Nonprofits Under Fire for Charity Care Policies

In their latest strike against nonprofit hospitals’ policies toward uninsured patients, Scruggs Law Firm, Oxford, Miss, and other law firms filed new lawsuits against four health systems, bringing the total number of health systems under litigation to nearly 50. The lawsuits claim that the defendant hospitals overcharge uninsured patients for treatments and engage in aggressive tactics to receive payments. Included in these allegations is the American Hospital Association (AHA), which questions the legitimacy of the lawsuits.

“Hospitals in America have had charity care policies in place for many years, and simply because a [hospital] system is sued, it doesn’t mean that there is something wrong with its charity care policy,” says Rick Wade, senior vice president of strategic communications at the AHA. “At a time when hospitals are working very hard to try to figure out a way to care for the increasing number of uninsured patients, a lawsuit misses the point.”

Plaintiff attorney Richard Scruggs, of Scruggs Law Firm, does not see it that way. In a recent statement responding to an AHA comment that the lawsuits are hindering hospitals from finding ways to make health care accessible to the uninsured, Scruggs Law Firm reiterated its claim that nonprofit hospital systems and other hospitals are violating their obligations to provide charitable health care for the uninsured, and claimed the AHA still has not provided any real defense against the allegations made against the AHA or the other hospitals charged in the lawsuits.

Adding fuel to its pursuit against nonprofits and hospital systems, Scruggs Law Firm reached a settlement agreement with North Mississippi Health Services (NMHS), a six-hospital system in Tupelo, Miss, that has not even been named in a lawsuit. Under the agreement, which is awaiting approval by the United States District Court for the Northern District of Mississippi, the hospital system agreed to provide an estimated $150 million in refunds, debt forgiveness, discounts, and free care to about 48,000 eligible uninsured patients. It will also not charge eligible uninsured patients more than 10% of their annual income. Though the NMHS system is not a defendant in Scruggs’ lawsuits, it sought to avoid the distraction and costs associated with a potential lawsuit.

Scruggs sees the NMHS settlement as a model for other hospital systems to abide by, but the AHA is not convinced that one settlement will make a monumental impact in the way nonprofit hospitals and other hospital systems currently provide care. In the same statement announcing the settlement agreement, NMHS said its existing policies that are currently offered to uninsured patients were not too far off the proposed discounts by Scruggs.

“The point is that we have millions of people in this country without health insurance; we need to figure out how to correct the problemthis is a bigger issue than a lawsuit,” says Wade.

Scruggs was not available for comment.

New Head and Neck Cancer Treatment Yields Improved Mortality

According to a study published in the May issue of The New England Journal of Medicine, patients with high-risk squamous cell head and neck cancer may benefit from combined chemotherapy and radiation therapy treatment. Results of a trial involving 459 patients showed that 22% were less likely to experience a recurrence of cancer or death.

“We’ve shown that there are relatively safe ways of combining chemotherapy and radiotherapy concurrently,” says Jay Cooper, MD, lead author of the study. “There might be better ways in the future, but the principal concept that we are showing is that there are ways of making radiation more effective.”

According to Cooper, the study is not advocating a change in treatment protocol entirely; instead, it is showing one way in which patients who have tumors that did not respond to surgery alone, radiation therapy alone, or surgery with standard radiation can be treated.

“There’s no reason in giving someone extra treatment by putting them through more therapy and side effectsyou always want to do the most effective, but least treatment you possibly can,” says Cooper. “However, if you have patients who, by experience, you know will not be successfully treated with surgery and standard radiation therapy, concurrent chemotherapy is more beneficial.”

Traditionally, surgery and postoperative radiation therapy are the treatments that most patients who are diagnosed with advanced squamous cell carcinoma of the head and neck region receive, and chances of survival after 5 years are 40%; for patients with high-risk disease, where cancer has spread to the lymph nodes, the chances of survival after 5 years drop to 35%.

