Barbara Feder Ostrov, Author at ��ϳԹ�� News

Hospital Executive Charged In $1.4B Rural Hospital Billing Scheme

Lauren Weber — Tue, 30 Jun 2020 09:00:38 +0000

A Miami entrepreneur who led a rural hospital empire was charged in an unsealed Monday in what federal prosecutors called a $1.4 billion fraudulent lab-billing scheme.

In the indictment, prosecutors said Jorge A. Perez, 60, and nine others exploited federal regulations that allow some rural hospitals to charge substantially higher rates for laboratory testing than other providers. The indictment, filed in U.S. District Court in Jacksonville, Florida, alleges Perez and the other defendants sought out struggling rural hospitals and then contracted with outside labs, in far-off cities and states, to process blood and urine tests for people who never set foot in the hospitals. Insurers were billed using the higher rates allowed for the rural hospitals.

Perez and the other defendants took in $400 million since 2015, according to . Many of the hospitals run or managed by Perez’s Empower companies have since failed as they ran out of money when insurers refused to pay for the suspect billing. were affiliated with his empire.

“This was allegedly a massive, multi-state scheme to use small, rural hospitals as a hub for millions of dollars in fraudulent billings of private insurers,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division

Attempts to reach Perez for comment Monday evening were unsuccessful. But last year when Perez spoke to he said he was losing sleep over the possibility he could go to jail after propping up struggling rural hospitals.

“I wanted to see if I could save these rural hospitals in America,” Perez said. “I’m that kind of person.”

Pam Green, a former night charge nurse at the now-shuttered Horton Community Hospital in Horton, Kansas (population under 1,700), said she hopes Perez and his colleagues receive long prison sentences.

“He just devastated so many people, not just in Kansas, but in Oklahoma and all the other places where he had hospitals,” said Green, 58, of nearby Muscotah, Kansas. “I went months and months without pay, without health insurance. He robbed the community.”

Green recalled that money was so tight under Perez’s management of her former hospital that the electricity was shut off at least twice and staffers had to bring in their own supplies. She said she is owed about $12,000 in back pay, as well as money for uncovered dental expenses and a workplace injury that would have been covered had employees’ insurance or workers’ compensation premiums been paid.

A KHN published in August 2019 detailed the rise and fall of Perez’s rural hospitals. At the height of his operation, Perez and his Miami-based management company, EmpowerHMS, helped oversee a rural empire encompassing 18 hospitals across eight states. Perez owned or co-owned 11 of those hospitals and was CEO of the companies that provided their management and billing services.

Perez styled himself a savior of rural hospitals, swooping into small towns with promises to save their struggling facilities using his “secret sauce” of financial ventures. Multiple employees told KHN they had no idea what happened to the money their hospitals earned after Perez and his associates took control, since the facilities seemed perpetually starved for cash.

Over the past two years, amid mounting legal challenges and concerns about the lab-billing operation, insurers cut off funding and his empire crumbled. Overall, 12 of the hospitals have entered bankruptcy and eight have closed. The staggering collapse left hundreds of employees without jobs and small towns across the Midwest and South without lifesaving medical care.

The four rural hospitals are Campbellton-Graceville Hospital in Graceville, Florida; Regional General Hospital of Williston, Florida; Chestatee Regional Hospital in Dahlonega, Georgia; and Putnam County Memorial Hospital in Unionville, Missouri.

The indictment marks the third major case federal prosecutors have filed alleging billing fraud at Perez-affiliated hospitals. In October, David Byrns to a federal charge of conspiracy to commit health care fraud involving a Missouri hospital he managed with Perez. A Missouri Auditor General previously found that the 15-bed hospital, Putnam County Memorial in Unionville, had received about $90 million in questionable insurance payments in less than a year.

In July 2019, Kyle Marcotte, owner of a Jacksonville Beach, Florida, addiction treatment center, for his part in a $57 million lab-billing scheme involving two Perez-affiliated hospitals, Campbellton-Graceville and Regional General Hospital. Marcotte admitted cooperating with unnamed hospital managers to provide urine samples from his patients for lab testing that was billed through the rural hospitals and, in exchange, getting a cut of the proceeds.

Perez, on his own and through Empower-affiliated companies, in 2016 and 2017 purchased South Florida properties that totaled more than $3.7 million, including three condos on Key Largo, according to property records. He told KHN last year that the Florida properties were bought with earnings from unrelated software companies but declined to give details. He and his brother Ricardo Perez, if convicted, must forfeit over $46 million, according to the indictment, as well as two Key Largo condos and other properties.

Another defendant, Aaron Durall, if convicted, could lose $184.4 million and a six-bedroom, 6,500-square-foot home in the affluent Parkland district north of Fort Lauderdale, Florida.

Perez-affiliated hospitals also face ongoing lawsuits in Missouri and other states filed by dozens of insurers asking for hundreds of millions in restitution for allegedly fraudulent billings. In those court documents, Perez repeatedly has denied wrongdoing. He told KHN last year that his lab-billing setup was “done according to Medicare and state guidelines.”

For former employees of EmpowerHMS and members of the affected communities, the indictment represents vindication. As the company foundered, hundreds of employees worked without pay in vain efforts to keep their hospitals afloat. They would discover later that, along with the missing paychecks, their insurance premiums had not been paid and their medical policies had been discontinued. In the June 2019 interview, Perez acknowledged that, as finances withered, he stopped paying employee payroll taxes.

“It’s nice to think he might be held accountable,” said Melva Price Lilley, a former X-ray technician at Washington County Hospital in Plymouth, North Carolina, which has reopened with new owners under a new name. “At least there’s a chance that he might have to suffer some consequences. That gives me some hope.”

Lilley, 56, said she and other employees could not retrieve their retirement savings from the bankrupt hospital until about three weeks ago. She has been trying to pay off about $68,000 in medical bills from a back surgery she needed for a workplace injury that wasn’t covered by workers’ compensation insurance premiums that went unpaid for hospital employees. She remains unable to work full time.

I-70 Community Hospital, an Empower facility in Sweet Springs, Missouri, has remained closed since February 2019. Tara Brewer, head of the Sweet Springs Chamber of Commerce and the local health department, said she was almost shocked to hear that Perez had gotten indicted after months of wondering if anything would happen.

While she hopes these charges bring closure to her community, she said, the charges do little to fix the closed hospital doors for a county that has had one of the highest per capita rates of coronavirus cases in Missouri.

“What he did to us will linger on for a long time,” Brewer said.

��ϳԹ�� News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

This article/health-industry/hospital-executive-charged-in-1-4b-rural-hospital-billing-scheme/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1127189&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

With Medical Safety Gear Scarce, The Public Is Stepping Up. Here’s Help On Ways To Help.

Barbara Feder Ostrov — Mon, 23 Mar 2020 15:01:00 +0000

Increasingly desperate pleas from health care workers and public authorities for donations of face masks and other protective gear are an unsettling sign of just how unprepared American hospitals are for the COVID-19 pandemic.

Dr. Alison Cooke, assistant chief of hospital medicine for Kaiser Permanente-San Francisco, warned recently that her institution had less than a week’s supply of medical masks for doctors and nurses. “If you have any masks or safety goggles at home, please consider giving them to your nurse and doctor neighbors,” she wrote on the neighborhood social networking site Nextdoor.

On Friday, New York Gov. Andrew Cuomo urged nonessential medical offices and other businesses to donate their protective gear to hospitals. And former federal health official Andy Slavitt tweeted a to dentists, painters, contractors and plastic surgeons, to give “all you have” in the way of masks, gloves or thermometers to local hospitals.

DENTISTS/PAINTERS/CONTRACTORS/PLASTIC SURGEONS: Please— if you have any protective gear, N-95 masks or other, gloves, thermometers sitting around, bring them to your local hospitals. In any number. All you have.

Let us know what you’ve done! Please consider circulating this.
— Andy Slavitt (@ASlavitt)

As supplies of critical protective gear dwindle, nurses and doctors are wiping down and they’d normally toss after one use. On social media, health workers beg for supplies under the hashtag , using the medical profession’s abbreviation for “personal protective equipment.”

