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Examining Medicare’s Hospital Readmissions Reduction Program


July 24th, 2014

New financial incentives and penalties in the Affordable Care Act (ACA) designed to optimize health care system performance are proving difficult to manage, but they are also providing new opportunities for leaders to foster collaboration between acute and post-acute health care providers.

Perhaps one of the most promising, albeit controversial, programs has been Medicare’s Hospital Readmissions Reduction Program (HRRP), which penalizes hospitals with excess 30-day readmissions for health conditions such as pneumonia, myocardial infarction, and heart failure. Although not all hospital readmissions are preventable, many could be avoided with improved post-discharge planning and care coordination.

The HHRP was designed to penalize hospitals with excess 30-day readmissions regardless of whether the patient was readmitted to the same hospital or another hospital. Although there are some exceptions (for example, readmissions due to hospital transfers or planned readmissions), most readmissions of patients with health conditions targeted by the HHRP will count against a hospital.

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Implementing Health Reform: Hobby Lobby Response, The ACA In The Territories, And More


July 18th, 2014

July 17, 2014 was a remarkably active day in an otherwise quiet week for Affordable Care Act implementation. First, the Departments of Labor, Treasury, and Health and Human Services issued their first response to the Supreme Court’s Hobby Lobby decision —a Frequently Asked Question (FAQ) guidance requiring ERISA plans to provide notice to their participants and beneficiaries if they do not intend to cover contraceptives. Second, the Department of Health and Human Services sent letters to the territories (the Virgin Islands, Northern Mariana Islands, Guam, American Samoa, and Puerto Rico) informing them that insurers that market individual insurance policies in the territories are no longer required to comply with the ACA’s insurance market reforms.

Third, HHS released an enrollment bulletin at its REGTAP website describing how insurers in the federally facilitated exchange should handle enrollment for 2015 for individuals whose coverage was terminated in 2014 for non-payment. This post describes these issuances, as well as the May Medicaid enrollment report released on July 11, 2014 by HHS

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The Medicaid Boom And State Budgets: How Federal Waivers Are Advancing State Flexibility


July 18th, 2014

Note: The authors would like to thank Erica Socker, Senior Research Associate, and Michelle Shaljian, Associate Director of Communications, for their review and editorial assistance.

According to data released by the Department of Health and Human Services, one in five Americans now receive their health insurance through a state Medicaid program. Despite this increase in enrollment, it is estimated that 6 million Americans will likely remain uninsured because 20 states have decided not to expand Medicaid as the Affordable Care Act (ACA) envisioned. There are at least four states that are considering expanding Medicaid but have yet to do so.

Medicaid expansion continues to be one of the most politically charged directives of the health care law, mainly because the Supreme Court decision left the choice to states. This decision has generated an ongoing debate about whether and how states should expand their Medicaid programs. For example, an intense debate has been underway in Virginia, over the decision to include Medicaid expansion in the state budget; putting Democratic Governor Terry McAuliffe at odds with the Republican State Legislature. Similar debates are occurring in states across the country, and are further complicated by states’ option to pursue alternative expansion approaches under a Medicaid waiver. For states that have not yet expanded the program, the success of these alternative expansion models may influence whether they can find a politically feasible path forward.

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Positive Results For 2012 Physician Quality Reporting System And eRx Program


July 17th, 2014

In April, the Centers for Medicare & Medicaid Services (CMS) released the 2012 Physician Quality Reporting System and Electronic Prescribing (eRx) Experience Report, showing a significant increase in participation in two programs that allow eligible professionals to earn incentive payments through voluntary participation.

Record Participation in 2012

With over 430,000 professionals participating in the Physician Quality Reporting System (PQRS) and more than 340,000 e-prescribing, the 2012 report marks encouraging progress in efforts to improve quality measurement and reporting through the PQRS and eRx programs. Thanks to increased participation, more clinicians are actively measuring and reporting on quality and focusing on improvement.

CMS is beginning to add this information to Physician Compare, a website that can be viewed by patients. Measuring, transparently sharing, and improving quality performance provide the keys to a better health system.

