Blog Home

Archive for the 'Medicare' Category




Recent Health Policy Brief: Site Neutral Payments


July 28th, 2014

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) describes the different proposals designed to eliminate differences in Medicare’s payment systems that depend on where care and services are delivered. Currently, services that can be provided in a variety of clinical settings may sometimes be paid for at dramatically different payment rates.

Recently, the Centers for Medicare & Medicaid Services (CMS) and the Medicare Payment Advisory Committee (MedPAC) proposed eliminating this differential payment for certain services. This brief explains the origin of these differential payments and the debate over approaches that have been proposed for developing so called “site neutral” payments.

Topics covered in this brief include:

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

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).

Read the rest of this entry »

Treated Prevalence Versus Spending Per Case: Responding To Starr And Coauthors


June 17th, 2014

I was surprised but pleased to see the Martha Starr, Laura Dominiak, and Ana Aizcorbe article in the May issue of Health Affairs replicating earlier work of Charles Roehrig and David Rousseau. These papers attempt to understand the role that treated disease prevalence and spending per case treated assume in accounting for the growth in average per capita healthcare spending. (Treated disease prevalence can increase when either a disease becomes more common or is diagnosed more frequently.) Starr and coauthors, like Roehrig and Rousseau, conclude that spending per case treated accounts for more of the growth in per capita spending than treated prevalence.

In our own work, my colleagues and I have addressed a different question. Our line of research focuses on changes in total health care spending – as opposed to per capita spending — over time. We have updated this work now through 2011 and our major conclusion remains the same; the rise in treated disease prevalence accounts for a slightly larger share of the growth in total healthcare spending than spending per case treated.

The three research teams employ different methods and use different spending measures. (In an earlier appendix, we described in detail the differences between our approach and that of Roehrig and Rousseau.) For example, our expenditures include home health and dental services, which are excluded in the paper by Starr and colleagues.

Read the rest of this entry »

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:

Read the rest of this entry »

The Cost Of A Cure: Medicare’s Role In Treating Hepatitis C


June 5th, 2014

Editor’s note: In addition to Tricia Neuman, Jack Hoadley and Juliette Cubanski also coauthored this post.

For a patient with hepatitis C, a potentially deadly disease, the prospect of finding a cure with minimal side effects is a really big deal. Also a big deal is the cost of Sovaldi (sofosbuvir), an oral drug approved by the Food and Drug Administration in December 2013 for the treatment of chronic hepatitis C. Sovaldi has been priced by its manufacturer, Gilead, at $1,000 per pill, or an estimated $84,000 for its entire 12-week regimen. It joins the treatment arsenal with several older drugs generally thought either to be less effective or to have more side effects, and another newly approved drug to be taken in combination with other drugs. More drugs are expected to gain approval within the year.

Sovaldi’s price tag has drawn attention in part because an estimated 3 million Americans have the hepatitis C virus and could be considered candidates for new drugs. Patients will clearly benefit from a long-awaited cure, and public and private payers could potentially see a reduction in health care spending over the long term if Sovaldi successfully cures this disease and fewer patients require high-cost liver transplants. But private insurers and public programs will face significant budgetary pressures if a large number of patients receive this treatment at current prices.

To date, attention has focused on cost implications for private health plans, Medicaid, and the Department of Veterans Affairs (VA). For example, UnitedHealth reported that the cost of Sovaldi was “multiple times” its expectations. State Medicaid officials and Medicaid plans have warned that the cost of the new treatments will pose significant fiscal challenges to state budgets and plan payment rates, even though Medicaid receives a 23.1 percent rebate (discount) for all brand drug purchases. The VA has decided to cover the drug and secured from Gilead a discount of 44 percent, one that applies to certain other federal purchasers, but is targeting treatment to the sickest patients while waiting for less expensive drugs to become available.

Less attention has been paid to the cost implications for Medicare, where coverage of Sovaldi will fall under Part D, the program’s outpatient prescription drug benefit administered by private plans. Given the drug’s effectiveness, most if not all of Part D plans will likely cover Sovaldi. The anticipated impact on costs to Medicare will be revealed to CMS later this month, when plans submit premium bids for 2015. Plans will increase their bids to cover the expected costs of new treatments, which will raise costs for both the federal government and Part D enrollees who pay premiums. CMS will release the average Part D premium for 2015 in August.

Read the rest of this entry »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

Reducing Barriers To Care For Patients With Parkinson’s And Other Chronic Diseases


May 29th, 2014

Editor’s note: For more on this topic, see the February issue of Health Affairs, which features a series of articles on connected health. 

It is one of the greatest ironies of our time that the United States is home to some of the highest-quality medical care in the world, yet millions of Americans cannot access it. This problem is all too familiar for Parkinson’s patients who could receive better clinical outcomes simply by being connected to a specialist outside of their immediate vicinity.

Every year, approximately 60,000 people in the U.S. are diagnosed with Parkinson’s disease, a chronic, progressive neurological disease for which there is no cure. But there is hope.