Officials personal protective equipment from the Strategic National Stockpile, and manufacturers like and have boosted production of critical medical supplies.

But for now, that’s not enough. So charities, corporations and ordinary Americans are stepping up, donating everything from N95 masks to hospital gowns, disinfectant wipes and hand sanitizer.

If you want to help, here are some answers to questions you might have.

Q: Why is there such a shortage of face masks and other protective gear?

Fear of COVID-19 is generating demand that far outstrips supply. Because no one has immunity to the novel coronavirus, doctors and nurses are exercising caution by wearing protective gear when they see almost any patient with respiratory symptoms or a fever ― most of whom don’t have COVID-19.

At the same time, panic-buying of N95 face masks and other gear has reduced available supplies. Some people have even surgical masks and hand sanitizer from clinics. Now, with more than confirmed coronavirus cases in the U.S. as of Monday morning and the number rising sharply, public health officials fear hospitals will soon be overwhelmed with patients, further boosting demand for protective gear.

The supply chain for medical equipment overseas — mostly in China and Taiwan ― increasingly commandeered by governments for domestic use. And shortages of the fabric and other raw materials used to make masks are beginning to be a problem. The U.S. Centers for Disease Control and Prevention issued bleak for hospitals facing shortages, including using homemade masks. The Deaconess Health System in Indiana the public to sew and donate masks that meet CDC protocols, hospitals in Washington state.

Q: What can I do to help?

Whether you want to donate supplies you have at home or at your company, check a recently launched website, , which lists numerous hospitals in need of protective gear in at least 41 states and gives specific instructions, including drop-off points, for donating to each one.

/news/family-physicians-reject-suggestions-to-have-nurses-lead-practices/

If you don’t find your local hospital on that website, try contacting the hospital’s supply manager to see what they need most. In times like these, however, it may be difficult to reach overworked hospital staff. If your local hospital is a nonprofit or county-run, check to see if it has a foundation or charity arm that may be organizing donations.

In Santa Clara County, California, the charitable foundation for the county’s vast public safety-net hospital system — composed of three hospitals and 11 clinics ― launched a via social media and on its website that has garnered tens of thousands of masks, gloves and gowns, as well as thousands of bottles of hand sanitizer, said Chris Wilder, the Valley Medical Center Foundation’s CEO.

“It’s been very heartening. The generosity has been very strong,” said Wilder, who is now soliciting electro-mechanical equipment such as oxygen concentrators and ventilators.

If you can’t reach a hospital official or foundation, ask health care workers you know what they need. Cyrus Farivar, an Oakland, California-based reporter for NBC News, from his neighbors to deliver to a Kaiser Permanente nurse.

Also try contacting your local government’s emergency operations office, which may be the center for donations in your area, suggested Cathy Chidester, who directs Los Angeles County’s emergency medical services agency.

Q: What do hospitals need most?

Chidester said many hospitals and first responders are looking for medical-grade masks, gloves and face shields. And, she said, don’t forget blood donations, which are down as shelter-in-place orders proliferate. Check the for donation sites in your area.

What hospitals don’t need are: extremely small quantities, unpackaged, used or expired supplies. If all you’ve got are two loose N95 masks, age unknown, that you found in your basement workshop, don’t bother.

Q: What help has arrived so far?

The Santa Barbara, California-based humanitarian aid organization Direct Relief has distributed tens of thousands of face masks and other personal protective equipment to more than 1,000 safety-net health providers, $5.5 million in donations from the Clorox Co. Foundation and Verizon.

During wildfires that ravaged Australia in late 2019 and earlier this year, the charity worked with a factory in China to manufacture the masks and amassed 1.5 million of them. Now, it is trying to get more. “We thought that was a lot,” said Tony Morain, a Direct Relief spokesperson. “Little did we know.” Direct Relief is now of protective gear.

In California, political consultant Kate Catherall a to gather supplies for bulk donations to hospitals.

Among other donations, IBM contributed 15,000 masks to Santa Clara County’s public hospitals, Wilder said. Over the weekend, pledged to donate millions of masks to hospitals, and Pacific Gas & Electric said it would donate . Nationally, some dentists who are have dropped boxes of masks and gloves at local hospitals.

Q: Should I donate cash to crowdsourced or other donor campaigns I’m seeing online?

Be cautious. While there are some legitimate campaigns organized by well-meaning people on crowdfunding sites like GoFundMe, potential as well.

This article/health-industry/coronavirus-ppe-mask-shortage-donation-guide/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1071550&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

In Face Of Coronavirus, Many Hospitals Cancel On-Site Training For Nursing And Med Students

Barbara Feder Ostrov — Tue, 17 Mar 2020 09:00:53 +0000

Yet another casualty of the COVID-19 pandemic may be the clinical training that’s so essential for America’s future nurses and doctors.

As university campuses close and disease prevention efforts intensify, hospitals, nursing homes and other health care venues in California and nationally are canceling clinical rotations for student nurses — and, in some cases, medical students. The rationale is to protect both students and patients from getting sick and to reserve personal protective equipment, including masks, that may be in short supply.

But medical educators worry the students won’t get the hours of direct patient care experience required to graduate on time, slowing the pipeline of new health care professionals precisely at a time when the country may need them most.

“We are in unprecedented times,” said Dr. John Prescott, chief academic officer of the Association of American Medical Colleges. “Medical education hasn’t faced anything quite like this since the beginning of the second World War.”

The risk that hospitals and other health care facilities fear was underscored this month when an instructor after bringing a group of nursing students to the Kirkland, Washington, nursing home where at least 63 residents have been stricken by the illness — , as of Monday afternoon. Those students are now in self-quarantine.

On March 5, Kaiser Permanente requested that nursing schools temporarily discontinue student clinical rotations in its 21 medical centers in Northern California. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.) “We are in a dynamic situation and our highest priority is ensuring the safety of KP members, staff and students participating in clinical training,” a Kaiser Permanente executive wrote in an email to the nursing schools obtained by KHN.

A spokeswoman for the health system, which , confirmed the cancellations.

Two other large hospital chains in California, Adventist Health and Dignity Health, soon followed suit.

As a result, the nursing schools at the University of California-Davis and Samuel Merritt University have had to scramble to find new clinical training opportunities for dozens of students. Some landed at the University of California-Davis’ medical center or clinics and others at Veterans Affairs hospitals.

Nursing education leaders in California appealed to the state’s Board of Registered Nursing on Thursday to ease the number of on-site clinical hours required for student nurses to graduate and allow them to learn from simulations instead.

State law requires nursing students to receive 75% of their clinical training in health care settings such as hospitals or nursing homes approved by the board; only 25% can be completed using simulations, such as computerized mannequins. The educators, in a letter to the board, requested that students be allowed to do 50% of their training through simulation.

“Many schools in California are experiencing serious clinical displacement. The effects of the lost clinical hours will be devastating to the students we serve,” more than 60 officials from community colleges and nurse training programs around the state said in the letter.

As of Monday, Board of Registered Nursing officials had not responded to a request for comment.

Even before the COVID-19 pandemic, some private nursing schools had pressed state regulators to allow more simulation training, arguing it has advanced to the point where it can be as effective as training in a hospital or clinic.

The move to cancel clinical training is the opposite of what happened during the 1918 flu pandemic, when to care for patients. Some fell sick and died along with those in their care.

Most hospitals have not canceled clinical rotations for doctors-in-training, but some have, and Prescott, of the Association of American Medical Colleges, said more may do so in the coming weeks.

On Thursday, the University of Arkansas for Medical Sciences asked all its students to immediately to prevent the spread of COVID-19. The University of North Carolina School of Medicine for visiting students from other medical schools from March 30 to April 24.

The University of Pennsylvania for some medical students, . SUNY Downstate College of Medicine also for its medical students.

Some teaching hospitals have banned medical students from emergency and intensive care units while allowing them elsewhere in their facilities.

