Late last Tuesday night, only hours after Republican leaders announced they were pulling the Graham-Cassidy repeal and replace bill from Senate consideration, the body unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 (the Act).

Aiming to improve care for seniors with chronic conditions, the Act first passed the Senate Finance Committee in May of this year. A Health Affairs blog post by former Senators Tom Daschle and Bill Frist, along with in-depth analysis from the Bipartisan Policy Committee, helpfully outline the need for a bipartisan effort to address these issues.

This post will outline the key components of the legislation, assesses its outlook in the House, and considers what its progress may tell us about the prospect for more bipartisan action on health care in the future. The Act includes offsets and has been scored by the Congressional Budget Office (CBO) as being budget neutral, so its sponsors have “checked the boxes” they need to move forward when the political will materializes.

Home-Based Care

The Act would extend the Affordable Care Act (ACA)-enacted Independence at Home (IAH) demonstration for two years and increase the number of beneficiaries that can be included in the program from 10,000 to 15,000. The IAH demonstration provides shared savings incentive payments to medical teams providing high quality home-based care to Medicare beneficiaries with multiple chronic conditions and functional limitations. The program was slated to expire on September 30 of this year, so Congress will need to act fast to avoid its termination.

Managed And Accountable Care

A key focus of the Act is improving and expanding the degree to which Medicare beneficiaries can participate in managed or accountable care programs. Section 201 would make the Medicare Advantage (MA) Special Needs Plan (SNP) program permanent. SNPs, which are the only type of MA plans that can limit enrollment based on patient characteristics, were first established by Congress in 2003 and have been subject to periodic extensions ever since. They include plans for beneficiaries eligible for both Medicare and Medicaid (so-called “dual eligibles” or “duals”) (D-SNPs), those residing in medical institutions (I-SNPs), and those with chronic illnesses (C-SNPs).

This provision of the Act would require enhanced coordination between states and the Federal government for D-SNPs, especially with regard to appeal and grievance protocols, while requiring all of these plans to have direct contracts with the states in which they operate. Starting in 2020, care management strategies employed by C-SNPs would be subject to heightened standards, with CMS required to update the list of qualifying chronic conditions these plans can target every five years. The CBO scored the provision as costing $123 million over the next 10 years.

Currently, the Center for Medicare and Medicaid Innovation (CMMI) is piloting value-based insurance design (VBID) for MA plans, primarily in the northeast. Under this model, plans may adapt their benefit structures to promote treatments that generate the most value for enrollees based on their medical needs. The Act would expand the pilot to allow any willing MA plan to participate.

The Act would also expand the array of extra benefits MA plans may offer to chronically ill beneficiaries. When their premiums are below the benchmark for their region, plans can use the corresponding “rebates” they receive to add coverage of health-related services beyond the traditional, mandatory Medicare package for all of their enrollees. For chronically ill beneficiaries, the legislation would allow plans to provide more benefits that need not be directly medically related (e.g., social and functional supports) and can be restricted to certain patients based on their conditions.

Beyond the traditional managed care approach offered by MA plans, since passage of the ACA, CMS has deployed various versions of the accountable care organization (ACO) model. Generally, ACOs can earn shared savings incentive payments if they use less resources to deliver the same or better quality of care. Medicare beneficiaries are assigned to ACOs based on where they receive their primary care services. ACOs have complained that retrospective assignment of beneficiaries (based on primary care usage patterns) can make it difficult to proactively design care plans for their cohort.

The Act attempts to resolve this problem in two ways. For models where patients are currently retrospectively assigned, ACOs would be allowed to elect prospective assignment. The downside of this approach is that some of those patients may not actually see a primary care physician in the ACO’s network during that forthcoming year, but the upside is the organization knows in advance who its patients are and can plan accordingly to improve care quality and efficiency. Also, the Act would allow beneficiaries who would not be assigned to an ACO based on the attribution algorithms to choose to participate in an ACO appropriate for them.

Further, the legislation would establish the ACO Beneficiary Incentive Program, which authorizes these organizations to provide cash incentives to their patients to receive appropriate primary care services, including preventive care. The payments of up to 20 dollars would be funded by the ACOs themselves and not reimbursable by Medicare. In other words, the ACO must believe the service will deliver a return on their investment in the form of improved patient health (and thus less need for acute health care services). CBO believes this change will save money over time.

Telehealth And Other Technologies

Several sections of the CHRONIC Care Act are dedicated to expanding access to telehealth. Currently, Medicare limits the availability of these services to beneficiaries who receive the treatment at certain sites (like a hospital or physician office) located in rural areas.

First, the Act would allow patients on home dialysis to receive the required monthly clinical assessment using telehealth at their home or a dialysis center, without any geographic restrictions. Patients would still need to see their nephrologist in person once every three months.

