Healthcare News: March 30, 2016

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Healthcare News from the West Region

In the news for this issue, CMS is rapidly expanding its ability to utilize data and benchmarking; The Doctors Company has analyzed their claims against hospitalists; senior living organizations and residents with a criminal history; and cyber developments too.

Hospital Re-admissions News From CMS
A total of sixteen states had 16 or more hospital re-admissions per 100 Medicare beneficiaries in 2014, according to a new, CMS data mapping tool. The tool breaks down data by state or county, beneficiaries' demographics, health conditions and Medicare measures.  In 2014 California, Alaska, Massachusetts, Rhode Island and New Jersey had the highest average total Medicare cost per beneficiary, with $52,955 or higher per year.
Read more.
And CMS press release. 
Read more. 
The Doctors Company Study of Claims Against Hospitalists
Failed, delayed, or wrong diagnosis, improper management of treatment and medication-related error are the main triggers that lead patients to sue hospitals, according to a study by The Doctors Company of 464 claims against hospitalists.  The analysis found that 78 percent of all claims against hospitalists included the three most common patient allegations: failed, delayed or wrong diagnosis; improper management of treatment; and medication-related error.  The research is unique because it includes insights from expert physicians into the specific factors that led to patient injury. The top factor, the physician reviewers determined, was inadequate patient assessments, which occurred in 35 percent of cases. This included failure to establish a differential diagnosis, failure or delay in ordering diagnostic tests and failure to consider available clinical information. Also included in the study are examples of actual malpractice cases and suggested risk mitigation strategies.
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California Insurance Marketplace News
California’s insurance exchange is putting pressure on providers to reduce costs and improve quality, and will vote on whether (starting in 2019) plans would be required to expel poor-performing providers from their exchange networks.  
Read more. 
State Had No Duty To Monitor Sex Offender Admitted To Nursing Home
Iowa Court of Appeals ruled that state officials were not responsible for protecting the residents of a nursing home where a sex offender was committed by court order, and had no legal obligation to supervise the offender nor develop a safety plan for the facility once he was admitted.
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OCR HIPAA Breach Settlement News
This month, OCR announced two large settlements of $1.55 million (plus two year corrective plan and $3.9 million (plus three year corrective plan) arising out breaches of only 9,000 and 13,000 individuals respectively.  OCR is particularly interested in following up with and correcting entities with data breaches where the required policies and procedures are not in place. In particular, this is a reminder that a breach can bring regulatory scrutiny on your encryption of electronic devices, regular security risk assessments and analyses, adequate safeguards to protect PHI, business associate agreements with all business associates, and on having and implementing HIPAA policies and procedures to protect the security and privacy of PHI.
Read more. 

Drug Price News
Anthem is suing Express Scripts to get more savings on drugs, alleging that savings are not being passed through sufficiently.
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CMS Will Test Paying More for Skilled Nursing to Curb Hospital Re-admissions
The CMS will test whether paying skilled-nursing facilities more will help reduce avoidable hospital admissions among their long-term-care residents.
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Affordability of Drugs News
The pharmaceutical industry remains largely unregulated.
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St. Joseph Health Settles Privacy Class Action Lawsuit News
The press has reported that St. Joseph Health in Irvine, CA has settled (for payment of $7.5 million plus a $3 million fund for those patients suffering loss from identity theft) a class action lawsuit arising out of a 2012 PHI data breach. The system had also provided one year of credit monitoring at a cost of $4.5 million.
The breach had reportedly affected 31,802 individuals, and the class action lawsuit included alleged violation of CMIA (California’s Confidentiality of Medical Information Act, which provides for $1,000 fine/penalty per person), negligence, money had and received, and violation of the CA 17200 Business and Professions Code.
This case is a good reminder of the need for sufficient policy limits to cover not only first party notification, credit monitoring costs, but also to cover settlement of third-party claims (and associated regulatory fines and defense costs too). 
Just taking the $7.5 million settlement and the reported $4.5 million cost of credit monitoring, spread across approximately 32,000 affected individuals, produces a cost per person of approximately $375 – an interesting figure for future reference in assessing limit needs. However, the approx. $140 per person for credit monitoring seems way too high, especially since the underlying breach did not expose SSN. In practice, individuals have to each enroll themselves in credit monitoring, and typically only 10 percent to 20 percent sign up. Given that the top product at Experian is around $70 per year, the math does not seem to work out at $4.5million – there must be more to this than meets the eye.

Read more - Becker's Hospital Review
Read more - OC Register
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Your Healthcare News from the West Region Team

Maureen Archambault
(p) 818.539.1339
(c) 818.438.3322
Trevor Weyland
(p) 818.539.1224
(c) 415.279.8479
Angie Chua
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(c) 626.643.2852