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For High-Risk Medicare Beneficiaries: Targeting CMMI Demonstrations On Promising Delivery Models


April 22nd, 2014

Medicare beneficiaries with multiple chronic conditions, certain types of serious conditions (e.g. heart disease, pulmonary disorders, mental disorders, cancer), and functional limitations have higher health and long-term care costs and more adverse outcomes than other beneficiaries.

One of the biggest opportunities for savings for Medicare, Medicaid, and beneficiaries themselves, is through reducing hospitalizations, readmissions, and institutional care, especially for these high-risk beneficiaries. Achieving these savings and serving this population will require innovative delivery models and a clear business case to convince organizations to implement those new models.

The Affordable Care Act set aside $10 billion for experiments in innovative care delivery and payment systems.  With these funds, the Centers for Medicare and Medicaid Innovation (CMMI) is launching and evaluating several initiatives, primarily Accountable Care Organizations (ACOs), bundled payment for care innovation, and primary care transformation.  These initiatives change financial incentives for health care providers so that while they bear some financial risk for the costs of providing care, they also stand to benefit from any savings produced.

Historically, it has taken additional legislative action to apply successful delivery models more broadly across the Medicare program. Now, the health care law has removed this barrier, giving the Secretary of Health and Human Services the ability to expand successful innovations that improve quality or lower costs.  While early results show improvements in quality and modest savings, most CMMI pilots and demonstrations to date are not specifically targeted on high-risk beneficiaries, where the biggest gains can be expected.

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Return Of The Repressed: Spending Growth Is Back, But What To Do?


April 21st, 2014
by Rob Cunningham

The sheer magnitude of the Affordable Care Act and its implementation seems to have briefly preempted the attention of the health policy community, distracting it from its perennial and inescapable preoccupation with spending growth. Everyone knew, of course, that when the dust settled, access and insurance market reforms would set off in ever starker relief the menace of the spending dragon. But in the meantime, an eerie 4-year lull in growth seemed to dull the edge of the problem.

There was research suggesting that structural changes, some in anticipation of payment and delivery system reforms encouraged by the ACA, might continue to restrain growth as the health economy joined a recovery from recession. This hopeful scenario got a boost as the lull outlasted a return to improved GDP growth. Flagging growth in pharmaceutical spending and unexpectedly low premiums in many state and federal insurance exchanges were other favorable straws in the wind. Could a generation-long growth trend averaging nearly two-and-a-half points above GDP finally be at an end? Some saw cause for cautious optimism.

This month, however, the Michigan-based Altarum Institute released an analysis based on government data that showed health spending growth began to surge last October, when it reached a 5-percent annual rate, and has continued to accelerate to a 6.7 percent pace in February, 2.4 percent above GDP and a 7-year high. Growth over the fourth quarter of 2013 was 5.6 percent, a 10-year high.

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We’ll Need A Bigger Boat: Reimagining The Hospital-Physician Partnership


April 17th, 2014
 
by Francis J. Crosson and John Combes

Editor’s note: In addition to Francis J. Crosson, this post is coauthored by John Combes.

Change is underway in the delivery and financing of American health care, and it is manifested in the evolving relationship of hospitals and physicians across the U.S. These developments are most striking in California, but are appearing in various forms in almost all states. Physicians and hospitals are being both “pushed” and “pulled” together in new ways by a variety of market forces, including the development of Accountable Care Organizations (ACOs) for both Medicare and commercially insured patients, increased direct employment of physicians by hospitals, the emergence of new payment mechanisms such as global payments, and, in general, by the need for physicians, physician groups and hospitals to deliver greater “value.”

All of this presents the opportunity to redesign care to be more coordinated, efficient, patient-driven, and effective. These integration forces could lead to the kind of organizations envisioned 15 years ago in the Institute of Medicine report “Crossing the Quality Chasm”, resulting in the Triple Aim of better health, better patient care experiences and outcomes, and improved affordability — driven, in part, by new patient care models and payment methods including incentives for improving the value of health care services.

Many physicians are uncomfortable with the idea of physician-hospital integration for several reasons. The long tradition of “professional autonomy”– perhaps best described as “the need for physicians to be able to make appropriate and scientifically based patient-by-patient decisions in the best interest of those patients” — can raise fears among some physicians about becoming part of a larger practice or institution and losing that autonomy. Additionally, some physician groups have shown that they can develop a successful ACO without the need for hospital and insurance partners, preferring to manage the clinical and financial risk alone.

