That’s why this story is potentially very good news for claimants, plaintiff lawyers, insurance companies, and insurance company lawyers. We all need relief.

Inside Health Policy reports that trial lawyers and other stakeholders are hailing recent guidance from the Centers for Medicare and Medicaid Services on a program for repaying Medicare for medical services following a third-party settlement, saying that it will help streamline the process. The Medicare Secondary Payer (MSP) program “will now allow beneficiaries with claims under $25,000 to self-calculate the amount owed, after which Medicare would send a final demand letter within 60 days that would be considered accurate for 60 days, according to the trial lawyers association, which supports the new guidance.” American Association for Justice President Gary Paul called the new CMS guidance “a ‘win, win’ for seniors, businesses, insurance companies and taxpayers,” adding that the “current system is riddled with inefficiency, costing taxpayers and businesses millions of dollars each year. Assuming CMS expands the program above the $25,000 threshold, this guidance will go a long way towards addressing these concerns.” Noting that further information is expected to be released by January 15, the account adds that CMS “has also said that it intends to extend the claims threshold beyond $25,000, which the American Association of Justice also strongly supports.” Lawyers USA also quotes the AAJ president in reporting the story.

From the American Association for Justice press release.

Readmission rates at 3,119 hospitals scrutinized. In a related story, the Washington Post /Kaiser Health News detailed the methodology behind the Kaiser Health News (KHN) analysis of 3,119 facilities. For the analysis, “KHN looked at congestive heart failure, which is the most common cause of rehospitalization for Medicare patients. Readmission rates came from Medicare’s Hospital Compare Web site, which publishes risk-adjusted rates for heart failure and two other conditions (pneumonia and heart attacks).” Specifically, “the data cover patients who were readmitted within 30 days of discharge between July 2007 and June 2010.” Finally, “to gauge the socioeconomic status of each hospital’s patient population, KHN relied on an index that the Centers for Medicare & Medicaid Services (CMS) uses to decide whether a hospital deserves ‘Disproportionate Share Hospital’ (DSH) payments because it treats an excess of poor patients.”

Post-discharge clinics are new strategy to prevent readmissions. In “Insuring Your Health,” Kaiser Health News reported, “According to a study released this month by the Center for Studying Health System Change, a Washington-based research group, a third of adult patients discharged from a hospital don’t see a physician within 30 days — and experts say this is a key reason so many of them are readmitted.” Now, “some hospitals are trying a new strategy to interrupt this predictable and pricey pattern: post-discharge clinics. These hospitals are identifying patients who are more likely to have trouble after discharge, either because of their medical conditions or because they lack health insurance or a primary-care provider, and funneling them to the clinic where they receive one-on-one assistance.” Still, some experts question if such clinics are really the best solution. What’s more, experience has shown that up to half of the patients fail to keep post-discharge appointments.

From the news release of the American Association for Justice.

From the American Association for Justice news release.

To combat this broken system, the plaintiff bar has joined forces with a natural opponent, the U.S. Chamber of Commerce. This strange alliance, and the reasons behind it were discussed in a recent article at Law.com. Here are excerpts:

An imposing new obstacle is getting in the way of the nation’s personal-injury lawsuits. It has nothing to do with the merits of the cases, or how the courts are operating. The obstacle is Medicare, the federal health insurer for the elderly. Lawyers say the program is disrupting a countless number of their settlements.

Court papers in Connecticut describe one example: After a minor is hurt in a traffic accident, his family agreed to a settlement of $7,500 with the other party’s insurer, but the settlement broke down when the insurer, United Services Automobile Association, said it needed to run the minor’s case by Medicare. Minors aren’t eligible for Medicare, but the insurer said it had no choice under federal law.

The disruptions are happening because, under a 2007 law, Medicare is making a new effort to collect money it’s owed. The effort is targeting auto insurers, worker’s compensation insurers and other third parties that are liable for injuries, like a grocery store in a slip-and-fall case. Under federal law, third parties are supposed to reimburse Medicare if the federal program has paid an injured person’s medical costs.

But lawyers say they often have difficulty getting a final number, or even a good estimate, for how much Medicare is to be paid. The number is vital to determining how much a settlement should be. Even in cases where the number will be zero, as with the minor in Connecticut, the parties want to be sure because they could face sanctions of $1,000 a day per claim if they shortchange Medicare, even by accident.

Medicare officials say their effort has the potential to save taxpayers billions of dollars, but they acknowledge the amount of paperwork is overwhelming and is causing delays. Between the fiscal years 2007 and 2010, the number of cases involved grew by 86%.

In Washington, an unusual set of organizations doesn’t want to wait for Medicare to work through the bureaucracy. The American Association for Justice, which lobbies for plaintiffs’ lawyers, and the U.S. Chamber of Commerce, the largest lobbying group for business, are on the same side. Joining them are major corporations such as the Walt Disney Co. and Wal-Mart Stores Inc., as well as defense-side law firms and their trade group, the Defense Research Institute.