For medical students in the University of California system, clinical training continues for now, but they’ve been directed to avoid contact with suspected or confirmed COVID-19 patients, as have medical students across the nation.

One Baltimore nursing student learned Friday that her psychiatric nursing rotation had been canceled for at least two weeks. She must complete more than 100 more clinical hours before graduation in May and has no idea whether her school, the University of Maryland, would be able to quickly find her a new placement.

“I understand why they did it, for the precaution and the liability,” said the 26-year-old, who asked that her name not be used to protect her future career prospects. “But I had eight shifts scheduled in those two weeks. I’m in a kind of panic mode, worried I’m not going to finish in time for graduation.”

This article/public-health/in-face-of-coronavirus-many-hospitals-cancel-on-site-training-for-nursing-and-med-students/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1065635&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

5 Things To Know As California Starts Screening Children For Toxic Stress

Barbara Feder Ostrov — Wed, 08 Jan 2020 10:00:53 +0000

Starting this year, routine pediatric visits for millions of California children could involve questions about touchy family topics, such as divorce, unstable housing or a parent who struggles with alcoholism.

California now will pay doctors to screen patients for traumatic events known as adverse childhood experiences, or ACEs, if the patient is covered by Medi-Cal — the state’s version of Medicaid for low-income families.

The screening program is rooted in that suggests children who endure sustained stress in their day-to-day lives undergo biochemical changes to their brains and bodies that can dramatically increase their risk of developing serious health problems, including heart disease, asthma, depression and cancer.

Health and welfare advocates hope that widespread screening of children for ACEs, accompanied by early intervention, will help reduce the ongoing stresses and skirt the onset of physical illness, or at least ensure an illness is treated.

The higher the number of such adverse events — and so, the higher a child’s ACEs “score” — the higher the risk of chronic illness and premature death. About 63% of Californians have experienced at least one adverse childhood event, and nearly 18% have faced four or more, according to state health officials.

California is the first state to create a formal reimbursement strategy for ACEs screening, and the program will be open to both children and adults enrolled in Medi-Cal. The initiative is part of a larger championed by the state’s first surgeon general, , who is a national leader in the ACEs movement.

The public health impact could be significant as Medi-Cal covers 5.3 million kids — roughly 40% of all California children — and 6.3 million adults.

“It is a profound shift that’s going to change the type of prevention and management we do with families,” said Dr. Dayna Long, a pediatrician who is director of the Center for Child and Community Health at UCSF Benioff Children’s Hospital Oakland and helped develop the state-approved screening tool for children and teens. “We’re not going to make all the hard things go away, but we can help families build resilience and reduce stress.”

Here are five key things to know about ACEs and California’s new screening program:

1. How it works.

At a typical well-child visit, parents or caregivers will be asked to fill out a state-approved about potentially stressful experiences in their children’s lives. For children under age 12, caregivers fill out the survey. Young people ages 12-19 will complete their own questionnaire in addition to their caregivers’ questionnaire.

The questions will touch on 10 categories of adversity spanning the first 18 years of life: physical, emotional or sexual abuse; physical or emotional neglect; and experiences that could indicate household dysfunction, such as a parent who has a serious mental illness or addiction, having parents who are incarcerated or living in a home with domestic violence.

The screening will measure for experiences that could regularly trigger fear and anxiety, including homelessness, not having enough food or the right kinds of food, and growing up in a neighborhood marred by drugs and violence.

Long acknowledged some caregivers and children might be reluctant or unwilling to disclose sensitive information, particularly if they fear shame or repercussions. “We acknowledge it takes time to build trust,” she said. “But we want to encourage families to have hard conversations with their doctors and to understand how stressful events over the life of the child are impacting that child’s health.”

Physicians will review the responses and discuss them with caregivers during the visit. Doctors will have access to free online training on how to communicate with families and connect them to community resources. Physicians will be eligible for a $29 reimbursement for each Medi-Cal patient screened.

The responses are considered confidential patient information and won’t be shared with state officials. But researchers hope that aggregated information will be studied to improve care for patients with high ACEs scores.

2. The screenings are voluntary.

Doctors do not need to offer them, and patients and their caregivers do not have to participate. Doctors will need to complete online training before they can be paid for screening patients. The state will cover the costs of screening once a year for children and once in a lifetime for adults. But children are the main focus of the screening campaign.

3. What happens after the screening is less clear.

Community clinics often have social workers or “navigators” available to connect families to aid like food stamps or counseling. Doctors in private practice, however, are less likely to have those resources, said Dr. Eric Ball, an Orange County pediatrician who served on a committee advising the surgeon general on the ACEs campaign. Ball said local chapters of the American Academy of Pediatrics will work to educate doctors on how to help children who register high ACEs scores, because social services vary so much by county.

Doctors “are not going to get rich doing ACEs screenings, that’s not the point,” Ball said. “If we can pick up kids at higher risk for these issues down the road and mitigate it, that’s really exciting to me.”

4. Researchers aren’t yet sure which interventions will best help kids with high ACEs scores.

Long and her UCSF Benioff colleagues are how well the ACEs screening works and what interventions might be most effective. It’s one thing to help hungry families sign up for food stamps and free school lunches. It’s less clear how to help a child whose parent is in prison. Researchers have identified protective factors that can help children better resist the effects of toxic stress, including nurturing relationships with trusted adults, such as grandparents or teachers.

“The fact of screening is also an intervention,” Long said. “Being able to sit in a room with a pediatrician is not going to make those hard experiences go away, but it creates a freedom to talk about some things that are solvable. That’s therapeutic in and of itself.”

5. Not everyone agrees that widespread ACEs screening is a good idea.

Sociologist David Finkelhor, director of the Crimes against Children Research Center at the University of New Hampshire, is among those who caution that universal screening for ACEs is premature, given there is little consensus about the potential negative effects of screening or the best interventions.

“The good news is that we are focusing on these adversities that are clearly the source of so many downstream health and mental health problems,” Finkelhor said. “But the bad news is we’re moving way too fast, before we know how to best conduct this kind of screening and intervention, and we could get it wrong with pretty disastrous consequences.”

“Mostly, we don’t know what to do with somebody who has a high ACE score,” he said. “There are already long waits to get into family counseling or child mental health programs.”

For example, a doctor might be legally required to report previous abuse to authorities, upending a family even if the child no longer is exposed to the abuser, Finkelhor said.

“These are tough questions,” Long of UCSF acknowledged. Still, she said, screening is important, because it encourages physicians to engage in difficult conversations they might not otherwise have and pushes clinics to create links to supportive services and resources.

“That is the next phase, and that is important,” Long said. “We’re doing this because we care about your child and want them to grow into healthy adults.”

This article/mental-health/5-things-to-know-as-california-starts-screening-children-for-toxic-stress/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1037202&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

Valley Fever Cases Climb In California’s Central Valley — And Beyond

Barbara Feder Ostrov — Tue, 17 Dec 2019 10:00:31 +0000

It can be republished for free.

Valley fever cases are on the rise in California and across the arid Southwest, and scientists point to climate change and population shifts as possible reasons.

California public health officials of confirmed, suspected and probable new cases of the fungal disease as of Nov. 30, 2019, up 12% from 6,929 in the first 11 months of 2018.

The increase is part of a recent trend in the nation’s Southwest dating to 2014, with outbreaks most prevalent in California and Arizona. Nationally, public health officials reported 14,364 confirmed cases of valley fever in 2017, more than six times the number reported in 1998, according to the and Prevention.

Valley fever is caused by a that lives in the soil of California’s Central Valley, Arizona and areas of other Southwestern states prone to desert-type conditions. Animals and people can contract the infection by breathing in dust that contains the microscopic fungus spores. The infection is not transmitted from person to person.

Symptoms can include fatigue, cough, fever, headache, muscle aches or rash. While the majority of people infected experience mild flu-like symptoms or no symptoms at all, as many as 10% develop serious, sometimes long-term lung problems, including pneumonia.

Valley fever generally is treated with antifungal medications, but about 200 Americans die from the disease every year, according to the CDC. Researchers are working to develop a vaccine for both humans and animals.

