DOJ announces New Jersey Medicare and Virginia Medicaid fraud schemes

The U.S. Department of Justice (DOJ) announced that (1) a New Jersey woman has pled guilty in a $1 million Medicare fraud scheme that deceived seniors into unnecessary DNA tests, and (2) three Bristol, Virginia individuals have been indicted for fraudulently billing over $350,000 to Virginia Medicaid for services under the Virginia Medicaid Intellectual Disability (ID) waiver program that were not provided.

New Jersey fraud

Sheila Kahl, 44, admitted that she wrongfully accessed protected health information (PHI) and paid kickbacks to healthcare professionals on behalf of a Medicare fraud scheme involving a purported non-profit, The Good Samaritans of America. Sentencing is scheduled for March 14, 2017.

A DOJ press release from the District of New Jersey, based on the criminal information and court statements, alleged that from July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, of Point Pleasant, New Jersey and others used. The Good Samaritans of America as front to present information about genetic testing to seniors in low-income housing projects.

In order to convince senior citizens to submit to genetic testing, Rehfuss allegedly used fear-based tactics, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. Rehfuss also allegedly claimed that the genetic testing allowed for “personalized medicine.”

Rehfuss was previously charged on December 2, 2015. The pending criminal complaint against Rehfuss contains mere allegations, and he is considered innocent unless and until proven guilty.

Virginia fraud

A grand jury, sitting in the Western District of Virginia, charged Deborah Branch, 64, Melissa Harr, 49 and Bryan Harr Sr., 40, with one count of health care fraud, one count of conspiracy to commit health care fraud, and two counts of wire fraud.

According to a DOJ press release from the Western District of Virginia, the indictment alleged that Melissa and Bryan Harr Sr., hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and qualifies for services paid for by Virginia Medicaid, under the Virginia Medicaid’s ID waiver program. Branch was allegedly paid through two different Virginia Medicaid contractors.

The indictment further alleged that from January 2010 until September 2015, Branch submitted time sheets claiming she was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in getting paid for work she did not do, Branch allegedly paid the Harrs approximately $200 every two weeks. Virginia Medicaid paid out $350,641.02 to two different Virginia Medicaid contractors, Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions), based on Branch’s time sheets, of which $207,854.43 was paid to Branch.

FTC staff opposes Virginia hospital systems’ cooperative agreement

The Southwest Virginia Health Authority and State Health Commissioner should deny a cooperative agreement application submitted by Mountain States Health Alliance and Wellmont Health System, according to comments submitted by staff of the FTC Bureau of Competition, Bureau of Economics, and Office of Policy Planning.

Mountain States and Wellmont are the two largest hospital systems in the border area of Southwest Virginia and Northeast Tennessee, and they are the only two full-service hospital systems serving the vast majority of patients living in this area, according to the FTC staff’s comments. Together, the hospitals would purportedly hold a near-monopoly over inpatient services in the area and have significant shares in several outpatient services and physician specialty service lines.

Consequently, the FTC staff—after a year-long assessment of the proposed merger—concluded that the proposed deal “presents substantial risk of serious competitive and consumer harm in the form of higher healthcare costs, lower quality, reduced innovation, and reduced access to care.”

The hospitals proposed several commitments they claimed would control and mitigate any anticompetitive effects, including price commitments. However, these commitments would be insufficient and unlikely to mitigate the anticompetitive effects, according to testimony presented by Mark Seidman, FTC Deputy Assistant Director for the Mergers IV Division.

“[T]he price commitments described in the application are ambiguous and appear to leave the hospitals with the opportunity and incentive to obtain higher prices from health insurers,” Seidman stated. “And even if prices were successfully constrained, it would do nothing to prevent harm to quality of care, and in fact would make that harm more likely.”

It also was noted that “once a merger is consummated—whether under a cooperative agreement or otherwise—it is extremely difficult to unwind.” Consequently, approving the cooperative agreement would risk that the deal would become permanent, especially because the plan of separation submitted by the hospitals did little to alleviate the significant challenges of “unscrambling the eggs,” following the merger.

Highlight on Virginia: Health Opportunity Index maps out disparities

An updated version of the Virginia Health Opportunity Index (HOI) allows consumers, policymakers, and providers to evaluate multiple social determinants of health as they impact different geographic areas of the Commonwealth. The Virginia Department of Health’s Office of Minority Health and Health Equity (VDH-OMHHE) originally developed the HOI to provide a picture of the social, economic, educational, demographic and environmental factors that impact community health. Since its inception, the HOI has been redesigned into a continuously updated source of information to help stakeholders engage with changing health data using a convenient, visual dashboard.

