Tag: Affordable Care Act (ACA)

This is How CMS will Pay for Medicare

CMS just released Medicare payment final rules and says new policies focus on value, improve how care is provided, and increase transparency of information on quality.

Over the past several days, the Centers for Medicare & Medicaid Services (CMS) released final rules outlining how Medicare will pay major health care providers and suppliers in 2015. Important provisions of the Affordable Care Act that reward higher quality, patient-centered care at a lower cost are being implemented by these rules. The final rules include Medicare payments to physicians and non-physician practitioners, hospital outpatient departments, ambulatory surgical centers, home health agencies and dialysis facilities that treat patients with end-stage renal disease.

“Health care systems across the country are shifting their focus from volume of services to better health outcomes for patients, coordinating care, and spending dollars more wisely,” said CMS Administrator Marilyn Tavenner. “These rules are a part of the broader strategy driving greater value in health care. By collaborating and building on best practices across the health care system, we can deliver the results of higher quality care and lower costs that consumers, providers, purchasers, and businesses deserve.”

The rules reflect a broader Administration-wide strategy to move our health care system to one that values quality over quantity and spends taxpayer dollars more wisely by finding better ways to deliver care, pay providers, and distribute information:

Empowering providers to deliver coordinated and integrated care, transition to new models of care, and improve the doctor-patient relationship.

  • Better coordination of care for beneficiaries with multiple chronic conditions. Often, seniors with multiple conditions see a number of specialists. In those cases, extra physician effort is required to coordinate a care regimen that prevents over-treatment or duplicative tests. Historically, Medicare has not paid for services that support care management but are not delivered face-to-face, such as telephone check-ins with nurse care managers, in the clinical setting. Under this year’s rulemaking, the Medicare Physician Fee Schedule will include a new chronic care management fee beginning next year. This separate payment for chronic care management will support physician practices in their efforts to coordinate care for Medicare beneficiaries with multiple chronic conditions. This helps improve the way care is provided by supporting clinicians coordinating care for patients, including outside of regular office visits.

Aligning the way providers are paid to reward value rather than volume.

  • Paying providers for quality, not quantity of care. In 2015 Medicare is continuing to phase in the Value-based Payment Modifier, which adjusts traditional Medicare payments to physicians and other eligible professionals based on the quality and cost of care they furnish to beneficiaries. Those adjustments translate into payment increases for providers who deliver higher quality care at a better value, while providers who underperform may be subject to a payment reduction.

Providing incentives to hospital outpatient departments and facilities to deliver efficient, high-quality care.

The Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS) rule includes provisions that promote greater packaging of payments for items and services rather than making separate payments for each individual service. For example, a new comprehensive Ambulatory Payment Classifications payment policy is being implemented in CY 2015 to make a single payment for all related hospital items and services provided to a patient receiving certain device-dependent procedures, such as insertion of a pacemaker, rather than separate payments for each supportive service, such as routine tests and diagnostic procedures.

Increasing the availability and accessibility of information on quality, utilization and costs for effective, informed decision-making.

  • Better information for providers to understand the total scope, cost, and quality of care that the Medicare beneficiaries they serve receive. To assist physician groups and physicians in improving quality of care for their Medicare beneficiaries, CMS recently made Quality and Resource Use Reports available. The reports include information about the scope, cost and quality of care that is delivered to the Medicare beneficiaries they serve, both inside and outside of their practices. These reports include information on where beneficiaries are hospitalized and whether they were readmitted. Solo practitioners and group practices can use the reports to implement action steps that can improve care coordination and reduce the provision of unnecessary services, improving the quality, effectiveness, and efficiency of care delivered to Medicare beneficiaries.
  • Expand and add new measures to the Physician Compare website. The Physician Compare website allows consumers to search for reliable information about physicians and other health care professionals who provide Medicare services so they can make informed decisions about who delivers their care. CMS has finalized policies to significantly expand the quality measures available on this website by making group practice and individual physician-level measures available for public reporting, including patient experience measures, and measures collected by Qualified Clinical Data Registries. By making all of these measures available for public reporting, CMS can work to include a diversity of quality measures on the website while including only those measures that are most beneficial to consumers and best aid decision making.
  • New quality and performance measures for dialysis facilities. The End-Stage Renal Disease (ESRD) Prospective Payment System rule introduces new quality and performance measures for outpatient dialysis facilities. The rule incorporates in 2017 a Standardized Readmission Ratio, which assesses the rate at which ESRD dialysis patients return to an acute care hospital within 30 days of discharge from an acute care hospital, supporting the Administration’s efforts to reduce unnecessary hospital readmissions in all settings.

