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Medicare Integrate: A New Benefit Option For Medicare Beneficiaries

July 23rd, 2013
by Ken Thorpe

I. The Need for Medicare Reform

Policy options for making the Medicare program sustainable over the long run will have to identify approaches that reduce costs and improve the quality of care delivered. Effective interventions will be ones that target the key cost drivers in the system, chronic diseases. Since 1987, 10 percent of the growth in Medicare spending is associated with a doubling of obesity among seniors. Moreover, over half the Medicare population receives treatment for five or more chronic conditions during the year, accounting for nearly 80 percent of spending.

My earlier paper, “The Medicare Advantage Experience: Lessons for Reform to Original Medicare,” identified some best-practice approaches for prevention and care coordination derived from Medicare Advantage plans and other private-sector delivery models. Clearly the original Medicare program needs comprehensive care coordination and more effective approaches for reducing the rise in chronic disease incidence and prevalence.

This post outlines a plan to add a new Medicare option featuring evidence-based care coordination and prevention, with the goal of improving the health care outcomes for Medicare beneficiaries while reducing costs for the federal government. Others have set forth related plans, indicating that there is a momentum building behind the goal of more effectively addressing chronic disease in the Medicare program.

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Reforming How We Pay For Health Care: The Role Of Bundled Payments

December 13th, 2012
by Ken Thorpe

Structural reforms to the Medicare and Medicaid programs will be on the table as the debate over entitlement reform intensifies. There are three areas of opportunity for changing our entitlement programs: adding prevention initiatives that truly slow or reduce the growth in chronic disease prevalence; introducing care coordination into the original Medicare program; and reforming how we pay health care providers.

On November 30th, the Centers for Medicare and Medicaid Services (CMS) provided additional information regarding the implementation of the Bundled Payment for Care Improvement (BPCI) initiative. The CMS released a preliminary list of 48 “episodes of care” where providers would be paid a targeted rate lower than actual fee for service payments. The extent of the episodes is notable since they would cover approximately 70 percent of all Medicare expenditures if applied to all providers and to all 48 episodes. Under the initiative, participating providers could identify which of the 48 conditions they were interested in testing.

These reforms could replace the clearly flawed sustainable growth rate formula and provide strong financial incentives to integrate inpatient and post-acute health care services. Over 75 percent of spending in the Medicare program is associated with patients under treatment for 5 or more medical conditions and virtually all the growth in Medicare spending since 1987 has come from patients with multiple chronic health care conditions. Despite these fiscal facts, original Medicare does not provide coordinated care for chronically ill patients. Such care requires “team-based care” that includes transitional care, comprehensive medication management, health coaching, and a care coordinator among other elements.

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Assuring Post-Acute Care Treatment for Medicare Beneficiaries

October 31st, 2012
by Ken Thorpe

A federal judge in Vermont may soon act to approve a proposed settlement in a national class action suit, Jimmo v. Sebelius. In the case, the plaintiffs argue that Medicare contractors and administrative officials have been denying nursing and therapy services for patients who were not expected to show long-term improvements in their medical conditions. Patients with chronic conditions like multiple sclerosis, Parkinson’s disease, paralysis, cerebral palsy, skilled nursing visits for insulin injections for diabetics, and Alzheimer’s were denied Medicare and Medicare Advantage benefits under this so-called “Improvement Standard,” the lawsuit alleged.

The “Improvement Standard” refers to a standard that Plaintiffs have alleged, but that Defendant denies, exists under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.

The agreed-upon changes would alter the Medicare manual to say that eligibility for skilled-nursing, home healthcare and outpatient physical therapy services coverage “does not turn on the presence or absence of beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care,” the settlement says. The proposed settlement would result in changes from the Centers for Medicare and Medicaid Services to its subregulatory guidance contained in the Medicare Benefits Policy Manual to clarify that therapy services in home health, skilled nursing facilities, and outpatient physical therapy are covered so long as the patient is eligible for the services regardless of their clinical prospects for improvement.

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Creating the Virtual Integrated Delivery System

October 5th, 2009
by Ken Thorpe and Lydia Ogden

Preventing and more effectively managing chronic illness are critical national health priorities. Patients with chronic disease currently account for three-quarters of overall health spending. Multiple morbidities are common: More than half of Medicare beneficiaries are treated for five or more chronic conditions yearly. Nine chronic ailments account for nearly 60% of the recent rise in […]

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