Dashboards and Indicators

The HOI website uses a number of interactive dashboards and maps to allow consumers, policy-makers, and providers to interactively examine the HOI data. With separate dashboards for counties, health districts, and legislative districts, the HOI interface is designed to allow scrutiny of the data at multiple different levels of detail. The HOI relies on 13 indicators, which were chosen to serve as the building blocks of the HOI. The indicators were selected for their influence upon health, stakeholder input, and the availability of data on those factors for all of the relevant geographical areas in Virginia.  The indicators are all focused on determining an individual’s opportunity to live a long and healthy life in a particular area.

Profiles

The HOI dashboards synthesize the 13 indicators into four different profiles: the Community Environment Profile, the Consumer Opportunity Profile, the Economic Opportunity Profile, and the Wellness Disparity Profile. The Community Environment Profile is an indicator of social and natural measures, including air quality, population turnover, population density, and walkability, which refers to street connectivity and public transit accessibility. The Consumer Opportunity Profile measures the availability of consumer resources, including access to and the affordability of food, transportation, housing, and education. The Economic Opportunity Profile evaluates economic opportunity in individual communities by measuring employment accessibility, income inequality, and the number of individuals actively participating in the workforce. The Wellness Disparity Profile provides a measure of the disparate nature of access to health care services within in a community. The Wellness Disparity Profile indicates access by measuring the number of physicians in a community, the number of uninsured individuals. The Profile also more broadly considers whether community members have access to a primary care physician and the means to pay for care.

Impact

According to VDH-OMHHE,” the HOI is remarkably predictive of health outcomes.” The VDH-OMHHE believes that because the HOI explains the majority of life expectancy variation in Virginia’s Census Tracts, the HOI influence is comparable to that of the World Health Organization’s Social Determinants of Health (SDOH). In other words, Virginia believes that its HOI does as good of a job predicting health outcomes as the economic and social predictor of health used by the Centers for Disease Control and Prevention (CDC). The HOI is premised upon an understanding that place matters and, with appropriate spatial modeling, health care can be improved. The HOI provides a wealth of information. Now, stakeholders need to put that information to good use in order to start improving health across the state of Virginia.

HHS Deems Insurance Premium Hikes in 9 States Excessive

HHS Secretary Kathleen Sebelius has announced that health insurance premium increases in nine states are “unreasonable” under the rate review authority granted by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), which requires insurance companies to justify rate increases of 10 percent or higher.

The announcement was made after HHS determined, based on independent expert review, that two insurance companies have proposed unreasonable health insurance premium increases in Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virginia, Wisconsin, and Wyoming. The rate hikes would affect over 42,000 residents across these nine states. Sebelius has called upon these companies to immediately rescind their unreasonable rate hikes, issue refunds to consumers or publicly explain their refusal to do so.

New rate review report issued by HHS

Sebelius also released a new rate review report showing that, six months after HHS began reviewing proposed health insurance rate increases, health insurers have proposed fewer double-digit rate increases and states have begun to take an active role in reducing rate increases. In fact, since March 10, 2012, the justifications and analysis of 186 double-digit rate increases for plans covering 1.3 million people have been posted at HealthCare.gov, resulting in a decline in rate increases. In the last quarter of 2011 alone, according to the report, states have reported that premium increases dropped by 4.5 percent, and in states like Nevada, premiums actually declined.

In these nine states, the insurers have requested rate increases as high as 24 percent. HHS has deemed these increases unreasonable because the insurer would be spending a low percentage of premium dollars on actual medical care and quality improvements and because the justifications of the insurers for the premium increases were based on unreasonable assumptions.

It should be noted that most rates are reviewed by states and many states have the authority to reject unreasonable premium increases. In addition, since the passage of PPACA, the number of states with this authority has increased from 30 to 37, with several states extending existing “prior authority to new markets. The HHS report also shows that:

• Texas, Kentucky, Nevada and Indiana are reporting fewer requests for rate increases over 10 percent;

• California, New York, Oregon, and many others, have proactively lowered rate increases for their residents; and

• the rate review program has made insurance companies explain their increases, and more than 180 have been posted publicly and are open for consumer comment.