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Already beset by data breaches andsuspensions for improperly managing itsMedicare programs, Woodland Hills-basedHealth Net was ned $150,000 last month by

the Department of Managed Health Care forfailing to help a diabetic enrollee rell hisinsulin prescription and rebufng the agencysintervention in the matter.

The ne is one of the largest ever leviedby the DMHC for a grievance involving asingle member. The agency imposed a total of$231,000 in penalties against Health Net lastmonth, records show.

Documents suggest the case is similar tothe plans repeated failures to providemedication to Medicare Advantage and Part Denrollees that led to Health Nets recentsuspension by the Centers for Medicare and

Medicaid Services., although a Health netspokesperson said the issues were separate.

In the DMHC case, the enrolleeattempted to rell his mail-order insulinprescription on New Years day, and was toldby the pharmacy that the prescription couldnot be renewed for at least ve days. Hecontacted the DMHC for emergencyassistance.

According to DMHC correspondence,the department's representative contacted(Health Nets) emergency contact number toresolve the enrollee's urgent grievance, butwas informed by the plan's agent that the

ofce was closed and that she would have to

call back two days later. The plan's agentrefused to transfer the Department'srepresentative to an on-call medical directoror supervisor.

The rebuff of the DMHC was traced to adocument that outlines how Health Nets callcenters handle grievance interventionshandled by the DMHC. The document omittedauthorizations involving enrollees in HealthNets health maintenance organization, whichis overseen by the DMHC. Neither DMHC norHealth Net ofcials could say specically howthe omission occurred, although a clericalerror appeared to be the most likely cause.

The enrollee was directed by a DMHCstaff nurse to a retail pharmacy to obtain anew insulin regimen, and was reimbursed bythe agency, according to spokesperson Lynne

Randolph. Although the enrollee did notsustain an interruption in his insulin regimen,lack of access to the drug can cause a diabeticto lapse into a coma and even die. Health Netdeclined to discuss the DMHC account,saying it did not have proper clearance fromthe enrollee to do so.

In addition to paying the ne, Health Net which has 2.2 million enrollees statewide agreed to provide new documentation andadditional training to its call centeremployees.

Randolph noted her agency is very rarely

brushed off by a health plan when it tries tointervene on an enrollees behalf.

It does not happen very often...and wetake it very seriously, she said.

Health Net spokesperson Brad Kieffer saidthe matter was isolated. This was likely a

8(2/9-*4/(!:-;/)!0/+;1++/-4!-9!/++1)+!+1;3!(+!>8P+!(40!F(22/(

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Payers & Providers Page 2

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In Brief

APP LaunchesWebsites For ACO

Clarity

The Oakland-based Council ofAccountable Physician Practices

has launched several websites aspart of an initiative to informvarious factions in the healthcaredebate rearding accountable careand ACOs.

The websites are named5RealAnswers.org;AccountableCareChoices.org,AccountableCareFacts.org andAccountableCareStories.org, areaimed at constituencies thatinclude consumers, the media andpolicymakers. They include tools,research and case studies aboutaccountable care.

"We want to share ourknowledge and best practices so

that the general public, media, andpolicymakers can come tounderstand what can be achievedwhen 'systems' of care are alignedin the patient's best interest, saidCAPP Chairman Francis J. Crosson,M.D., who also serves on theMedicare Payment AdvisoryCommittee. "This campaign strivesto illustrate what healthcare that isaccountable and patient-centeredcan look like when healthcareproviders are properly motivated towork together.

San Francisco HealthPlan Gears Up ForExpansion

San Francisco Health Plan isgearing up for an expansion ofapproximately 25% over the nextseveral years, officials said.

The plan, which providescoverage for 60,000 Medi-Calmanaged care and Healthy

Continued on Page 3

NEWS

Health Net (Continued from Page One)

one-time incident and it nevertheless gave usthe impetus to revisit our policies, he said.

The DMHC also ned Health Net

$81,000 for 27 other violations primarilystemming from not answering enrolleegrievances in a timely manner and notproviding the DMHC with information it hadrequested.