Reform Update: Doc groups concerned over looming Medicare penalties tied to PQRS

Medicare will begin docking physicians’ pay next year if they decline to report on quality measures under a voluntary system launched in 2007. Providers, however, remain confused and frustrated by its framework. The program—the Physician Quality Reporting System, or PQRS—will gain even more significance in 2017, when the CMS will apply a value-based modifier to physician payments based on the quality data collected. Physicians had little time to analyze their 2013 data to help choose their best option for PQRS reporting for the next 12 months, which the Medical Group Management Association, a trade group for physician practices, says is typical of its frustrations with the program. The CMS allows providers to report the data as individuals or groups, and there are several avenues for reporting, including Medicare Part B claims, qualified clinical registries and electronic health records. Medical groups seeking to participate in the 2014 PQRS’ group practice reporting option must register by Sept. 30, yet those who participated in the 2013 program received notice last week if they qualified for incentive payments. If physicians met PQRS quality-measure reporting criteria in 2009 and 2010, they received a 2% bonus of their Medicare Part B charges. This percentage fell to 1% for 2011 and to 0.5% for 2011 through 2014. This year’s financial incentive was also reduced by 2% under the broad federal budget cuts known as sequestration. “The decreased incentive being offered is not that significant. The greater concern is on the penalty going forward,” said Anders Gilberg, the MGMA’s senior vice president for government affairs. For 2015, failing to participate could mean a 2% penalty. The PQRS requirements for 2015 will not be known until the release of the final 2015 Medicare physician fee schedule in November, so the recently received feedback received for 2013 performance has limited usefulness, Gilberg said. “It’s not the most actionable information,” Gilberg said. “It’s also resulting in a level of provider frustration that’s as high as it’s ever been.” A chief concern for the MGMA has been the subtle differences and redundant reporting of the same data for PQRS, the CMS value-based payment modifier, and the incentive program for the meaningful use of electronic health records. When all of these programs move from awarding bonuses to issuing penalties, doctors could face a cumulative 11% reduction in Medicare payments, by the association’s tally. Current plans, as mandated by the Patient Protection and Affordable Care Act, call for applying the value-based payment modifier, or VBPM, to Medicare payments in 2017 based on 2015 PQRS data. The current state of provider thinking on PQRS could be summed up in one word: “confusion,” said Melissa Blom, an account executive with Covisint, a company offering Web-based applications for PQRS participation. Blom said the same cycle of data release and registration requirements happened last year, so medical groups should have been prepared. She added that the 2013 data—if released earlier—could have been used to help validate physician decisions to either report individually or as a group. “While it could have made a difference for some, they should have already have had an idea of what they might do,” Blom said. Some groups have discussed not participating in PQRS and just accepting whatever penalties are assessed, but Blom said that is short-sighted and often based on an incorrect assumption that the program won’t continue. “Not only is it not going away, there will be more penalties and awards based on their ability to demonstrate they’ve delivered high-quality care at low cost,” she said. “If they don’t participate, the hit is going to be a lot more than they realize, and I think they will regret it.”

