Category Archives: Investing and fiduciary requirements

Hospitals grab at least $1 billion in extra fees for emergency room visits

NOTE- this is an excellent, but very long article.  To read the article in its entirety click on:

Hospital billing of the two most expensive emergency room codes — 99284 and 99285 — jumped while less expensive codes — 99281 through 999283 — dropped off. The billing codes represent the varying levels of hospital resources required for different types of care; the codes call for payments ranging from $50 to $324, and come on top of physician fees. The codes were developed for physicians, not hospitals. Yet Medicare’s administrator has balked at implementing uniform standards governing how hospitals determine which codes to bill. Instead, Medicare relies on hospitals to set their own internal rules.

Emergency Room Visits Higher-numbered codes receive higher payments from Medicare. Percentage of visits charged at higher-level codes 9928499285‘01‘02‘03‘04‘05‘06‘07‘080%10%20%30%40%
Percentage of visits charged at lower-level codes 992819928299283‘01‘02‘03‘04‘05‘06‘07‘080%10%20%30%40%


Medicare has emerged as a potent campaign issue, with both Barack Obama and Mitt Romney vowing to tame its spending growth while protecting seniors. But there’s been little talk about some of the arcane factors that drive up costs, such as billing and coding practices, and what to do about them.  Our 21-month investigation documents for the first time how some medical professionals have billed at sharply higher rates than their peers and collected billions of dollars of questionable fees as a result.

Weekly Economic Update for September 17, 2012







“Every exit is an entry somewhere else.”


– Tom Stoppard




Think about making a household budget using an online spreadsheet. You can easily find or create one on the Web for free; some even have built-in calculators.




What lives above a star but never burns, has 11 neighbors, and can replace the letters P, Q, R or S in some cases?



Last week’s riddle:

What 9-letter word remains an English word each time you remove a letter from it, until it becomes a 1-letter word? (Hint: You can remove letters from any part of the word.)


Last week’s answer:

Startling (Starting, Staring, String, Sting, Sing, Sin, In, I).


September 17, 2012



On September 13, America’s central bank announced its third round of quantitative easing since 2008. QE3 has no set timeframe: the Fed will buy $40 billion of agency mortgage-backed securities each month until it elects to halt its effort. Pair that with the ongoing Operation Twist and the Fed will purchase about $85 billion worth of longer-term securities monthly in the last third of 2012. In addition, the latest FOMC policy statement reaffirmed the pledge to keep interest rates at “exceptionally low levels” through mid-2015. Will the Fed also decide to buy Treasuries? Will mortgage rates drop to new all-time lows? Will this promote more spending and lending? While the answers to these questions won’t be known for a while, the Dow went +206.51 Thursday in the wake of the news.1,2


The Labor Department said that its Producer Price Index climbed 1.7% in August, mostly on soaring energy costs. Wholesale prices hadn’t advanced so much in a month since June 2009. Core PPI rose just 0.2%. August also saw a 0.6% increase in the Consumer Price Index – the CPI’s largest monthly rise since March. Retail gas prices represented 80% of that gain. Core CPI rose only 0.1%, as in July.3,4


August turned out to be the best month for retail sales since February. Last month’s 0.9% gain complements the 0.6% advance recorded by the federal government in July. The University of Michigan’s preliminary September consumer sentiment survey rose to 79.2, much improved from the final August mark of 74.3.4,5


The S&P 500 gained 1.94% last week to settle Friday at 1,465.77 – its best close since December 31, 2007. The lift from QE3 also took the Dow (+2.15% to 13,593.37) and NASDAQ (+1.52% to 3,183.95) higher last week. NYMEX crude settled at $99.00 per barrel Friday; COMEX gold ended the week at $1,772.70 an ounce.5,6,7

THIS WEEK: No major U.S. economic releases are slated for Monday. Tuesday, September’s NAHB housing market index comes out plus earnings from FedEx, Cracker Barrel and Darden. Wednesday, earnings from Bed Bath & Beyond, AutoZone, General Mills and Adobe Systems complement reports on August existing home sales, building permits and housing starts. The Conference Board’s August index of leading indicators appears Thursday, plus weekly jobless claims and earnings from CarMax, Rite Aid and Oracle. The iPhone5 ships Friday, which is also a quadruple witching day.

DJIA +11.26 +20.87 +0.22 +6.35
NASDAQ +22.22 +23.77 +4.47 +14.66
S&P 500 +16.55 +23.31 -0.25 +6.47
10 YR TIPS -0.76% 0.12% 2.20% 3.10%

Sources:,,, – 9/14/126,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


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Reeve Conovers Disclosure:

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.


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As hospitals take over doctors’ practices, fees rise

By Marni Jameson, Orlando Sentinel
9:11 p.m. EST, September 15, 2012

Hospitals throughout Florida are taking over doctors’ practices at a rapid — and some say worrisome — rate.

