Health Business Blog

Often when a dependent or I have a claim we get a letter asking us to call Healthcare Recoveries who works on behalf of our insurer, Blue Cross Blue Shield of MA. I know what they want: they are trying to figure out if someone else is at fault for an injury, whether the claim should be for workers comp instead of medical and whether I have other insurance beyond Blue Cross that might pay some or all. I usually try to ignore these requests because I know the claims are legitimate as billed and I don’t want to deal with the hassle.

But today, after getting a second request letter with a lot of bold print I decided to go ahead and make the call, which I’ve recorded in its entirety for your listening pleasure.

I’m not sure how much Blue Cross pays for this service but my guess is they’re getting their money’s worth. The total length of my call was 3:40, which included 1:05 of an automated system telling me why they’re calling and getting my event number. Then there’s 30 seconds of hold time, which is quite acceptable. Then about 2 minutes of interaction with a live operator, Tim.

In this case Tim was professional and courteous. He took it in stride when I told him I was recording the call, and he moved through the questions efficiently. As you’ll hear, this claim appears to include a mis-coding, which is something Tim must encounter all the time. He handles that one pretty well, too.

After determining that we can’t easily blame someone else for this injury, Tim double checks to see if this could be work-related (not likely considering the demographics of the patient) and whether I have any other insurance. After that we’re done!

In the recording I redacted identifying information about the patient and me so you will hear a few gaps.

I’m slightly annoyed that this business exists, since it basically just redistributes costs around the system. But as a Blue Cross Blue Shield customer I guess I’m pleased overall because it is probably keeping my insurer’s medical costs down, which might limit my premium increases at some point if I’m lucky! The interaction is perfectly pleasant and there is no sense that the insurer is trying to put the squeeze on me.

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 On the line with Healthcare Recoveries subrogation service: Play Now | Play in Popup | Download

This is the transcript of my recent podcast interview with Mary Hiller of MedExpert International.

David Williams:            This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Mary Hiller.  She is Executive Director of Knowledge Engineering and Health Systems at MedExpert International.  Mary, thanks for being with me today.

Mary Hiller:            It’s a pleasure to be with you.

Williams:            What is MedExpert?

Hiller:            MedExpert is a medical information company that is rooted in medical informatics and artificial intelligence. Our information goals are to provide patients with current advice and accurate information so they can make the best decisions possible and keep pace with the time that they need to make those decisions.

Williams:            I understand that you have something called IMDS.  What is that and how does it fit in with your approach?

Hiller:            IMDS is something that we started about ten years ago.  It stands for Individual Medical Decision System and in generic terms it’s a shared decision model.

Williams:            It’s interesting what you said about “keeping pace” with patients.  Can you say a little bit more about that?

Hiller:            I certainly will.  Part of the genesis of MedExpert is that I was a bench scientist at Stanford in leukemia research. If you came to our lab or one other lab in the world you had a chance to live. At that point in time, wherever else you went, the protocol was such that you were not going to get into first remission, which was the standard of care at that time.

It left an indelible mark that there was a protocol and a procedure and a best evidence play available that the bulk of the world didn’t get to tap into.  So we got together during the 80’s and tried to figure out how to deliver care.

To truly sift through all the peer reviewed medical information, which has been growing exponentially, required about 400 to 800 hours.  No patient can afford that kind of time.  No physician can afford that kind of time.

We conducted a study from  1993 to 1997 where we tracked 200,000 patients for five years. The goal was to understand the informational needs at the different stages of diseases and divide them up. What do patients want from information? How do they use information?  We were astonished to find that patients make up their mind in 24 to 48 hours, especially when faced with a severe health issue.

So to keep pace with the patient we realized we were going to have to automate the knowledge and so that is what we embarked on in the late 90’s.  We set up the expert system  rules base and we had a dozen MD’s and PhD’s work through it. The real challenge was how to condense the 400 to 800 hours to come up with best evidence in a matter of minutes.

At that point there wasn’t a company called MedExpert.  We were really trying to solve an issue. Through the combination of supercomputing and artificial intelligence, we were able to automate the process.

That is how you keep pace with the patient.

Williams:            It sounds like the patient and perhaps his or her family and friends would be the users of the service, but who are the customers?  Who are the people that pay the bills for it?

Hiller:            The end user is the patient and whoever –we call them a communicator– is working with that patient.  The customers of MedExpert are the purchasers of health care so it would be corporations, cities, Taft-Hartley groups.

Williams:            What do you foresee in terms of health reform and what impact if any that will have on your services?