Health Costs Inch Up As Obamacare Kicks In

Doctors and hospitals treated more patients and collected more payments in the spring as millions gained insurance coverage under the health law, new figures from the government show.

But analysts called the second-quarter increases modest and said there is little evidence to suggest that wider coverage and a recovering economy are pushing health spending growth to the painful levels of a decade ago.

Thursday’s results from the Census Bureau’s survey of service industries join other recent cost indicators that “are quite a bit lower than what the folks at CMS were projecting,” said Charles Roehrig, director of the Center for Sustainable Health Spending at the Altarum Institute, a nonprofit research and consulting outfit. “And they’re lower than what we were expecting as well.”

CMS is the Centers for Medicare & Medicaid Services, the government’s main health care bookkeeper. Last week CMS projected that health-expenditure growth would accelerate to 5.6 percent this year from an estimated 3.6 percent in 2013.

But health and social spending as measured by the Census Bureau grew by only 3.7 percent from the second quarter of 2013 to the same quarter of 2014. Hospital revenue increased 4.9 percent during the same period. Revenue for physician offices barely budged, growing by only 0.6 percent. Medical lab revenue rose 1.9 percent.

The report is far from being the last word. It doesn’t include spending on prescription drugs, which has been rising this year thanks to new very expensive medicines for hepatitis C.

And while the Census Bureau’s year-over-year results for the second quarter show tame cost trends, the increase from the first quarter to the second was more substantial. Total health and social spending rose at an annual rate of more than 12 percent from first quarter to the next. If sustained, such acceleration would raise alarms and actuaries’ blood pressure.

But some who follow costs closely don’t think the pace will continue.

First, health spending suffered a mini-crash over the winter, as bad storms kept people away from caregivers. Hospitals and doctors billed less from January to March than they did last fall. Part of the second-quarter recovery may just have been catch-up, analysts said.

At the same time, many people covered through the health law’s online marketplaces didn’t sign up until close to the deadline at the end of March. Much of the spring increase may represent a one-time surge as those folks sought treatment for previously neglected conditions.

For those reasons, the year-over-year results for the second quarter may give a better indication of longer-term cost trends than the change from the first quarter to the second, Roehrig said.

Estimates vary, but no one disputes the idea that the Affordable Care Act’s health insurance marketplaces and expansion of Medicaid for the poor have added millions of previously uninsured people to coverage rosters this year.

History and logic suggest that expanded coverage and an improving economy will boost long-term, national health expenditures from their average growth rate of 3.7 percent during the past five years. (That’s spending by everybody — government programs, employer insurance, commercial plans and consumers paying out of pocket.)

But so far the speedup seems nowhere close to the near-double-digit rates in the early 2000s.

5 Megatrends With The Potential To Transform U.S. Health Care

Recently, Cisco chairman and CEO John Chambers told me that U.S. health care is at a tipping point. A positive one, he hopes, but the truth is no one knows for sure which direction the system will tip.

At the close of our interview, I asked Chambers what health care topic he’d like me to cover in the future. He asked me to answer two questions. And they happen to be the two questions weighing most heavily on the minds of just about every U.S. health policy expert:

Question 1: “How will the health care world move from operating in silos to working together seamlessly?” And question 2: “How will (doing that) help patients achieve the health outcomes that are possible and most important to them?”

Predicting the future is impossible. But these five health care megatrends offer reason for hope – and for concern, as well.

1. The Formation Of Accountable Care Organizations (ACOs)

ACOs are groups of health care providers (primary care physicians, specialists, hospitals, etc.) who band together voluntarily to look after a patient’s total health. ACOs promise to eliminate silos, improve patient outcomes and lower overall health care costs.

At least, that’s the concept.

ACOs were built into the Affordable Care Act (ACA), also known as “Obamacare,” and carry both incentives for better clinical outcomes and the backing of many commercial insurance carriers.

If successful, ACOs could move American health care from its historically fragmented structure to one that provides substantially higher levels of integration and collaboration.