For the study, researchers enrolled patients from September 1995 to April 2000. Only patients with squamous cell carcinoma of the head and neck region that was classified as high-risk (having tumors that invaded two or more lymph nodes, extended beyond a lymph node capsule, and/or microscopically involved mucosal margins of resection) were chosen to participate. After all visible and/or palpable areas of cancer were surgically removed, the patients were randomly chosen to receive radiation therapy alone or the identical radiation therapy plus cisplatin, a chemotherapy drug.

When evaluated during a follow-up time of approximately 45.9 months, the 2-year local-regional control rate was 82% for the group that received concurrent radiation therapy and chemotherapy, and 72% for the group that received radiation therapy alone. A drawback of the combined chemotherapy and radiation therapy method noted in the trials was increased side effects.

“The outcome of the study is not saying we’ve prevented these patients from getting metastasis.’ The big difference is in the local control,” says Cooper. “We’ve found one way to combine chemotherapy with radiation to allow the chemotherapy to make radiation more effective.”

The study, entitled RTOG 9501/ECOG R9501/SWOG 9515: Phase III Intergroup Trial of Surgery Followed by Radiotherapy vs Radiochemotherapy for Resectable High-Risk Squamous Cell Carcinoma of the Head and Neck, was conducted by the Radiation Therapy Oncology Group, a grantee organization of the American College of Radiology.

VIP Health Care Program Expedites Service

Florida Hospital, Orlando, Fla, has begun a pilot medical services program that caters to the needs of the growing Baby Boomer population. Called the VIP Concierge Program, the plan aims to provide selected members, ages 45-64 years old, with a centralized service that efficiently secures physician referrals and appointments for outpatient services, such as CT scans, x-rays, and MRIs.

To initiate the pilot program, invitations for membership were sent to 50,000 patients. The response rate exceeded expectations, bringing in more than 4,000 patients and counting. The utilization of the program will be tracked through individual membership cards that each patient receives when joining the program. The services of the concierge program are open to the patient and the members of their immediate household. More than 600 physicians, representing more than 50 specialists, are offering their services in the program.

“The agreement with the physicians is that they will see patients within five working days,” explains Chelle Simmons, director of affinity programs at Florida Hospital. “However, there are a couple of exceptionsexpedited services are offered for all imaging tests, except for mammography. Right now it can take months to get a diagnostic mammogram in Florida, as there are not enough radiologists here to read mammogram tests. So, mammograms are not included in this concierge program; everything else we are able to do in 5 days or less.”

The program works like this: Patients call the number on the back of the card and specify the type of physician needed, location (near their work or home), and special needs, such as the physician being able to speak a second language. The physicians’ offices are called right away to secure an appointment. Patients stay on the telephone while the appointment is being set up so that they have immediate confirmation of their appointment.

Charlatan Radiation Safety Officer Prosecuted

Perry Beale fooled administrators at more than 50 hospitals by posing as a certified radiation safety officer for nearly 15 years. Beale’s facade was finally uncovered in July, when federal prosecutors charged him with 38 counts of mail fraud (after discovering he was paid via the mail).

Beale allegedly portrayed himself as a medical physicist and radiation safety officer who was qualified to inspect and certify mammography facilities and nuclear medicine departments. He also examined x-ray machines, fluoroscopy machines, and sealed sources of radioactive material used to calibrate nuclear medicine devices. He carried with him a falsified resume, college transcripts, and fake credentials as a radiation safety officer. According to the prosecutors, Beale did not qualify as a radiation safety officer under the regulations of the Nuclear Regulatory Commission, nor did he qualify as a medical physicist under the standards of the Food and Drug Administration (FDA).

Beale turned himself into the federal authorities and has been released by the US District Court in Harrisonburg, Va, on a $25,000 bond. He waived his right to a grand jury and stated that he intends to plead guilty to all 38 counts. After evaluation of the case, the FDA released a statement confirming that Beale’s activities did not contribute to a health risk to mammography patients.

Research Highlights Advantages of Breast MRI

Recent research performed by physicians at six cancer centers throughout the Netherlands suggests that MRI scans find nearly twice as many tumors as mammograms in women at high risk for breast cancer. The study, which was published in The New England Journal of Medicine , also showed that MRI may make monitoring a less dangerous option for women who otherwise might have their healthy breasts removed as a preventive measure.

