Arizona KidsCare restart estimated to help 40K children

Arizona will begin taking applications on July 26, 2016, for its government-sponsored health-insurance program KidsCare; coverage will begin September 1, 2016. As a result, the population of uninsured Arizona children, currently around 162,000, is projected to drop significantly this fall, as an estimated 34,278 Arizona children would be eligible for KidsCare upon reinstatement of the program.

KidsCare, the Arizona version of the Children’s Health Insurance Program (CHIP), is administered by the state’s Medicaid program, which is known as the Arizona Health Care Cost Containment System (AHCCCS). Officials with AHCCCS expect that within its first year of being newly active, KidsCare will enroll 30,000 to 40,000 Arizona children. Arizona is the only state without an active CHIP program. According to a study by the Center for Children and Families at Georgetown University, the state has the third-highest rate of uninsured children in the U.S.

Opponents of KidsCare have expressed concern that Arizona will eventually have to pick up the tab for the program, as federal dollars are only appropriated to cover the cost of the program for the next year. Supporters said reopening the program was the moral thing to do for Arizona children.


Enrollment in KidsCare was frozen in 2010 after Arizona decided to cut eligibility and phase out CHIP benefits over time. KidsCare II, a temporary hospital financing agreement meant to fill the gap due to frozen enrollments beginning in 2010 until new coverage options were available to Arizona families with the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), was terminated at the end of January 2014.

An earlier Georgetown study observed that the termination of KidsCare resulted in families paying more for alternative subsidized health care coverage while receiving fewer benefits under that coverage (see Arizona CHIP discontinuation results in higher prices, less coverage, Health Law Daily, May 9, 2014).

Marketplace deductibles down, cost-sharing for common services low

Health coverage from the marketplace covers, on average, seven common health care services other than preventive services with no or low cost sharing before policyholders meet their deductibles. Additionally, the median individual deductible for policies went down $50 from 2015 to 2016, according to a CMS Data Brief. The brief looked through data on marketplace plans and discussed the numbers showing that health insurance is more affordable for consumers than it was before passage of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

The Data Brief noted that 60 percent of marketplace consumers qualified for financial assistance to reduce deductibles, out-of-pocket maximums, and other cost-sharing obligations in 2016. It also found that consumers are overwhelmingly choosing silver plans, with higher premiums and lower cost sharing, over bronze plans. Over all, approximately one-third of marketplace enrollees have deductibles less than or equal to $250.

All marketplace plans cover preventive care like cancer screenings and immunizations without cost sharing; however, the Data Brief shows that most policies also cover common health care services either without cost sharing or with low copayments, even if the yearly deductible has not been met. The main services accounting for this finding are primary care visits and prescription drugs.

Kusserow on Compliance: DOJ announces record-breaking $1B Medicare fraud case

The Department of Justice (DOJ) in Miami reported what it called the largest single criminal health care fraud case ever brought against individuals. It involved a $1 billion scheme involving numerous Miami-based health care providers. The DOJ brought charges against the owner of more than 30 Miami-area skilled-nursing and assisted-living facilities, a hospital administrator, and a physician’s assistant. The charges included conspiracy, obstruction, money-laundering and health care fraud. Philip Esformes was named as having been at the top of a complex fraud scheme, along with Odette Barcha, and Arnaldo Carmouze. Using Esformes’ network of Miami-Dade skilled-nursing and assisted-living facilities, the scheme involved filing false Medicare claims over the last 14 years for services that were not necessary or in some instances not provided.

The DOJ reported that the network of skilled nursing homes and assisted living facilities provided access to thousands of Medicare and Medicaid beneficiaries. Many of these individuals did not qualify for skilled nursing home care or for placement in an assisted living facility, but were admitted anyway where they received medically unnecessary services that were billed to Medicare and Medicaid. Charges include allegations that they received kickbacks in order to steer these beneficiaries to other health care providers, who also performed medically unnecessary treatments that were billed to Medicare and Medicaid.

Ten years ago, Esformes paid $15.4 million to resolve civil federal health care fraud claims for unnecessarily admitting patients from his assisted living facilities into a Miami-area hospital. The fraudsters subsequently continued to engage in their fraudulent practices, employing sophisticated money laundering techniques to hide the scheme.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.

Few U.S. hospitals attain five-star quality of care

Only 2.2 percent of U.S. hospitals earned a five-star quality rating from CMS in its Overall Hospital Quality Star Rating (Star Rating) system, which reflects the level of patient care received. According to a CMS data brief preview and evaluation, 934 hospitals, or 20.3 percent, received a four-star overall hospital quality star rating. The most common rating was three stars, which was received by 1,770 hospitals, or 38.5 percent. Two stars were given to another 723 hospitals, or 15.7 percent, and 133, or 2.9 percent, received only one star.

Notably, another 937 hospitals, or more than 20 percent, were not assigned a rating. No star rating is assigned to hospitals that do not report or do not have the requisite minimum amount of data, which can occur for small or new facilities.

CMS’ Star Rating takes 62 existing quality measures already reported on the Hospital Compare website and summarizes them into a unified rating of one to five stars. Quality measures range from the routine care an individual receives when being treated for heart attacks and pneumonia to quality measures that focus on hospital-acquired infections, such as catheter-associated urinary tract infections.


CMS believes that star ratings spotlight excellence in health care quality and make it easier for consumers to use the information on the Hospital Compare website (see Care to compare? Hospital five-star rating system now available, Health Law Daily, April 16, 2015). This is consistent with the call for transparent, easily understood, and widely available public reporting found in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The ratings also support using quality measures as a key driver of health care system improvement.

CMS had previously delayed its intended April 21, 2016, release of overall hospital quality star ratings on its Hospital Compare website until at least July 2016. The delay was partly attributable to efforts raising concerns about whether the involved methodology for star ratings provided a fair, accurate, and meaningful representation of hospital performance.

Lawmakers and associations, alike, noted that a number of the quality measures that are the ratings’ foundation impact teaching hospitals that treat patients of low socioeconomic status, treat more complex patients, and perform various complicated surgeries (see Lawmakers’, hospitals’ wish upon star ratings temporarily granted, Health Law Daily, April 21, 2016).