The trend, happening across the country, allows hospitals to charge more and doctors to worry less about their financial futures.

Meanwhile, patients and others who foot the bill for health care lose, say some health-policy analysts.

The most recent local example of this is the potential sale of Physician Associates, one of the largest multispecialty practices in Central Florida, with 95 doctors. The physician group is entertaining bids from the area’s most eligible suitors, Florida Hospital and Orlando Health.

Today 40 percent of primary-care physicians nationwide are hospital employees, more than double the number employed by hospitals in 2000, according to Southwind, a Nashville, Tenn.-based consulting group that analyzes health-care trends. In 2000, only one in 20 specialists was a hospital employee; today nearly one in four is.

Buying physician practices is a boon to hospitals because it helps them secure more patients and profits. Once employed, physicians admit their patients to the hospital they work for and also funnel patients there for tests and procedures.

Physicians trade their independence for employment because they see the hospital as a buffer against the increasing challenges of private practice. Hospitals can cover the investment in technology to handle electronic medical records, and the rising cost of malpractice insurance. Some even cover costs for the doctor’s office overhead and staff.

Hospitals also have more clout, so they can negotiate higher payments from insurance companies than solo practices can.

“Doctors watch hospitals get higher payment rates, and they want in on that,” said Dr. Robert Berenson, an analyst at the Urban Institute’s Health Policy Center, a Washington think tank. “They find it attractive to work on high salary with productivity incentives, and get out from under the headaches of managing a practice.”

But all that bonding is driving health-care costs up, and access to care and choice down, say critics of the trend.

“As a result of their allegiance to one hospital, physicians may not give patients the range of referral choices they did before,” Berenson said.

Hospital executives say the acquisition of physician practices helps streamline care and creates an “integrated” health-care-delivery system.

“Acquiring physicians’ practices is not that profitable of an endeavor,” said Dr. Wayne Jenkins, who oversees Orlando Health Physician Group, hundreds of multispecialty physicians employed by Orlando Health. “It gets to where we’re going in the long run.”

That long run is a move from a fee-for-service payment model to value-based reimbursements, which reward good outcomes, fewer readmissions and nonduplication of tests, Jenkins said.

“Yes, some patients will see their bills go up. But consumers may not see the ways costs will come down. Over the years, we’re going to see costs come down more,” Jenkins said.

But others question the practice.

“It doesn’t matter what political party you belong to,” said Dawn Lipthrott, a Winter Park family therapist and patient advocate. “If we’re going to talk seriously about health-care reform, lowering health-care costs and Medicare viability, this is what we should be talking about.

“Unbeknownst to everybody, these consolidations are doubling the cost of health care.”

Lipthrott felt compelled to take action after a routine surgery in 2004 led her to question her medical bills and who got paid what. The next year she launched the Ethical Health Partnerships website to get the word out about the rising costs and compromised care she saw happening as a result of hospital-practice mergers.

“How do I make an informed choice when I don’t know who owns my doctors and whom they’re beholden to?” Lipthrott said. “How is this happening and why does no one know about it?”

No turning back

In Central Florida the movement is well under way.

In recent years, Orlando Health — a multihospital system in Central Florida that operates Orlando Regional Medical Center, Arnold Palmer Hospital for Children, Health Central Hospital and several others — has purchased two large cardiology groups: Orlando Mid-Florida Cardiology and Orlando Heart Center, which together have more than 40 heart specialists.

During the past 21/2 years, Orlando Health Physician Group has grown from 200 employed doctors to more than 400, Jenkins said.

Florida Hospital already has turned more than 200 community physicians into employees who practice in 90 local offices. Though to patients the doctors appear as private practitioners, they band together under the invisible hand of Florida Hospital Medical Group, a wholly owned subsidiary of Adventist Health, Florida Hospital’s parent company.

When asked about the trend, Florida Hospital spokeswoman Samantha O’Lenick said, “Our leadership believes it would be inappropriate for us to make any comment right now.”

Next, in what would be the region’s biggest shift yet, Physician Associates may be acquired. Industry insiders expect a decision next month.

Though the sale of Physician Associates could be a great opportunity for hospitals and physicians to improve communication, efficiency, quality and continuity of care, employers are concerned, said Karen van Caulil, president of the Florida Health Care Coalition, which works with local employers to reduce health-care costs.

“We are seeing significant increases in charges for care once practices have been purchased by hospital systems,” van Caulil said.

A spokeswoman for Physician Associates said the organization would not comment on the negotiation. Nor would representatives from either of the bidding hospital systems.

Payment loopholes

When hospitals employ doctors, they can layer in a “facility fee,” which adds cost to a patient’s visit without adding value, experts say.

It’s a practice few consumers are aware of.

“Patients don’t even know, quite honestly, and they aren’t going to notice,” said Cynthia Peterson, vice president of the Broward County Medical Association.