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Payment and Delivery Reform Case Study: Congestive Heart Failure


April 15th, 2014
by Darshak Sanghavi

Editor’s note: In addition to Darshak Sanghavi (photo and bio above), this post is coauthored by Meaghan George, a project manager at the Engelberg Center for Health Care Reform at the Brookings Institution. The post is adapted from a full-length case study, the first in a series of case studies made possible through the Engelberg Center’s Merkin Initiative on Physician Payment Reform and Clinical Leadership, a special project to develop clinician leadership of health care delivery, payment and financing reform. The case studies will be presented using a “MEDTalk” format featuring live story-telling and knowledge-sharing from patients, providers, and policymakers. The event series will kickoff on Wednesday, April 16 from 10 a.m. – Noon EST.

Introduction

Clinicians and hospitals across the nation struggle with providing and paying for optimal care for their congestive health failure (CHF) patients. However, there are opportunities to make care better. In fact, of the more than 10,000 pages in the Affordable Care Act (ACA) implementing regulations, the least talked about are the dozens of small experiments led by the Center for Medicare and Medicaid Innovation (CMMI) that test new ways to pay for medical services.

We use a case study approach to investigate and tell the story of what two academic medical centers, Duke University Health System (“Duke”) and University of Colorado Hospital (“Colorado”), are doing to innovate and improve CHF care while implementing alternative payment models offered by CMMI.

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Origins In Oregon: The Alternative Payment Methodology Project


April 14th, 2014

Editor’s note: This post is part of a periodic Health Affairs Blog series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation. The authors of this post are part of the team evaluating the Oregon model.

How the country pays for health care is currently at odds with its vision of how health care should be delivered. Traditional fee-for-service health care payments are linked to the volume of visits, rather than the quality of patient-centered care.

To unlink payment from the volume of services provided and begin aligning it with value, Oregon recently launched the Alternative Payment Methodology (APM) demonstration project, where participating community health centers (CHCs)—aka federally qualified health centers—no longer earn revenue based on the number of individual patient seen. Instead, community health centers will receive a monthly payment based on the size and composition of their patient population, shifting the paradigm from the number of doctor visits to the provision of high-quality, team-based, patient-centered care.

APM is being piloted at three Oregon Community Health Centers: Virginia Garcia Memorial Health Center, Mosaic Medical, and OHSU Family Medicine at Richmond. The clinics are receiving technical assistance from the Oregon Primary Care Association (OPCA) and other community, regional and national partners.

With funding from the Robert Wood Johnson Foundation, a team of researchers from Oregon Health and Science University and OCHIN, one of the nation’s largest health information networks, is investigating the impact of APM on the delivery of primary care in safety-net populations. In addition to regular posts like this one, the research team will also share lessons learned and perspectives from key stakeholders on Frontiers of Health Care.

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Medicare Advantage Rolls On


April 11th, 2014
by Billy Wynne

Monday afternoon, the Centers for Medicare and Medicaid Services (CMS) released the final rates and other reimbursement policies for Medicare Advantage (MA) plans, referred to as the Final Call Letter. Once again, the Administration took pains to ameliorate planned cuts to MA, demonstrating the program’s increasing popularity with seniors and, by extension, its robust political strength.

For my money, we’ll look back at this year as the final hurdle the program jumped on its path to dominating the Medicare benefit for a generation to come. It’s already well on its way, covering 30 percent of Medicare beneficiaries and growing. So let’s take a quick tour of the MA program’s initially volatile history and the winning streak it’s been on of late, culminating with the breaks the Administration cut it this go round.

The history. First there was the growth and then precipitous decline of managed care in the 90s, a wave that the program – then called Medicare+Choice – rode alongside the commercial sector.

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The Role Of Remote Care Management In Population Health


April 4th, 2014
by Alan Snell

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

Remote care management (RCM) programs use telehealth technology to facilitate clinically driven, remote monitoring, care, and education of patients and are an absolute necessity for providers and payers striving to implement an effective population health management strategy. Historically, RCM programs have been viewed through a fee-for-service lens and, as a consequence, overlooked, because physicians would not be reimbursed for the time to monitor these patients outside the confines of their offices.