Second, the Act would expand telehealth services for patients presenting with stroke symptoms by eliminating the geographic restrictions that limit it to predominantly rural areas. This is a relatively costly aspect of the bill, with CBO suggesting it would increase outlays by $180 million over the next decade.

Third, the Act would allow Medicare Advantage plans to cover telehealth services beyond the restricted approaches currently covered under traditional Medicare. Plans can do this now as a supplemental benefit funded by the rebates described above; under the Act, they would be able to build these services into their “base” premium bids. With MA enrollment forecasted to exceed 34 percent of all Medicare enrollees in 2018, this section may be the most impactful of all of the Act’s provisions. CBO said this provision will save $80 million over the next 10 years.

Fourth, the legislation would expand use of telehealth by ACOs that face “downside risk: i.e., are subject to penalties if the resources they use to care for patients exceed projected benchmarks. ACOs could deliver telehealth services to a patient’s home regardless of geographic location.

As you can see, policymakers are more amenable to expanding use of telehealth when there are financial incentives for providers (or health plans) to restrain costs. They have historically resisted expanding telehealth in a fee-for-service context where they believe doing so would often add to (not replace) services already otherwise being delivered.

GAO Inquiries

There are three mandatory Government Accountability Office (GAO) reports in the Act, signaling that Congress is interested in the issues involved but not yet prepared to legislate in a definitive way on them. The first report would assess the pros and cons of a new reimbursement code for formulation of a comprehensive plan of care for beneficiaries diagnosed with a serious or life-threatening illness, such as cancer or Alzheimer’s.

The second GAO report would examine medication synchronization programs that attempt to align the dates on which beneficiaries with multiple prescriptions are required to pick up the 30-day fills for their respective medications. GAO will analyze whether aligning dispensing in this way can have a positive impact on medication adherence, patient outcomes, and patient satisfaction.

The third report would investigate the potential inclusion of obesity-related drug therapies in Medicare Part D, where they are currently banned. With AMA’s 2013 declaration that obesity is a disease, and the robust documentation of health risks and comorbidities associated with it, removal of this long-standing barrier may be coming in the near future.

Next Steps

While the House leadership has not yet signaled its formal posture toward the Senate-passed legislation, the chamber has advanced a number of related bills that demonstrate it is amenable to the goals of the package.

In September, the health subcommittees of the House committees of jurisdiction (see here & here) advanced three measures that mirror components of the Act. These included expanding telehealth services for stroke patients and under Medicare Advantage, as well as extending the Independence at Home demonstration.

Also, last July, the House Ways & Means Committee passed legislation expanding access to telehealth for dialysis patients and extending MA SNPs, a topic on which their counterparts at the Energy & Commerce Subcommittee on Health subsequently held had a hearing.

Some important differences between the approaches to these issues exist, however. For example, House legislation includes Sense of the Congress provisions that access to telehealth under traditional Medicare Part B should maintain parity with what Medicare Advantage allows, a principal important to many members. Furthermore, while the House SNP bill extends I-SNPs permanently, its authorization of C-SNPs and D-SNPs would expire in five years.

For this and other reasons, finding agreement between the House and Senate on the entirety of policies the chambers would deem important to the chronically ill will prove challenging. There are a host of must-pass health care-related items waiting in the wings – most notably the need to extend funding for the Children’s Health Insurance Program (CHIP) – with a shrinking number of work days this year for a Congress otherwise ready to move on to tax reform and other issues. Having said that, the need to enact these measures could create an attractive vehicle to attach some or all of these policies to before the holidays.

Harbinger of Bipartisanship?

It is fairly rare for a legislative package as robust as this to pass the Senate by unanimous consent. Given the timing of that action immediately after withdrawal of Graham-Cassidy, it would be tempting to conclude that we have quickly moved into a new era of bipartisan collaboration, at least on issues not ostensibly related to the ACA.

But it is worth keeping in mind that the fallout from the eight-month repeal and replace campaign is still raw, with lingering acrimony and blame among Republican circles and burgeoning proliferation of primary opponents for moderates. Democrats, meanwhile, believe they have earned the approval of the public for their work opposing ACA repeal; they will not passively hand Republicans victories that the GOP will characterize as demonstrating commitment to helping those in need. On top of that, we are now launching into a highly partisan debate over tax reform under the same divisive reconciliation process deployed for repeal and replace.

Despite this obligatory dose of pessimism, there is also a strong appetite among a fairly silent majority of members on both sides to get things done. They are frustrated with the acrimony (and futility) of recent months and ready to produce some legislative accomplishments, not just for the sake of their personal satisfaction but for their political wellbeing.

Hope springs eternal that our leaders will look beyond partisan bickering to adopt well-reasoned policies that show promise in improving people’s health. Enactment of the Act would be a good step in that direction.