March 7th, 2014
Editor’s note: Part 1 of this post discussed the Department of Health and Human Services March 5 bulletin extending until October 1, 2016 its transitional policy permitting the renewal of ACA non-compliant individual and small group health insurance policies. Part 1 also began examining the final 2015 Notice of Benefit and Payment Parameters rule, issued on the same date; that analysis is concluded below. Subsequent installments will discuss two final rules also issued March 5 by the Internal Revenue Service regarding reporting by insurers of minimum essential coverage and reporting by employers on coverage under employer-sponsored health plans.
Reduced notice requirement for new state exchanges. The final 2015 Benefit and Payment Parameters rule requires states that would like to begin operating their own exchanges to notify HHS of this intention by June 15 of the preceding year. Earlier rules had required a year’s notice.
Consumer assistance and privacy. States may permit web brokers to assist individuals, employers, and employees with enrolling in qualified health plans (QHPs) through their exchanges. Agents and brokers must comply with privacy and security standards protecting personally identifiable information and may not use it for marketing. The SHOP exchange, and not the web broker, is responsible for aggregating premiums and forwarding them to insurers. Web brokers must display information on all available QHPs, although insurers may refuse to provide non-appointed brokers with certain information. Web brokers must also provide enrollees with a disclaimer noting that they are not the exchange and may not have full information on all plans.
State exchanges must comply with federal personally identifiable information requirements, but may seek the approval of HHS to use this information to ensure the efficient operation of the exchange if they secure the consent of the individual whose information is to be used. Exchanges that disclose personally identifiable information to non-exchange entities (such as certified application counselors, in-person assisters, brokers, QHP insurers or others) must enter into a contract with these entities ensuring protection of this information. Non-exchange entities that must independently comply with Health Insurance Portability and Accountability Act data privacy and security requirements (such as QHPs) may be deemed to be in compliance with exchange requirements by virtue of their compliance with HIPAA as long as the HIPAA requirements are at least as protective as the exchange requirement and if the entities also comply with additional ACA data protection requirements. Read the rest of this entry »
March 7th, 2014
Quality improvement (QI) and patient safety initiatives are created with the laudable goal of saving lives and reducing “preventable harms” to patients. As the number of QI interventions continues to rise, and as hospitals become increasingly subject to financial pressures and penalties for hospital-acquired conditions (HACs), we believe it is important to consider the impact of the pressure to improve everything at once on hospitals and their staff.
We argue that a strategy that capitalizes on “small wins” is most effective. This approach allows for the creation of steady momentum by first convincing workers they can improve, and then picking some easily obtainable objectives to provide evidence of improvement.
National Quality Improvement Initiatives
Our qualitative team is participating in two large ongoing national quality improvement initiatives, funded by the Agency for Healthcare Research and Quality (AHRQ). Each initiative targets a single HAC and its reduction in participating hospitals. We have visited hospital sites across six states in order to understand why QI initiatives achieve their goals in some settings but not others. To date, we have conducted over 150 interviews with hospital workers ranging from frontline staff in operating rooms and intensive care units to hospital administrators and executive leadership. In interviews for this ethnographic research, one of our interviewees warned us about unrealistic expectations for change: “You cannot go from imperfect to perfect. It’s a slow process.”
While there is much to learn about how to achieve sustainable QI in the environment of patient care, one thing is certain from the growing wisdom of ethnographic studies of QI: buy-in from frontline providers is essential for creating meaningful change. Frontline providers often bristle at expectations from those they believe have little understanding of the demands of their daily work. Requiring health care providers to improve on all mandated measures at once, in an atmosphere of reduced reimbursements and frequent staff shortages, is a goal that risks burnout, discouragement, and apathy — all signs of initiative fatigue. Read the rest of this entry »
March 7th, 2014
Editor’s note: In addition to Jonathan Simon (photo and bio above), this post is coauthored by Daniel Mistak, a graduate student in Jurisprudence and Social Policy at the University of California, Berkeley. He previously earned his juris doctorate from University of California, Berkeley, School of Law. Prior to law school he attained a master’s degree in philosophy, with a focus in bio-ethics, and a master’s degree in genetics and cell biology. This post is published in conjunction with the March issue of Health Affairs, which features a cluster of articles on jails and health.