What that means for patients is that fewer will fall between the cracks at the point of care. When a primary care physician is sharing patient information and collaborating with a heart specialist, the probability of error decreases.

What’s the catch? Getting health care providers to work together is no easy feat.

Health care silos have been around for decades. Few doctors are quick to cede their independence or autonomy for the sake of greater collaboration. Meanwhile, hospital administrators don’t like having to share authority with clinicians. They’ve been trained to fill beds, not improve the effectiveness of care.

Most newly formed ACOs have demonstrated the ability to improve the quality of patient care. But few have been able to reverse the rising costs of health care delivery.

Overcoming the cultural issues is likely to prove harder than policy makers would hope.

2. Moving Away From Fee-For-Service Payment Models

Health care’s traditional fee-for-service payment model is flawed. Physicians and hospitals get paid based on volume and complexity of their services – not based on clinical outcomes.

Through these perverse incentives, physicians make more money by doing more tests, seeing patients more frequently and performing high-priced, complex procedures. Under fee-for-service, keeping patients healthy and avoiding major diseases would be relatively unprofitable for doctors and hospitals.

America spends nearly $3.8 trillion a year on health care. That’s 17.6 percent of the gross domestic product (GDP) and significantly more than any other country. Yet our measurable health outcomes – from infant mortality to life expectancy – rank nowhere near the top of developed nations.

Some health care delivery systems are adopting viable alternatives called prospective payments. These include bundled payments – a single payment for an entire episode of care (a start-to-finish treatment for any given patient). They’re also exploring capitation – a negotiated payment for a given period to cover the costs for a group of patients with clear expectations around quality and service.

Both approaches seek to shift financial incentives away from volume to providing total care for the patient. They’re about moving from sick care to health care.

And there have been some successes here. Take Pacific Business Group on Health (PBGH). Rather than generating a bill for hundreds of individual tests and procedures, PBGH is requiring hospitals and doctors to charge a single, all-inclusive price. In 2008, the purchasing group limited what it would pay for total joint hip replacements to $30,000. As a result, participating hospitals dropped the price of the procedure.

What’s the catch? Before we can generalize about the efficacy of this approach, we must recognize that total joint surgery is a procedure performed by only one group of medical specialists. And their outcomes are consistently good.

What happens when we introduce patients with more complex problems, like those with multiple chronic diseases? With bundled payments and capitation, physicians and hospitals will need to figure out how to distribute revenue among care providers from different specialties.

And this may prove more difficult in practice than theory.

Medicare Advantage is an alternative to the fee-for-service (traditional) Medicare program.

Under Medicare Advantage, the Centers for Medicare & Medicaid Services (CMS) contract with private health plans to provide Medicare beneficiaries with medical coverage.

Patients enrolled in Medicare Advantage agree to obtain care from a specific group of physicians and hospitals. In return, subscribers enjoy lower out-of-pocket expenses.

Participating organizations must report quality and patient satisfaction data to CMS on an annual basis.

Based on this information, each Medicare Advantage program is awarded one to five stars. The Medicare stars program rewards the highest-rated organizations – the ones with superior quality, the greatest success in prevention and the highest levels of patient satisfaction – with additional payments.

What’s great about this program is that it aligns incentives and puts more power in the hands of patients. If the doctors and hospitals don’t perform, the health plans with which they contract receive a lower rating. And each year, patients get to assess which Medicare Advantage provider is right for them.

This program shows a lot of promise. It has demonstrated improved clinical outcomes and increased patient satisfaction. As a result, nearly half of all newly enrolled Medicare members select a Medicare Advantage plan.

What’s the catch? In spite of this success, most Medicare beneficiaries are still in the older fee-for-service payment model.

The Medicare Advantage model may be the future’s preferred approach. It combines many of the elements for success: choice, accountability and transparency. And it could well provide the force needed to tip the U.S. health care system in the right direction.

