Excuse me for being skeptical of the HMOs explanation of this event:

HMO botches billing, won't charge clients

Filed: 01/23/2000

The Bakersfield Californian

Some Kern County seniors who receive health coverage through Secure Horizons, a Medicare health management organization, may have been confused when they received their statements this month. Subscribers received a bill for $20, although nothing will happen if they don't pay it. And they shouldn't receive a bill like that again, according to Secure Horizons officials. The mix-up stemmed from changing federal regulations governing Medicare HMOs and Secure Horizons' policy changes. When Secure Horizons officials determined last summer what their policies would be for the year 2000, they decided they would need to charge members in Kern, San Bernardino and Riverside counties $20 per month to maintain service, said Tyler Mason, spokesman for PacifiCare of California. In the past, members did not receive a monthly bill from Secure Horizons. Then, Congress passed the Balanced Budget Refinement Act of 1999 in the fall, which increased reimbursements to Medicare HMOs by 1.7 percent. That change, along with the feedback Secure Horizons was receiving from its subscribers, led the company to decide to rescind the monthly charge to members, Mason said. However, making the change wasn't simple. The federal government has to approve any changes Medicare providers want to make with their providers, including pay decreases. Approval delays made it mandatory for Secure Horizons to send the bill to its subscribers this month. According to a company memo, "While we would prefer to not send a bill for January's plan premium, the federal government requires us to do so." Secure Horizons will not, however, penalize members who choose not to pay it. The confusion about the new policy prompted a few Kern County residents to call Secure Horizons and the Kern County Office of Aging and Adult Services. "They're just asking, Is this something that will continue.' Will it affect their services?" said Robin Ackling, program assistant at Aging and Adult Services. Secure Horizons members may call (800) 228-2144 for information or attend a member education meeting. For times and dates of the meetings, call 322-2536.

Link to story:

http://www.bakersfield.com/bak/i--1263458986.asp

-- Carl Jenkins (Somewherepress@aol.com), January 24, 2000

Answers

Any follow-up to the Harvard Pilgrim HMO bankruptcy fiasco in Connecticut (and possibly Massachusetts)? I had read the docs got what Hechinger's employees got (bupkis for the last paycheck), were leaving medicine (possibly for day-trading?) and filing for unemployment (geez, all those $100,000 salary lines - poof!).

-- Total Doomer (sky@falling.com), January 24, 2000.

From today's Boston Herald:

http://www.businesstoday.com/topstories/hmo01242000.htm Fair use, etc.

Hospitals claim HMO computers creating fiscal chaos by Eric Convey

Tuesday, February 2, 1999

A potential health care disaster lurks in the computers of some of the state's big HMOs, hospital executives say.

In many cases unable to grapple with the volume and complexity of data being pumped into them, overloaded computers are preventing the health maintenance organizations from paying doctors and hospitals in a timely way.

As a result, bills increasingly go unpaid for months, and patients are receiving dunning notices about bills not being paid. More importantly, in some cases health plans have been unable to give hospitals clinical data about their members.

``This is the closest thing we have to a disaster in medicine right now,'' said a top executive at a Greater Boston teaching hospital. ``I worry about whether or not the payers are going to crash.''

James Kirkpatrick, a Massachusetts Hospital Association senior director, accused the HMOs of being irresponsible. ``Hospitals feel like they're holding the bag - they delivered the care, incurred the cost and now they're left holding the bag.'' He added that ``tens of millions of dollars, maybe $100 million'' rightfully owed to hospitals is instead sitting in HMO accounts.

``We've become their bankers,'' added an angry hospital president who asked to remain anonymous.

From a financial perspective, the most important question of all may be whether HMOs even know their own financial health.

Hospital executives and doctors were uniformly unwilling to speak out publicly about the situation, fearing they might disrupt already tenuous relationships with payers.

``Their systems have gotten so complex that they can't handle the complexity of the terms they put in their contracts,'' said one hospital's chief financial officer.

As the situation plays out, there's one word that arises over and over again when worst-case scenarios are discussed: Oxford.

The reference is to Oxford Health Plans Inc., the Connecticut-based for-profit HMO that stunned the health care industry in October 1997 when it declared it had lost control of billing and financial management due to computer problems. The crisis led to financial collapse.

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Serendipity! Hope none of the pollies here are on the Harvard Pilgrim payroll, Newsweek's "best HMO" for 1996! It wouldn't phase me a bit! There are many helpful government programs to help out.

-- Total Doomer (sky@falling.com), January 24, 2000.

