21 April 2011
California Edition
Calendar
May 4-7
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May 11-13
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June 3-5
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the details of your event, or call
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published in the Calendar section,
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Ups, Downs For Hospital Procedures
C-Section Rate Rises While CABGs, PTCAs Decline
Utilization and volume data released by the Medical Holdings, 67.5 out of 100 births in
Ofce of Statewide Health Planning and 2009 were delivered via c-section. A
Development shows that the rate of cesarean spokesperson from the organization did not
sections continues to rise at the state’s return a phone call seeking comment.
hospitals, while intensive cardiac procedures Although C-sections are generally
are continuing a years-long decline. considered a safe procedure, they often
California’s hospitals performed require blood transfusions and sometimes
136,196 C-sections in 2009, down about 2% admission to the intensive care unit, driving
from 2008. However, the rate per 100 births up costs and the risks for complications. Risks
increased to 29.8 from 29.2. The rate was 27.1 also rise when a C-section is performed
per 100 births in multiple times. A
2005, when subsequent vaginal
OSHPD rst began C-Section Rates For Selected Hospitals birth after a C-
releasing data. The (Per 100 Births in 2009) section occurs in
agency considers only eight per 100
C-sections as a Kaiser South Sacramento Medical Center 18.1 births, according to
possibly Riverside County Regional Medical Center 20.4 OSHPD data.
overutilized Mercy Medical Center Redding 28.7 State and hospital
procedure, Kaweah Delta Medical Center 34.1 ofcials were at
although the Scripps Memorial Hospital La Jolla 37.4 odds as to what is
Community Hospital of San Bernardino 44.7
statewide rate is driving up the c-
Memorial Hospital of Gardena 46.3
still lower than the section rate. Joseph
Bellflower Medical Center 52.4
national rate of Parker, manager of
about 31 per 100 (Source: OSPHD) OSHPD’s health
births. outcomes center,
The C- suggested that
section rate among Los Angeles County scheduling on both the parts of patients and
hospitals is much higher than the statewide physicians played a hand.
average, at nearly 35 per hundred births. “More women are scheduling their c-
Several facilities perform C-sections well over sections in advance so they can plan their
half the time. At Los Angeles Community parenthood better, there are probably certain
Hospital, a small facility in East Los Angeles
owned by the for-prot chain Prospect
Continued on Next Page
www.lakesidecommunityhealthcare.com
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 Payers & Providers
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In Brief
DOI Commissioner
Jones Joins
Whisleblower Suit
Against Sutter Health
California Insurance Commissioner
Dave Jones has joined a civil
whistleblower lawsuit against
Sacramento-based hospital
operator Sutter Health.
The suit, which dates to 2009
and was filed in Sacramento
County Superior Court, was
originally filed against Sutter and
billing intermediary Interplan by
Rockville Recovery Associates
Limited, which inspects billings for
potential fraud.
The suit claimed that Sutter’s
hospitals routinely overbilled
insurers for anesthesia services.
Typically, hospitals charge nominal
fees for such services to cover the
cost of its anesthesia technician,
while the anesthestiologist submits
a separate bill.
However, Sutter billed as
much as $5,000 per procedure.
and in some instances allegedly
billed for anesthia services when
no anesthesia was used.
"We believe the amount of the
fraudulent charges is in the
hundreds of millions of dollars, if
not more," said Jones, who used
his authority under the California
Insurance Frauds Prevention Act to
intervene.
A statemet issued by Sutter
said “this case is without merit and
that our anesthesia charges are
appropriately billed. We intend to
vigorously defend this matter.”
OSHPD Awards $2.7
Million To Nursing
Programs
The Office of Statewide Health
Planning and Development awared
Continued on Page 3
NEWS
OSHPD Data (Continued from Page One)
incentives on the part of physicians
also...such as for planning (their schedules),”
he said.
Ofcials with the California Hospital
Association and Citrus Valley Health
Partners, a hospital operator in the San
Gabriel Valley, suggested that lack of prenatal
care is driving the rates upward. This might be
exacerbated in Los Angeles County, where
poverty rates are higher than in other urban
regions of the state.
“We have a lot of mothers who do not
get good prenatal care, a lot of the Medi-Cal
population, and some who have no access to
prenatal care at all,” said Tracy Dallarda,
Citrus Valley’s senior vice president of
communications. Citrus Valley’s 325-bed
hospital in West Covina performs a C-section
for every 47 out of 100 births, among the
highest rates for a high-volume facility in
California. Dallarda added that the hospital
SCAN Incentivizes Medical Groups
$5 Million Set Aside; Plan to Emulate CMS System