California’s system of incarceration is in the midst of sweeping changes. Recent shifts in state and federal law, motivated and bolstered by Supreme Court decisions, have created a perfect storm for institutional change. But as with any storm, it can be difficult to predict what can be done to prepare and what will be left when the clouds clear.
What caused this perfect storm in California? In 2011, the Supreme Court found in Brown v. Plata that California’s prisons could not meet the mental and physical health needs of the inmates because of prison overcrowding. To avoid violating the VIII Amendment’s prohibition on cruel and unusual punishment, the Court mandated that California prisons decrease their over-crowded prison populations to 137.5 percent of their design capacity within two years. Governor Jerry Brown signed into law Assembly Bill 109 (‘Realignment’) to facilitate this transition. Read the rest of this entry »
March 7th, 2014
March 5, 2014 was a banner day for Affordable Care Act implementation. The Department of Health and Human Services released its final 2015 Notice of Benefit and Payment Parameters rule (fact sheet here), as well as a bulletin extending until October 1, 2016 its transitional policy permitting the renewal of ACA non-compliant individual and small group health insurance policies. The Internal Revenue Service also issued two final rules regarding reporting by insurers of minimum essential coverage and reporting by employers on coverage under employer-sponsored health plans. (Fact sheet here.)
This post will discuss the HHS bulletin and begin consideration of the benefit and payment parameter rule. Subsequent posts will discuss the remainder of the benefit and payment parameters rule and the IRS rules.
HHS Bulletin On ACA Non-Compliant Policies
On November 14, 2013, the Center for Medicare and Medicaid Services issued a letter to state insurance commissioners informing them that CMS would permit state regulators to allow insurers to renew non-grandfathered health insurance policies in the individual and small group market that did not comply with the 2014 market reform rules for policy years beginning by October 1, 2014. Specifically, renewed 2013 plans did not need to comply with the guaranteed issue and guaranteed renewability requirements; limitations on health status underwriting and preexisting condition exclusions (for adults); the single risk-pool requirement; the prohibition against discrimination; the essential health benefit and clinical trial coverage requirements; and limitations on cost-sharing. (Group plans are not excluded from the preexisting condition and discrimination provisions.) Insurance departments in 27 states allowed insurers to renew 2013 policies, while 21 states and the District of Columbia prohibited renewals.
The March 5, 2014 bulletin permits states and insurers to extend this transitional relief for another two years, that is, for policies renewed prior to October 1, 2016. It also allows states to permit employers with 51 to 100 employees, which are currently considered large employers but will become small employers as of January 1, 2016, to renew their current policies through October 1, 2016. States that had not earlier decided to implement the transitional policy may still do so for 2013 policies renewing in 2014. States may also opt to implement the transitional policy for fewer than two years, or only in the individual or in the small-group market, or only for large employers that become small employers. Read the rest of this entry »
March 6th, 2014
It’s worth sitting up and taking notice when everyone seems to hate what you are doing. Last week, 20 of the 24 members of the sometimes fractious Senate Finance Committee wrote Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner about a Medicare Part D proposed rule CMS published on January 10. They told her that they were “perplexed as to why CMS would propose to fundamentally restructure Part D …” and urged her to scrap the plan.
The House Energy and Commerce Committee held a hearing, also last week, with the hardly neutral title of “Messing with Success: How CMS’ Attack on the Part D Program Will Increase Costs and Reduce Choices for Seniors.” At the hearing, Medicare Chief Jon Blum, one of the most well-liked federal health officials there is, was subjected to a bipartisan, first class, grilling.
These Congressional complaints followed on the heels of a Feb. 28 letter slamming the proposed rule from 277 organizations (with more organizations continuing to sign on) including patient advocates, insurance companies, health plans, pharmacists, employers, and both brand and generic drug companies.