Yet the current shift to value-based care presents an imperative for health care providers to avoid costs by better managing the health of people with chronic conditions. This change will require more hands-on, effective support for patients that result in lasting behavior change.

Providers are working to keep the health of an individual from rapidly deteriorating once they develop a chronic condition(s). Two prominent barriers to providers’ efforts to keep their patients healthy are the providers’ intermittent contact with patients and limited access to clinical data. Remote care management addresses these barriers.

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The Payment Reform Landscape: Price Transparency


April 2nd, 2014
by Suzanne Delbanco

Editor’s note: This is the third post in a Health Affairs Blog series on payment reform by Catalyst for Payment Reform Executive Director Suzanne Delbanco. The first two posts are available here and here.

Last week Catalyst for Payment Reform (CPR) and our partners at the Healthcare Incentives Improvement Institute (HCI3) released our second annual Report Card on State Price Transparency Laws. This year, we decided not to grade states on a curve and to place greater emphasis on the price information actually available to consumers—not just what is written in the law.

Forty-five states received an F in this year’s Report Card, but there were a couple of notable exceptions: Massachusetts and Maine. Each month in this blog, I’ve been sharing insights about payment reform and which models are proving to work, so this naturally raises the question: what is the relationship between payment reform and the success of state price transparency efforts?

At CPR, we like to say price transparency is one of the core building blocks of payment reform and a higher-value health care system. Purchasers and consumers need transparency for three primary reasons: (1) to help contain health care costs; (2) to inform consumers’ health care decisions as they assume greater financial responsibility; and, (3) to reduce unknown and unwarranted price variation in the system.

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Should Provider Performance Measures Be Risk-Adjusted For Sociodemographic Factors?


March 27th, 2014
by Christine Cassel

The National Quality Forum released draft recommendations on March 18 to change the way we assess the care that doctors and hospitals provide, and they are sure to cause a buzz in and beyond the health care community. That’s a good thing, because reflection and conversation are vital pieces of ‘getting it right’ when determining how measures can be used to gauge healthcare performance.

The recommendations come from a panel of 26 national experts convened by NQF at the request of the federal government. The question before them: Should the measures we use to assess providers’ performance be risk-adjusted to account for patients who are poor, homeless, illiterate, uneducated, or have other indicators of lower socioeconomic status? The panel’s recommendations are discussed below, and we encourage you to register your views by commenting on the report by April 16 and on this post.

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March Madness: Medicare Part D’s Persistent Challenge And Opportunity


March 24th, 2014
by N. Lee Rucker

March Madness came early for CMS, with more than 7,600 public comments received on their Medicare Part D proposed rules and technical changes for 2015.  Less than 72 hours after that docket closed, CMS unfurled their white flag via a March 10 letter to Congress, retracting certain highly-contentious provisions, as previewed in recent posts on Health Affairs Blog by Jack Hoadley and Ian Spatz.  However, CMS’ hasty retreat should not signal a relaxed advocacy in the coming weeks.  Like NCAA basketball’s March Madness, much remains in play, especially given Part D’s programmatic (and patient-level) complexity.

For example, in their March 14 report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concern “about the quality of pharmaceutical care received by beneficiaries with multiple medications.”  MedPAC notes that Part D enrollees’ medical problems may be “caused or exacerbated by their heavy use of medications (polypharmacy), and they are at increased risk of adverse drug events, drug-drug interactions, and use of inappropriate medications.”

To help alleviate such potential risk, prescient policymakers required Part D plan sponsors to implement medication therapy management (MTM) programs, something that I examined closely during my tenure at AARP.  Within Part D, MTM’s experience to date represents a cautionary tale of missed opportunities to bring clinicians, patients, and drug plans together to achieve the Triple Aim.  This commentary reviews several challenges, and identifies new positive cues to better integrate systematic, patient-centered medication management across all of Medicare.

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Three Better Bipartisan Health Policies To Pay For Repealing Medicare’s SGR


March 21st, 2014
by Robert Moffit

After months of House and Senate negotiations on legislation to replace the Medicare Sustainable Growth Rate (SGR) formula for updating Medicare physician payment, members of Congress are relieved to finally have an agreement. It is perfectly understandable that they, as well as professional medical organizations, want to act quickly. The danger is that even normally staid and stern budget hawks are prepared to move quickly to get this unworkable payment system permanently off the national agenda.