“We’re typically not on the same side of issues. The fact that we are shows how broken the system is,” said Sarah Rooney, regulatory counsel for the American Association for Justice. Rooney said her organization’s membership has become increasingly frustrated with the issue.

The groups are pushing legislation that would rein in Medicare. The bill would set a hard deadline for Medicare to notify the parties to a claim how much the program is owed, or else Medicare would lose its right to collect the money at all. It would create a “safe harbor” from the $1,000-a-day penalties based on willfulness and other factors. It would also require Medicare to resolve its claims to reimbursement within three years of a settlement — whereas now there is no statute of limitations. Reps. Tim Murphy (R-Pa.) and Ron Kind (D-Wis.) are the bill’s lead sponsors.

Lawyers who interact with the system say it’s already costing taxpayers money because it’s so inefficient. In one example that has made the rounds on Capitol Hill, Medicare sent a demand letter in 2009 in a personal-injury case asking to be reimbursed for $1.59 out of a $4,500 settlement. A provision in the pending legislation would exempt from Medicare’s collection efforts any cases below a certain threshold, to be determined later.

“It’s truly ironic that trial lawyers can’t get the government to take back money that belongs to the taxpayers,” said Marianne LeBlanc, a partner at Sugarman and Sugarman. “The problem is that they won’t tell us how much we owe them, so we can’t pay them.”

William Cremer, who represents insurance companies as a partner at Cremer, Spina, Shaughnessy, Jansen & Siegert in Chicago, said the Medicare rules affect every case his firm handles, even if they don’t think Medicare paid any medical bills in a case. That’s because the firm still has to ask and verify, so it doesn’t get hit with a penalty. “That’s why it has this paralyzing effect on getting these cases done,” Cremer said.

“The conventional wisdom is that hospitals aggressively seek to shift costs from public insurance programs to private payers such as auto insurance companies,” said Elizabeth Sprinkel, Senior Vice President of the IRC. “With this study, we now have information on the magnitude of cost shifting and a better understanding of the need for supportive state laws and effective tools that will enable auto insurers to pay hospitals appropriately and help control auto injury claim costs,” said Sprinkel.

“Now this concept will be extended to Medicaid,” CQ reports. “Under the healthcare law (PL 111-148, PL 111-152), the curb on payments for preventable conditions must also apply to Medicaid.” In other words, “states won’t be allowed to pay providers including hospitals, doctors and other health care organizations if patients develop conditions that are deemed reasonably preventable.”

Kaiser Health News reported, “Currently, about 21 states have such a nonpayment policy,” but “the 2010 federal health law, in effect, expands the ban nationwide. The rule published [yesterday] gives states until July 2012 to implement it.” However, some medical groups have reservations about this policy. Kaiser Health News quoted written comments made by Michael Maves, MD, CEO of the American Medical Association, to the CMS three months ago. Maves wrote, “Simply not paying for complications or conditions, that, while extremely regrettable, are not entirely preventable, is a blunt approach that is not effective or wise for patients or the Medicare or Medicaid program.”

Writing in the Forbes “Health Dollars” blog, David Whelan focused on possible unintended consequences of the new rule proposed by the CMS that “would modify the Inpatient Prospective Payment System.” Whelan pointed out that “the new payment plan assumes that changing a whole industry is as simple as turning a few knobs and pushing a few buttons on the Medicare dashboard. Implementing such a scheme will be extremely difficult, possibly unfair and will most definitely increase the cost of health care rather than save money.” Whelan contended that Medicare currently does not have the necessary experience to make clinical judgments affecting patients. He also voiced concern that hospital systems would have to merge as a result of the proposed rule, thereby setting up “powerful health care oligarchies.”

From the American Association for Justice news release.

Yet, says CMS Administrator Donald Berwick, “it is the most important answer to the healthcare sustainability issue, achieving lower costs through high quality is the right way to do it,” Reuters reports. According to CMS data, nearly $4.4 billion was spent caring for patients who were harmed while hospitalized in 2009.

Readmissions to the “hospital cost Medicare another $26 billion,” CQ “Healthbeat” reported. But the new program “will save up to $35 billion in health costs over the next three years, including $10 billion in Medicare,” CMS estimates. “Starting Oct. 1, 2012, hospitals will get paid more if they ensure patients get care within 90 minutes of possibly having a heart attack,” as will “those that provide care within a 24-hour window to surgery patients to prevent blood clots; communicate detailed instructions to heart failure patients on follow-up care once they leave the hospital; and ensure their facilities are clean and well-maintained.”