4. Health Information Technology (healthIT) Incentives

The year is 2014. Technology drives nearly every American industry. But look behind the reception desk at your doctor’s office and there’s a good chance you’ll find a maze of file-folders stuffed with patient information – just as it was 20 years ago.

As part of the recent HiTECH legislation, physicians were offered $44,000 to purchase, install and demonstrate “meaningful use” of modern information technology systems.

These computer systems can provide doctors with important clinical information and help them coordinate with other medical colleagues. As a result, physicians will be able to make better clinical decisions and avoid duplication of tests or procedures.

What’s the catch? Lack of connectivity.

You’d think that doctors and hospitals would share a single technology platform or would, at least, be able to achieve connectivity between their systems.

That’s not the case. Progress in linking disparate technology systems has been slower and more difficult than previously imagined.

Meaningful Use “Stage 2” will provide incentives for interoperability (the ability of making systems and organizations work together). But it remains to be seen whether these federal incentives will be enough to offset the cost required to connect these systems.

Having taken the original dollars, physicians must now deliver on the “meaningful use” requirements. But to net a positive ROI on the IT investment, physicians will need to modify their practices – something they have not been interested in doing in the past.

5. A New Generation Of Physicians

The new generation of physicians are tech-savvy. They can’t imagine their lives without mobile devices or constant connectivity.

And in school, they were trained to work in teams – unlike their elder colleagues. As a result, a majority of new docs prefer to be employed by an established organization (a hospital or an integrated health care system, for example) rather than launching their own private practice.

Their backgrounds and predilections align well with what willAmerican health care will need in the future.

What’s the catch? Many Gen X and Y physicians value and expect greater work-life balance than physicians who came before them. And their enthusiasm may wane once they realize how sluggish the profession has been in embracing new technology.

On the other hand, when patients begin choosing this next generation to care for them, the world of health care may tip rapidly.

Will Change Happen?

Physicians and hospitals are moving forward in each of these areas. They are forming ACOs, accepting new forms of payment, focusing on preventive services, reducing medical errors, and learning to benefit from computer systems.

Still, many providers are hedging their bets.

Some of their practice is bundled and prepaid, but much remains fee-for-service. Some patient information is available through their computers, but much remains on paper. Some are hoping that the prevailing megatrends in health care are just fads. Some will continue to resist change.

What many don’t recognize is what John Chambers emphasized heavily in our interview. The economics will drive change in health care, whether we like it or not.

Change will happen one way or another.

Health Safety Experts Call For Public Reporting Of Medical Harms

The health care community is not doing enough to track and prevent widespread harm to patients, and preventable deaths and injuries in hospitals and other settings will continue unless Congress takes action, medical experts said Thursday on Capitol Hill. “Our collective action in patient safety pales in comparison to the magnitude of the problem,” said Dr. Peter Pronovost, senior vice president for patient safety and quality at Johns Hopkins Medicine. “We need to say that harm is preventable and not tolerable.” Dr. Ashish Jha, a professor at the Harvard School of Public Health, said patients are no better protected now than they were 15 years ago, when a landmark Institute of Medicine report set off alarms about deaths caused by medical errors and prompted calls for reform. “We can’t continue to have unsafe medical care be a regular part of the way we do business in health care,” Jha said. One of the biggest problems, the experts told the Senate Subcommittee on Primary Health and Aging, is that providers and public health agencies still are not accurately measuring the harm. Sen. Bernie Sanders, I-Vt., the panel’s chairman, said afterward that most patients probably don’t know that preventable patient harm is the third-leading cause of death in America. He said the problem hasn’t received the attention it deserves in the public arena or from lawmakers. Jha said it is crucial to develop better metrics to produce credible data about harm that is valid and credible. Without data, providers don’t know how they’re doing or if quality improvement efforts are working, he said. Pronovost and Jha called for requiring the Centers for Disease Control and Prevention, which already collects data about hospital-acquired infections, to begin tracking other patient harms. Dr. Tejal Gandhi, president of the National Patient Safety Foundation, said studies show that medication errors, adverse drug events and injuries due to drugs occur in up to 25 percent of patients within 30 days of being prescribed a drug. Missed and delayed diagnosis is also a problem, and a primary cause of malpractice lawsuits in the outpatient setting, she said. Systems need to be put in place to monitor patient care instead of simply relying on doctors to get it right, Gandhi said. “We cannot just tell clinicians to try harder and think better,” Gandhi said. The title of the hearing, “More Than 1,000 Preventable Deaths a Day Is Too Many: The Need to Improve Patient Safety,” was inspired by a study by John James, a scientist and patient advocate whose son died because of a string of medical errors. James’ recently published study estimated that preventable harm in hospitals contributes to as many as 400,000 deaths a year. James suggested that lawmakers establish a National Patient Safety Board — similar to the National Transportation Safety Board — to investigate patient harm. He also proposed a national patients’ bill of rights that would contain protections similar to those for workers and minority groups. Lisa McGiffert, director of the Consumers Union Safe Patient Project, urged the legislators to ensure there is more meaningful public reporting of the harm to patients, so consumers can make informed choices and providers will be motivated to improve.