Federal health officials say these infections likely are underreported because not every state requires public disease reporting for valley fever and because some infected people never develop symptoms or seek medical care.

Dr. Royce Johnson, a valley fever expert, recalls treating about 250 to 300 cases a year when he arrived in rural Kern County in the 1970s. As of Nov. 30 this year, Kern County — now a hot spot for the disease — reported more than 2,700 confirmed, suspected or probable cases, according to the California Department of Public Health.

“This is a major, major health problem, and it’s growing,” said Johnson, medical director of the Valley Fever Institute at Kern Medical in Bakersfield. “The extent of the endemic area is increasing, and the number of cases in the whole Southwest is going up.”

A University of California study examining on California estimated the direct and indirect lifetime costs of 2017 cases at about $700 million, when considering treatment expenses, lost productivity and mortality.

Researchers attribute the spike in cases to a number of factors. There’s more awareness of the disease because of media coverage and public health campaigns. California has earmarked $2 million for a public awareness campaign, and employers in regions of the state where workers are at higher risk for the disease will be required to educate them about the disease.

Population growth in the American Southwest, where the fungus is endemic, also plays a role, both because of the increased pool of patients and development that disturbs the soil. In Kern County, which reports the majority of California’s cases, the population has grown 65% since 1990.

But the most significant factor may prove to be climate change, which expands the ecosystems where the fungus can flourish. Using climate models, that by 2100 the expanse of areas with hot, dry conditions favored by the fungus could double and the number of valley fever cases could grow by 50%.

(Courtesy of Gorris et al.)

This article/public-health/valley-fever-cases-climb-in-californias-central-valley-and-beyond/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1030814&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

Nursing Home Safety Violations Put Residents At Risk, Report Finds

Barbara Feder Ostrov — Thu, 14 Nov 2019 14:15:53 +0000

As huge swaths of California burned last fall, federal health officials descended on 20 California nursing homes to determine whether they were prepared to protect their vulnerable residents from fires, earthquakes and other disasters.

The results of their surprise inspections, which took place from September to December of 2018, were disturbing: Inspectors found hundreds of potentially life-threatening violations of safety and emergency requirements, including blocked emergency exit doors, unsafe use of power strips and extension cords, and inadequate fuel for emergency generators, according to a released Thursday by the U.S. Department of Health and Human Services Office of Inspector General.

The nursing home residents “were at increased risk of injury or death during a fire or other emergency,” the report concluded.

The threat is not theoretical in a state that has been ravaged by natural disasters: One of the nursing homes that was inspected burned down in a wildfire afterward, so the report only includes results for the 19 remaining facilities, which it does not identify.

“The fact that one of the nursing homes inspected was later destroyed by a wildfire speaks to the grave danger residents are facing today,” said Mike Connors of the advocacy group California Advocates for Nursing Home Reform. He called the findings alarming but not surprising.

Even though the report didn’t name the nursing home that was destroyed, the California Association of Health Facilities, which represents most of the state’s skilled nursing facilities, identified it as one that burned down in the November 2018 Camp Fire, the .

Craig Cornett, CEO and president of the association, said all the residents were evacuated safely from that home — and from in the same fire. Hundreds of other nursing homes also have responded to emergencies in the past three years without loss of life, he said, which shows that “the deficiencies in the report do not reflect true facility readiness.”

The association is concerned about safely violations, he added, but “this is an example of bureaucracy equipped with blinders.”

The federal auditors said the violations occurred because of poor oversight by management and high staff turnover at the homes. But they also criticized the California Department of Public Health, the agency responsible for overseeing nursing homes in the state, for not ensuring the homes complied with federal safety and emergency requirements.

In some cases, the state’s own inspectors had previously cited nursing homes for the same problems, but did not inspect the facilities again to ensure they had been fixed, the report said.

The department “can reduce the risk of resident injury or death by improving its oversight,” the report said. For example, it could “conduct more frequent site surveys at nursing homes to follow up on deficiencies previously cited rather than relying on reviews of documentation submitted by nursing homes.”

The public health department told the auditors it had followed up with the 19 remaining homes to ensure they were addressing the problems auditors identified. But the state disagreed with the auditors’ recommendation to inspect nursing homes more frequently, saying in a letter to the auditors that federal rules don’t require onsite visits to determine whether problems have been fixed — and that the agency simply does not have enough inspectors.

The department declined a California Healthline request for comment.

The Office of Inspector General is auditing nursing homes across the nation that receive payments from the public health insurance programs Medicare or Medicaid to determine whether the facilities meet the stricter federal safety and emergency guidelines that were adopted in 2016. The auditors did not choose the 20 nursing homes randomly out of the approximately 1,200 statewide, but rather selected those in fire- and earthquake-prone regions, as well as ones already on notice for health and safety violations.

The inspectors found a total of 325 violations at the 19 homes. Among them:

Two of the homes had pathways leading to emergency exit doors that were blocked, including one exit door blocked by a pallet.
16 had violations related to their fire alarm and sprinkler systems, including two that didn’t have their fire alarm systems routinely tested and maintained.
All had violations related to electrical equipment, including using power strips that did not meet requirements or were unsafely connected to appliances or other power strips.
Eight had not properly inspected, tested and maintained their emergency generators, which provide electricity for critical medical equipment during a power outage. Two didn’t have enough generator fuel to last 96 hours. Generator power has become critical for nursing homes in recent months amid aimed at preventing wildfires.
Three nursing homes’ emergency plans didn’t address evacuations.

“We don’t want reports like this,” said state Sen. John Moorlach (R-Costa Mesa). “It sounds like maybe we need to ask the state auditor to see if the site visits done by the state are being done thoroughly.”

This article/aging/nursing-home-safety-violations-put-residents-at-risk-report-finds/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1020153&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

Pharma Sells States On ‘Netflix Model’ To Wipe Out Hep C. But At What Price?

JoNel Aleccia — Fri, 25 Oct 2019 11:00:47 +0000

When a long, black bus bearing the logo of drugmaker AbbVie rolls through Washington state next year, it will promote a new effort to eradicate hepatitis C infections.

The state is paying for the marketing campaign as part of a deal to give AbbVie the exclusive right to treat its citizens who have the potentially deadly liver disease. Armed with its medication, Mavyret, AbbVie beat out rivals Merck and Gilead Sciences in a blind bidding process.

It’s the second time this year that a state has struck a novel deal with a pharmaceutical company to obtain drugs that can cure hepatitis C ― with discounts from a price that came to market at $84,000 for a course of treatment.

The drugmakers are in a race to treat the . with the viral infection. Left untreated, its most chronic form can cause liver damage, including cirrhosis, as well as liver cancer and death. States are weighing the price of curing those infected with hep C using the new drugs against the medical and economic costs of long-term care for those with untreated infections. The state bears the medical expenses of the Medicaid and prison populations as well as public employees and retirees.

The money paid to AbbVie buys a package of services that includes outreach and testing to identify patients as well as the drugs to treat them. But the price and other details of the deal are secret under the Washington state Public Records Act, even though they involve massive commitment of taxpayer dollars.

Washington officials said they’re prohibited from releasing details by that hide drug pricing to protect what companies consider trade secrets. Lawyers for the three pharmaceutical firms that submitted bids vowed to go to court to halt the release of bid documents requested by Kaiser Health News under state public records laws.

Without transparency about the details, however, it is impossible to evaluate whether the spending amounts to smart public policy or a boondoggle that primarily benefits manufacturers hoping to lock down payments of perhaps $10,000 per patient for drugs from Medicaid. The same drugs from the same manufacturers can cost in other parts of the world.

The secrecy troubles Dr. John Scott, medical director of the University of Washington’s Hepatitis and Liver Clinic at Harborview Medical Center in Seattle, which treats most of the 65,000 hepatitis C patients in the state ― even as he welcomes the curative drugs and wider access to treatment.

“I absolutely support greater transparency,” Scott said. “I think the public needs to know how much these things cost.”