For the report, researchers examined 1,909 Dutch women with a higher than average risk; 358 women had one of the BRCA genes or other mutations that increase a women’s chance of getting breast cancer. Women were screened in three ways: a breast examination by a physician every 6 months, annual mammograms, and annual MRI scans. Results were analyzed by different physicians, so none knew what the others had found. After an average of approximately 3 years, 45 tumors were found, of which 32 were identified by MRI, including 22 that had not been visible on mammograms. Only 18 of the 45 tumors were caught by mammograms. Although the study showed that MRI scans found more tumors than mammograms, it also found that MRI produced more false alarms, which may lead to unneeded biopsies.

The importance of mammograms for women at average risk is a debated topic, but mammograms continue to be recommended for screening most women starting at age 50. However, in a study appearing on the web site of Cancer, a journal of the American Cancer Society, researchers found that few women get yearly mammograms. The study involved 72,417 women of all ages at Massachusetts General Hospital, and found that a mere 6% of women who received a mammogram in 1992 received mammograms annually for the next 10 years. Poor patient communication about reminders, and the shortage of providers were attributed to the low number of women getting mammograms.

NIH Ethics Controls Called Insufficient

The Office of Government Ethics (OGE) released a 20-page report stating that the National Institutes of Health (NIH) needed to restore the public’s confidence in the organization with firm, across-the-board restrictions, according to an article appearing in the Los Angeles Times on August 6, 2004.

The report challenges the efforts of NIH’s health director Elias Zerhouni, MD, to clean up the organization by banning top officials from accepting industry payments while NIH scientists worked on consulting deals. Marilyn L. Glynn, the head of the OGE, said in the report that the NIH had been permissive to outside compensation and that the OGE had discovered a number of unapproved outside arrangements involving NIH employees. The report was sent to the Department of Health and Human Services and to Zerhouni’s office, with a message from Glynn stating that a follow-up review would be conducted within the next 6 months.

Earlier this year, Zerhouni proposed a total ban on paid consulting with pharmaceutical or biotechnology companies for directors, deputy directors, scientific directors, and clinical-research directors, but other NIH employees, such as the chief of laboratories, remained eligible to receive industry consulting payments. The OGE maintains its dissatisfaction with this proposal, urging that it still leaves room for ethical misconduct.

Top 10 Recruited Physicians & Salaries

Securing the top position as the most recruited medical specialty during April 2003 to April 2004 is orthopedic surgery, a field that is experiencing a growth in demand fueled by an increase in the aging population. Orthopedic surgery surpassed radiology, which was the most recruited specialty from 2000 to 2003.

The report, 2004 Review of Physician Recruiting Incentives, was compiled by Merritt, Hawkins & Associates, a national physician search and consulting firm based in Irving, Tex. This is the 11th annual survey of which types of physicians are most highly recruited by the firm’s hospital and medical group clients, and the average income they are offered.

Reimbursement Disparities: Are practices sufficiently compensated?

A new report by the Medical Group Management Association (MGMA) shows that physician practices that are aware of their contractual rates are reimbursed at a higher rate than practices that are not aware. For selected codes, contracted rates were reimbursed on average 4% higher per evaluation and management (E&M) code than practices that indicated reimbursement levels derived from payors’ explanation of benefits (EOB) (Table 1).

Table 1

A major finding in the survey was that practice revenue may influence reimbursement levels (Table 2). For most codes reviewed, practices that reported the lowest levels of net revenue also reported lower average reimbursement. Surprisingly, the practices with the highest levels of net revenue (practices with revenues of $2M to $5M and more than $5M) also reported lower average reimbursement rates. According to MGMA, this suggests that smaller practices may not have the resources to negotiate better payment and that larger practices may be willing to accept lower E&M reimbursement for other benefits, possibly including greater ancillary revenue, or in the case of integrated systems, greater inpatient reimbursement.

Table 2

The report also takes a look at medical practices’ satisfaction levels with various payor interactions including contracting, payment of claims, claims denial, and credentialing; an overall satisfaction score of 2.1 (on a scale of 1-4, with 1=poor and 4=excellent) was given from all respondents.