At CMS, we are pleased by the success of these programs and other CMS quality measurement programs. We are also encouraged by the potential of these initiatives to empower patients and providers with information that can support care coordination and improved delivery of care.

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Income Verification On The Exchanges: The Broader Policy Picture


July 14th, 2014

The Affordable Care Act scandal de jour (or at least one of them) is the difficulty the exchanges have faced in verifying the eligibility of many premium tax credit applicants. Two Department of Health and Human Services Office of Inspector General Reports in early July documented the existence of these problems. One reported that as of the first quarter of 2014, the federal exchange alone had been unable to resolve 2.6 or 2.9 million data inconsistencies. Another reported that internal controls at the federal and two state exchanges were not fully effective in ensuring that individuals enrolled in exchanges were in fact eligible.

House Republicans claim that in fact there are 4 million data inconsistencies affecting half of all enrollments. In House Energy and Commerce hearings on June 10, 2014, Republican Representative Charles Bustany Jr. claimed that $44 billion in improper payments would be made over the next 10 years. Douglas Holtz-Eakin, a former Bush Administration official, who testified at the hearings claims that improper payments may equal $152 billion. The House Energy and Commerce Health Subcommittee is holding further hearings on data inconsistencies on July 16.

The seriousness of verification issues should not be overestimated. The administration has been put in place procedures to verify carefully premium tax credit applications. Many of the discrepancies CMS is attempting to resolve do not relate to income eligibility, and those that do may result ultimately in a finding of eligibility for increased, rather than decreased, premium tax credits. A discrepancy that could result in the need for additional documentation may be as trivial as a hyphen left out of a name or a digit transposed on a Social Security number.

Unfortunately, programs proposed by Republicans and other ACA opponents that in fact make a serious attempt to cover the uninsured will require income reporting and face similar difficulties. Current reform proposals that avoid coverage eligibility determinations will not in fact cover the uninsured. While the administration could have perhaps done a better job in making eligibility determinations, any means-tested program faces a similar challenge. It is possible to design a system that does not rely on means testing and could cover low-income and high-cost uninsured Americans, as I describe below. But it would be a very different system than the ACA or alternatives currently being proposed.

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Washington Wakes Up To Socioeconomic Status


July 11th, 2014

John Mathewson, executive vice president of Health Care Services for Children with Special Needs (HSC) – a Medicaid managed care plan in D.C. for children on Supplemental Security Income (SSI) – recently spoke at the Association for Community Affiliated Plans (ACAP) CEO Summit before the July 4 Recess.

Mathewson described what he has dubbed The Kitten Paradox: When HSC examined environmental factors for children with asthma, it found that the presence of pets in the house was a common thread, not too far behind having a smoker around. Yet, it turns out the value a cat brings by protecting from mice or spawning a litter for sale outweighs any financial costs to the family associated with an ER visit, which are often free or carry a low copayment. Thus the paradox.

An awardee at the conference, Hennepin Health, catalogued the evidence showing that reliable housing can improve health outcomes, including improving mental health and lowering emergency room and inpatient hospital utilization.

The focus of these sessions was the social determinants of health, and a lot of these safety net health plan leaders’ heads were nodding throughout. The plans, which disproportionately serve Medicaid enrollees and thus ‘dual eligible’ seniors in Medicare, know something about the importance of social determinants that the health policy community – at least in Washington – is only now slowly waking up to.

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A Health Reform Framework: Breaking Out Of The Medicaid Model


July 10th, 2014

Editor’s note: This post is coauthored by Joseph Antos and James Capretta.

A primary aim of the Patient Protection and Affordable Care Act (ACA) is to expand insurance coverage, especially among households with lower incomes. The Congressional Budget Office (CBO) projects that about one-third of the additional insurance coverage expected to occur because of the law will come from expansion of the existing, unreformed Medicaid program. The rest of the coverage expansion will come from enrolling millions of people into subsidized insurance offerings on the ACA exchanges — offerings that have strong similarities to Medicaid insurance.