SCAN Health Plan has committed $5 million
over the next two years as incentives to its
contracting medical groups to improve the
quality of healthcare delivery, and has
established a rating system that mirrors one
employed by the Medicare program.
“This is really all about improving patient
care and making healthcare more responsive
and accessible for our members,” said
Timothy Schwab, M.D., SCAN’s chief medical
and informatics ofcer. The Long Beach-based
Medicare Advantage plan has about 130,000
enrollees in California and contracts with
about 50 medical groups.
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Page 2
system has rigid criteria for evaluating
expectant mothers for c-sections.
While the C-section rate continued
upward, volumes for complicated cardiac
procedures such as coronary artery bypass
grafts and coronary angioplasties continued to
decline. The number of CABG procedures
totaled 17,105 in 2009, down from 17,985 in
2008 and 21,295 in 2005, a 20% drop in less
than ve years. Angioplasties declined 4.2%
in 2009, to 50,514 versus 52,935 in 2008. A
total of 60,414 were performed in 2005 – an
overall drop of 17%.
OSHPD and hospital ofcials credit the
drop to the use of medications such as blood
thinners.
“Some of these interventional therapies
have similar outcomes to surgery, and far
fewer risks for complications such as strokes,”
Parker said.
Schwab said SCAN would emulate the
ve-star rating system used by the Centers for
Medicare and Medicaid Services to evaluate
providers. It is requesting that its medical
groups select at least one CMS quality
measure and build a program around
improving it.
“The providers can have an impact in the
delivery of care, such as specic disease
measures like diabetes, osteoporosis,” Schwab
said. “Or they could improve preventative
Continued on Next Page
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In Brief
$2,724,000 to 19 programs
statewide that educate registered
nurses.
The awards, which ranged
from $48,000 to $365,000, went
to a combination of public and
private universities and
community colleges.
The money was made
available through the Song-Brown
Health Care Workforce Training
Program, which is aimed at
increasing the number of
healthcare workers in rural and
other medically undersvered areas
in California. The program is
administered by OSHPD, while
funds are collected via fees
imposed on hospitals and other
health facilities. Awards are
decided in conjunction with the
the California Health Data
Planning Fund.
“As funding opportunities for
nursing programs diminish, the
Song Brown program increasingly
plays an important role in
supporting a skilled, culturally
competent nursing workforce,”
said OSHPD Director David
Carlisle, M.D.
SCAN Names Chan
Medical Director
Long Beach-based Medicare
Advantage insurer SCAN Health
Plan has named Raymond L.
Chan, M.D. as its medical
director.
Chan previously served as
director of clinical services and
quality for Hil Physicians Medical
Group in San Ramon, and was a
medical director for Health Net
and Private Healthcare Systems.
“Dr. Chan brings with him an
impressive history of
understanding the needs of
seniors and in trying to make the
healthcare system work better for
everyone,” said Timothy Schwab,
M.D., SCAN’s chief medical
officer.
NEWS
SCAN (Continued from Page One)
care measures,” such as inuenza
vaccinations or other areas of disease
prevention.
Schwab added that the groups could
also be graded on the overall infrastructure
of care, such as whether specialty care is
provided for particularly frail patients.
The money earmarked for this year will
focus on funding the improvements, while
payments made in 2012 will be based on
overall outcomes. Schwab said the funds
Molina Reports Strong Earnings
Plan Demurs On Increasing 2011 Guidance
Long Beach-based Medicaid managed care
plan Molina Healthcare posted a strong
earnings gain for the rst quarter of 2011,
although company ofcials warn that budget
strictures in certain states could impinge on
future earnings.
Molina reported net income of $17.4
million for the quarter ending March 31, up
61% from $10.6 million for the rst quarter
of 2010. Revenues were up 13.7%, to $1.1
billion from $966.7 million.
Company ofcials attributed the growth
to better cost controls – inpatient utilization
was reduced 7% while pharmaceutical costs
were kept at – and expansion in the Texas
market, where Molina won a Medicaid
contract in February to service enrollees in
the Fort Worth area.
“We exceeded the solid start we
intended for achieving the nancial
guidance we had provided for this year,” said
Molina Chief Executive Ofcer J. Mario
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Page 3
would be paid based on overall patient
representation. A group that provides care for
20% of SCAN’s enrollees, for example, could
receive up to 20% of the funding, or $1
million.
“We’ve gotten a lot of traction from our
(medical) groups so far,” Schwab said.
“They’re interested not so much in the dollars,
but in the way the Medicare program will be
paying Medicare Advantage plans to deliver
care in the future.”
Molina, M.D., during a conference call earlier
this week.
Overall enrollment in the 10 states
