Sympathy for the Recovery Audit Contract (RAC) Process, Really?

I read an editorial this AM from the editor of Fierce Health Finance and I think that it's a first........someone sympathetic to the RAC process.  I have written a number of blogs on this topic in the past as to the absurdity of the RAC process.  Centers for Medicare and Medicaid (CMS) created this process to rid health care of waste and inefficiency.  For the most part, I have no problem with the concept since both exist and need to be eliminated.  It was the way in which CMS went about putting the program in place.  

Their contractors deny virtually every appeal at the first two appeal levels, where the CMS contractor gets paid a percentage for every identified RAC claim.  At the third level where the appeal involves an administrative law judge who is outside of the RAC contractors' purview, the game changes.  At the ALJ level, WMHS has won virtually every appeal.

Unfortunately, CMS and their contractors got greedy and as a result, hospitals and health systems are now challenging every denial at the administrative law judge appeal level.  Previously, many hospitals budgeted a percentage for the RAC process as a cost of doing business, but not any more.  As a result, it would take decades to hear every appeal at this level.  

Since CMS put a flawed process in place, they are now offering hospitals 68 cents on the dollar to settle short stay claims and scrambling to figure out a solution to their backlog of the rest of their cases.  Of course, hospitals are taking advantage of the settlement offer.  
At WMHS, we have had over $10 million dollars tied up in all RAC appeals; and through the settlement just for short stay disputes, we should receive over $3 million.  

Now the editor of Fierce Health Finance is equating hospitals to the five year old who hasn't gotten his way.  Really?  I took the opportunity to read previous editorials from this same guy and he is obviously no friend of hospitals.  It's time to cancel my subscription to Fierce Health publications; if you can't be balanced in your editorials, I have no use for your tainted opinions.

Summit on Population Health

Yesterday, I had the privilege to serve on a panel of "experts" on population health at the Mid-Atlantic Summit on Population Health.  The focus was "Value Based Payments in Population Health: Accelerating Concept into Reality."  Two of my favorites presenters preceded the panel discussion, Anirban Basu, the Chief Economist for the Sage Policy Group, and Dr. David Nash, Dean of the Thomas Jefferson School of Population Health.  I have heard both speakers a number of times; in fact, Anirban served as our keynote speaker at our board summer planning meeting last year.  He is extremely knowledgable and quite entertaining as a presenter.  David Nash is also an excellent presenter and is one of the nation's leading experts on population health.  He is a frequent speaker at the Governance Institute meetings and his message now resonates very well with what we are doing at WMHS.  


What I found yesterday was not necessarily that deer-in-the-headlights look from the audience, but still a look of skepticism regarding accelerating concept into reality by what we have done over the last four years with value-based care delivery at WMHS.  We are living it, but it is really hard for those who have been part of the fee-for-service or volume- based care delivery model for their entire career to understand  just how value-based care really works.  I tried to assure the group, including a number of folks from outside of Maryland, that it does work and that I would never go back to fee for service.  Unfortunately, it doesn't really sink in until they visit with us.  Once they see first hand the success that we have achieved in reducing admissions, re-admissions, and use rates; improving quality-based reimbursement and patient satisfaction scores and ultimately providing better care to those patients who are our high utilizers with multiple co-morbidites, they become believers.  

As I have blogged previously, we have had a multitude of visitors to WMHS to experience our journey on value-based care delivery; I guess the rest will have to experience it for themselves.

It's Hard to Believe

Recently, WMHS was notified that our application for a Department of Health & Human Services grant on Mobilization for Health: National Prevention Partnership Awards Program was approved.  This grant submission took a great deal of time to assemble and to ensure that it was thorough in meeting the scoring criteria requirements.  The grant request was for $1.3 million; and as I noted previously, it was approved.  Time to pop the champagne corks........$1.3 million and it was approved.  

Unfortunately, the celebration stops before it begins.  The letter from HHS says, "Your application was approved, but UNFUNDED because there are no remaining funds available."  I am not joking; that's what the letter from an acting Assistant Secretary for Health says.  Why bother seeking grants or approving grants when you have NO MONEY?  I can't stop shaking my head in disbelief over this one, but then again, it's government and, based on some of their actions over the years, I should be less and less surprised.

Don Alexander

Yesterday, I blogged about my trip to Germany and how good it was to be home. Unfortunately, when I arrived back in the US, I was immediately informed of the death of Don Alexander, President of Allegany College for nearly 30 years until his retirement six years ago.  But, more importantly, at least from my perspective, Don was a Memorial Hospital and then a WMHS board member for well over 17 years.  He served as the WMHS Board Chair for three years just a few years ago.  Don served our organizations so very well and he will be missed immensely.  

Even in Don's retirement, we would stay in touch.  Don would send a politically charged email, a joke or a message that immediately complimented me and my team when he read something favorable about WMHS.  Even during some of our most challenging times early in the WMHS history, Don was always upbeat and positive.  He was a gentle giant in so many ways; not so much his stature, but in every other way.  

In the decades of knowing Don, I never heard an unkind word spoken about him.  He touched so many lives in so many ways.  I looked to Don as both a friend and a mentor.  Fortunately, I am left with some wonderful memories and stories from Don but sad to have lost someone so special far too early in one's life.  Don's wonderful sense of humor and his kind heart are now in a better place and free of suffering from the ravages of cancer. 

Nice to be Back

For the last ten days or so, I had the opportunity to celebrate my 38th wedding anniversary in Germany with Pamela.  How fitting to celebrate along the Romantic Road in southern Germany and then into Austria?  Pamela and I had a wonderful time visiting small towns, villages, castles, palaces and churches.  I was able to take some magnificent photos of King Ludwig's Neuschwanstein castle, which served as the model for Disney's Magic Kingdom castle; Zugsptiz, the highest mountain in the German Alps; and Eagle's Nest in Berchtesgaden, which was Hitler's retreat in Bavaria.  At the same time, it's nice to be home and back to work; so little time, but so much to do.

Where Did the Summer Go?

I sat down to write my blog this AM, the first of this week and realized that it was already September.  Where the heck did the summer go?  Wow!  This will be my last blog for a while as I will be traveling for the next week and a half.  So, this blog will be a collection of items.

First, many have been asking about my son-in-law, Terrell, and he continues to receive inpatient chemotherapy treatments on almost an every-other-week basis.  Treatments are now scheduled through November.  He is doing as well as can be expected under the circumstances.  He and my daughter are two very amazing people based on how their lives have changed since that mid-February diagnosis and how they are coping.  They have fast become my heroes. We had a chance to visit with them a few weeks ago and I have attached a photo.

Then, there is their dog, Sammy.  Sammy is a fox red lab who is the nicest dog.  He is so nice that their plan is to train Sammy as a therapy dog in the coming months.  They all live in a very nice neighborhood in Charleston, SC.  Sammy is very well trained and never leaves their property unless he is a accompanied by one of them.  Well, that all changed yesterday. Sammy ran away.  They were devastated as they couldn't find him anywhere.  Then, their neighbor from down the street came to their door and said I found Sammy, but you have to see for yourself where he is.  Upon arriving at their neighbor's house there is Sammy doing laps in their swimming pool.  As a retriever, Sammy loves the water and demonstrated that yesterday.  I think that an invisible fence is in Sammy's future.

On a more work related note, yesterday I had the opportunity to hear Anirban Basu, a Maryland economist speak on our global economy, our national economy and our local economy.  His presentation was excellent.  He said that the global economy has rebounded for the most part, but expanding economies of China and India are down this year from previous years.  Anirban said that the next quarter will be strong and the following quarter will be even stronger for the US.  

Corporate profits are at their highest along with stock prices.  Consumer spending, i.e. autos, retail shopping and restaurants, is also up; however, housing, jobs and incomes are down overall.  

He said that Maryland continues to underperform as we are pretty much a government dependent state.  Our state is over dependent on federal government jobs, according to Anirban.  In addition, our lack of energy production and our over regulation make us one of the worst performing states related to economic recovery.  As a state, we rank 43rd in recovery with WV and PA at 36th and 38th respectively.  North Dakota, Texas, Utah and Colorado, because they are energy producing states, are leading in economic recovery.  

Anirban said that what is negatively impacting western Maryland is no ability to have a business formation strategy.  Our young people are forced to leave the area for employment so, there is little to no entrepreneurship among our twenty and thirty-somethings where new business occurs.  In addition, western Maryland needs natural gas drilling in order to have economic recovery.  Unfortunately, Maryland is focused exclusively where the most votes are--Montgomery County, Prince Georges County, Baltimore city and Baltimore County.  If legislation doesn't benefit any of those jurisdictions, it will not pass.  According to Anirban, the state has no interest in seeing any county outside of the previously mentioned succeed.  He said that the statement is harsh but it is reality. 

During the Q&A, he offered the following: the US needs conditional amnesty  through an immigration policy because right now we have none.  That policy should  be socially and fiscally sound and include a a secure border and a well thought out  path to citizenship.  He then commented on our debt and said what is more troubling than our over $17 trillion dollars in debt is our $45 trillion in entitlement commitments to Medicare and Social Security that directly impact our ability to address infrastructure needs in the US, including bridges, roads, the electrical grid and broadband development.  Infrastructure improvements are key for the US to remain competitive in the global market.  No other country has the entitlement burden that the US has now and into the future.

As I mentioned earlier, the presentation was excellent, but at the same time sobering.  If you ever have the opportunity to hear Anirban Basu speak, don't pass it up.  I am excited in that he and I will be speaking at a GE/Sage Group presentation in two weeks in Baltimore with a focus on health care.


I will return to blogging the week of September 22.  Have a good weekend.