As for Medicare and insurance companies paying more, she said, “eventually they will figure it out.”

“Hospitals are taking advantage of anomalies in the payment system that allows them to charge a lot more for the same doctor visits in the same office,” Berenson said.

Because of how Medicare and private-insurance plans pay, hospitals can offer generous compensation to physician employees and still generate more profit, he said.

“In the short term, they are doing this for mercenary and financial reasons, not because it’s better for patients,” Berenson said.

In its March report to Congress, Medcap, a government agency that analyzes Medicare policy, found that the cost for a basic doctor visit nearly doubled once a practice was purchased.

Last year, a 15-minute visit to a doctor in private practice cost $69, including the $14 patient co-pay, the report said. That same visit to a hospital-employed physician cost $124. The patient portion rose to $25. At that rate, Medicare spending for doctors visits alone would increase by $2 billion a year, the Medcap report said.

Analysts at Florida Blue, the state’s largest provider of health insurance, looked at data from cardiologists who practiced in Orange, Osceola and Seminole counties. During the past two years, they found that overall costs from hospital-employed cardiologists were 20 percent higher than for cardiologists not employed by hospitals, said Andy Marino, a Florida Blue vice president.

“Though normally physicians want to be their own bosses, market uncertainty is making them run for cover,” Marino said. They are seeking employment partly because of pending mandates of the health-care overhaul, he added.

The good and bad

“I think it’s a bad direction,” said Dr. Harbinder Ghulldu, an Orlando internist in private practice. “Hospitals are one of the major culprits behind high health-care costs. They’re about billing, billing and billing, and how to get more money out of Medicare and insurance companies.”

The trend is bad for patients because they face higher co-pays to see their physicians once they become hospital employees, and that discourages access, Ghulldu said.

Florida Blue’s Marino gives the employee arrangement more credit.

“The goal of health-care reform — to encourage hospitals and physicians to get together to keep health-care costs more affordable and to offer better quality — is a good thing,” he said.

“But if doctors and hospitals are coming together to gain market power and negotiating leverage, that’s bad.”

Some analysts say the profits of consolidation won’t last long.

“Whatever windfall hospitals may be receiving won’t be sustained past the next few years,” said John Deane, chief executive for Southwind. “Regulators will cut reimbursements over time, and the old payment system will likely be replaced with value-based payment methods.”

Berenson doubts those days will come.

“My concern is that the short term will never lead to the long term, because hospitals and doctors like this arrangement too much,” Berenson said.

“The current system encourages doctors to generate volume. Both sides get more revenue. It’s basically fee for service on steroids,” he said.

“If the long-term plan is to change to a new payment plan that rewards providers for something besides productivity and maybe rewards them for not doing tests and procedures, I don’t see how hospitals can flip the switch,” Berenson said. “You don’t change culture overnight.” or 407-420-5158

What’s a consumer to do?

Because so much of what is happening between doctors and hospitals is invisible to consumers, patients need to ask more questions and question more answers, experts say.

•”Consumers should ask their doctors upfront if they’re employed by a hospital and what that implies,” said Dr. Robert Berenson, with the Urban Institute’s Health Policy Center.

After an independent physician becomes a hospital employee, patients will see bills become higher and more confusing, he said.

•Ask providers about options for elective tests or treatments, said Andy Marino of Florida Blue. “Rather than just go where the doctor refers you for, say, a mammogram or physical therapy, ask about your choices. The difference in cost can be significant.”

Florida Blue offers its members a “Know Before You Go” resource on its website, which lets consumers shop for elective services and compare costs and quality ratings. Medicare has a similar resource on its website.

Marni Jameson

The rise of High Deductible Health Plans. Goodbye HMO’s?

HMOs Decline, Consumer Plans Rise As Health Insurance Option
9/17/2012 @ 8:59AM | Forbes | Bruce Japsen
More employers are choosing consumer-directed health insurance over HMOs while PPOs remain the most popular choice, a new survey shows.

The health maintenance organization (HMO), once billed as a savior of medical insurance that would reign in medical costs by restricting choices and pushing patients to low-cost primary care, is deteriorating as an option for U.S. consumers.

A new study by Aon Hewitt (AON) is the latest sign that so-called “consumer directed health plans” — high deductible medical insurance usually tied to a health savings account that allows enrollees to set aside money through a tax-deferred arrangement — have overtaken HMOs as an option offered by major employers.

Preferred provider organizations, or PPOs, are still the most popular health plans offered by employers. PPOs allow their enrollees to go outside of the health plan’s network but at a higher cost to the health plan subscriber.

Aon Hewitt’s survey shows 58 percent of nearly 2,000 U.S. employers offered a consumer-directed health plan in 2011, compared to 41 percent in 2010. Meanwhile, 38 percent offered an HMO in 2011 compared to 41 percent in 2010.