Unfortunately, ample evidence demonstrates that this kind of insurance model leaves the poor and lower-income households with inadequate access to health care. The networks of physicians and hospitals willing to serve large numbers of Medicaid patients have been very constrained for many years, meaning access problems will only worsen when more people enroll and begin using the same overburdened networks of clinics and physician practices.

It does not have to be this way. It is possible to expand insurance coverage for the poor and lower-income households without reliance on the flawed Medicaid insurance model. Opponents of the ACA should embrace plans to replace the current law with reforms that would give the poor real choices among a variety of competing insurance offerings, including the same insurance plans that middle-class families enroll in today. Specifically, we propose a three-part plan that includes a flexible, uniform tax credit for all those who lack employer-based coverage; deregulation of Medicaid; and improved safety-net primary and preventive care.

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ACAView: New Findings On The Effect Of Coverage Expansion Since January 2014


July 9th, 2014

Editor’s note: In addition to Josh Gray, Iyue Sung also coauthored this post. 

Together, athenahealth and the Robert Wood Johnson Foundation (RWJF) have undertaken a new joint venture called ACAView, as part of the foundation’s Reform by the Numbers project, a source for timely and unique data on the impact of health reform.

The goal of ACAView is to provide current, non-partisan measurement and analysis on how coverage expansion under the Affordable Care Act (ACA) is affecting the day-to-day practice of medicine. athenahealth provides a single-instance, cloud-based software platform to a national provider base.

Any information that our clients enter using our software is immediately aggregated into centrally hosted databases, providing us with timely visibility into patient characteristics, clinical activities, and practice economics at medical groups around the country.

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Investing In The Social Safety Net: Health Care’s Next Frontier


July 7th, 2014

Editor’s note: In addition to Jennifer DeCubellis, Leon Evans also coauthored this post. 

The United States spends 250 percent more than any other developed country on health care services, yet we are ranked below 16 other countries in overall life expectancy. A less frequently discussed statistic, however, is the degree to which the U.S. under-invests in social services: for every dollar spent on health care, only 50 cents is invested in social services. In comparison, other developed countries spend roughly $2 on social services for every dollar spent on health care. The U.S. is 10th among developed countries in its combined investment in health care and social services.

This imbalance has ramifications for the nation’s Medicaid program, where just five percent of beneficiaries with complex health and social problems drive more than 50 percent of all program costs. Many individuals in this high-cost group have chronic complex medical, behavioral health, and/or supportive service needs, and in the absence of coordinated intervention, they tend to be frequent visitors to emergency rooms and have high rates of avoidable hospital admissions.

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Happy Birthday HCPF


July 1st, 2014

Today marks the 20th birthday of the Colorado Department of Health Care Policy and Financing.  The story of its creation provides an important reminder of how our thinking about health care has evolved over the past few decades – and how it continues to evolve today.

Back in the bad old days, Medicaid was just another social service.  Housed within a broader social services agency, Colorado Medicaid – as was the case in most states – grew up with a typical welfare mentality.  Program enrollees were beneficiaries.  If they did not enroll, we assumed it meant they did not need or want our services.  Eligibility was a cumbersome, rule-bound process with inscrutable results and unintelligible notices to applicants of what was missing from their file.

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Exhibit Of The Month: The Medicare Reimbursement Margin


June 30th, 2014

Editor’s note: This post is part of an ongoing “Exhibit of the Month” series. Readers who’d like to highlight other noteworthy exhibits from the same issue are encouraged to make their pitch in the comments section below.

This month we look at three exhibits from the June issue’s care span article, “Medicare Home Health Payment Reform May Jeopardize Access for Clinically Complex and Socially Vulnerable Patients,” published in the June issue of Health Affairs.

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New Health Policy Brief: Risk Corridors


June 26th, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) describes the Affordable Care Act’s premium stabilization programs that encourage insurers to participate in the exchanges by eliminating some unpredictability around newly insured enrollees.

The ACA created health insurance Marketplaces and premium subsidies to make insurance more affordable, and the ACA completely changed the way insurance is priced and sold in the individual market. As of 2014, insurers (both those participating in the exchanges and those selling on the individual market outside the exchange) face a number of new restrictions.

