealed as not quite accurate in the impression it gave.

  • The full advisory board has not met as a group yet. The impression was given in the release that they did.
  • They were split into three groups, each spending about a day at the Palo Alto HQ “viewing data shown to them by the company about its blood tests, examining Theranos’ Edison machines, and asking questions”. They did not visit any working labs, including the two under CMS fire.
  • Drs Ladenson and Spitalnik thought that what they saw looked “promising” and “intriguing” but would not answer questions on whether Theranos’ devices were ready to be used. Eight hours for Dr Spitalnik was, as he stated, was enough to whet the appetite, but not more than that.

It remains that Theranos has not published one peer-reviewed study, despite promises, promises. The company leadership took in a lot of investor money, gained a $9 billion valuation, got Safeway and Walgreens as partners (now rescinded)–never proving that Theranos’ tests would do what they said they would do. Besides being the bottom line and the one proposition that must be proved, they potentially endangered trusting patients in Arizona and California. And gave a black eye and probably a broken nose to innovation in and consumer access to lab testing.

At least the Yak-52 aerobatic aircraft and its pilot are in a planned, recoverable flat spin. Nothing about Theranos’ spin can be. Forbes

Theranos flunks CMS review. Is there a there, there?

April 3, 2016 | by

There is no kinder way to put it. The impression that Theranos is equivalent to what writer Gertrude Stein said of her vanished home in Oakland, California–‘there is no there there’–is building. The US Center for Medicare and Medicaid Services (CMS) after multiple inspections in 2014 and 2015, found that the company failed its own standards on its proprietary Edison blood-testing and analysis system. Cited by the Wall Street Journal, which had access to the full 121-page report, is that “erratic quality-control results for Edison-run tests were frequent in July 2014 and from February 2015 to June 2015.” Overall, Edison devices produced test results that differed widely from traditional lab machines for the same blood samples. Additional problems were unqualified staff, blood samples at the wrong temperature and delays in notifying patients of flawed tests.

Theranos has promised to make further corrections at its Newark, California testing site but it may be too late. “CMS has deemed the company’s plan inadequate and plans to impose sanctions against Theranos, according to people familiar with the matter. In January, the agency said the punishment could range from fines to suspending or revoking the lab’s certification to legally test human samples.” (WSJ)

No stronger case has been made for an early-stage company under-promising and over-delivering than this, especially in health. There is no joy in hearing the grand slam of its $9 billion valuation cratering, but on the other hand, there are a lot of other worthy startups and early-stage companies which could have used the funding. A high profile fail such as this scares off investors from angels to VCs worldwide and tarnishes the entire health tech sector as well as young entrepreneurs. Also many of us looked forward to inexpensive, retail driven, minimally sampled blood testing.

In this Editor’s view, the wide-eyed CEO Elizabeth Holmes should attend more to the integrity of her company’s operations and less to working political connections such as Hillary Clinton fundraisers (last month) and putting everyone from Henry Kissinger, George Shultz and retired Marine Gen. James Mattis on the company’s board of governors (BioSpace). In Marine-speak, knock it off.

Ed. note: If the WSJ is paywalled (search on the headline “Theranos Devices Often Failed Accuracy Requirements” to get around it), see BioSpace. Previous coverage in TTA here.

Update 7 Apr: Some effort in the operations integrity area was made with another Theranos announcement of eight Scientific and Advisory Board members appointed (only two with any previous connection to the company) and three scientific review sessions at their Palo Alto HQ. MedCityNews

Telehealth reimbursement: a major growth obstacle overcome this year?

March 4, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/03/Hurdle.jpg” thumb_width=”150″ /]Will 2016 be the year where the hurdles are jumped? Telehealth systems and platforms are becoming more comprehensive and compatible with mobile technologies. While there are still discussions (arguments!) as to telehealth remote patient monitoring effectiveness in care models, with the occasional naysaying short-term or IVR study ‘proving’ RPM doesn’t work, the long-term positive VA Home Telehealth results since 2003, and the large body of research prove otherwise when integrated within a chronic or transitional care model. Yet at $14 million or .0025 percent, it was in 2014 a tiny part of Medicare payments because of CMS’ emphasis on rural telehealth at that point (and still). Medicaid (state programs for low-income children and adults under CMS oversight and administered through private payers) is more generous, with most states providing some payment and some having parity (with in-person visits) regulations.