Many people don’t realize that such obscurity is “baked into the system,” said Pam Curtis, director of the Center for Evidence-Based Policy at Oregon Health & Science University.

“That definitely hamstrings our ability to weigh the facts in front of us,” she said. “You want policy to be driven by the highest-quality evidence.”

Other states are eyeing the experiments “with a healthy skepticism but a high level of interest,” said Jennifer Reck, project director for the National Academy for State Health Policy.

In Washington, officials would describe the terms of the AbbVie contract only in the broadest terms. After federal rebates, the state spent about $80.4 million in 2018 on the drugs, known as direct-acting antivirals, to treat more than 3,300 patients, figures show.

Under the new contract, officials expect to spend about the same amount of money per year, while treating twice as many patients, said Dr. Judy Zerzan, chief medical officer for the Washington State Health Care Authority.

That works out to more than $321 million to treat about 30,000 patients over four years, with options for two-year extensions.

But that would be an improvement over the nearly $387 million state officials have to treat just 10,377 people, according to state records. That works out to an average cost of $37,259 apiece, though actual fees vary by program.

Washington’s request for proposals included a provision that other states could join its program in the future ― also a potential benefit to AbbVie.

“There’s probably an alignment of interests all the way around here,” said Alan Carr, a senior analyst focusing on biotechnology with the Wall Street firm Needham & Co.

Another reason it’s a race for the drugmakers: The overall market for hepatitis C drugs has been “falling fast,” as more patients are treated and cured, Carr said.

“The companies are trying to find a way to ensure the remaining patients use their drug,” Carr said. “[They] have a lot less leverage than they once had, and that’s why they’re willing to do these deals.”

Many patients with hepatitis C have no symptoms and are silent carriers. Only a fraction of people with the virus will develop the serious consequence of the disease, liver failure or cancer. Still, most public health experts urge screening ― and treatment.

The new contracts ― sometimes because they ― call for capped costs or flat-rate subscriptions for cheap access to the drugs.

But the plan is much broader than creating a drug discount for the state, said Michael Staff, AbbVie’s vice president of U.S. market access.

“Simply stating you want to eradicate hepatitis C without a very detailed plan is probably not going to be effective,” he said. AbbVie’s contract includes payments for services that include outreach, such as the bus, to identify infected patients.

In Washington, would treat about half of those in the state infected with hepatitis C, but the average per-patient cost would be about 40% less than before the deal, Zerzan said.

In Louisiana, the first state to announce a flat-rate hepatitis C drug , Asegua, a subsidiary of Gilead, will provide an unlimited amount of its drug, Epclusa, for a set price — roughly $58 million a year for five years, or up to $290 million. Louisiana plans to treat about 31,000 of 39,000 Medicaid patients and prisoners believed to have the disease. Costs could drop to less than $10,000 per patient, according to the contract, which the state health agency made available after a public records request.

The was put forward by Dr. Peter Bach, director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes, and his colleagues. Australia implemented a in its national health plan. England’s National Health Service has one as well.

In Egypt, which has the highest hepatitis C rate in the world, negotiations and generic pricing have reduced costs to

U.S. drugmakers likely wouldn’t have considered such a plan when they first introduced their medications. Gilead’s Sovaldi, the first antiviral for hepatitis C, launched at $84,000 for a course of treatment; the second, Harvoni, started at $94,500. Three years later, AbbVie introduced Mavyret at $26,400.

Now, Bach said, drugmakers are staring down a sharp decline of their once-hot market.

“They were losing market share and price per share,” Bach said. “If payers [like state Medicaid programs] can give them the same revenue with much more certainty, they’ll prefer that to uncertainty over what’s happening now.”

Hepatitis C poses dilemmas for public health officials and drugmakers alike.

Louisiana has been from the American Civil Liberties Union regarding prisoners who said they were denied effective hepatitis C treatment. And Washington state’s Department of Corrections faces from a prisoner who said he was denied timely care for his disease.

In Washington, Gov. Jay Inslee last year to negotiate the best deal to eliminate hepatitis C in the state by 2030, which mirrors goals of global health agencies.

The federal Centers for Disease Control and Prevention warned last month that new hepatitis C infections are on the rise ― , the seventh consecutive annual increase. New cases of hepatitis C have spiked among adults in their 20s and 30s, largely because of the opioid epidemic, according to the CDC.

Between 15% and 25% of people with acute hepatitis C will clear the infection on their own; the rest become chronically infected with the virus.

Hundreds of thousands of people have been treated ― and cured ― since the drugs were introduced early this decade. Deaths from hepatitis C fell from almost 20,000 in 2014 to a little more than 17,000 in 2017, which could be an effect of the new drugs.

“It’s just been transformational,” said Scott, of the University of Washington’s Hepatitis and Liver Clinic. Previous treatments for hepatitis C had to be taken for a year, had toxic side effects and helped only 40% of patients, he added.

The Center for Evidence-Based Policy has advised Washington state in the effort to eradicate hep C, Curtis said. She noted that the arrangements Washington and Louisiana struck share an overall goal of reining in runaway drug prices, especially in state-run Medicaid programs, which can’t shift costs like the commercial market and would be forced instead to cut services.

“States are already struggling,” Curtis said. “A larger and larger part of their budget is being eaten up by these new high-cost drugs.”

“This is not a solution,” she said, “but it’s a step in the right direction.”

This article/health-industry/pharma-sells-states-on-netflix-model-to-wipe-out-hep-c-but-at-what-price/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1005093&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

California’s New Transparency Law Reveals Steep Rise In Wholesale Drug Prices

Barbara Feder Ostrov — Mon, 14 Oct 2019 09:00:41 +0000

Drugmakers fought hard against California’s groundbreaking drug price transparency law, passed in 2017. Now, state health officials have released their on the price hikes those drug companies sought to shield.

Pharmaceutical companies raised the “wholesale acquisition cost” of their drugs — the list price for wholesalers without discounts or rebates — by a median of 25.8% from 2017 through the first quarter of 2019, according to the Office of Statewide Health Planning and Development. (The median is a value at the midpoint of data distribution.)

Generic drugs saw the largest median increase of 37.6% during that time. By comparison, the annual inflation rate during the period was 2%.

Several drugs stood out for far heftier price increases: The cost of a generic liquid version of Prozac, for example, rose from $9 to $69 in just the first quarter of 2019, an increase of 667%. Guanfacine, a generic medication for attention deficit hyperactivity disorder (ADHD), on the market since 2010, rose more than 200% in the first quarter of 2019 to $87 for 100 2-milligram pills. Amneal Pharmaceuticals, which makes Guanfacine, cited “manufacturing costs” and “market conditions” as reasons for the price hike.

“Even at a time when there is a microscope on this industry, they’re going ahead with drug price increases for hundreds of drugs well above the rate of inflation,” said Anthony Wright, executive director of the California advocacy group Health Access.

The national debate over exorbitant prescription drug prices — and how to relieve them — was supposed to take center stage in recent weeks, as House Speaker Nancy Pelosi released a to negotiate prices for as many as 250 name-brand drugs, including high-priced insulin, for Medicare beneficiaries. Another under consideration in the Senate would set a maximum out-of-pocket cost for prescription drugs for Medicare patients and penalize drug companies if prices rose faster than inflation.

President Donald Trump has highlighted drug prices as an issue in his reelection campaign. But lawmakers’ efforts to hammer out legislation are likely to be overshadowed, for now, by presidential impeachment proceedings. In Nevada, health officials in early October for failing to comply with the state’s two-year-old transparency law requiring diabetes drug manufacturers to disclose detailed financial and pricing information.

California’s new drug law requires companies to report drug price increases quarterly. Only companies that met certain standards — they raised the price of a drug within the first quarter and the price had risen by at least 16% since January 2017 — had to submit data. The companies that met the standards were required to provide pricing data for the previous five years. In its initial report, the state focused its analysis on drug-pricing trends for about 1,000 products from January 2017 through March 2019.

California’s transparency law also requires drugmakers to state why they are raising prices. Over time, that information, in addition to cost disclosures, could create “one of the more comprehensive and official drug databases on prices that we have nationwide,” Wright said. “That, in itself, is progress, so that we can get better information on the rationale for drug price increases.”