Hiller:            When we first started this organization we looked at the possibility of how information would play in a managed care or universal coverage system. We carved out the space on knowledge so we’re agnostic to what the structure is.  Our assumption is that there will always be discovery, there will always be research, there will always be patients who need help.

The rules of the game are something that we can adjust to but patients will always need current knowledge.  They will always strive to make the most appropriate medical decision possible. It good be from the preventive aspect like, “How do I avoid this?” so we have the whole genetic aspect at play. Also if you’re trying to avoid going up the curve of disease. Also if you have been diagnosed and now you’re trying to find the best treatment options.

In terms of reform, our focus is to install any rules at play. We have very elaborate systems on how to install whatever the rules are at play but by focusing just on the knowledge we know that we can always help patients regardless of the rules that the patient has to live by.

Williams:            A lot of what you’ve described here sounds to me like it is improved on focusing quality and responsiveness for the patient.  But your marketing materials also emphasize cost savings.  Can you tell me how those two things come together?

Hiller:            We always focus on quality of care.  When we’re discussing options with patients we never ever say this is less or more expensive. One of the premises that we based our work on is that if a patient is treated with current, unbiased, accurate information they will become less costly because they will make better decisions.

That’s just a hypothesis.  We assume that if you get it right the first time you’re going to avoid a second time.  We always said everyone would want to have one surgery if that was all that was necessary. They wouldn’t want to be on ten drugs if they could find a good solution with three drugs.  So by focusing on what’s most appropriate, we made the assumption that cost would come out.  That was a gamble and that was a risk but it was something that in the last ten years has been borne out. We’ve taken huge swipes at cost.

We also don’t make decisions for the patient.  That was another gamble.  We find that if you put up a series of stop signs the patient starts focusing on the stop signs, but if you remove all the stop signs and stop lights and just ask, “What is the road you want to travel?” and let them know they can travel down any of those roads, then they start off with questions.  They ask about the pro’s and con’s of going down each path.

We’ve found that patients are really good at choosing a path that meets their needs the best.

Williams:            What should we expect to see from MedExpert over the next two or three years either in terms of advances in your technology or from your market position?

Hiller:            In terms of market position, we have some pretty good results that have been beaten up and validated. So from a market standpoint you will see us in some larger populations.

In terms of business lines and services, there is a lot that can be done on timing and a lot that can be done in delivering information more swiftly to a patient at their point of need, more instant coordination with the health delivery system.  Those are services that can improve.  We are also keeping pace with potential shifts for primary coverage from a physician-based office to the inclusion of retail as primary care.  So we will be working in those areas.

Williams:            Final question, just to change the topic a little bit.  How does working for MedExpert compare with being in a James Bond film? (See clip from Diamonds Are Forever)

Hiller:            It’s a lot more meaningful!

That role was only the result of the fact that I was a gymnast and our national team was training down in Southern California. In that era they were pulling a lot of gymnasts into spots.

It was fun but MedExpert is a lifetime effort.  There is a fundamental need in what we’re trying to solve and it’s intellectually more stimulating.

Williams:            I’ve been speaking today with Mary Hiller, she is Executive Director of Knowledge Engineering and Health Systems at MedExpert International.  Mary thanks very much.

Hiller:            Thank you for having me today.

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When I mention the new Center for Medicare and Medicaid Innovation to my business-oriented friends, they often sneer at the idea. “Medicare and innovation,” the say. “That’s an oxymoron.” And while it’s true that in general innovation thrives in small, private, entrepreneurial organizations rather than big government bureaucracies, the only real hope to bend the health care cost curve in this country lies with CMS.

Some Medicare Demonstration Projects, notably the Medicare Health Support Program for chronic illness that was part of the 2003 Medicare reform bill, have been big failures. Thankfully the Innovation Center has been freed of many of the restrictions that have prevented success. As described by Barr et al. in a subscribers-only Health Affairs article (Lessons For The New CMS Innovation Center From The Medicare Health Support Program):

The statute authorizes the secretary of health and human services (HHS) to select the models to be tested and to expand those that reduce costs while preserving or improving the quality of care. It also eliminates the requirement of budget-neutrality during the initial period of development and testing, allowing the CMS and its partners to build and refine new models before testing their impact on program expenditures.

The statute also requires the HHS secretary to terminate or modify the design and implementation of models if initial testing indicates that they are not expected to produce the desired results. This authority gives the CMS greater flexibility to design and develop new models. The new health care law also exempts Innovation Center activities from some judicial and administrative review processes, thereby accelerating the potential pace of improvements.

Finally, the center is not required to use randomized controlled trials for evaluation, which permits the CMS to use other valid evaluation methods to facilitate rapid learning and to test models not well suited to randomization.

These changes will allow the Innovation Center to design, manage, and evaluate new models as quality and cost improvement efforts without adhering to rigid research protocols. This approach should help stimulate innovation and diffuse its lessons more rapidly while maintaining the credibility of the process and the validity of the findings.

I’m hopeful that HHS will use its authority to test and deploy some bold new initiatives. Commercial health plans will get on board once Medicare demonstrates what works. It would be great if it could happen the other way around but it’s unlikely. Only Medicare is big enough to matter.

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Check out the latest edition of the Cavalcade of Risk blog carnival at Colorado Health Insurance Insider.

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MedExpert International’s Individual Medical Decision Systems (IMDS) help patients answer the question, “What would the world’s top experts do for my medical situation?” This e-enabled shared decision tool promises to provide answers in the short time frame patients demand when facing serious health problems.

In this podcast interview, MedExpert’s Executive Director of Knowledge Engineering and Health Policy, Mary Hiller talks about the origins and history of the company, how MedExpert improves patient outcomes and decision making while simultaneously reducing costs, and how her role at MedExpert compares with her role in Diamonds are Forever.

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 David Williams interview MedExpert's Mary Hiller: Play Now | Play in Popup | Download

Inside Surgery hosts the latest edition of Grand Rounds.

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This is the transcript of my recent podcast interview on how health reform is affect Flexible Spending Accounts.

David Williams:            This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Jody Dietel.  She is president and Chair of the Special Interest Group for Inventory Information Approval Systems Standard (SIGIS).  Jody, it’s nice to speak with you today.

Jody Dietel:            Thank you.  Nice to speak with you.

Williams:            Starting with the basics, what is an FSA?

Dietel:            A Flexible Spending Account or FSA is one of several consumer directed accounts whereby employees can set aside some pre-tax dollars to pay for out of pocket health care expenses that they already know they have. These include office visit co-payments, prescription drug co-payments, over-the-counter medications, dental, vision –all sorts of expenses.

Williams:            Have FSAs been well utilized?

Dietel:            Yes, there are about 35 million households with Flexible Spending Accounts today. Yet I would say it’s also an underutilized benefit.  Many employees have the opportunity to participate but for whatever reason it’s just an underutilized benefit much like 401K was in the early years.

Williams:            The new health reform law is quite sweeping in its scope. Although most people focus on big topics such as mandates to purchase insurance and medical loss ratio requirements, I understand that there are some changes afoot for FSAs as well.  Can you explain those?

Dietel:            The Affordable Care Act does impact many of the consumer directed accounts. The changes that I’m going to describe first also affect employer funded Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) as well. The Affordable Care Act requires that beginning January 1^st, any purchases for over-the-counter drugs and medicines will require a physician’s prescription in order to be covered under a health care Flexible Spending Account or other types of consumer directed accounts.

The wording is very specific, yet we’re looking for additional guidance from Treasury.  We can’t really believe that they meant a prescription with a capital “P,” which would have to be filled by the pharmacist. That kind of thing would really add a burden to the health care system. We think they mean a Black’s Law Dictionary definition of a physician directive.  In other words I have acid reflux and so my doctor tells me to take Prilosec OTC on a daily basis or something like that.

Williams:            I suppose in the worst case it could mean that you pick up that over-the-counter product from the shelf and then actually take it back to the pharmacist. The impact could be that an over-the-counter product becomes essentially a behind-the-counter product.

Dietel:            Assuming Treasury guidance is reasonable –and we expect it will be–   I think it’s more likely that before you buy an OTC medicine or drug that you want to have covered under one of these consumer directed accounts or your health plan, you’ll need to just make sure that you’ve talked to your doctor about it.

It will have to be made clear that you have a specific condition and they’ve told you to take or consume that particular OTC item to address the condition that you have.  So we’re looking for it to be not an onerous thing.  I think that putting OTC drugs and medicines behind the counter doesn’t make sense.  It would add a layer of complexity that wouldn’t be reasonable in the system.

Williams:             What’s the logic for introducing this change though in the first place? Even if it’s not onerous it still is an additional step and an additional cost and an additional thing for people to do.

Dietel:            That’s a very good question.  The only thing we’ve been able to understand during our extensive conversations on The Hill is that everyone needed to chip in some money to pay for health care reform. This was viewed as a way to raise about $5.4 billion over ten years. That’s assuming that consumers don’t follow the directive to get their physician to direct them to take their medicine.  We think the figure is overstated, but I think that’s simply a revenue grab to pay for health care reform.

Williams:            Now at the nitty gritty level, what impact does this have in terms of how a pharmacy sets things up or how somebody is administering the benefit?  What are the downstream issues?

Dietel:            That’s a really great question. The SIGIS Association, the Special Interests Group for IIAS Standards is really concerned about this change because over the past several years the IRS has issued guidance that allows for the use of a debit card in many of these consumer directed accounts. Today, in most cases, consumers can go to the drug store or their supermarket, purchase an over-the-counter item (an over-the-counter medicine or drug), and that item is automatically paid for with a debit card.  Funds come directly out of their account and in most cases there is no further need for substantiation.

So this change under the Affordable Care Act is really three steps backwards.  Essentially what it means is that you will no longer be able to use your card to purchase these items because the card doesn’t know whether or not you’ve had a discussion with your doctor and they’ve given you some sort of written directive or prescription to take the over-the-counter drug and medicine.  It’s also important to note that this really only affects about 35% of the items that are considered over-the-counter items.  So you can still buy Ace bandages, Band-Aids, gauze pads, reading glasses, wheel chairs.  There is a whole host of over-the-counter items and again about 65% of the list that is in existence today will still be available for the cards’ use.

Williams:            Okay but now you’re going to have to split up your order.  You’re going to have some things that you can still use your card for but then you’re going to have to take money out of your pocket and go through reimbursement like in the olden days?

Dietel:            Yes, that’s correct.

Williams:            So you also mentioned I think January 1^st as a time for implementation here.  Will people be ready in time for that?

Dietel:            Actually no.  In fact, we’ve talked to the Treasury Department and issued a letter that requests a delay or basically a non-enforcement period.  January 1^st is a horrible time of year for the retail community. Many of our members are merchants. Essentially this rule asks them to, overnight, December 31^st to January 1^st at the busiest retail season of the year, during a time where many retailers have historically had a blackout period against IT changes, to make this really substantial change.

So we’re asking Treasury and the IRS to consider the impact on the retailers and the economy. Despite our best communication efforts, I think that participants are going to be very confused, because essentially, something that they purchased with their card on December 31^st will no longer be able to be purchased on January 1^st.  We know the retailers won’t be able to consistently apply that and so even worse, a participant’s experience will differ from retailer to retailer unless we get this extensive guidance from Treasury and some relief from the arbitrary date of January 1^st.

Williams:            It does sound like a mess.  Do you have any sense yet of whether Treasury is sympathetic to your arguments and whether they can actually do anything about it even if they are?

Dietel:            I’m not sure that there is anyone who has a real sense.  I can tell you that they’re very interested and empathetic to our concerns.  We have had telephone conversations with them following our letter and I think that arguments that we made were sound and were really appreciated by the Treasury folks. The only word on the street is that we’ll see guidance sooner rather than later, whatever that means. We’re hopeful that that does mean in the next three or four weeks or so.

Williams:            What should employers and consumers be doing now?

Dietel:            I think that employers definitely need to start communicating with participants that there is a change.  About five or six years ago the change to allow over-the-counter drugs was made because these drugs are considered safe by the Food and Drug Administration.  In many cases it’s far less expensive for consumers to self-medicate through the over-the-counter process without the prescription drug/pharmacist process. And it’s certainly far cheaper for our health care system.

We need to start communicating with consumers today that there is a change on the horizon, that we are expecting additional guidance and that we’ll get that guidance out to them as soon as possible. But I think we’re in for a wild ride over the next few months until the end of the year and then when this change really takes place.

Williams:            If you look ahead another year or two when this transition has passed one way or the other, do you expect that FSAs will have an ongoing role under health reform or will they gradually fade off?

Dietel:            I really believe that Flexible Spending Accounts and other consumer directed accounts are part of the solution and not part of the problem.  Every single person’s health status and health needs are different and the reality is that under the Affordable Care Act there still are substantial out of pocket costs and cost sharing with participants.

The Flexible Spending Account is one of the only tools that puts the participant in the driver’s seat.  Milton Friedman, a noted Nobel Prize winning economist said, “No one spends someone else’s money as carefully as they spend their own.”  And so the whole idea is personal engagement, personal responsibility –that you and I can control much of our health care costs in America because of our own health status and taking better care of ourselves.  What we’ve found is that people who participate in a Flexible Spending Account or other consumer directed account actually have lower health care costs, have better compliance with treatment regimes and are healthier people. So I believe they have a very, very strong role in solving the health care ills of our country.

Williams:            I’ve been speaking today with Jody Dietel about Flexible Spending Accounts and some of the changes that are coming under health reform sooner rather than later.  Jodie, thanks very much for your time.

