Mnet Health News delivers the latest news and information articles for the world of healthcare.

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Patients Really Do Want to Discuss Price & Payment Options Prior to Surgery

Recent surveys show that more than ¾ of patients believe that it is either important, or very important to know what their costs are going to be before a procedure or surgery.  More than half of those polled also said they would like to discuss options for financing prior to receiving treatment.  However, a majority of providers are not making these options available to patients according to the results of a patient survey conducted by ORC International and HealthFirst Financial.

This survey showed that only 18 percent of those surveyed said that their provider had spoken to them at any point in time over the previous two-year period of time.  57 percent of respondents said they thought it important, or very important for providers to offer payment programs for patients; offering payment plans without any interest being charged.  Only 8 percent of those surveyed had ever been offered a low or no interest finance option by their provider.

Of the millennials aged 18 to 36 years old, 40 percent said that they would be likely or very likely to switch to a different provider if they were able to offer them low or no interest finance options to resolve their medical bills.  A full 29 percent of respondents to the survey also said that they would move to another provider if the new provider was willing to offer them the option of an affordable payment plan.

No matter what the income level of those responding to the survey; everyone worries about the cost of healthcare.  42 percent are either concerned or very concerned about whether they can pay for the self-pay portion of their medical bills in the next two years.  For respondents making less than $35,000 per year, that same number jumps to 54 percent but falls to 24 percent for those making $100,000 or more per year.  

Patients would like to know what they will have to pay as early on in the process as possible. 77 percent of those surveyed said it was either important, or very important that providers make it clear what the cost of a procedure or surgery would be prior to the date of surgery.  63 percent stated that they found it important or very important that pricing lists are published detailing costs for common procedures.

People now find that they have less room in their budget to take on the self-pay portion of their medical bills.  53 percent of those polled said they were concerned about their ability to pay $1000 in medical bills; while 35 percent worried about paying $500 in medical bills and 16 percent worried about paying $250 or less. 

The reasons the survey was commissioned was to understand how consumers are dealing with medical expenses now and in the future.  The survey makes it clear that when providers don’t educate their patients about options for finance, patients are willing to switch providers altogether or delay necessary care while they search for necessary help.  Neither scenario is good for the financial health and welfare of a provider though; so it’s extremely important for providers to develop a plan to meet the needs of patients even as they continue to evolve.

 

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Medical Debt Reporting Requirements Take Effect in September: What You Need to Know

The National Consumer Assistance Plan (NCAP) has brought many changes to data furnishers, and there are more on the way, including in the healthcare collections field.  For a refresher, NCAP is the result of an agreement between the big three consumer reporting agencies (Experian, Equifax and TransUnion) and multiple state attorneys general.  The final result is a set of reforms that are reshaping, in many ways, how data is furnished to CRAs. 

While many of the NCAP reforms have already been implemented, a new round of reforms is set to take effect. Medical debt continues to be a huge market in the credit and collection industry. In 2013, healthcare-related

debt represented nearly 38 percent of debt collected through the third-party collection industry, according to the ACA International white paper, “The Role of Third Party Debt Collection in the U.S. Economy.”

 

Required by Sept. 15, 2017 for Debt Collectors and Debt Buyers

Do not report medical debt collection accounts (as defined by Creditor Classification Code 02) until they are at least 180 days past the date of first delinquency with the original creditor that led to the account being sold or place for collection.

Delete accounts that are being paid by insurance or were paid in full through insurance. This does not include accounts paid in full by the consumer. The date of first delinquency with the original creditor needs to be determined by the provider and furnisher based on the underlying financial agreements and the creditor’s policies for when an account becomes “delinquent.”

Date of delinquency, as defined in the Fair Credit Reporting Act, is “the month and year of the commencement of the delinquency on the account that immediately preceded collection activity, charge to provide or loss, or similar action.”

 

Practical Considerations

Now is the time to tackle these changes in order to make the transition smooth. Begin working with your operations personnel to update your policies and procedures and train your staff. Consult with other agencies that you may be in contact with to see how they are dealing with the new requirements. Educate clients on NCAP and work with them as you move forward. 