The TELE-MED Act

With the use of technology, there is an easy way to allow patients to integrate their complex disease management into their daily lives while eliminating frequent and disruptive travel. Unfortunately, this option – popularly known as telemedicine – is not properly regulated, and lawmakers need to update licensure regulations though common sense solutions such as the TELE-MED Act (HR 3077).

This bipartisan measure introduced by Congressmen Nunes (R-CA) and Pallone (D-NJ) would enable health care providers in the Medicare program to treat Medicare patients virtually across state lines without having to obtain additional state medical licenses.

Read the rest of this entry »

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.

Read the rest of this entry »

Tweeting Up A Data Revolution


May 16th, 2014

In the first 24 hours after the Department of Health and Human Services opened up data on CMS reimbursement for 880,000 Medicare providers, the deluge of analysis coming in 140-character increments was breathtaking. Critics have complained that such data tweets are, at best, a disservice and, at worst, an injustice.

Undoubtedly, many snap judgments will later be viewed as data caricatures—embellishments of a few outliers. Indeed, taken out of context, some providers may even be unfairly criticized when deeper analysis provides a logical explanation for data anomalies.

However, uncovering unwarranted variation in practice patterns has never been a linear exercise in finding the right answers. Forty years ago, when Jack Wennberg first published his seminal work in Science that uncovered dramatic variation in procedure rates, the data were far from perfect. There may have been many reasons why tonsillectomy rates more than 10 times higher in some Vermont communities than others, and Wennberg could not really know the root causes at that point. But unleashing the data did demonstrate that “geography was destiny,” and Wennberg’s brave research started a conversation — one that would evolve into the Dartmouth Atlas, and ultimately plant the seeds of an entire movement for measuring the value of care provided.

Read the rest of this entry »

Managed Competition 2014: Rescued By The Private Sector?


May 12th, 2014

Managed Competition (MC) among health care financing and delivery systems was first conceived as a proposed public policy to drive delivery system change in the private sector by assuring consumers that they have choices, as well as rewards for choosing high-value providers. Many legislative proposals have used MC ideas in whole or in part. The Affordable Care Act’s (ACA) exchanges reflect the MC idea, but the three percent of the population they cover is too small to drive large scale change.

The new private corporate exchanges are also based on MC. While they cover few people now, private exchanges have the potential to change the incentives for tens of millions of consumers, and — if done right — to drive large scale delivery system reform. The combination of both kinds of exchanges could be powerful.

This post puts the idea of managed competition in a historical context, then describes how private exchanges are operationalizing the concept. I conclude with a brief look at how managed competition may develop going forward, and how MC may change the health care system.

Read the rest of this entry »

An Extraordinary Opportunity: Hospital Community Benefits


May 8th, 2014

Editor’s note: In addition to John O’Brien, this post is coauthored by Rob Restuccia.

You wouldn’t know it from the chorus of critics, but health reform represents an exciting opportunity for America’s hospitals. We believe this can be a seminal moment for hospitals and communities to come together to build a more sustainable health system and to improve the health and quality of life in our communities.

We are two individuals from differing vantage points: a long-serving health care CEO and a lifelong health advocate CEO who have worked together for more than 25 years. We are fortunate to have had the chance to see over time what has worked and what hasn’t, both locally and nationally. And yes, we are both from Massachusetts.

Many people are tired of hearing about health reform in Massachusetts, either due to sheer frequency, disbelief that it works as claimed, or skepticism that even what does work in Massachusetts will work elsewhere. Understood. However, by many measures it has been a success. As almost all know, elements of it were borrowed for the Affordable Care Act (ACA), and one longstanding element in particular – a strong community benefit expectation – is where we think the nation’s hospitals have an extraordinary opportunity.

Read the rest of this entry »

The Payment Reform Landscape: Payment For Non-Visit Functions And The Medical Home


May 6th, 2014

As I’ve been discussing in Health Affairs Blog each month, payment reforms can pose a spectrum of financial risk for providers, with financial upside only — such as pay-for-performance programs — on one end, and downside-only models — such as nonpayment for care that shouldn’t happen — on the other. In March, we examined pay-for-performance, an upside-only model.  This month, we look at another upside-only model, typically used to support care coordination and patient centered medical homes (PCMH). The technical term Catalyst for Payment Reform (CPR) has coined for this payment model is “payment for non-visit” functions.

In its simplest form, this model is a per member per month (PMPM) payment, layered on top of another form of payment like fee-for-service. Providers typically receive this PMPM payment to help them manage their patients’ care and to support their coordination with other providers in the “medical home.” A lot has been written about care coordination and patient-centered medical homes and their ability to improve care outcomes; however, like their pay-for-performance “cousin,” the ability of these models to contain costs remains to be seen.

How common is this payment model?

According to CPR’s 2013 National Scorecard on Payment Reform, based on responses to eValue8, a nationwide survey of commercial health plans, 0.6 percent of commercial insurance payments to doctors and hospitals are payments for non-visit functions, such as care coordination fees for patient-centered medical homes. This percentage represents about 5 percent of all value-oriented payment as measured by CPR. (Approximately 11 percent of all commercial payments are value-oriented—designed to improve quality and reduce waste.)

Read the rest of this entry »

Click here to email us a new post.