{Correct post - fair use, etc.)

bostonherald.com

Critical week ahead for HMO

by Jennifer Heldt Powell

Monday, January 24, 2000

Regulators will soon be making a decision about the future of Harvard Pilgrim Health Care Inc. that could affect the entire health care system in Massachusetts.

Investment bankers are expected to let regulators know this week whether anyone is willing to invest in the failing HMO or take it over entirely. If no money or buyer is found, the regulators may be forced to liquidate the plan with 1.1 million Bay State members.

Although regulators have said they are working with the plan to pay all of its bills, unpaid liabilities could top $300 million, according to a report to be released by Standard & Poor's today. Analysts at the New York bond rating house estimate that the best case scenario will leave unpaid bills of at least $100 million.

The most optimistic estimate is based on the assumption that the HMO will report a 1999 loss of just $150 million and that it is able to sell health centers now occupied by Harvard Vanguard Medical Associates. It also assumes that members stay with the plan.

If the losses are higher, a large number of members leave the plan and it can't be recapitalized, health care providers could be on the hook for $300 million or more, according to the Standard & Poor's report.

``Estimating the amount of the liabilities that may be unpaid is difficult because it depends on a number of factors,'' analysts wrote. Those include figuring out how much hospitals and other health care providers are owed.

With so much at stake for the state's health care system, regulators said they will be talking with everyone who will be affected - health care providers, consumer groups and business leaders.

Attorney General Thomas Reilly and Insurance Commissioner Linda Ruthardt should move carefully, said Jim Klocke, a lobbyist with the Greater Boston Chamber of Commerce.

``The cost of doing the wrong thing is greater than the cost of doing nothing,'' Klocke said.

The solution shouldn't revolve around large rate increases, he said.

``What's critical here is to get a handle on the inflows and the outflows,'' Klocke said. ``If you increase the rates without getting a handle on the inflows and the outflows, you're going to have a greater problem two years down the road.''

The state also needs to look at the overall health care system and figure out what led to Harvard Pilgrim's problems in the first place, he said.

Regulators took over the HMO earlier this month after officials revealed they had discovered accounting errors that pushed anticipated 1999 year-end losses over $150 million.

But the HMO was struggling before the additional losses were discovered. Like many HMOs in the region, it has been hit by high drug costs, Medicare cuts and more visits to doctors than predicted.

Regulators need to ask if ``there are burdens we place on our health care system that need to be changed. Are there inefficiencies that need to be looked at? And are there ideas that are being used in other states that help their health care system run more efficiently?'' Klocke said.

While there is general agreement that saving Harvard Pilgrim should be the first option, it depends on what it will take to keep the HMO alive, said Michael Miller, a policy analyst with the consumer advocacy group Health Care for All.

Regulators should consider how high rates must go and who would have to pay, Miller said. Also, he said, are increases to be ``fairly distributed or do people with less market clout end up paying more for the bailout?''

Other issues to consider are whether health care providers would have to accept lower payments and if so, how that would affect the entire health care system, Miller said.

Saving the plan might not be worth the effort if rates go too high or doctors are forced to take on more risk or accept lower payments, he said.

If the plan is to be sold, the question would be for how much and on what terms, Miller said.

``You want to scrutinize the buyer very carefully and look at the terms that would be put on the sale such as community benefit and behavior of the plan,'' he said. ``We would want to see more scrutiny on behalf of members.''

Health Care for All doesn't want the HMO to fall into the hands of a for-profit company, but that might be preferable to some alternatives, Miller said.

Hospitals are first and foremost concerned that they get paid the millions of dollars they are owed by Harvard Pilgrim, said Andrew Dreyfus, Massachusetts Hospital Association executive vice president.

``Rehabilitation of the plan is our first choice because it maintains a pluralistic insurance market in Massachusetts and keeps our not-for-profit tradition,'' he said.

But if the plan is to be sold, regulators should make sure the new plan is committed to access for all and won't skim off the healthiest residents, he said. The new entity should also agree to make prompt payments, Dreyfus said. Hospitals have been critical of the time it takes HMOs to pay bills.

Doctors are also concerned that whatever the solution they be paid on time, said Dr. Harry Greene, executive vice president of the Massachusetts Medical Society.

Paying doctors better will be key to maintaining Harvard Pilgrim's network, he said.

``Historically, the physicians have been helping this plan. The phsyician end has been underfunded for a substantial amount of time,'' he said. ``Physicians will continue to take care of their patients, but they're going to have to be compensated.''

-- Total Doomer (sky@falling.com), January 24, 2000.

wow!!! Thanks for the posts!!!!

-- Carl Jenkins (Somewherepress@aol.com), January 24, 2000.