Most importantly, carefully review any information provided by the CRAs and contact the CRAs as soon as you have questions. The CRAs are the entities steering the implementation of the NCAP, so they are in the best position to provide clarification to furnishers.  

 

Andrew Pavlik formerly served as ACA International’s senior compliance analyst.

 

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Healthcare Providers Fall Within Grasp of the CFPB

Doctor Works On Laptop

Healthcare providers and their vendors may not fully realize that they must answer to the Consumer Financial Protection Bureau (CFPB).  Providers, specifically, are not yet caught in the crosshairs of the bureau, but those providers that do report delinquent accounts to credit reporting agencies, make use of collection agencies (both first and third party), or collect on patient accounts can fall under the auspices of the CFPB.

Patients have the ability to complain to the CFPB about the way providers, central billing offices, or first and third-party vendors engaging in collection activities on behalf of providers carry out their collection activities.  When a complaint is sent to the CFPB, the group that the complaint was lodged against is required to provide a timely response to the CFPB.  Clearly then, the healthcare industry finds itself within the grasp of the CFPB.

The healthcare community is likely to face such scenarios more frequently due to the rise in self-pay brought on by the uninsured and those with high-deductible health insurance plans.  The changes seen in the healthcare field in recent years have created an atmosphere that encourages healthcare providers to rely on vendors to care for receivables while finding ways to improve the revenue cycle.  As these issues continue to evolve, it will become even more important to understand the risks associated with compliance that arise from time to time.

Clearly things have changed; it used to be that compliance was managed through a vendor contract, making the vendor responsible for any risks that might arise pertaining to compliance.  In those days, it was up to each vendor as to whether they actually followed along with federal and state regulations, which technically kept providers out of the loop.  But this is no longer the case.

In our time, the CFPB conducts examinations that take into consideration the entire chain of custody; which doesn’t allow for the blame to be maneuvered back and forth along the chain of custody.  This climate makes it imperative for providers and vendors to work together in the best interests of everyone involved.

The CFPB now requires that those taking part in the collection of payments from patients will ensure that their vendor partners comply with federal consumer financial law.  Of course, this can be a difficult task to tend to since medical providers are typically focused on providing care for patients.  It is clear, though, that the CFPB that there is a substantial risk when debt stemming from medical expenses is being collected or credit reported.

There shouldn’t be any doubt that the healthcare community is now well within the grasp of the CFPB; and the reasons appear to be for the benefit of patients.  Medical debt can prove to be quite daunting for many patients and the insurance industry trend of shifting medical costs back onto patients is seen by many as a crisis.  Compliance with state and federal laws should be a top priority for your vendor partners and they should be working diligently to ensure that the best interests of your practice are always being met.  Are you getting this level of service from your vendors?

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News & Notes

Minnesota Nurses Association Buys Past-Due Debts

In June, the Minnesota Nurses Association purchased the past-due accounts of 1,800 families with medical debt as a way to give back for the support they received during strikes against Allina Health. The debt totaled $2.6 million secured for $28,000 between the MNA and New York-based nonprofit RIP Medical Debt. The credit reporting bureaus received notification that the consumers’ debts were paid.  http://ow.ly/YvcE30cOGRj

CMS Issues Long-Term Data on Health Spending by State

The recession had a “sustained impact” on health spending and insurance coverage, according to a Centers for Medicare and Medicaid Services report on spending. “Every state experienced slower growth in per capita personal healthcare spending from 2010-2013 than experienced during the period 2004-2009,” according to the report.  http://ow.ly/cIHL30cOKxZ

Pace of Healthcare Sector Expansion Slows

The healthcare industry added 24,300 new jobs in May and overall monthly job growth this year is lagging behind 2015 and 2016.  Job growth through the first five months of this year averages less than 22,000 jobs each month, compared to 32,000 monthly in 2015 and 2016, according to the Altarum Center for Sustainable Health Spending. http://ow.ly/HUR930cQhRP

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CMS Proposes Updates to Reduce Burdens Under Quality Payment Program in 2018

The Centers for Medicare and Medicaid Services has proposed changes to the Quality Payment Program instituted by the Medicare Access and CHIP Reauthorization Act of 2015 that aim to simplify the program.  The proposed changes would occur in the second year of the Quality Payment Program and would especially help streamline the requirements for small, independent and rural healthcare practices, “while ensuring fiscal sustainability and high-quality care within Medicare,” CMS reports (http://ow.ly/U9rN30cQpuA.)

Under the program, healthcare providers that bill more than $30,000 to Medicare Part B and care for more than 100 patients a year should start recording their quality data and documenting how they are using technology to support their practice, ACA International’s Collector magazine editor Anne Rosso May previously reported.  

The first performance period of the program is currently underway and during this time providers can pick their pace to report data to Medicare. They can choose to test the Quality Payment Program on a limited basis, participate for only part of the calendar year or participate for the full calendar year. This reduced set of requirements for 2017 gives providers time to fine-tune their basic infrastructure and get familiar with what’s expected of them.

The proposed rule for 2018, “would amend some existing requirements and also contains new policies for doctors and clinicians participating in the Quality Payment Program that would encourage participation in either Advanced Alternative Payment Models or the Meritbased Incentive Payment System,” CMS reports.  CMS has also used feedback from healthcare providers to craft the second year of the program.

“We’ve heard the concerns that too many quality programs, technology requirements, and measures get between the doctor and the patient,” said CMS Administrator Seema Verma in the news release.  “That’s why we’re taking a hard look at reducing burdens. By proposing this rule, we aim to improve Medicare by helping doctors and clinicians concentrate on caring for their patients rather than filling out paperwork.”

Healthcare providers who participate in Medicare serve more than 57 million seniors and the Quality Payment Program is designed to promote greater value within the industry.  If finalized, the proposed rule would further advance the agency’s goals of regulatory relief, program simplification, and state and local flexibility in the creation of innovative approaches to healthcare delivery, CMS reports. 

More information on the Quality Payment Program is available here: qpp.cms.gov and in a fact sheet from CMS: http://ow.ly/CXKn30dRMTH

 

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Patient Credit Scores Get Grace Period Following Healthcare Services.

For many, an unexpected healthcare crisis can quickly lead to a financial crisis.  Surveys show that slightly more than half of all debt showing up on American’s credit reports are related to expenses from the medical industry.  Sadly, this can quickly lead to a less-than-satisfactory credit report.  However, changes in credit agency evaluation and reporting of medical debt are currently in process and are designed to reduce the pain from financial consequences associated with the rise of a healthcare issue.

The three major credit reporting agencies, Equifax, TransUnion, and Experian, will begin setting a 180-waiting period on medical debt before including it on a patient’s credit report starting on September 15th.  The rationale behind this is to give a 6-month period of time to patients to give them the opportunity to resolve and delay in payment from insurers as well as resolving any disputes that might arise between patient and insurer.

Additionally, the three credit bureaus are set to begin removing medical debt from the credit reports of patients as soon as the debt has finally been resolved by a medical insurer; although some models do not currently penalize the consumer for medical debt.

The need for change was spurred on by states working to bring aid to consumers.  The first was a settlement in 2015 that was negotiated by the Attorney General of New York, Eric Schneiderman.  Schneiderman and the three credit reporting agencies came to an agreement and the changes agreed upon will be enacted nationwide.  Currently, most hospitals, ASC’s, and medical providers choose to hire collection vendors to handle accounts once they have become 30-60 days past due.  

A 2014 report from the Consumer Financial Protection Bureau (CFPB) showed that forty-three million Americans had medical debt in collections that was adversely affecting their credit reports.  A noteworthy finding was that the average amount of medical debt in collections was a mere $579.00 as opposed to the typical $1000.00 dinging the credit reports of those with non-medical debt.  Even more noteworthy is the fact that for 15 million of those with blemishes to their credit, medical debt was the only issue for them.

In the era of high deductible health plans (HDHP) which carry an extremely high financial responsibility for the policyholder; it might not be too difficult to understand how this situation has occurred.  It’s clear that many who would previously have had good credit are now faced with a large self-pay portion for health services which can be daunting.

While credit reports are designed to demonstrate the likelihood of a consumer paying debt that he or she has accrued; some credit scoring companies such as VantageScore & FICO have adjusted their models to account for medical debt because they do not believe it is an accurate predictor of whether or not a consumer is a good credit risk.  In fact, FICO has stated that consumers with medical accounts are typically less inclined to default on their accounts than those with non-medical accounts.

Both FICO and VantageScore are now updating their models to differentiate between debt that is medical and that which is non-medical.  Those who have medical debt in collections will now receive a smaller penalty than those with non-medical collections; a change that can make a big difference in the lives of American consumers.  So far, however, the one caveat is that many lenders and banks have not yet adapted to this new credit-scoring methodology.  Because of this, even though medical debt should not be impacting consumer credit as much; for many nothing has changed yet.

 

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Consumers Expect Higher Costs Under American Health Care Act

Since the U.S. House of Representatives approved the American Health Care Act (AHCA) on May 4 and the U.S. Senate, at press time, continued to review the plan, consumers overall say they have an “unfavorable” view of the legislation and are pessimistic about its impact on their healthcare costs and quality of care, according to the Henry J. Kaiser Family Foundation Health Tracking Poll.  Fifty-five percent of respondents to the poll said they have an unfavorable view of the AHCA and 31 percent said they have a favorable view of the plan to repeal and replace the Affordable Care Act, according to a news release from the Kaiser Family Foundation.

“There is also a considerable enthusiasm gap with a larger share saying that they have a ‘very unfavorable’ view (40 percent) than saying they have a ‘very favorable’ view (12 percent),” it states.  Consumers are more pessimistic about the healthcare plan now compared to in December, after the elections, but before the proposal in the 115th Congress was introduced.  Forty-five percent of respondents to the poll in May said the AHCA would result in higher healthcare costs compared to 28 percent who provided that response in December.

“In addition, a third now expect their ability to get and keep health insurance and the quality of their healthcare to get worse under the pending bill, compared to about one in five that said so in December,” according to the news release.  The poll also shows that 55 percent of respondents want the U.S. Senate to make significant changes to the version of the AHCA passed in the House or not pass the legislation. The Henry J. Kaiser Family Foundation has been following the public opinion on the Affordable Care Act since 2010. The May poll shows consumers continue to have more favorable views of the Affordable Care Act than unfavorable, 49 percent and 42 percent, respectively.  Additional findings in the poll include:

-Thirty-one percent of consumers have favorable views of the AHCA.

-Republicans have more favorable views of the AHCA (67 percent) than of the Affordable Care Act (12 percent.) Among Democrats and independents, 48 percent have more favorable views of the Affordable Care Act than of the AHCA (30 percent.)

-However, a majority of consumers in the poll (74 percent) say it is “likely” that the president and Congress will move forward with repealing and replacing the Affordable Care Act.

See a graph based on data from the poll in Data Watch. 

More information: http://ow.ly/MMQH30cg9qk

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Out-of-Pocket Costs Catching up with Medicare Beneficiaries

Medicare beneficiaries are facing higher out-of-pocket costs that amount to a “substantial” share of their income, according to an issue brief from The Commonwealth Fund, “Medicare Beneficiaries’ High Out-of -Pocket Costs: Cost Burdens by Income and Health Status.”  There are 56 million people, or 17 percent of the U.S. population, who rely on Medicare, according to the report. By 2024, one-fifth of the population will have Medicare coverage. The benefits exclude dental, vision, hearing and long-term services coverage, and there is no limit on out-of-pocket costs for the covered services, it states.

As more consumers become eligible for Medicare, The Commonwealth Fund reports they will find the need to supplement their coverage, “since the program has relatively high cost-sharing and no limit on patient liability for covered benefits.”  Research on beneficiaries’ financial burdens for the brief is based on the 2012 Medicare Current Beneficiary Survey, with 11,299 responses and population and spending data projected to 2016.  The respondents shared their experiences with access to care, medical services and spending activity, including costs for services not covered by Medicare.

Overall, the survey shows beneficiaries spent an average of $3,024 in out-of-pocket costs each year, according to the report. Findings also include that 15 million Medicare beneficiaries spent 20 percent or more of their income on healthcare premiums plus medical care, including cost-sharing and services that are not covered, it states.  Medicare beneficiaries also face costs from a separate private plan for prescription drugs.

“If they want to buy private Medigap supplemental coverage for cost-sharing, they incur significant additional premiums,” according to the report.  “Even after they pay for supplemental drug and Medigap plans, beneficiaries face the cost of dental, hearing, vision, and long-term services—all excluded from Medicare. For beneficiaries with multiple illnesses or serious functional limitations, out-of-pocket costs can easily add up to thousands of dollars per year.”  Findings on costs for Medicare beneficiaries also include:

-Hospitalization costs for beneficiaries are $1,300 and they pay 20 percent of bills for physician care.

-They also pay a $1,600 annual premium for Medicare Part B medical services.

-Annual Medigap, the supplemental coverage for Medicare cost sharing, premiums are $2,000 per beneficiary, but can be significantly higher in some states. “Medigap has notably high overhead costs: administrative costs and profits absorb 20 percent of premiums on average.”

-Private Medicare Advantage plans are available for beneficiaries interested in opting out of traditional Medicare plans. While those plans have lower cost-sharing in general, it has increased significantly in recent years.

Overall, the report shows that 5.4 million beneficiaries with only Medicare and no supplemental coverage are subject to higher healthcare costs.  “These beneficiaries spent an estimated $5,374 on out-of-pocket costs in 2016 compared to $2,587 for beneficiaries who received supplemental coverage from Medicaid. With incomes too high to qualify for Medicaid but too low to afford supplemental coverage, 32 percent of Medicare-only beneficiaries spent 10 percent or more of their income on health care,” according to the report.

Financial burdens and unmet needs from Medicare leave beneficiaries at risk.  As Medicare enters its sixth decade and the Baby Boom population becomes eligible, the costs of the program will increase, likely placing it on the policy agenda,” the report concludes.  “Financial burdens and access gaps highlight the need to approach reform with caution.  Already-high burdens suggest restructuring cost-sharing to ensure affordability and to provide relief for low-income beneficiaries,” the report concludes.

More information:  http://ow.ly/iCQY30cc4m8

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Repeal of Obamacare Likely to Grow Number of Self-Pay Patients 

While Congress moves forward in their effort to repeal the Affordable Care Act (ACA), a new report points out that the changes anticipated appear to point to an increase in the number of self-pay patients; meaning less revenue for medical providers historically.  This analysis has been provided by accounting and consulting firm Crowe Horwath.  The report, “Self-Pay Becomes Ground Zero for Hospital Margins: Lower Net Revenue Realization Impact Follows,” used data taken from their revenue cycle analytics platform.  The report made use of the analysis of a sampling of 357 hospitals in states where Medicaid had expanded.

Hospitals in states that had expanded their Medicaid coverage between 2013 and 2016 witnessed their number of patients who were covered by Medicaid increase from 12.3 percent to 18.3 percent during that time.  During that same time, patient self-pay dropped from 7.4 in 2013 to 3.5 in 2016; a drop of 4 percent.  Crowe Horwath is now pointing out that with so much uncertainty in healthcare, that medical providers should prepare for growth in self-pay patients.

Medical provider cash flow is likely to be adversely affected, according to the report, as the average self-pay patient remains in the AR cycle for about 96 days whereas those with Medicaid balances typically only do so for about 64 days.  Not to mention the current trend of insureds moving to high-deductible health plans, an insurance model with a mix of self-pay and insurance coverage, is set to continue growing.  The Crowe Horwath analysis plainly states that the combination of growth in HDHP insurance policies added to a full repeal of the ACA will cause an increase in self-pay patients of 4.2 percent.  The report also points out that this situation will decrease revenue by 2.8 percent.

Crowe Horwath recommends several common-sense practices for providers in dealing with self-pay.  One thing that can be very helpful is to make use of tools that determine a patient’s capabilities for paying.  Another good practice is to create positive interactions pertaining to the financial portion of patient experience.  It is also valuable to train attention on those patients who have the ability to pay for their out-of-pocket expenses.  Providing multiple payment options, affordable payment plans, discounts and even help with Medicaid enrollment forms will all be beneficial.

Lastly, giving patients the advantage of price transparency and the opportunity to shop around and even the ability to negotiate prices will all help providers weather the storm on the horizon that’s been created by the rise of HDHP’s combined with the effects of the likely ACA repeal.

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News & Notes

 

Access to Care, Health, Improve under Medicaid Expansion

A Journal of Health Affairs study of states that expanded Medicaid under the Affordable Care Act shows declining uninsured rates and annual out-of-pocket-costs, Fiercehealthcare reports. For example, in Kentucky, the uninsured rate dropped to 7.4 percent in 2016 and low-income consumers in Kentucky and Arkansas saw a $337 decline in annual costs, according to the article.  http://ow.ly/9q4f30caBqY

Pace of Healthcare Job Growth Continues to Slow

Healthcare job growth has slowed compared to the past two years, according to the monthly report from the Altarum Institute. There were 19,500 new healthcare jobs in April and the average for the first four months of this year is just under 20,000 jobs each month, “a considerable decrease from the 32,000 per month seen in 2015 and 2016,” according to the report.  http://ow.ly/XHpn30ccfDP

The State of Hospital Employee Turnover

A “Leaders for Today” survey on hospital staff hiring and turnover shows a high rate of turnover in the industry. For example, 42.8 percent of respondents said they have worked with their current hospital for fewer than two years and 65.7 percent said it’s been fewer than five years.  http://ow.ly/cYCu30cceX0

 

 

 

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Hospital Merger Activity Continues to Increase

Hospital merger and acquisitions continue to increase, including a notable rise in transactions among large healthcare providers, according to an analysis of industry activity by Kaufman, Hall & Associates LLC.  In the first quarter of 2017, hospital and health system transactions increased 8 percent from 25 to 27 compared to the first quarter of last year, according to a news release from the firm.

“The increase follows another year of continued growth, with transactions climbing from 66 announced deals in 2010 to 102 in 2016. The overall trend illustrates that healthcare organizations across the country continue to seek new efficiencies and capabilities for a transforming industry,” it states. “The first quarter was particularly notable for an uptick in transactions among large organizations, with three announced deals targeting organizations with nearly $1 billion or more in revenues. 2016 saw four such deals announced in 12 months.”  Additional transactions among the larger organizations are expected.  

“Hospitals and health system executives are looking for strategic opportunities to ensure the continued growth and success of their organizations amongst disruptive forces, including innovative competitors, declining payments, flat or decreasing inpatient volumes, and increasing price sensitivities among consumers,” said Anu Singh, managing director at Kaufman Hall, in the news release. “As the number of independent hospitals declines, organizations are seeking to build new capabilities and economies of scale through partnerships.”

More information: http://ow.ly/1JmB30cc6DY

 

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National Poll Shows Healthcare Costs Top Financial Concerns

 

While Americans always seem to have something to be concerned about; a new national poll from Gallup shows that Americans are most concerned today with healthcare costs when considering ALL financial concerns for those living in the United States.  The poll further went on to show that a majority of those living in America believe that the Federal government should also make it possible for all Americans to have healthcare coverage.

Two other polls that were recently published also point out that most citizens of the United States are concerned about healthcare coverage for themselves and their families.  In fact, a growing number of poll respondents now appear to be favoring a single-payer healthcare system.

Gallup points out that some of the anxiety around the topic of healthcare could be due to all of the uncertainty regarding the current healthcare policy and the effort to repeal and replace the law.  In 2010, healthcare concerns spiked as the ACA was being signed into law and many Americans made clear that the costs of healthcare were their top concern.

While healthcare costs were the top anxiety for Americans at 19 percent, other financial concerns cited by those who responded to the poll included high debt at 11 percent, college expenses at 10 percent and lack of money at 10 percent.

One bright spot worth noting is that some financial anxieties have lessened in recent years.  While 10% of respondents say low wages are their families biggest financial problem; this percentage is the lowest number seen since before the financial crisis of 2008 began.

 

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