Presented at RBMA – The Radiology Business Management Association 2004 Radiology Summit, San Diego, June 6-9.

Self-Referral:The $6 Billion Issue . Self-referral is the ultimate corruption of capitation, because “the buyer and the seller are the same,” James Borgstede, MD, chairman of the Board of Chancellors, American College of Radiology, told attendees of the RBMA meeting in San Diego, whose 1,500 members include radiology practice and business managers. Borgstede said that between 1993 and 1998, mammography was the only area of imaging where radiologists increased utilization and nonradiologists did not. He cited a 2% increase in radiologist utilization versus 277% increases in nonradiologist utilization for nuclear medicine in that same time period. “Where there is no money, there is no interest,” he noted. While most radiology procedures are considered designated health services under Stark, neither nuclear medicine nor some interventional services are designated under Stark, resulting in a virtual free-for-all in physician self-referral for those procedures. In mobilizing to counteract the effects of self-referral, the ACR has gathered actuarial data to show that CMS can save $6 billion over 10 years if the loopholes are closed, Borgstede reported. The organization is also meeting with insurance carriers; is helping state chapters develop data; and is in the process of drawing up legislation that will not be introduced until 2005.

Race to Reimbursement:The ER Dilemma . Current Medicare policy allows carriers to reimburse radiology, but it can pay ER doctors as well, leading to what Tom Greeson, attorney with Reed Smith LLP, Falls Church, Va, called “a race to bill.” In describing the Office of Inspector General (OIG) work plan for 2004, Greeson reported that the OIG has raised the question as to whether it is more appropriate to reimburse the ER physician. In reviewing the situation, the OIG will look at whether the services were medically necessary and whether the tests were interpreted “contemporaneously” with the beneficiary’s treatment, raising many questions for radiology practices and the hospitals they serve, Greeson told general session attendees.

Prior to 1993, when a radiologist interpreted a radiograph already interpreted by an ER physician, it was reimbursable. Current policy allows payment for only one interpretation, with the proviso that there is a written report prepared for inclusion in the patient’s medical record. If multiple reports are submitted, CMS will pay for the one that was directly attributable to patient care. In default, CMS pays for the first one received. A more sinister potential threat than lost income, according to Greeson, is the fact that the Social Security Act provides for civil penalty against a person who presents a claim that is unnecessary.

In light of the fact that OIG has raised the possibility that radiologist interpretation of ER diagnostic tests might not be considered a physician service payable by Medicare, there is “the implication that OIG might not consider such services medically necessary,” said Greeson. “This raises significant fraud and abuse implications and you need to take steps to establish policies for these services.” Additionally, if a hospital chooses to allow ER physicians to bill for the interpretation of x-rays, radiologists should be aware that reviewing these images, if not compensated by the hospital, may raise suspicion of illegal remuneration to the hospital, Greeson said. To the extent that a radiology group is in a situation where radiologists and the hospital have expectations that the radiologist provide service, then the hospital has to pay fair market value. In other words, if ER physicians are permitted to read, but the hospital wants the radiologists to review, then the radiologists have every right to ask the hospital to pay for their services, Greeson said. What is fair market value? “The Medicare Physician Fee Service is a good benchmark for professional services,” he noted.

In recent years, radiology groups have devised various ways to meet the needs of ER physicians. Some groups have a radiologist on-site 24/7, but many more utilize teleradiology to provide preliminary reads that are later confirmed. Whether this will be acceptable to Medicare after OIG makes its determination remains to be seen. “This is a potential minefield and we don’t know how well fused the mine is and when it will go off,” said James Borgstede, MD, chairman of the ACR Board of Chancellors. According to Borgstede, the key question is what OIG will deem “contemporaneous,” and their answer could be “disadvantageous” to radiology. “It could have a negative effect on the ability to use teleradiology,” Borgstede noted. Borgstede urged practices to find out if the ER is billing and if it is issuing the report required to get paid, and if the doctors are credentialed. “Find allies,” he suggested.