But the data does not reflect discounts and rebates for insurers and pharmacy benefit managers and bears little resemblance to what consumers actually pay, said Priscilla VanderVeer, a spokeswoman for the trade group Pharmaceutical Research and Manufacturers of America. The group filed a seeking to overturn the California legislation that has not yet been resolved.

“If transparency legislation only looks at one part of the pharmaceutical supply chain, without getting into the various middlemen like insurers and pharmacy benefit managers that ultimately determine what patients have to pay at the pharmacy counter, it won’t help patients access or afford their medicines,” VanderVeer said in an email.

State Sen. Richard Pan (D-Sacramento), a pediatrician who chairs the Senate health committee, agrees — up to a point.

“Transparency always has value,” Pan said. But policymakers need more data on how much insurers and consumers are spending on prescription drugs, he said.

And he wonders why the price of generic drugs, including those with plenty of competition, rose at higher rates.

His concerns were echoed by University of Southern California policy researchers, who recently published a that concluded most state-level drug-transparency laws are “insufficient” to reveal the true transaction prices for prescription drugs, or where in the distribution system excessive profits lie.

“The question is, why are these prices going up? Typically, there are competing stories for that,” said Neeraj Sood, vice dean of the University of Southern California’s School of Public Policy and an author of the study. “Maybe cost of production is going up,” he said. “Maybe there’s a drug shortage, or some competitors got eliminated. This reporting of [wholesale acquisition cost] data doesn’t really tell us which of these stories is true.”

For now, California’s new data is not likely to be of much help to consumers, Pan said. But he said it might help state officials in their bid to overhaul the way the state purchases drugs for 13 million people served by Medi-Cal, the state’s Medicaid program for low-income residents. Gov. Gavin Newsom’s to have the state, rather than individual Medi-Cal managed-care plans, negotiate directly with drugmakers would save the state an estimated $393 million a year by 2023, according to the administration.

This article/health-care-costs/californias-new-transparency-law-reveals-steep-rise-in-wholesale-drug-prices/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1008044&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

California Hospitals And Nursing Homes Brace For Wildfire Blackouts

Barbara Feder Ostrov — Wed, 11 Sep 2019 09:00:45 +0000

California has seen a relatively to this year’s wildfire season, but Wanda Chaney still frets every time it’s hot and windy in Chico, a college town about two hours north of Sacramento. She’s far less worried about an actual wildfire than the power company shutting off her electricity to prevent one.

Chaney, 70, uses an oxygen machine at her apartment to treat chronic obstructive pulmonary disease, a lung disorder that makes it difficult to breathe.

“I can’t afford a generator,” Chaney said. “I’d probably end up going to the hospital if my electricity was cut off. There are people here on breathing machines; we got people who’ve got all kinds of medical problems who are scared to death if we lose power.”

In a controversial move approved by state regulators, Pacific Gas & Electric, which provides power to 16 million people in Northern and Central California, plans to be more aggressive in to broad regions of the state when the chance of wildfire is high. The utility — now in bankruptcy proceedings and facing billions of dollars in legal claims because of the role its equipment and power lines have played in a spate of deadly California wildfires — says it must limit risk to protect customers from fire.

The utility says it will try to provide 48 hours’ notice before the blackouts — which could span hours or days — and has launched a where customers can check whether their community might be affected. California’s two other major investor-owned utilities, Southern California Edison and San Diego Gas & Electric, have adopted similar programs.

A PG&E shutoff over two days in June affected Northern California customers across five counties. Hospitals in the region were not affected. But the potential for multiple prolonged shutoffs has prompted new disaster preparations by hospitals, nursing homes and home care providers charged with protecting the health of medically fragile patients.

Utility executives have broad discretion in ordering blackouts when forecasts call for extreme heat, high winds and low humidity in areas at risk of wildfire. Legislation by state Sen. Scott Wiener (D-San Francisco) would use fines and other financial penalties to create an incentive for utilities to minimize the use of blackouts.

Jeff Smith, a PG&E spokesman, said the utility is doing “extensive outreach” to alert customers to potential shutoffs, particularly for its nearly 197,000 “” customers who receive discounts because their health conditions require extra power, such as for a ventilator or home dialysis machine. The utility will try to reach those customers via phone, email or text, and even knock on doors if they don’t respond, Smith said.

Wanda Chaney uses an oxygen machine at home to treat chronic obstructive pulmonary disease and worries about losing her electricity if it’s shut off to prevent the spread of wildfires. (Courtesy of Wanda Chaney)

Bill Seguine, facilities management director for the 298-bed Enloe Medical Center in Chico, said the main hospital wasn’t affected during the June shutoff, but that power to an outpatient clinic was cut. Fortunately, he said, it was on a weekend when the clinic was closed.

The medical center’s subsequent emergency drill focused on power outages. Staff learned valuable lessons, Seguine said, including the need for a generator-powered office where they can quickly access online medical records and contact patients to reschedule surgeries or office visits. The hospital also arranged for PG&E to notify staff about power shutoffs in outpatient offices it leases; ordinarily, the utility would notify only a building’s owner.

Hospitals and nursing homes are required by law to maintain backup generators for critical functions. If the power goes out, hospitals can finish surgeries using generator power but can’t start new ones, Seguine said. That means during an outage some trauma patients may need to be transferred to hospitals outside the shutoff zone.

Both PG&E and health providers learned from the June shutoff, Seguine said. “It was new for them, so it was not the smoothest functioning thing,” Seguine said. “They’re making calls with very sketchy data 48 hours ahead. As conditions change, they’ll turn off more or less power, as the situation dictates.”

Seguine worries most about the potential burden on hospitals from patients like Wanda Chaney, who said she would go to her local ER to run her oxygen machine in the event of a shutoff.

“That is our No. 1 fear — that people in our community will come to us, when all they really need is power. If I’m inundated with people who just need to be plugged in or have health problems just because they lost power, it creates a second disaster,” he said. “They may not have family they can run to. What are they supposed to do?”

PG&E is working with Chico officials to set up a generator-powered center where patients with oxygen machines or ventilators could go to recharge and use their equipment.

Nursing home operators remain concerned about their ability to keep residents cool and food at safe temperatures during a power outage. Skilled nursing facilities in California are required to maintain generators for critical medical needs, but some homes do not have air conditioning or refrigerators connected to backup power, said Jason Belden, disaster preparedness manager for the California Association of Health Facilities, a nursing home trade group.

In the event of a shutoff, nursing homes have to weigh the risks of staying put versus evacuating their residents, some of whom may be cognitively impaired. The association has asked PG&E to make extra generators or other options available to nursing homes, Belden said, but that has yet to happen.

“Long-term care residents don’t traditionally do well in evacuations, especially those with dementia,” Belden said. “Nobody is considering how dangerous this could potentially be for residents.”

This article/public-health/california-hospitals-and-nursing-homes-brace-for-wildfire-blackouts/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=994743&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

The Collapse Of A Hospital Empire — And Towns Left In The Wreckage

Barbara Feder Ostrov — Tue, 20 Aug 2019 09:00:23 +0000

SWEET SPRINGS, Mo. — The money was so good in the beginning, and it seemed it might gush forever, right through tiny country hospitals in Missouri, Oklahoma, Tennessee and into the coffers of companies controlled by Jorge A. Perez, his family and business partners.

It was his “secret sauce,” the rotund Miami entrepreneur would smilingly tell people in their no-stoplight towns. The money-making ventures he proposed sounded complicated, sure, but he said they would bring in enough cash to save their hospital and dozens, even hundreds, of good jobs in rural towns where gainful employment is hard to come by.

And, in town after town, the people believed him. He offered what they could not resist: hope, and the .

Then a few major health insurance companies got suspicious, as did some government officials. How could Unionville, Mo. — a town of 1,790 — generate $92 million in hospital lab fees for blood and urine samples in just six months? Why had lab billings at a 25-bed hospital in Plymouth, N.C., to $32 million in the year after Perez’s company took control?