A retrospective look at telehealth reimbursement is in a just-published paper by the Health Care Cost Institute (full PDF of report) which analyzed thousands of claims from four major insurers (Aetna, Humana, Kaiser Permanente and United Healthcare).to track trends in telehealth billings from 2009-2013. Key findings are summarized by senior counsel René Quashie of leading health tech law firm Epstein Becker Green in this article. It’s evident that the private payer sector didn’t exactly lead the way on commercial adoption of telehealth and telemedicine.

Here, the public sector is forcing change. Medicare rules on chronic care management changed for year 2015 to permit telehealth integration, and while complex (and not especially generous), CMS has further expanded them for ACOs in the Medicare Shared Savings Program (MSSP) and for new Next Generation ACOs. Yet only 20 percent of ACOs in the 2015 MSSP program actually used telehealth in care programs.

You can understand why from practices’ past experiences with payers. Becker’s Hospital Review cites from excerpts that while telehealth claims reimbursement on average rose 2009-2011 from $60 to $68/visit, in 2013 they dropped precipitously to $38. For all the hand-wringing over mental health, psychiatrists get the short end once again: a diagnostic interview exam (which is generally 1-2 hours if not more) cost $200 via telehealth (telemedicine) and $288 when the exam was conducted in person, but reimbursement was $77 and $105 respectively. After needing to invest in equipment and software, it’s understandable why physicians don’t look forward to getting paid less for their trouble.

But the argument is that things are changing for the better, and that is advocated by Nathaniel Lacktman, partner of tech law firm Foley & Lardner in his optimistic article in Advance Executive Insights, which maintains that 2016 is going to be the Year of Telehealth and remote patient monitoring. (more…)

Drive to ACOs and value-based care may make 2016 The Year of Telehealth (US)

November 6, 2015 | by

An encouraging prediction? Two Foley & Lardner attorneys with evidently a great interest in healthcare predict that 2016 may very well be The Year of Telehealth. Why? They cite accountable care organizations (ACOs) and the coordinated care at the heart of their model as a protected activity under the Medicare fraud and abuse waivers. “Coordinating care, such as through the use of telehealth, remote patient monitoring, and other enabling technologies”is “an activity reasonably related to the purposes of the Medicare Shared Savings Program and therefore is eligible for protection under one or more of the fraud and abuse waivers”. National Law Review, mHealth News. While from the legal point of view this may be significant, there’s been a concatenation of other factors.

What are the drivers for telemedicine and telehealth in ACOs? In the Medicare Shared Savings Program (MSSP), which is one model, ACOs must leverage savings, and perhaps the largest is avoiding unnecessary hospitalization costs among ‘high-risk’ patients–those with chronic disease–and usually more than one. They are also over half of high ER/ED utilizers. The Federal agency behind Medicare, the Centers for Medicare and Medicaid Services (CMS) has since 2011 been signing up ACOs in risk and value-based payment models that offer incentives such as shared savings. In 2014, only 28 percent of ACOs in the MSSP program earned shared savings bonuses. (more…)

Dartmouth-Hitchcock withdraws from Pioneer ACO

October 23, 2015 | by

Dartmouth-Hitchcock Medical Center has announced it will withdraw [grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/10/Dartmouth-Hitchcock-MC.jpg” thumb_width=”150″ /]from the Pioneer ACO program after losing more that $3M over the past two years.