Brand What? Branding a radiology practice is a critical step in strengthening and expanding a practice’s position in the marketplace. That was the message from marketing representative Peggy Wagner, Radiological Associates of Sacramento (RAS), who presented on “BrandingWhat Sets Your Radiology Practice Apart from the Pack?” The three principles of branding are: highlight strengths, understand the marketplace, and consistency. Focus on where you excel, recommended Wagner. Do you offer CME for referrers? Have multiple locations? A women’s health center? To understand your market, develop profile sheets on all of your competition. Do not be shy about calling them to ask what type of scanner they have, how old it is, and what kind of software they have. Ask referrers what the competition has that you do not. Pick up the phone and pretend you are shopping for imaging. Once you decide what your brand is, put it everywhere: fax cover sheets, stationery, on-hold messages, voice mail, referrers’ pads, and all collateral material. Wagner shared the folowing branding statements found on a search of radiology practice web sites: Our service goes beyond our imaging; Physicians dedicated to patient care; An image you can trust; Our biggest concern is caring for you; Giving you a better view of patient health; Focused on you; Care without compromise; Caring for your family’s health; and Imaging experts for life.

“A lot of people make the mistake that branding is what you want your customers to think of you,” said Wagner. “You can influence what they think, but you can’t make them think what you want.”

–By C. Proval

Industry News

GE Healthcare, Waukesha, Wis, and Nexense, New York, are working together to improve gating in MRI and CT-scan technologies by adapting the Nexense sensor, developed for navigation in outer space, to enhance the technologies’ triggering ability…Eastman Kodak Company’s Health Imaging Group, Rochester, NY, received a 2004 R&D 100 Award from R&D Magazine for its Kodak Min-R EV Screen-Film System, which was honored for improving visualization in the early detection stages of breast cancer…Varian Medical Systems, Palo Alto, Calif, has received FDA 510(k) clearance for a new AAA dose calculation algorithm in its Eclipse™ 3D radiotherapy treatment planning software. The new algorithm improves radiation dose distributions in heterogeneous areas of the body, where bone, dense soft tissues, and air pockets each interact with radiation in unique ways…Stentor, San Francisco, has integrated its iSite Enterprise PACS with the 3D imaging technology of Voxar, Framingham, Mass, providing Stentor users with additional functionality for diagnostic interpretation of images using MIP, MPR, 3D visualization, enhanced PET visualization tools, and new image enhancement and measurement tools…Connect Imaging Inc, Honolulu, has been selected as a finalist in the 10th annual Hawaii’s “Fastest 50” small business awards program, which recognizes the 50 fastest-growing independent, privately held small businesses in the state based on their average annual growth rate…Tradeshow Week has selected the American Society for Therapeutic Radiology and Oncology (ASTRO) Annual Meeting as one of the 50 fastest growing trade shows in the United States and Canada. The 2000 ASTRO exhibit hall hosted 220 companies, which occupied 87,400 net square feet of exhibit space, and in 2003 the meeting attracted 232 companies, which took 96,000 net square feet of exhibit space…Shared PET Imaging LLC, Canton, Ohio, has received 510(k) clearance from the Food and Drug Administration (FDA) for its ClarityPET viewing software program…AngioDynamics Inc, Queensbury, NY, is changing the name of its endovascular laser venous system to VenaCure™ Laser Vein Treatment and will be launching updated marketing kits to support the change…Dictaphone Corp’s Healthcare Solutions Group, Stratford, Conn, and eMed Technologies, Burlington, Mass, have integrated the Dictaphone PowerScribe Workstation™ Version 4.6 speech recognition application and eMed’s Matrix Version 1.1 PACS Suite …SourceOne Healthcare Technologies, Mentor, Ohio, and Merge eFilm, Milwaukee, entered into a nationwide distribution agreement, in which SourceOne will market and distribute Merge eFilm’s entire suite of PACS and radiology information system solutions throughout the United States…Medicsight, London, received Conformité Européene certification and clearance by the FDA to market the Medicsight Lung CAR, an image analysis software tool that assists radiologists in evaluating lesions or nodules found during CT scans of the lung.