The lab billings, insurers alleged, were simply fraudulent. Blue Cross Blue Shield and other insurers started filing lawsuits, stopped making reimbursements and shut off the spigot.

At the height of his operation, Perez and his Miami-based management company, EmpowerHMS, helped oversee a rural empire encompassing 18 hospitals across eight states. Perez owned or co-owned 11 of those hospitals and was CEO of the companies that provided their management and billing services. He was affiliated with companies that owned or managed the rest.

Now, with funding from the lab-billing venture dried up, 12 of the hospitals have entered bankruptcy and eight have closed their doors.

The staggering collapse left hundreds of employees without jobs and many more owed months of back pay. Only in recent months did they learn that their medical coverage had been terminated because EmpowerHMS had stopped making payments, according to interviews and .

At some of the hospitals, EmpowerHMS stopped paying employee payroll taxes, Perez acknowledged in an interview. Some of the shuttered hospitals owe hundreds of thousands in property taxes, according to local officials.

How companies run by this Miami businessman and his associates were able to drive so many hospitals into the ground so quickly, devastating their communities, is a story about the fragility of health care in rural America and the types of money-making ventures that have flourished in legal gray areas of America’s complicated medical system.

Perez styled himself as a savior of rural hospitals. “My only fault is I tried everything in the world to save them,” he told Kaiser Health News.

But for the townspeople left in the wreckage, the reality feels more sinister.

EmpowerHMS “is like a curse word,” said Tara Brewer, head of the Chamber of Commerce in Sweet Springs, Mo., where the I-70 Community Hospital closed in February, taking with it dozens of jobs and emergency care.

The town’s mayor, Francis Vaught, put it more simply: “We were robbed.”

Building An Empire On Promises

Jorge Perez’s company jet never seemed to take off on time.

Whether he was headed to Kansas, Missouri or Arkansas, Perez always was running late, said Scottie Collins, who joined the Empower team in 2017 with the expectation his Florida-based drug rehab program would be integrated into the burgeoning hospital group. It struck Collins as a luxury, given the flight crew charged by the hour, but neither Perez nor his entourage seemed concerned.

In September 2017, Perez and his team swooped into Fulton, Mo., days before the town’s nearly 100-year-old hospital was set to close. Fulton Medical Center, with 140 staffers, was a major employer and the only hospital in Callaway County. The hospital had struggled for a quarter-century, escaping closure at least three times as the economic forces battering rural hospitals across America took their toll.

At what was supposed to have been a farewell potluck for the facility’s staff, Perez appeared, announcing that he’d just bought the hospital and was keeping it open, according to . From the podium, he delivered what had become his standard pitch in small towns across the Midwest: He saw a community desperately fighting to keep its hospital, and he would help them win.

Fulton Medical Center has struggled for a quarter-century, escaping closure at least three times as the economic forces battering rural hospitals across America took their toll. (Heidi de Marco/KHN)

“He seemed to be a nice enough guy,” said LeRoy Benton, Fulton’s mayor at the time, “and seemed to say the right things.”

If the communities he wooed had the time or capacity to look deeper, they might have seen a red flag: Perez had no experience managing hospitals. Trained as an electrical engineer, Perez helped his father run a medical billing company in Miami that served doctors and hospitals. He repeatedly saw rural hospitals closing, he said, and felt moved to save them.

In 2015, Perez partnered with a company run by a Chicago-based emergency room physician, Dr. Seth Guterman, to take over the Campbellton-Graceville Hospital in Graceville, a town of 2,200 people in the Florida Panhandle.

Perez told the new ownership group would invest $2 million and reduce costs by 30%. “Consider Campbellton-Graceville Hospital SAVED,” enthused the Jackson County Times.

A year later, he invested in a struggling hospital in Williston, Fla., and with partner David Byrns landed a management contract for Putnam County Memorial in Unionville, Mo. In 2017, Perez formed a partnership with Paul Nusbaum, a former secretary of health and human resources in West Virginia, and acquired controlling interest in 10 hospitals in Oklahoma, Kansas, Missouri, Tennessee and North Carolina, swallowing them whole.

“When you rescue a hospital, you rescue a community” was on social media.

In an interview, EmpowerHMS CEO Jorge A. Perez was adamant he has operated in the best interests of the communities he sought to serve. If anything, he said, the townspeople should thank him, because he gave their dying hospitals “two to three years of life.” (Dan Margolies/KCUR, Kansas City Public Media)

People describe Perez as genial and courteous — “Everybody that knows me says I have a big heart,” he said of himself. But his inner circle included some people with questionable backgrounds.

One of Empower’s top executives, , had done time in federal prison after being convicted in 2009 of mail fraud and money laundering while serving as county attorney for Florida’s Dixie County. Byrns’ includes an arrest for check forgery at a Louisiana hospital he managed. (Byrns returned the money, and criminal charges were dropped.)

Neither Byrns nor Lander responded to a request for comment; a woman who answered Nusbaum’s phone said he was unavailable for comment.

Fernando Barroso, who worked as an assistant controller for EmpowerHMS in 2018, said the company’s financial systems were a mess, even as it wrestled with massive debt accumulated through rapid-fire hospital acquisitions.

“I’ve been an accountant for a long time and I thought I’d seen everything, but I’d never seen anything like this,” Barroso said. “It was total disorder.”

Jorge A. Perez and his team swooped into Fulton, Mo., in 2017, days before the town’s nearly 100-year-old hospital was set to close. “He seemed to be a nice enough guy,” says LeRoy Benton, Fulton’s mayor at the time, “and seemed to say the right things.” (Heidi de Marco/KHN)

A Lucrative Venture

To generate income for foundering hospitals, Jorge Perez took advantage of federal health care regulations that allow some rural hospitals to bill for laboratory tests at substantially higher rates than other providers. The goal is to keep hospitals that provide vital care in remote areas afloat, by paying generously for the relatively small number of tests needed in such locations.

But several of the Perez-affiliated hospitals established lab programs that reached well beyond the hospital doors. They contracted with outside labs, in other cities and states, to draw and process blood and urine tests for thousands of people who never set foot in the hospital. Insurers were billed using the higher rates afforded the rural hospitals, and the contractors got a portion of the proceeds.

In recent years, Perez and a handful of other rural hospital owners who have established similar operations have defended the billing setup as in alignment with federal regulations. But among some medical finance experts, it’s considered legally murky and has resulted in allegations of fraud involving owners in several states.

What is not in dispute is that the strategy can be lucrative. At 14-bed Putnam County Memorial alone, the lab-billing operation generated nearly $120 million in payments to outside vendors in the first six months of 2017, according to internal documents obtained by Kaiser Health News. And a chunk of those payments — nearly $80 million in lab-related charges — went to Perez-affiliated companies, according to the documents.

The closure of I-70 Community Hospital marked a searing loss for Sweet Springs, Mo. At the height of his operation, Perez and his management company, EmpowerHMS, helped oversee a rural empire encompassing 18 hospitals across eight states. (Heidi de Marco/KHN)

Lewis Bybee, a retired veterinarian and I-70 Community Hospital board member, and his wife, Janice, on their porch in Sweet Springs, Mo. “All he did was take from us,” Lewis says of Perez. (Heidi de Marco/KHN)

In interviews, multiple employees said they had no idea what Empower did with the money their hospitals earned, since the facilities seemed perpetually starved for cash.

Melva Price Lilley, an X-ray technician at Washington County Hospital in Plymouth, N.C., recalled regularly being short of supplies. “Sometimes we wouldn’t have soap to bathe patients,” Lilley said. “We didn’t have any crackers, orange juice. We didn’t have enough staff at night to run a code.”

“They never invested any money in our hospital,” she said. “You have to go on top of the roof to adjust the heat or air conditioning with a broomstick.”

Perez had taken control of the regional hospital in Drumright, Okla., in 2017 promising brighter days, said Tracy Byers, hospital CEO at the time. Instead, he said, the bills quickly piled up.