The agency “will take into account how well patients rank the quality of the care they received during their hospital stay,” MedPage Today reports. “Adherence to the quality care measures will be weighted at 70% and patient satisfaction scores will be weighted at 30% in determining payments, CMS officials said.” In short, the “release of the Hospital Value-Based Purchasing Program rule brings the Obama administration one step closer to something it has long proposed: paying hospitals for improvements in patient health, rather than for the number of services received during a hospital stay.”

According to the Hill “Healthwatch” blog, “some 3,500 hospitals will be eligible for $850 million in performance incentives for fiscal 2013.” And “Berwick said the new regulations would acknowledge both achievements and improvements, so that cash-strapped hospitals that serve poor areas aren’t at a disadvantage.” He added, “We need all boats to rise on the rising tide of quality.”

From the American Association for Justice news release.

There is a handy site for Texas who want to know who represents them, and how to contact that person. Just visit http://www.fyi.legis.state.tx.us.

The Fort Worth (TX) Star-Telegram reports, “At Baylor Surgical Hospital at Fort Worth after surgery in 2008,” a 67-year-old woman with gangrene, who was “disoriented and on pain medications, called for help,” but nurses failed to respond, according to a lawsuit filed in state district court in Fort Worth. The suit alleges, “Edna Faye Smith fell from bed and broke her leg and ankle. When nurses placed her back on the bed, an audible ‘pop’ came from the right ankle to the foot,” and Smith required more surgery. Notably, the CMS’ “information on so-called hospital-acquired” conditions, which “Baylor disputes as flawed,” shows the hospital’s “rate of falls and trauma was about nine times the national rate per 1,000 patients discharged.”

From the American Association for Justice news release.

The Los Angeles Times reports, “The Obama administration announced a broad new initiative Tuesday to reduce medical errors, partnering with private insurers, business leaders, hospitals and patient advocates to tackle a problem that kills thousands of Americans every year.” This “campaign, funded by the healthcare overhaul the president signed last year, aims to cut by 40% over the next three years the number of harmful preventable conditions such as infections that patients acquire in the hospital.” HHS Secretary Kathleen Sebelius made the announcement about the Partnership for Patients initiative, and CMS Administrator Donald Berwick noted that the initiative has “big goals.”

The AP reports, “Sebelius said the new national Partnership for Patients will help other hospitals adopt those proven safety strategies.” The program “is funded by $1 billion from the new healthcare law, but has the potential to save Medicare up to $10 billion in that same time.”

The New York Times “Prescriptions” blog quotes Sebelius as saying, “Americans go the hospital to get well, but millions of patients are injured because of preventable complications and accidents. … Working closely with hospitals, doctors, nurses, patients, families and employers, we will support efforts to help keep patients safe, improve care, and reduce costs. Working together, we can help eliminate preventable harm to patients.”

According to the CNN “The Chart” blog, the initiative “will save 60,000 lives over the next three years by reducing millions of preventable hospital-related complications and injuries. Sebelius says the new partnership will also save about $35 billion in healthcare costs including $10 billion in Medicare savings.” Meanwhile, American Medical Association president Cecil Wilson, MD, said that the group’s “physicians will be encouraged to do everything they can to reduce adverse events and hospital readmissions.” Wilson added, “We know that if we ensure that a patient’s primary care physician receives their discharge papers within 24 hours of their release from the hospital, the likelihood of hospital readmission will be reduced.”

The Hill reports in its “Healthwatch” blog that HHS aims to accomplish the initiative’s goals “by disseminating best practices that have already allowed the nation’s best hospital systems to cut preventable errors significantly.” Berwick noted, “Blame and accusation are not the answers; teamwork, improvement are the answers.” The AMA’s Wilson is also quoted as saying, “We all need to do everything we can to avoid preventable patient illness and injuries while also working to ensure that patients are able to heal without complications.”

Reuters reports that another goal of the initiative is to cut hospital readmissions by at least 20 percent. Sebelius noted that 500 hospitals are already part of the effort.

CQ reports, “Because the program is voluntary, making good on the projections is initially going to require a disciplined effort by hospital and other healthcare CEOs to devote time and resources to the project — in addition to their efforts to comply with the many requirements of the healthcare law.” Berwick explained that “the changes needed in healthcare delivery to meet the goals of the project will help hospitals qualify in a few years for incentive payments under the health law to improve patient safety.”

The PBS NewsHour “The Rundown” blog reports, “The partnership will begin by asking hospitals to focus on nine types of medical mistakes where there is potential for dramatic reductions in harm. These include pressure ulcers, drug reactions, childbirth complications and surgical site infections.” Notably, Berwick will “oversee the new partnership.” He stated, “Through strong partnerships at national, regional, state and local levels … we are supporting the hospital community to significantly reduce harm to patients.

From the American Association for Justice news release.