Molina operates in reached 1.65 million for
the quarter, up from 1.48 million for the rst
quarter of 2010 and 1.61 million at the end of
calendar 2010. However, California
enrollment stood at 347,000 at the end of the
quarter, down from 353,000 during the rst
quarter of last year.
Molina reported net income of 56 cents
per share for the quarter, and forecasts net
earnings of $2.20 a share for calendar 2011.
However, company ofcials were hesitant
about expanding that estimate further.
“Budgets in every state in which the
Company operates its health plans are in
decit and are likely to remain so through
state scal year 2012,” the company said in a
statement. “Given this uncertainty in the rate
environment, any adjustment to our guidance
is unwarranted at this time.”
]
Payers & Providers
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OPINION
Providers Get A Drug Program Lifeline
Expansion of 340B Will Cut Costs For Hospitals, Clinics
If you have ever taken the time to read a
hospital bill, you will have no doubt noticed
certain things beyond the usually mind-
bending bottom line. First, they are about as
simple to understand as a calculus problem
written in Roman numerals.
Second, at some point most people notice
one particular line and say to themselves “How process of eligibility determination can be quite
come that single pill costs as
much as an entire prescription I
get at a drug store?”
The question about drug
prices could soon be asked far
less often through the expansion
of the federal 340B prescription
medication discount program
enacted just a few months ago.
Originally passed in 1992
as part of the Veterans Health
Care Act, the 340B program
offered a signicant wholesale
discount on pharmaceutical
purchases to certain hospitals
and federal qualied health
centers (FQHCs). But in 2010,
the Affordable Care Act (part of By Henry Loubet
the federal healthcare reform
package) expanded the program,
allowing more facilities around the nation to
participate.
Currently, most hospitals are able to
purchase drugs at about a 15% to 20%
discount. The expansion of 340B will raise that deciding whether or not you want to be
discount to 51%. Studies show that that could
mean annual savings of $2 and $5 million for a
typical 200-bed hospital.
The broadening of the program means that
such facilities as specialty hospitals (free
standing cancer hospitals, for example), rural
hospitals, and a broad range of smaller
facilities (such as health centers for the
homeless) are now eligible to participate.
Additionally, off-site pharmacies owned by
any of the qualifying facilities may now take
advantage of the program. Also, as in the past,
all FQHCs, hospitals with a disproportionate
share of Medicaid patients and children’s
hospitals may participate. All of the facilities
must be non-prot.
In the current climate of what can only be
described as “shifting uncertainty”!in regards to
health care policy and nances, the expansion
of 340B will certainly provide a modicum of
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Page 4
stability and a real savings for both hospitals and
patients.!
So, what’s the catch? There really isn’t one.
However, 340B can be a rather complicated
program to initialize and manage. Like that
calculus problem, 340B has a signicant
number of regulations attached and even the
daunting for the uninitiated.
Therefore, it is crucial that any
healthcare facility considering
joining 340B do its homework
and know exactly what will be
expected of it and its personnel
from the very beginning. It is
strongly recommended that a
facility nd an experienced
outside partner who has “been
there, done that.”
Step one must be a review of
the eligibility criteria – there is
no point to investing time and
energy in trying to join 340B if
there is no hope of it actually
happening.
Step two needs to be the
creation of protocols and
procedures as to exactly how the
program will be implemented. For example, the
program does allow for the offering of
prescription discounts directly to the public at
off-site facility controlled pharmacies but
involved in that aspect has to made early in the
process.
Step three is ensuring continuing
compliance once the program is in place. As
with most federal programs, ensuring and
proving regulatory compliance can be
challenging.
While 340B can seem daunting, when
executed properly the benets can be truly
signicant and improve both patient care and a
healthcare facility’s bottom line.
Henry Loubet is Chief Strategy Officer for
Keenan. He is a member of the Payers &
Providers editorial board.
Op-ed submissions of up to 600 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com,
Payers & Providers MARKETPLACE/EMPLOYMENT Page 5

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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6

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!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
Payers & Providers MARKETPLACE/EMPLOYMENT Page 7

It costs up to $27,000 to fill a healthcare job*

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*New England Journal of Medicine, 2004.

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