In fairness to CMS, this is only a proposed rule and comment is what they are seeking. Well, it is comment that they are getting. What has led to this firestorm of criticism? Read the rest of this entry »
March 6th, 2014
There exist scientifically promising treatments not being tested further because of insufficient financial incentives. Many of these therapies involve off-label uses of drugs approved by the Food and Drug Administration that are readily available and often inexpensive. Pharmaceutical companies—largely responsible for clinical drug development—cannot justify investing in such clinical trials because they cannot recoup the costs of these studies. However, without prospective data demonstrating efficacy, such treatments will never be adopted as standard of care.
In an era of increasing health care costs and the need for effective therapies in many diseases, it is essential that society finds ways to adopt these “financial orphans.” We propose several potential solutions for the non-profit sector, pharmaceutical companies, health insurers, patient driven research, and others to accomplish this goal.
Drug Development Today
Under today’s drug development model, the vast majority of clinical trials are sponsored by pharmaceutical companies, and the process is lengthy, expensive, and, some have argued, inefficient. The cost of developing a new FDA-approved drug is estimated to exceed $1.2 billion, the average time from lead to market is typically over 10 years, and only 1 in 10 drugs entering a phase I study is finally approved. Thus pharmaceutical companies, seeking to recoup this investment, conduct a return on investment (ROI) calculation with attention to both scientific and financial considerations such as the chances of success and whether the therapy will be sufficiently profitable to justify the high cost of clinical development.
These considerations sometimes lead to inefficient outcomes from society’s perspective in which promising and potentially transformative therapies are not pursued because of improperly designed financial incentives. We call such therapies “financial orphans.” Read the rest of this entry »
March 5th, 2014
Physicians in Congress are on the rise. From 1960 to 2004, only 25 of the 2196 members of Congress were physicians. During an era that brought such fundamental changes to health policy as the creation of Medicare and Medicaid, physicians were disproportionately less likely to hold congressional office than their counterparts in law (979) and in business (298). In recent years, the ranks of physician-representatives have swelled—twenty physicians currently hold seats in the 113th Congress.
This surge in membership comes at a crucial time, for health care has become a defining issue in American politics. The passage of the Affordable Care Act has divided the nation and brought party relations to a standstill. In the 2012 presidential election, health care ranked as the second most important issue to voters, its highest level in twenty years. And with health care spending projected to be the largest long-term contributor to national debt, the nation’s health and economic future depends on sound health policy. What role can this new cadre of physician-representatives play in shaping this process? Read the rest of this entry »
March 4th, 2014
In one provision of its January Notice of Proposed Rulemaking (NPRM), for Medicare Part D and Medicare Advantage, CMS proposed that it will accept no more than two stand-alone prescription drug plan (PDP) bids from each Part D plan sponsor, starting in coverage year 2016. The agency stated two reasons for this proposal. First, it would reduce beneficiary confusion in the Part D market by both lowering the number of choices that they face and ensuring that differences between competing options are clear and meaningful to them. Second, it would address the impact of one source of favorable selection that leads to higher costs for the government and the taxpayer. This note looks at evidence from Part D to help understand the context for this proposal.
Reducing the Number of Plan Offerings
The competitive market design of Part D requires that plan enrollees regularly evaluate their options. Our recent study shows that most Part D enrollees have not changed their plan selection from one year to the next, and seven of ten enrollees in stand-alone PDPs did not switch plans over a five-year period. Both the current CMS guidance and the new CMS proposal stem from the principle that available PDPs offered by a given plan sponsor should have “meaningful differences” to help ensure that beneficiaries are presented with a clear and understandable array of choices. The Part D program in 2014 offers the average beneficiary a choice of about 35 PDPs and 20 Medicare Advantage drug plans.