The Pioneer Accountable Care Organization (ACO) Model was designed by the Center for Medicaid and Medicare Services (CMS) Innovation Center to encourage the development of ACOs which are groups of healthcare organizations and providers (e.g. doctors) that work together to provide care for their patients at a lower cost to Medicare while maintaining (more…)

ONC gets in study game in designing the Consumer Centered Telehealth Experience

September 23, 2015 | by

ONC (the Office of National Coordinator for Health Information Technology, HHS) in the spring conducted a design session on creating a more consumer-centered telehealth experience, commissioning the engagedIN research firm to help select a panel, run it and produce the study. The white paper focuses on how telehealth can either further fracture or integrate PHR (study pages 7-11), and what’s needed to make telehealth and telemedicine more convenient and effective for consumers. The panel avoided the big telemedicine providers (a bone that Mobihealthnews picks with the study) which typically dominate these panels–to this Editor a positive action–but included other telehealth providers like Qualcomm Life, Care Innovations and Zipnosis, as well as the US’ largest user of telehealth, VA Home Telehealth. Among the key drivers of telehealth are HHS’ and private insurers (UHC) shift to value-based payments; CMS’ target of 50 percent of Medicare value-based care is cited (page 5). There are nine principles at the end (pgs 13-16) to guide the way forward. Designing the Consumer Centered Telehealth and e-Visit Experience (PDF) (Though it is confusing why e-Visit was used rather than ‘virtual visits’ or, in fact, telemedicine.)

6 helpful hints for healthcare startup founders–and funders

July 18, 2015 | by

Investor Skip Fleshman of Palo Alto (of course)-based Asset Management Ventures has six points of sound advice for founders and developers–and funders of same–who think that their Big Idea(s) are the one thing which will revolutionize healthcare, particularly because of their personal experiences. We’ve observed that successful startups have fitted themselves into the Healthcare Establishment’s game [TTA 19 May], but if an investor is still seeing that attitude, it’s still there. AMV’s track record is there with investments in several healthcare companies, including Proteus Digital Health and HealthTap. Mr Fleshman’s points with this Editor’s comments:

1. Listen to the market–and it’s not direct-to-consumer, despite a cursory reading of Eric Topol. Find where your product or service can reduce or avoid cost, increase engagement and improve quality i.e. patient outcomes (which are all linked, see #4)
2. Hire people who know how to speak the language–experienced healthcare people who can work the system but also get the changes and want to make a difference. And no, they may not look or act like you. They’ll often have gray hair and families. Unless they are independently wealthy, they also expect to be paid decently. Quite a few will be women who don’t act or look like you either, but are invaluable in your organization in multiple ways.
3. Understand how the money flows–and the money is with providers, payers, self-insured employers and (Mr Fleshman doesn’t mention this) government (Medicare, Medicaid, the alphabet soup of HHS, CMS…). The incentives (shared savings) are now to providers to pull cost out of their system but somehow maintain population health quality and outcomes. How to pull this off is where the innovation is needed. Partner wherever you can–and this Editor would add, with other successful early-stage companies as well.
4. Read the Affordable Care Act–with a bottle of painkillers and eyedrops. (more…)

The pileup of Federal ‘titanic serial IT disasters’ (US)

June 26, 2015 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/06/keep-calm-and-secure-your-data-4.png” thumb_width=”150″ /]Don’t feel bad, HIT execs–the Feds are even worse. Complementary to our coverage of the increased danger of hacked health IT systems and data breaches (the trail of tears is here and here) is the oddly muted press clamor around the 4 June hacking report of the Federal Office of Personnel Management (OPM). Chinese hackers roamed around two OPM databases–personnel and security clearances–for nearly a year, according to CNN’s Senate briefing coverage. The breach likely exceeded 18 million records, though the real number may never be known. Privacy Rights Clearinghouse summarizes it and provides an interesting link to a timeline by Brian Krebs, whose independent reporting beat is IT security. Megan McArdle, a reformed IT consultant writing for Bloomberg News and independently, points at the Federal lack of urgency around having adequate IT that doesn’t fail. Example–the much chronicled failure around Healthcare.gov and the so-called health exchanges, which appear to be functioning better, but reports say they are nearly porous and hackable as they were in 2013. She notes that it’s all about ‘scorched-earth determination’ and that the direction has to come from the top, meaning the President. And ‘voters have never held Obama responsible for his administration’s appalling IT record’. A thought that should give those in telehealth and telemedicine who are working with CMS value-based program ACOs a great deal of pause. NY Post editorial via Press Reader.