“I would dread Mondays as that’s when all the certified letters would start showing up in the mail,” Byers said. “Typically, by Thursday and Friday, you’d have an idea of what bills you could pay, if any.”

Even as the hospitals struggled, Perez, on his own and through Empower-affiliated companies, was investing in real estate in 2016 and 2017, buying up nine South Florida properties that totaled more than $3.7 million, including three condos on Key Largo, according to property records.

In an interview, Perez maintained that the Florida properties were bought with earnings from unrelated software companies. He declined to get into details about his finances. “The little I have left I need to preserve and protect,” he said. “I’m as broke today as anybody out there.”

Sweet Springs Mayor Francis Vaught is among the local officials who feel a sense of betrayal since the closure of I-70 Community Hospital. “We were robbed,” he says. (Heidi de Marco/KHN)

Fallout From A Damning Report

In August 2017, Missouri State Auditor Nicole Galloway delivered a stunning blow.

A of Putnam County Memorial had uncovered questionable financial dealings. From December 2016 to May 2017, Perez and Byrns’ company, Hospital Partners, had managed to generate $92 million from lab tests run through Putnam. By comparison, hospital revenue totaled $7.5 million in fiscal year 2016, according to the audit.

The analysis found 80% of that money was flowing to laboratory companies, including some in which Byrns had a financial stake; another 6% to a Perez-controlled billing company; and a major portion to 33 out-of-state phlebotomists — blood draw specialists — they had put on the hospital payroll.

“What was astounding to me was that the hospital was not better off during and after this lab activity,” Galloway told KHN.

The reaction was explosive. Dozens of major insurers banded together to against Perez-affiliated hospitals in Missouri and other states, demanding hundreds of millions in restitution. The , still ongoing, describe the lab-billing operation as a “widespread fraudulent scheme” that aimed to enrich Perez, some of his associates and affiliated companies, as well as participating labs.

Tara Brewer, head of the Sweet Springs Chamber of Commerce, with her children, Keegan, 15, and Kendall, 13, and dog, Sawyer. Brewer worries Sweet Springs won’t survive the closure of I-70 Community Hospital. “What is it that we’re going to have for our kids?” she asks. (Heidi de Marco/KHN)

In court documents, Perez has denied wrongdoing and asked for dismissal based on questions of jurisdiction, among other issues. In an interview, he said his billing setup was “done according to Medicare and state guidelines.” He added: “I’m still waiting [to see] where we’ve done anything wrong.”

Legal or not, as public scrutiny intensified, the revenue generated by lab tests slowed to a trickle. dropped four Perez-affiliated hospitals from its network, cutting off a crucial source of funding. Lenders took Perez and his partners to court to force them out of other hospitals.

Across the Midwest, employees were living the fallout. In hospital after hospital, paychecks came late — and then not at all, according to employee interviews and documents. Doctors quit. Vendors stopped delivering vital supplies.

At Haskell County Community Hospital in Stigler, Okla., former laboratory supervisor Shawna Smith recalled an alarming shortage of antibiotics and IV catheters as early as October 2018. By January 2019, she said, employees weren’t getting paid. The Ladies Auxiliary set up a fund for employees who couldn’t pay their utility bills. One resident brought packages of hamburger and bison for every employee.

About two hours west, the local middle school in Prague, Okla., held a drive to collect toilet paper and cleaning supplies for Prague Community Hospital. A veterinary clinic delivered medical essentials. Still, supplies fell so low, said City Manager Jim Greff, that the hospital had to stop admitting patients.

At Drumright Regional Hospital, Human Resources Director Allyson Lunsford said they ran out of oxygen and blood. By December, she said, they were so far behind on bills that the company that rented them hospital beds came to repossess them — despite patients still using them.

I-70 Community Hospital in Sweet Springs, Mo., is one of eight hospitals owned or managed by Perez that closed in recent years. Twelve Perez-affiliated hospitals are in bankruptcy. (Heidi de Marco/KHN)

A Sense Of Betrayal

By March 2019, seven Perez-affiliated hospitals had closed. And as bankruptcy proceedings unfolded at those and others, employees got more devastating news, according to interviews and : Along with missing paychecks, the company had stopped funding their health insurance; their medical and dental policies had been discontinued.

Perez said in an interview that the hospitals were not making enough money to cover their expenses and debt. He said he faced constant pressure about which bills to pay.

“I had a whole executive team of experts, and they made decisions — we all made decisions — of what needed to be paid so we can live another day,” Perez said. “Do we pay the medication? Do we pay the pharmacy stuff? Do we pay the doctors? Do we pay the nurse?”

“We felt at that moment we were going to be able to pull out of it in a month or two,” he said of the missed payroll taxes. “Hindsight on that looks bad.”

In February, the I-70 Community Hospital in Sweet Springs became one of the latest Empower hospitals to shut its doors, leaving its red-lettered “Emergency” sign shrouded in a white sheet. It marks a searing loss for a town where the last dentist recently closed shop and multiple storefronts sit abandoned.

Like many rural towns, Sweet Springs faces economic challenges. The hospital closed owing $300,000 in unpaid property taxes, says the county assessor. (Heidi de Marco/KHN)

The closure left $300,000 in unpaid property taxes that could have been spent on schools, according to the county assessor. Mayor Vaught said the town lost dozens of jobs. Medical equipment bought with money raised at hot dog fundraisers sits unused.

Brewer, the Chamber of Commerce head, worries Sweet Springs won’t survive the hit. “What is it that we’re going to have for our kids?” she asked.

It’s not clear what recourse the towns have. Bankruptcy court documents indicate the Department of Justice is investigating Perez’s companies, though DOJ officials would not comment. Perez has not been criminally charged, but federal prosecutors recently indicted one of his associates.

On July 9, Kyle Marcotte, owner of a Jacksonville Beach, Fla., addiction treatment center for his part in a $57 million lab-billing scheme involving two Perez-affiliated hospitals, including Campbellton-Graceville. Marcotte admitted cooperating with unnamed hospital managers to provide urine samples from his patients for lab testing that was billed through the rural hospitals and, in exchange, getting a cut of the proceeds. His sentencing has yet to be scheduled.

Perez, who still lives in Miami, said the company jet has been sold and he is turning his attention to software development. He told KHN he is losing sleep over the possibility he could go to jail but was adamant he has operated in the best interests of the communities he sought to serve. If anything, he said, the townspeople should thank him, because he gave their dying hospitals “two to three years of life.”

“I wanted to see if I could save these rural hospitals in America,” Perez said. “I’m that kind of person.”

This article/health-industry/rural-hospital-empire-collapse-missouri-town-fallout-jorge-a-perez-empowerhms/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=986863&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

Hospital Executive Charged In $1.4B Rural Hospital Billing Scheme

Barbara Feder Ostrov — Tue, 30 Jun 2020 09:00:38 +0000

A Miami entrepreneur who led a rural hospital empire was charged in an unsealed Monday in what federal prosecutors called a $1.4 billion fraudulent lab-billing scheme.

“I wanted to see if I could save these rural hospitals in America,” Perez said. “I’m that kind of person.”

Another defendant, Aaron Durall, if convicted, could lose $184.4 million and a six-bedroom, 6,500-square-foot home in the affluent Parkland district north of Fort Lauderdale, Florida.

“What he did to us will linger on for a long time,” Brewer said.

This article/health-industry/hospital-executive-charged-in-1-4b-rural-hospital-billing-scheme/">article; first appeared on KFF" rel="nofollow">">KFF Health News and is republished here under a

/?republication-pixel=true&post=1127189&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">

With Medical Safety Gear Scarce, The Public Is Stepping Up. Here’s Help On Ways To Help.

Barbara Feder Ostrov — Mon, 23 Mar 2020 15:01:00 +0000

DENTISTS/PAINTERS/CONTRACTORS/PLASTIC SURGEONS: Please— if you have any protective gear, N-95 masks or other, gloves, thermometers sitting around, bring them to your local hospitals. In any number. All you have.

Let us know what you’ve done! Please consider circulating this.
— Andy Slavitt (@ASlavitt)