Currently, a plan sponsor may offer up to one plan with the basic Part D benefit as described in statute (or actuarially equivalent to the basic benefit) and two enhanced plans. If two enhanced plans are offered, a sponsor may enhance the benefit through lowering the deductible, cost sharing, or both. The second plan must add substantial coverage in the coverage gap (“doughnut hole”). Current CMS guidance further encourages plan sponsors to eliminate plans attracting few enrollees. Nevertheless, 330 of the 1,169 PDPs in 2014 have fewer than 1,000 enrollees (239 of them with fewer than 500 enrollees) — the level at which CMS encourages sponsors to consolidate smaller plans with another of the sponsor’s plan options. Read the rest of this entry »
March 4th, 2014
Editor’s note: This is the second post in a Health Affairs Blog series by Catalyst for Payment Reform Executive Director Suzanne Delbanco. Over the coming months, Delbanco will examine how different methods of payment reform are being employed and how well they’re working. The first post in the series provided an overview of payment reform; this post examines pay-for-performance.
One of our core beliefs at Catalyst for Payment Reform (CPR) is that we need to move away from fee-for-service, toward new models that pay for care based on value, not volume. And while our National Scorecard on Payment Reform shows these new payment models are spreading, we still don’t know if they are really delivering the value we hope for — higher-quality care at more affordable prices. So we decided to make 2014 a year “all about the evidence,” taking an in-depth look at different payment reform models and assessing whether they are proving to enhance value. We’re delighted Health Affairs Blog is our partner in this journey. This month we examine pay-for-performance.
What is pay-for-performance? Is it widespread?
A pay-for-performance (P4P) model provides what are typically financial incentives to providers to improve the quality of the care they deliver and/or reduce costs. In CPR’s terminology, pay-for-performance is an “upside only” method of payment reform. The model gives health care providers the chance for a financial upside – such as a bonus — but no added financial risk, or downside. Our 2013 National Scorecard on Payment Reform demonstrated that almost 11 percent of commercial payments are value-oriented; approximately 1.6 percent of commercial payments are fee-for-service with pay-for-performance.
Despite the small portion of dollars flowing through pay-for-performance programs, we know it is a relatively popular model of payment reform. According to a 2010 report issued by the National Conference on State Legislatures (NCSL), an estimated 85 percent of state Medicaid programs were expected to operate some type of pay-for-performance program by 2011. Provisions in the Affordable Care Act expand the amount of pay-for-performance in Medicare as well. Read the rest of this entry »
March 3rd, 2014
Among the groups that stand to benefit from the Affordable Care Act (ACA) are people living with HIV, a population with significant and high-cost health care needs but one that has historically faced barriers to coverage and care. While several provisions of the ACA are of particular importance for this population, two are expected to have the most far reaching effects on coverage – the expansion of Medicaid eligibility to include most Americans with incomes up to 138 percent of the federal poverty level (FPL) (although the Supreme Court’s 2012 decision effectively made the Medicaid expansion optional for states) and the creation of new Health Insurance Marketplaces where individuals can purchase private coverage, including subsidized coverage for those with lower incomes. Others include an end to pre-existing condition exclusions, a ban on premium rate setting based on health status, and an end to annual and lifetime caps on coverage, all of which posed barriers for people with HIV prior to the ACA.
Despite the importance of these changes for people with HIV, little has been known about how many are estimated to gain new coverage. While there are more people living with HIV in the U.S. than ever before (an estimated 1.1 million), almost two-thirds are not yet in regular care, either because they have not yet been diagnosed or have not been retained in care, thus challenging efforts to develop nationally representative estimates of the population of people with HIV in the U.S. by income and coverage. Indeed, a recent Institute of Medicine study concluded that no single data source was yet available that could establish baseline estimates of coverage before 2014; instead, the Committee recommended that multiple data sources should be considered.
Examining The Population Of Americans With HIV/AIDS
Two new studies, each using different data sources, shed light on this question — our study from the Kaiser Family Foundation, conducted in collaboration with researchers at CDC, and Snider et. al’s analysis published in the March issue of Health Affairs. While the two studies use different data sources and methodological approaches, they arrive at a similar conclusion: significant shares of people with HIV stand to benefit from Medicaid expansion (as well as subsidized coverage in Health Insurance Marketplaces), but state choices about Medicaid expansion will affect the ACA’s reach for this population. As such, both studies highlight the continued importance of the Ryan White HIV/AIDS Program (Ryan White Program), first created in 1990, which has become a critical safety net for people with HIV who have no coverage or face limits in their coverage. Read the rest of this entry »