The employers represent more than 20 million employees who have their medical care managed by an array of health plans including Aetna (AET), Cigna (CI), Humana (HUM) and UnitedHealth Group (UNH) and Blue Cross and Blue Shield plans across the country.

Though consumer-directed plans are on the rise, PPOs were offered by four in five employers, or 79 percent in 2011, Aon Hewitt said. That compares to 79 percent of employers that offered PPOs in 2010.

PPOs have been popular for years because of choices and flexibility. But the AON Hewitt study shows the rise of the consumer-directed health plan is a sign that employers want to stabilize what they pay for health costs by putting more of the risk and decision making about costs with their workers.

In a consumer-directed-health plan, employees can set aside their own money in an account though often times the employer provides a match or a certain amount for the worker to use toward their deductibles and co-payments. The consumerism comes through the idea that health plan subscribers think twice about using certain services and therefore make better health choices when they know they could exhaust money in their accounts toward potentially unnecessary procedures or costly medicines.

“Employers are beginning to explore innovative solutions that focus on both the short-term need to manage health care costs and the longer-term requirement to change underlying behavior patterns, shifting the focus from ‘caring for the sick’ to ‘actively managing the health of their employees,’” Maureen Fay, senior vice president and head of Aon Hewitt’s Consumer Directed Health Plan (CDHP) working group said in a statement. “Consumer-driven health plan designs are becoming increasingly popular among employers because they provide them with a vehicle for promoting consumerism and a framework for educating and motivating employees to actively engage in understanding and managing their health.”

Even though employers continue to offer HMOs, their workers are moving toward consumer directed health plans, a study earlier this year by benefits consultancy Mercer showed 20 percent of all employers in 2011 in its survey offered consumer-directed health plans and 13 percent of workers enrolled in them. By comparison, 27 percent of all employers last year in the Mercer survey offered HMOs and 20 percent enrolled in them.

Health Care Costs For Workers Almost Doubled Since 2002, New Survey Finds

Health care costs at work have nearly doubled since a decade ago, according to a new survey. The news is better this year: Health insurance premiums rose just 4 percent since 2011.

Health insurance costs workers almost twice what it did in 2002 even though premiums have grown more slowly since 2007, according to a new survey of more than 2,000 employers.

The average total cost of a family health insurance plan reached $15,745 this year, an increase of 4 percent since 2011, report the Henry J. Kaiser Family Foundation of Menlo Park, Calif. and the Chicago-based Health Research and Educational Trust. Workers paid an average of $4,316 for those plans with their employers paying the rest, according to the survey, which was conducted between January and May. In 2002, job-based family coverage cost $8,003.

The slowdown in employer-sponsored health insurance premiums in recent years mirrors an overall reduction in how quickly national health care spending is increasing. American households, employers and government programs spent $2.7 trillion on health care last year, 3.9 percent more than the amount spent in 2010, according to official federal estimates published in June. This spending increased by the same 3.9 percent from 2009 to 2010, after a decade during which it grew by 6.8 percent on average per year.

The economic recession that began in 2007 and the sluggish recovery since appear to be the main reasons why health care spending has slowed. High unemployment and stagnant wage growth mean Americans have less money to spend, and more people are going without health care because of costs.

Efforts by health insurance companies and medical providers to become more efficient may be helping to curb costs, but elements of President Barack Obama’s health care reform law probably aren’t a factor in cost to-date, Kaiser Family Foundation President and CEO Drew Altman contends in a post on the organization’s website. “No one has yet been able to disentangle the causes of the slowdown persuasively,” Altman wrote.

Slower growth in health insurance premiums doesn’t mean workers are better off, however. The 4 percent increase in the cost of job-based health benefits is still higher than the rise in wages, which went up 1.7 percent, or inflation, which was 2.3 percent, the Kaiser Family Foundation, the Health Research and Educational Trust and the journal Health Affairs noted in a press release.

The picture looks even more ominous over a longer period time. Workplace health benefits cost 97 percent more than they did in 2002. In the meantime, wages have risen just 33 percent, and inflation has increased 28 percent.

Sixty-one percent of companies offered health benefits this year, one percentage point more than in 2011. Consistent with long-term trends, firms with 50 or more workers are more likely to offer coverage than smaller companies. Just half of firms with fewer than 10 workers provide health insurance, compared to 98 percent of companies with at least 200 employees. The percentage of all employers offering health benefits declined from 66 percent in 2002, according to the survey.

Health care reform so far has had a modest impact on job-based health insurance. A provision of the law enabling people up to age 26 to remain on their parents’ plans is covering 2.9 million young adults, according to the survey. Forty-eight percent of workers are enrolled in a “grandfathered” plan that won’t have to comply with health care reform requirements, such as not charging co-payments for preventive health services, until 2014.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck