Undermining the Health Reform Agenda From Within

Bureaucrats with CMS are determined to pull the plug on a family practice program for bureaucratic reasons, devastating a local government, a local economy in the midst of a recession, an underserved health care population and the Obama Administration’s own health care reform objectives. And if that can happen in one community, it will happen in another and another, with different scenarios but the same results. The administration’s health reform agenda can be undermined from within.

The emerging Medical Home movement is an important component of the Administration’s stated health care agenda. Medical Homes are primary care driven, in an era when the shortage of primary care physicians is accelerating. Thus CMS administrative actions taken to further reduce the supply of primary care physicians is not in the interest of Medical Homes.

Family Practice residency programs not only help develop the supply of community based primary care physicians, they deliver health care services to vulnerable populations, which is again an important component of the Administration’s agenda that CMS is thus undermining.

Where is all of this taking place? As reported in the local paper, the Modesto Bee, in the March 14, 2009 article Stanislaus County doctors program loses its funding: “The Stanislaus Family Medicine Residency Program...has lost its federal funding and that has put its future in doubt. The federal Centers for Medicare and Medicaid Services not only stopped payments to Doctors Medical Center, where the residents are trained, but required the hospital to pay back $19.1 million it received for the program from 2001 to 2008. Because DMC and the county split the costs of the program, the county is on the hook for half that amount.”

A March 30, 2009 California Healthline article, California Medical Residency Program Fights CMS for Funding, elaborates:“Founded in 1935, the program was originally a general practice residency at the public county hospital. It earned family medicine accreditation in 1975. When the county hospital closed in 1997, the residency program was taken over by Doctor's Medical Center, owned by Tenet Healthcare Corporation. The residency program is a key part of the safety net where 22% of county residents rely on Medi-Cal and 16% of the population is unemployed. The 27 residents and 30 primary care doctors who serve as faculty for the program care for about 70,000 patients, handling about 230,000 patient visits annually, according to the California Academy of Family Physicians.”

So why is the plug getting pulled? California Healthline reports that “until 2006, it was business as usual with the residency program training 27 family practice physicians and billing the federal government for support through Medicare reimbursements for education....About 18 months ago, CMS attorneys began questioning the way the program was transferred from the county hospital to the new parent hospital a decade before. Marc Hartstein, deputy director of CMS' hospital and ambulatory policy group, said CMS is following rules laid out in the Balanced Budget Act of 1997. ‘That law puts caps on the numbers of residents in programs," Hartstein said, adding, "This situation arises because of those caps.’ Because Tenet's Doctors Medical Center chose not to take on the assets and liabilities of the county hospital in 1997, ‘that ended the cap that was associated with the previous hospital,’ Hartstein said. In essence, the residency program ceased to qualify for educational funding in 1997 under CMS' interpretation of the regulations. Hartstein attributed the program's funding for several years to errors by unnamed third-party administrative contractors.”

The Modesto Bee adds “when the county hospital closed almost 12 years ago, DMC's parent company, Tenet Healthcare Corp., paid the county $12 million and guaranteed care for patients in the county's indigent health program. The physician training program was transferred to DMC based on a claim that, in effect, it had merged with the county hospital. The federal government provided DMC with $115,000 in annual reimbursements for each of the 27 physician slots, but CMS officials later said they disagreed with the merger theory. The reimbursement was lowered to $75,000 per resident on the premise a new program had been created at DMC. About 18 months ago, CMS attorneys came out with a determination that the program no longer qualified for reimbursements under the Balanced Budget Act of 1997. Some of the act's rules had not been written when the previous determinations were made. CMS also demanded that Doctors Medical Center repay the funding received since 2001. ...The government has said the hospital and the county can apply for reimbursements if they close the program for a year and then reopen with a new program with new faculty, a new director and a new set of residents.”

So CMS initially signed off on the arrangement, reimbursed the program for a number of years, later ruled that the arrangement was not a merger but a new program- so they lowered their reimbursement, and subsequently decided that as a new program, it didn’t qualify for reimbursement at all, and demanded all their money back retroactively. Is it within CMS’ authority to have interpreted this differently? Is CMS’s pulling the plug helping advance their Administration’s health care agenda?Is CMS’s demand of retroactive repayment from a cash starved County government helping their Administration advance their object of economic stimulus?

Yes, No and No.

And watch out in your home town, because CMS oversees such a wide range of health care programs and services. Shuffle the deck a little, and your local community probably has some situation that could be a ticking time bomb for CMS to uncover, and blow up the Administration’s health care and economic stimulus agenda for you too.