The nes are the latest in what has been aseries of issues bedeviling Health Netsmanagement since late 2010. Last month, itdisclosed that several server drives weremissing from its data center in RanchoCordova, a Sacramento suburb. Aninvestigation launched by DMHC indicatedthat the data of at least 845,000 currentHealth Net enrollees in California were

missing, and as many as 1.9 million enrolleesnationwide.The breach is the largest that has been

recorded since a federal law enacted in 2009require breaches involving 500 or morepatients be reported to the U.S. Departmentof Health and Human Services.

In November, CMS suspended Health Nefrom enrolling or marketing to new MedicareAdvantage and Part D members. In its

termination letter to Health Net, the CMScited repeated instances of the plan failing toprovide appropriate medications to itsmembership, and accused it of failing to heedrepeated warnings from regulators to improveits performace.

In an interview in 2010, CMS spokesmanPeter Ashkenaz said the agency decided notmoving against Health Net could endanger thlives of patients. The plan has about 650,000Medicare enrollees. It continues to providethem coverage during the suspension, whichremained in effect as of this week.

Randolph did note that Health Nets

issues have not yet become serious enough towarrant an unscheduled review of the qualityof care being delivered by the plan.

It has not risen to that level, but thedepartment has the ability to address it if needbe, she said.

CEO/COO/CFO COMPENSATIONPAYERS & PROVIDERS EXCLUSIVE WHITE PAPERCOMPENSATION ON MORE THAN 300 OF CALIFORNIAs

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Caution, Optimism On ACO RegsMost Groups Still Examining 429-Page Document

At 429 pages, the regulations released by theCenters for Medicare and Medicaid Servicesregarding the formation and operation ofaccountable care operations are apparentlynot easy reading.

Ofcials with many of Californiasleading healthcare organizations were unableto provide signicant comments on them as ofthe middle of this week, although someconcerns have already been raised regardingincentive payments and other issues that pivoton the nancial viability of forming an ACO.

Incorporated into the Patient Protection andAffordable Care Act, ACOs were intended tocreate a mechanism that monitored every stepof patient care, promote evidence-basedmedicine and keep close tabs on providercommunications, ensuring a better continuumof care and lower costs. Providers were toreceive nancial incentives to keep costsdown.

Continued on Next Page

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Page 3Payers & Providers

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CMS would let the ACOs keep as much as60% of the money they save by banding

together to coordinate a patients care. But theywould also have to pay penalties if they dontmeet targets. Donald M. Berwick, M.D., director of CMS,said the Medicare Shared Savings Program forACOs is structured to accelerate progresstoward better care for individuals, better healthfor populations, and slower growth in coststhrough improvements in care. The fragmentednature of the current system, he wrote in theNew England Journal of Medicine, leads towaste and duplication and unnecessarily highcosts.

CMS wants to allow the maximum exibilityin development of these new organizations.They may be led by physicians in group

practices, networks of individual practices,hospitals employing physicians, or partnershipsamong those entities.

The regulations were delayed by severalmonths as CMS sought input from a variety oforganizations in the eld.

It is projected that ACOs might save between$170 million to $960 million over three years.They would cover up to 5 million individualsenrolled in Medicare. Each ACO would have tohave a minimum of 5,000 enrollees in order tobe considered a viable operation.

The California Medical Association andCalifornia Hospital Association both declinedimmediate comment on the regulations.

Our staff specialists are analyzing thesevery complex regulations, said CMAspokesperson Rosanna Westmoreland.

We are still reviewing the...regs. Thus wearen't yet ready to issue formal comments,said Jan Emerson, vice president of externalrelations for the CHA.

However, Donald Crane, chief executiveofcer of the California Association ofPhysician Groups, noted that the regulations

may be unpalatable to medical groups outsidof California.

A fair number of voices say they dont

offer enough incentives to physicians andphysician groups (to form or enter into anACO), Crane said. A similar concern wasraised on the facility end of the equation bythe Hospital Association of SouthernCalifornia.

Crane noted that many medical groupswould have to invest up to $1.75 million instartup costs to get an ACO operational, andthat it would have to generate savings of abo7% a year in order to generate an acceptablereturn on investment.

However, he added that many medicalgroups in California are already well-prepare

to leap into an ACO structure. They haveeverything they need: the disease registries,the data warehouse, and they have theexperience. The problematic issue is that thisis really taking an unmanaged population thwill require a lot of organized discipline inorder to bend the cost curve down and thequality curve up.

Crane would not say however whether hgroups membership would eagerly join ACOJim Lott, Executive Vice President of HASC,observed that some concerns have been raisregarding how the cost savings and sharingformulas shift from year to year, as they willchange based on the prior years performanc

There may be an incentive to do it inyear one, but not in the years beyond yearone, Lott said. Thats what was in theoriginal law, and we interpreted that it wouldbe in the regulations as well.

Once everyone nishes their reading, thconcerns are likely to be aired quickly.We will be issuing a letter on the regs durinthe public comment period, Crane said.

ACO Regs (Continued from Page One)

Families enrollees, projects it willgrow by an additional 16,500enrollees over the next year. Thatincludes1,200 special needsseniors who will be moved intomanaged care as part of a cost-reduction campaign by Medi-Cal,

and a lowering of incomeeligibility as part of the Medi-Calwaiver.

We've overseen thereadiness of our provider network,performed health assessments andengaged with senior and disabledadvocacy groups to help usdevelop best practices and meetexpectations. In the end, we aregoing to we are going to providewhat SFHP has become wellknown for: providing the bestcare possible to our members,"said John F. Grgurina, CEO of SanFrancisco Health Plan.

CEP America, SutterEmergency Medical

Associates Merge

CEP America and SutterEmergency Medical Associates,two Emeryville-based medicalgroups that focus on emergencymedicine, have agreed to merge.

Sutters 75 physicians will befolded into CEPs approximately1,100 doctors. Terms of thetransaction, which was expectedto be finalized later this month,were not disclosed.

SEMA has been a qualityprovider of emergency departmentservices in Northern California formany years. Were pleased towelcome SEMA providers to CEPAmerica, said Wes Curry, MD,CEPs chief executive officer. Thismerger of two leading physiciangroups enhances our ability todeliver quality...care.

Once the merger iscomplete, the two groupscombined will provide slightlymore than one-quarter ofCalifornias emergency room physicians.

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8/7/2019 Payers & Providers California Edition April 7, 2011

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Payers & Providers PageOPINION

Overreaching Leads To Higher CostIn Doing Too Much, Providers May be Doing Less

Shannon Brownlee is acting director of the

health policy program at the New America

Foundation in Washington. She is author of

Overtreated.

9-21:)!;6!1%2/+3)0!).)*&!?31*+0(&!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!

778@!A4!(441(2!/40/./01(2!+1%+B*/>C/-4!/+!DEE!(!&)(*!

FD$=E!/4!%12G!1>!C-!$#!+1%+B*/%)*+H@!^-++!]-20%)*56!(&)*+(40>*-./0)*+@B-: Op-ed submissions of up to 600 words are

welcomed. Please e-mail proposals to

editor@payersandproviders.com,

When Congress passed the Accountable CareAct almost a year ago, it set into motion asolution to the long-festering issue of theuninsured in America. But that was only halfthe job. We now fact the much harder task ofreforming the healthcare delivery system.

Most Americans think their doctor is doinga good job, and their hospital is above average,which is only possible if everybody lives inLake Wobegon.

The fact is, we pay more percapita than any other country in theworld by far, but we dont get goodvalue out of our health care dollars.

Just look at patient safety. If you addup all the mistakes committed inhealth care -- all the medicationerrors, hospital infections, falls,bedsores -- health care is the thirdleading cause of death in thiscountry. People are not dying oftheir disease; theyre dyingbecause something happened.And the hospital is the mostcommon place for it to happen.

One of the biggest factors inthis quality chasm is largelyhidden from view. Patients are being routinely

overtreated. Probably 20% to 30% of everyhealth care dollar is spent on avoidable care.This amounts to $500 billion to $800 billion ayear. Thats enough to cover the uninsured acouple times over.!Worse than the wastedmoney, however, is the potential for harmingpatients.!