Of course, the Sustainable Growth Rate (SGR) should be repealed and replaced. Congressional leaders point out that since 2003, the routine cycle of emergency “doc fixes” have cost taxpayers $150 billion. The compromise legislation, which is barely better than the deplorable status quo, falls far short of what should be done.  In fact, the House bill (H.R. 4015), which passed the House of Representatives on March 14, and the Senate bill (S. 2000), which was reported out of the Finance Committee, would worsen the nation’s deficits.

It is not only critical for lawmakers to responsibly finance the $138 billion in new spending over the next 10 years that eliminating and replacing SGR will incur, but also do so without creating future budget deficits.

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The Arkansas Payment Reform Laboratory


March 18th, 2014

Editor’s note: This post is the first in a periodic Health Affairs Blog series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation. The authors of this post are part of the team evaluating the Arkansas model.

In 1932, Supreme Court Justice Louis Brandeis famously described states as laboratories of democracy. The idea that states can try “novel social and economic experiments without risk to the rest of the country” is certainly relevant today as the United States reforms its health care system. Many states are developing novel strategies.  Arkansas is one, adopting an innovative model of delivering and financing health care.

The Arkansas transformation model, known as the Arkansas Payment Improvement Initiative (APII), aims to create payment incentives that motivate and reward patient centered management of outcomes and reductions in total cost of care. The payment model relies on several types of reforms, including payments based on “episodes of care” and incentives surrounding Patient Centered Medical Homes for health needs and Health Homes for populations with additional, more complex support needs. In this post, we focus on the episodic payment component. Arkansas’s system is a multi-payer model, with participation by Medicaid, the self-insured State Employee and Public School Employee health insurance plans and the two largest insurers in the state, Arkansas Blue Cross and Blue Shield (ABCBS) and QualChoice of Arkansas (QCA), as well as Walmart, the state’s largest private self-insured employer purchaser.

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Nine Questions About My New Medical Home


March 17th, 2014
by Matthew Anderson

Sometime in the past five years — it’s hard for me to say exactly when — I suddenly found myself living in a new home. I must admit I am still a bit disoriented by how this happened. But it did. People keep telling me that everything will be ok but I am not entirely sure.

For example, in my old home we had occasional family meetings; things are different now. We now have weekly (and monthly) meetings. The many new administrators ask us to complete personality surveys. Once we had to figure out what items we should take from a sinking yacht in the South Pacific (hint: the $100 bill will be useful). Another time we had to decide if we were a “Wow” or a “Thinker.” We are asked to figure out how we can do a better job for them. I guess, like all forms of therapy you don’t get better unless you change.

Despite all these meetings there are a series of things I still don’t understand. I am afraid to raise my hand at the meetings and give the impression I’m a bad sport so I have written my questions down. Please, please don’t think I am a Luddite who wants to go back to the old home. In fact, what I dislike most about the new home is precisely the way — even in its differences — it resembles the old home.

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The Latest Health Wonk Review


March 14th, 2014
by Chris Fleming

Brad Wright at Wright on Health offers this week’s edition of the Health Wonk Review. His “Mud Season Edition” is an entertaining read and includes a Health Affairs Blog post by Suzanne Delbanco on pay-for-performance.

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A Lifetime Value-Based Proposal For Medicare Payment Reform


March 14th, 2014
by Zhou Yang

urrent Medicare reform policy proposals mainly focus on lowering annual cost or cost increase per capita, but they fail to recognize Medicare as a lifetime plan that covers each beneficiary from age 65 to death. I propose a Lifetime Value-Based Payment Plan (LVBPP) for Medicare reform. LVBPP aims to achieve efficient use of the government contribution to Medicare for each beneficiary from age 65 to death and features shared responsibility among beneficiaries, providers, and federal government.