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New Offices Of Minority Health At FDA And CMS: Will They Help Eliminate Disparities In Health?


June 19th, 2014

Given the rocky roll-out of healthcare.gov, the end of the open enrollment period brought surprising good news: over eight million Americans signed up for coverage through the new Health Insurance Marketplaces. Three million previously uninsured young adults are now covered through their parents’ policies and six million more are enrolled in Medicaid and the Children’s Health Insurance Program.

Minorities are disproportionately more likely to be uninsured, and continued expansions in coverage will help significantly to close gaps in care. However, the impact of the Affordable Care Act (ACA) will not be limited to coverage. A number of provisions to address disparities were included in the ACA, relating to community health, workforce, and data collection. In addition, the ACA authorized new offices of minority health to lead and coordinate federal and national efforts to improve health and reduce disparities.

Several operating divisions at the U.S. Department of Health and Human Services (HHS), including the Centers for Disease Control and Prevention and the Agency for Healthcare Research and Quality, had existing offices dedicated to improving the health of vulnerable populations. However, this was not the case for the Food and Drug Administration (FDA) or the Centers for Medicare & Medicaid Services (CMS).

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When ICD-10 Implementation Becomes A Game


June 9th, 2014

Editor’s note: For more on this topic, stay tuned for the upcoming Health Policy Brief update on transitioning to ICD-10. 

The on again, off again plans for ICD-10 code set implementation leaves many organizations at a crossroads. In a previous blog post, we discussed the details of ICD-10 and assessed the industry’s readiness for implementation.  This assessment assumed the improbability of a further delay.  In February, CMS Administrator Marilyn Tavenner had seemingly given the green light, declaring, “There are no more delays and the system will go live on October 1.”

However, at the end of March 2014 Congress passed another temporary delay of Medicare physician reimbursement rate cuts that also included language unexpected to many — including CMS — that ICD-10 would be delayed until October of 2015.  Given this latest development, ICD-10 implementation has begun to feel like a high stakes game of the childhood pastime, “Red Light, Green Light,”  in which players must run forward at full speed, until the words ‘red light’ are called out with no warning, forcing them to stop on a dime.  In this case, countless organizations and institutions may be feeling a little disoriented by the latest change.

Some entities are grateful. Congress’s “red light” gives them extra time to prepare.  A February 2014 survey of over 570 physician group practices conducted by the Medical Group Management Association revealed that a large number of providers aren’t ready for the transition to ICD-10.  The survey showed that:

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Implementing Health Reform: Medicaid And CHIP Enrollment; Data Verification (Updated)


June 5th, 2014

Throughout the spring of 2014, the Department of Health and Human Services (HHS) has issued monthly reports on enrollment in the federal and state exchanges (marketplaces) and on applications, eligibility determinations, and enrollment in the Medicaid program.

With the close of the 2014 exchange open enrollment period, HHS has ceased issuing exchange enrollment reports, even though exchange enrollment continues to fluctuate as new enrollees join through special enrollment periods and current enrollees terminate their plans or are terminated, for example, for nonpayment. The Centers for Medicare and Medicaid Services (CMS), however, continue to issue Medicaid reports.

On June 4, 2014, CMS released the April 2014 Medicaid and CHIP Monthly Applications, Eligibility Determinations and Enrollment Report. As has been the case with earlier reports, the data are subject to so many qualifications as to offer only a rough approximation of current Medicaid enrollment or activity.

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Implementing Health Reform: State Opt-Outs From Employee Choice In SHOP And Other Developments


June 4th, 2014

If any further evidence were needed that the release of Affordable Care Act regulations has largely ceased for the immediate future, the Office of Management and Budget Spring Unified Agenda of Regulatory and Deregulatory Actions provides it. The Regulatory Agenda reveals that the Department of Health and Human Services (HHS) is currently working on final rules governing third party payments of qualified health plan (QHP) premiums and fair hearing and appeal procedures for Medicaid and exchange enrollment, as well as proposed rules for accepted benefit plans and, eventually, the 2016 notice of benefit and payment parameters; however, nothing seems likely to be released very soon.