This is a difcult concept for providers toaccept, much less do something about. Mostphysicians, nurses, and hospital administratorswant to do the right thing for their patients.They went into medicine to do good, not harm.But they nd themselves working in a systemwhere all of the incentives are pushing them in

the direction of delivering more care, notnecessarily better care.!

The fee-for-service payment systemincentivizes everyone in the system to domore. And not just hospitals and physicians.!Worries about malpractice also make it easierto give more care rather than better care.

Patients, too, push constantly for morecare.!Every physician has had the experience ofa patient who demands a brand name drug, anunneeded test, an unnecessary CT

scan.!Imaging tests are one of the fastest risinareas of cost, and while a CT scan can revealhidden injuries and life-threatening problemsit's estimated that at least a third are unneede

But under the current payment system, anhospital or physicians group that pushed bacon demand for CT scans would suffer a nanpenalty. Likewise, if youre a neurosurgeon wencourages patients to weigh the potential risof back surgery as well as the benets, you m

see your patients go down the stto a surgeon who tells them whathey want to hear.

If youre a hospital that

successfully reduces readmissionyou will lose the revenue fromthose returning patients.

Its hard for physicians to grapwith these realities. So much oftheir self-perception is wrapped in the belief that they are doing

good. Its hard to face the fact ttheyre trapped in a system thatoften drives them to do things tput their patients in harms wayThe cognitive dissonance mustvery acute.

What is the solution? There's no silver bul

no single change in the payment system or thway we buy insurance that will solve thesecomplex problems at once. But there are mapaths to a better delivery system.

Organized group physician practices havemade great strides toward righting theincentives. Medical groups such as KaiserPermanente, the Geisinger Clinic, and the MClinic are better at getting the balance right.

Fortunately, the health reform law is takinsteps toward changing the payment system. Lhope that the new accountable careorganizations really do deliver a higher qualiof service and treatment to our Medicare

beneciaries. The taxpayers and the patientdeserve no less.

By Shannon

Brownlee

8/7/2019 Payers & Providers California Edition April 7, 2011

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MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

WERE GROWING!

The Integrated Healthcare Association (IHA) is a statewide multi-stakeholder leadership groupthat promotes quality improvement, accountability and affordability of health care in California.IHA is a nonprot association!working to actively convene all healthcare parties for cross sectorcollaboration on health care topics. IHA administers regional and statewide programs and servesas an incubator for pilot programs and projects.!

PROGRAM MANAGER!Manages the CA pay for performance (P4P) program related to quality measurement; leads andsupports program committees comprised of executive representatives of organizationsparticipating in the program; oversees the data collection, aggregation, analysis, handling of

appeals, and distribution of results to physician groups and health plans for quality and efciencymeasures; builds positive relationships with stakeholders and maintains ongoing communicationsvia various methods to keep them informed. Required: 5-10 years experience in health caredelivery or managed care; BA/BS required; Masters Degree preferred in health-related eld.!

ANALYST / SENIOR ANALYST!Supports the Bundled Episode Payment demonstration with project coordination and developsclinical, data, or quality supporting materials for the project. The demonstration is in a dynamicstart-up phase; project assignments might include participant report formats and specications,communications recruiting support and dissemination of information about our preliminary

ndings and results.!Required:! Excellent analytic and critical reasoning skills; effectiveinterpersonal and communication skills; BA/BS required in health-related eld; Masters Degree orclinical training preferred.!!Join our dynamic team working on exciting statewide programs and projects!!!For complete jobdescriptions, visit:www.iha.org.! To apply, email Cindy Ernst at cernst@iha.org.

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T)!$)5!@#-3!3)!2&)2)'%!)&!2#&3+9+2#3%!+-!#!C535&%!4)5-,3#67%!8-3%]+*%S!"#&3+9+2#3+)-!+'!%-3+&%7$!)-7+-%I!@+3;!#!9)BB+3B%-3!)C!-)!B)&%!3;#-!)-%!;)5&:!/#77!4)-!M;+-AB#-!#3!VWWE

8/7/2019 Payers & Providers California Edition April 7, 2011

7/7

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