Dietel:                        My pleasure, thanks David.

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Discussion of health care reform tends to focus on the big issues like individual and employer mandates and minimum medical loss ratios for health plans. But the Patient Protection and Affordable Care Act (PPACA) reaches into just about every corner of the health care world, setting off a flurry of activity as rule-making and implementation proceed.

One change you might not be aware of: a new rule that requires patients to obtain a doctor’s prescription for OTC drugs if they want to use their tax-advantaged FSA to pay for them. The change is scheduled to go into effect January 1, 2011, but it presents serious challenges for retailers and others who must rework their IT systems right at the busiest time of year. Not only that, but the final rules still are not settled. For example, is the “prescription” as stringent as what’s required for a prescription drug, or is it more like a doctor’s note?

In this podcast interview, Jody Dietel, president of the Special Interest Group for Inventory Information Approval System Standard (SIGIS) talks about the compliance issues and argues for a delay in enforcement.

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 David Williams interviews Jody Dietel re: FSA rule changes: Play Now | Play in Popup | Download

Workers Comp Insider hosts the latest edition of the Health Wonk Review blog carnival. It’s the Dog Days edition.

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A grand jury in Georgia  indicted four members of the Final Exit Network earlier this year on charges that they helped a man with cancer kill himself.

In this guest post, Final Exit Network’s president, Jerry Dincin, PhD, puts forth his organization’s case.

Imagine being diagnosed with Lou Gehrig’s disease.

This incurable illness of the brain first manifests itself as low-level weakness and muscle atrophy. Soon you’re unable to stand, get in and out of bed, speak, or swallow food. You depend on loved ones and professional caregivers for basic tasks like eating, bathing, and going to the bathroom. You are, in essence, a prisoner within your own body — fully conscious of the outside world, but unable to interact with it.

Imagine now the insufferable frustration of knowing that there is a way to end this anguish, depression, and indignity — but it’s illegal.

This is the plight of many of Americans who suffer from Lou Gehrig’s disease and other debilitating illnesses like Alzheimer’s, cancer, Parkinson’s, and multiple sclerosis. For these individuals, one of the only chances at deliverance from their torture is physician-assisted suicide. Yet in most states — including Georgia — this option is against the law.

Opposition to physician-assisted suicide is understandable in the abstract. For many of us, death is something to be avoided at all costs, even when faced with incredibly dire prospects. The debate over physician-assisted suicide is really about the right of responsible adults to control their own lives. But physician-assisted suicide is not just an interesting, abstract discussion topic. Real people right now spend every minute of every day in agonizing torment.  Such adults, afflicted by incurable and unrelenting pain, should, if determined and competent to decide, have the right to end their lives.

Demographic shifts are making the legalization of physician-assisted suicide more urgent, particularly when it comes to dementia. With more and more Americans living into old age, the incidence of destructive mental illnesses like Alzheimer’s is on the rise. Today, over 100,000 Americans are in the advanced stages of Alzheimer’s.

For many of these individuals, the disease has already consumed their minds while their loved ones are forced, impotently, to bear tragic witness. Physician-assisted suicide would spare patients and their families the wrenching emotional pain that accompanies their slow, inexorable descent into oblivion.

Fortunately, many states have begun to recognize the basic human right to die with dignity. Both Washington state and Oregon allow physician-assisted suicide. Montana’s Supreme Court recently ruled that it is legal for doctors to prescribe lethal medications to terminally ill citizens. And Massachusetts lawmakers are considering legislation that would permit physician-assisted suicide.

Georgia has a long way to go before the essential freedom to die peacefully is recognized. Even the compassionate work of Final Exit Network (FEN), the organization I represent, has been met with strong opposition by Georgia’s state officials. In March, four of my colleagues were indicted in Forsyth County simply for providing information about suicide.

To be clear, FEN does not assist suicide nor do we encourage it. Instead, we are committed to supplying information and support to patients as they grapple with the most crucial decision of their lives: to end their misery or wait it out. (After discussing their options with Final Exit Network, many patients feel empowered to do the latter.)

Sadly, even these First-Amendment acts of counsel are under attack.

As medical science advances and people live longer, discussion of the freedom to take one’s own life will skyrocket. Just as a true conservative stands for individual liberty, so the members of the Georgia legislature should support keeping the government out of people’s private lives – and their deaths.

Jerry Dincin, Ph.D., is the President of Final Exit Network and a retired psychologist with more than 30 years of clinical experience. The website for Final Exit Network is www.finalexitnetwork.org.

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