The Internal Revenue Services (IRS) is drafting proposed rules on reporting of minimum essential coverage and final regulations on reporting of information for health insurance exchanges, defining minimum value for employer coverage, and determining whether employment-related health insurance is affordable for the family of an employee (the family glitch). It is also working on further regulations addressing the small employer premium tax credit, minimum essential coverage and other individual responsibility requirement issues. Most of these are topics on which the IRS has already provided partial rules, interim final rules, or other guidance, and no major new developments are anticipated imminently.

State opt-outs from employee choice in the 2015 SHOP exchange. Despite the lull in rulemaking, HHS continues to be very active at the subregulatory level as it prepares for 2015. In particular, Centers for Medicare & Medicaid Services (CMS) has been very focused on getting the SHOP exchange operational. CMS failed to implement many elements of the SHOP exchange program for the 2014 open enrollment period, including employee plan choice and aggregation of premiums. These elements were to be implemented for 2015.

Under the 2015 Exchange Rule, however, state insurance commissioners were allowed to ask that their states be excused from employee choice in the SHOP exchanges by submitting to CMS a written recommendation “adequately explaining that it is the State Insurance Commissioner’s expert judgment, based on a documented assessment of the full landscape of the small group market in his or her State, that not implementing employee choice would be in the best interests of small employers and their employees and dependents.”

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Health Affairs June Issue: Where Can We Find Savings In Health Care?


June 2nd, 2014

The June issue of Health Affairs, released today, features various approaches to cost-savings in the U.S. health care system. A variety of articles analyze the effects of potential policy solutions on the Medicare and Medicaid programs and their impact on the health of beneficiaries and tax payer wallets.

Federal approaches to reduce obesity and Type 2 diabetes rates by improving nutrition could work—but the how matters. Sanjay Basu of the Stanford University School of Medicine and coauthors modeled the effects of two policy approaches to reforming the Supplemental Nutrition Assistance Program (SNAP), which serves one in seven Americans. They found that ending a subsidy for sugar-sweetened beverage purchases with SNAP dollars would result in a decrease in obesity of 281,000 adults and 141,000 children, through a 15.4 percent reduction in calories by the lowering of purchases of this source. They also found that a $0.30 credit back on every dollar spent on qualifying fruits and vegetables could more than double the number of SNAP participants who meet federal guidelines for fruit and vegetable consumption.

With more than forty-six million people receiving SNAP food stamp benefits, the authors suggest that policy makers closely examine the implications of such proposals at the population level to determine which will benefit people’s health the most and prove most cost-effective.

If you’re between ages 15–39 when you are diagnosed with cancer, the implications later in life extend well beyond your health. Gery P. Guy Jr. of the Centers for Disease Control and Prevention and coauthors examined Medical Expenditure Panel Survey data and determined that survivors of adolescent and young adult cancers had annual per person medical expenditures of $7,417, compared to $4,247 for adults without a cancer history. They also found an annual per capita lost productivity of $4,564 per cancer survivor — because of employment disability, missed workdays, and an increased number of additional days spent in bed as a result of poor health — compared to $2,314 for adults without a cancer history.

The authors suggest that the disparities are associated with ongoing medical care needs and employment challenges connected to cancer survivorship, and that having health insurance alone is not enough to close the gap. They stress the importance of access to lifelong follow-up care and education to help lessen the economic burden of this important population of cancer survivors.

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ACO Results: What We Know So Far


May 30th, 2014

Editor’s note: For more on this topic, stay tuned for the upcoming June issue of Health Affairs, which features a series of articles on accountable care organizations. 

Accountable care is a relatively recent addition to the health care vernacular, but its roots can be traced to the decades-long effort to coordinate medical care. In the United States, health care has evolved into a fragmented pay-for-volume system which has both driven up cost and decreased quality. Coordination of care is meant to reverse this trend. Through such solutions as Health Management Organizations (HMOs), Integrated Delivery Networks (IDNs) and now Accountable Care Organizations (ACOs), policymakers, providers and payers have sought to consolidate and coordinate patient care.