Health Datapalooza 2015: more data, better health

June 10, 2015 | by

Guest columnist and data analytics whiz Sarianne Gruber (@subtleimpact) sat in on the Health Data Consortium’s 2015 edition of Health Datapalooza last week in Washington, DC. It was all about the data that Medicare has been diligently harvesting. Also see the US-UK connection on obesity.

Health Datapalooza 2015, now in its sixth year, welcomed more than 2,000 innovators, healthcare industry executives, policymakers, venture capitalists, startups, developers, researchers, providers, consumers and patient advocates. Health Datapalooza brings together stakeholders to discuss how best to work the advance health and healthcare,” said Susan Dentzer, senior policy adviser to the Robert Wood Johnson Foundation and a member of the Health Data Consortium. The Consortium promotes health data best practices and information sharing; and works with businesses, entrepreneurs, and academia to help them understand how to use data to develop new products, services, apps and research insights. This year’s conference was held on May 31 through June 3 in Washington, DC. And how best to celebrate is with the gift of more data!

New Medicare Data Means More Transparency
The Centers of Medicare and Medicaid Services (CMS) released its third annual update to the Medicare hospital inpatient and outpatient charge data on June 1, 2013. (more…)

Chronic care management with telehealth (US)

March 25, 2015 | by

Our readers, especially those in the US engaged with medical practices, might be interested in reading a two-part interview with Editor Donna by occasional TTA contributor Sarianne Gruber. We discuss the new model for Chronic Care Management (CCM) now included in what the Federal Government (CMS-Center for Medicare and Medicaid Services) pays physicians for Medicare patient visits and services. Telehealth, or in CMS terms remote monitoring, can play a vital role in the provision of care coordination, assessment, documentation, patient access and facilitation of self-management as part of the care plan, culminating in better outcomes at lower cost. Published in the new RCM (Revenue Cycle Management) Answers, a spinoff of HITECH Answers. Part 1.  Part 2

Hospitals snooping on your shopping and eating

October 31, 2014 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/10/Doctor-Big-Brother.jpg” thumb_width=”150″ /]Another charming use for Big Bad Data. Hospitals are investigating whether available data on patients–prospective and current–on shopping patterns and other purchase behavior such as gym memberships can be used to predict patient risk of disease. Leading the way is Carolinas HealthCare System, which operates the largest group of medical centers in North and South Carolina. With more than 900 care centers including nursing homes, they have 2 million patients to analyze for risk, using data points such as purchases a patient has made using a credit card or store loyalty card, to create predictive models on patient risk and eventually to reach out to patients. Of course this data crunching  has a purpose, and that is to meet quality metrics imposed by HHS and CMS. The goal would be to change the risk curve (more…)

Medicare dis-incentivizes home health care in ACA’s name (US)

July 4, 2014 | by

When it comes to home health care, the C in CMS (Centers for Medicare and Medicaid Services) should perhaps stand for ‘contradiction’. According to recent reports appearing in the pre-holiday ‘dead zone’ of late last week, CMS has decreed that it must save, as part of a four-year plan under ACA, $58 million (0.3 percent) in fiscal 2015 (starting 1 Oct) from home health agencies which were formerly touted as a great way to save money. To put this in perspective: in 2013, Medicare paid about 12,000 home health agencies $18 billion to provide services to 3.5 million patients. In the US, Medicare has always had more restrictive rules for home and community-based services (HCBS); state-administered (but Federally subsidized) means-tested Medicaid still pays for the vast majority of long-term care (well over 60 percent, according to another Federal agency, Housing and Urban Development [HUD]), which strikes many observers as one pocket to another. So where are the contradictions?

  • Conundrum #1: CMS has emphasized post-discharge, post-acute care as part of reducing acute care costs, exemplified in the penalty for 30-day same-cause readmissions. Nursing home expenditure is at least three times more costly than in-home LTC (a conservative estimate used by HUD).
    • But CMS plans to cut Medicare home health funding in total so fewer people may receive it at all or less of it even if needed. What will be their alternative, and the effect on outcomes? (more…)