LVBPP includes six major components to create incentives for chronic disease prevention and efficient use of medical care resources by promoting market-based competition on quality of care and innovations in medical technology and care delivery models. Preliminary results indicate that LVBPP could lead to better health in terms of longer longevity and lower disability rate, save up to $70 billion over 10 years, and save up to $164 billion for the federal government over the lifetime of the cohort of upcoming beneficiaries age 55 to 59, as of the 2010 census. (The bases for these savings estimates, as well as suggested values for the expenditure thresholds and copayment rates involved in LVBPP, are provided in the Simulation Appendix below.)

The challenge. There is wide consensus that chronic disease is the leading cause of mortality and rapidly increasing health care costs in the US. Lifestyle choices have been found to be a major factor behind the increasing prevalence of chronic disease. It is estimated that 60 percent of deaths and 70 percent of health care spending in the US are related to lifestyle choices. However, despite volumes of science-based clinical trial results demonstrating positive effects of behavioral change on patients’ long-term well-being, and continuous public media campaigns promoting lifestyle change, there is no sign of reduction in the prevalence rate of chronic disease in the US population.

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Physicians’ Concerns About Electronic Health Records: Implications And Steps Towards Solutions


March 11th, 2014

Policy makers and professional organizations have become increasingly concerned about physician professional satisfaction. As in the managed care expansion of the 1990s, recent health reforms, including but not limited to the Affordable Care Act (ACA) and the American Recovery and Reinvestment Act (ARRA), have begun to have effects “in the exam room,” changing how patients, physicians, and allied health professionals interact. To better understand how these reforms are affecting patient care and other aspects of physicians’ professional lives, we recently conducted an in-depth study of professional satisfaction using a combination of open-ended interviews and written surveys with physicians and other professionals in 30 practices (encompassing 55 distinct practice sites) across the United States.

We found several factors that enhanced physician professional satisfaction in 2013, including:
.

  • perceived ability to deliver high-quality patient care
  • reasonable control over the environment, pace, and content of work
  • sharing clinical values with organizational leadership
  • respectful professional relationships
  • incomes perceived as predictable and fair

Intense Physician Reaction To Electronic Health Records

At the time of our study, the ACA did not yet seem to have measurable effects on physician professional satisfaction, either positive or negative. Instead, regulations stemming from the ARRA—specifically, incentives and penalties to adopt electronic health records (EHRs)—have provoked widespread and intense responses from practicing physicians. Despite recognizing the value of EHRs in concept, many physicians are struggling to use their EHRs, which they describe as negatively impacting patient care in several important ways and undermining their professional satisfaction.

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Implementing Health Reform: Basic Health Program And More ACA Litigation Results


March 10th, 2014
by Timothy Jost

On March 7, 2014, the Centers for Medicare and Medicaid Services of the Department of Health and Human Services released its final rule on the Basic Health Program (BHP). This rule finalizes a rule proposed by CMS in September of 2013, which was covered here. CMS also released its methodology for funding the BHP for 2015. Finally, CMS published, along with the Departments of Labor and Treasury, a request for information regarding the implementation of a provision of the Affordable Care Act that prohibits insurers from discriminating against providers based on their licensure or certification status.

This post will discuss these issuances, as well as a decision by the United States Court of Appeals for the District of Columbia rejecting yet one more challenge to the ACA.

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Implementing Health Reform: Allowing Noncompliant Policies; Benefits And Payment Parameters Rule (Part 2)


March 7th, 2014
by Timothy Jost

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. 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.

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Implementing Health Reform: Allowing Noncompliant Policies; Benefits And Payment Parameters Rule (Part 1)


March 7th, 2014
by Timothy Jost

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.

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New Health Policy Brief: Geographic Variation In Medicare Spending


March 6th, 2014
by Tracy Gnadinger

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation describes geographic variation in Medicare spending. Data from the Centers for Medicare and Medicaid Services (CMS) show that in 2012 Medicare spent an average of $9,503 nationally per beneficiary, ranging from $15,957 in Miami, Florida, to $6,569 in Grand Junction, Colorado.

This brief looks at the factors that may be driving these variations, including the amount Medicare pays for services, the health status of beneficiaries, the types of services provided to a region’s population, and whether the local spending patterns are consistent with the spending on patients with private insurance.

As policy makers continue to find ways to improve quality in health care and eliminate unnecessary spending, a better understanding of geographic variation in Medicare spending has the potential to help achieve the so-called Triple Aim: better health, better health care, and lower costs.

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