Contemporary care coordination efforts focus on accountable care which increases provider accountability for the cost and quality of care. The driving principle behind the formation of ACOs is the Institute for Healthcare Improvement’s triple aim: improving the patient experience of care, improving the health of populations and reducing the per capita cost of health care.

One of the broadest applications of this concept is the creation of Medicare ACOs under the Patient Protection and Affordable Care Act. This includes the Pioneer ACO Program and the Medicare Shared Savings Program. More recently, states have also pursued ACO contracts to cover Medicaid populations. In the private sector, providers have forged ACO contracts with commercial payers. At the close of 2010, only 41 preliminary Accountable Care Organizations existed. The number of ACOs more than tripled to 138 a year after the passage of the PPACA. By 2012 the number nearly tripled again, and by the end of 2013 more than 600 ACOs were operating across the U.S.

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Is Public Policy Changing The Practice of Medicine?


May 21st, 2014

The quick answer to the title question is yes, but not in the way the architects of the Affordable Care Act (ACA) intended. Indeed, the most significant unintended consequence of the ACA may be the way poorly designed regulations are inadvertently opening the door to improved medical practice.

But first things, first. At the time the ACA was enacted, the belief that health care delivery in the United States was about to be radically transformed was widespread. “We’re going to find out what works and then go do it,” said Barrack Obama. Doctors will learn to practice medicine like engineers, predicted Atul Gawande. The profession will be dominated by Accountable Care Organizations (ACOs), said Karen Davis, and doctors will be rewarded for lowering costs and raising the quality of care. Only through ACOs can we achieve low-cost, high-quality care, said Elliott Fisher. Fee-for-service medicine is the problem, we were told, and the solution is bundled care. The idea that we should buy on value, not on volume, was a sentiment often heard.

Four years on, these predictions have been far from the mark — to put it charitably. We have spent tens of millions of dollars on demonstration programs and pilot projects investigating coordinated care, integrated care, managed care, pay-for-performance medicine, electronic medical records systems, etc. The result? Three separate Congressional Budget office reports have concluded that none of this is working, or at least not working very well. (See here, here and here.) The experience of the pilot ACO projects has been dismal. A total of 5.3 million Medicare beneficiaries are now in Medicare ACOs. Yet in their first year, only 29 percent of the physician-led ACOs and only 20 percent of the hospital-sponsored ACOs turned a “profit.” And among those that did so, the results were fairly mediocre.

The response of the advocates: double down and do more of the same. But before we throw good money after bad, perhaps we should stop and take stock.

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Is Non-Profit Hospital Community Benefit Equally Distributed Across States?


May 8th, 2014

Editor’s note: In addition to David Kindig, this post is also coauthored by Erik Bakken.

In a recent Health Affairs Blog post, Sara Rosenbaum, Amber Rieke, and Maureen Byrnes discuss how IRS Community Benefit expenditures might be better directed to community building and community health improvement activities instead of primarily being reported as unreimbursed Medicaid expenditures. They cite an estimate from the Northwest Health Foundation “…that were hospitals to shift 20 percent of their community benefit expenditures toward community health improvement efforts, the annual yield would be $2.2 billion in additional funds for prevention…”

This is a significant amount of money. In a similar recent analysis for Wisconsin non-profit hospitals, we estimated the following alternative: a minimum 10 percent of total community benefit would be mandated toward the community health improvement category, with an increasing 2 percent obligation for each 2.5 percent increase in hospital profitability for any hospital over 2.5 percent profitability, up to a maximum of 20 percent profitability.

This scenario would more than triple the amount of community health improvement spending through community benefit provision, from $46 million to $139 million, or 13 percent of total community benefit. We presented this model as just one modest example of the amount of revenue that could be derived from such a regulation, and encourage the development of other scenarios or policy alternatives such as alternative modeling approaches varying the minimum or increasing profitability percentage scenarios.

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