Federal Judge Won’t Dismiss FL Medicaid Lawsuit

A federal judge refused Tuesday to dismiss a lawsuit that alleges Florida provides inadequate care to children in its Medicaid program, despite state claims that privatizing the program will resolve many of the problems.

The state argued that a massive statewide overhaul to privatize Medicaid will raise reimbursement rates, improve doctor participation and address allegations that children can’t get doctor appointments. Attorneys for the state said the lawsuit, which was filed nine years ago, has become moot because of the Medicaid privatization. Statewide enrollment for most children began in May and ends in August.

Judge Adalberto Jordan said the changes are promising, but added there are too many unknowns about whether the program will actually improve access to medical care to dismiss the case.

Under privatization, the state pays insurance companies a set fee to provide care and the companies must follow standards. However, Jordan said it will be some time before it’s clear whether insurers follow through.

“It’s one thing to require standards in a contract. It’s quite another thing to see if they meet the standards and we aren’t going to know that for a very long time,” said Jordan, who said he plans to issue a ruling in October.

The state has spent millions defending the class-action lawsuit that claims Florida is violating federal Medicaid requirements by providing inadequate medical and dental care for children on Medicaid. The initial complaint alleges 390,000 children did not get a medical checkup in 2007 and more than 750,000 received no dental care. Many doctors and dentists won’t accept Medicaid, as Florida’s reimbursement rates are among the country’s lowest. The lawsuit alleges children on Medicaid often must wait two to three months to see specialists, especially in rural counties.

Nearly 3 million Florida residents — more than half of them children — are shifting to privatized Medicaid this year. Insurance companies are required to spend 85 percent on patient care and must expand their network of doctors and hospitals, increase reimbursement rates and meet a host of stringent new standards, said Stephanie Daniel, an attorney for the state. She said that will dramatically improve access to medical care.

“Medicaid as it was before won’t exist,” she said.

About 5,000 children will not transition into the privatization program and the state will still pay for the medical services they incur, said Daniel.

Medicaid privatization may be a “game changer” in the case, the judge said, but he noted there are still too many unanswered questions. For example, he said it’s unclear whether the state will decide in January 2015 to further increase doctor reimbursement rates. Additionally, the state must get federal approval if it wants to continue the program beyond three years. It’s unclear what federal health officials will decide, especially as tensions with the state escalated after the Florida Legislature voted not to expand Medicaid to roughly 1 million additional people under the Affordable Care Act.

The trial wrapped up two years ago, but Jordan, who was appointed to the 11th U.S. Circuit Court of Appeals and maintained jurisdiction over this case, has not yet issued a ruling.