The CMS has issued an interim final rule Monday that attempts to stop providers and organizations from steering patients eligible for Medicaid or Medicare into private insurance as a way to receive higher reimbursement rates.
The rule issued Monday requires dialysis centers that help patients pay private insurance premiums either directly or through charities to clarify what plans in their region pay for and how that compares to Medicare or Medicaid.
The notices must inform patients that some plans may not cover all costs typically covered by Medicare, such as necessary medical expenses for living donors.
“We believe these individual market premium payments are particularly prone to abuse because they are so closely tied to the type of coverage an individual selects,” the agency says in the rule.
The notices also must detail the exact subsidy amount for private insurance and how much the dialysis center’s reimbursement differs from private insurers to other payers.
Dialysis facilities must also reach out to a plan to ensure that they will accept insurance subsidies from a third party and will do so for a full calendar year to ensure continuity of care. The rule, which affects 6,064 dialysis centers throughout the country, goes into effect on Jan. 14, 2017.
The CMS estimates it will cost these facilities nearly $700 million in administrative costs to comply with the rule between 2017 and 2026.
Earlier this year, UnitedHealth Group alleged it was charged more by dialysis treatment chain American Renal Associates by steering Medicare- and Medicaid-eligible patients to the insurers’ plans and then helping the patients pay for the premiums through a charity, the American Kidney Fund.
The rule’s comment period ends Jan. 14, 2017.
Federal government accounts for nearly 29% of the total
Healthcare spending in 2015 increased at a rate of 5.8%, the fastest in eight years, as more people obtained health insurance and prescription drug costs continued to rise, according to a CMS report published Friday by Health Affairs.
For the first time, the federal government accounted for the largest share of healthcare spending at 29%, mainly because of Medicaid expansion. Household spending made up 28%, private businesses were 20% and state and local governments were 17%.
Federal government spending grew at a rate of 8.9% in 2015 after an 11% increase in 2014.
The 2015 increase follows a 5.3% spending increase in 2014, which came after five years of historically slow growth. National healthcare expenditures represented nearly 18% of the GDP in 2015.
Spending in 2015 reached $3.2 trillion, or $9,990 per person. The report’s authors predict continued growth in health spending over the next decade because of the aging population and continued medical price growth.
The report “casts further doubt on the extent of a permanent slowdown in health cost growth,” said economist Eugene Steuerle of the nonpartisan Urban Institute.
Although the 9% increase in prescription drug spending was lower than the 2014 rate of 12.4%, it was the fastest growth of any service in 2015. This was mainly due to new, high-cost medications to treat hepatitis C, cancer and autoimmune disease.
High prescription drug prices have been a rallying cry for Democrats and Republicans recently. Pharmaceutical executives have faced a backlash in Congress for generally high prices and price hikes to generic drugs.
Private health insurance continues to be the largest payer of healthcare and accounted for about one-third of total spending in 2015. Medicare spending grew by only 4.5% and was 20% of total spending.
Former White House official Ezekiel Emanuel said that’s partly due to the Obama administration’s stewardship. Not only did the health care law cut payments to service providers, it set into motion a series of initiatives that aim to reward quality, improve coordination and penalize poor performance.
Medicaid expenditures grew 9.7% and accounted for 17% of overall spending. About half of the states expanded Medicaid eligibility to cover all people who make up to 138% of the federal poverty level in 2014. A few more expanded in 2015. The federal government pays all the costs of expansion for the first three years.
Spending growth for physicians and clinical services was 6.3% and that category accounted for 20% of all healthcare spending. Hospital spending was 32% of overall spending and increased at a rate of 5.6%.
Out of pocket spending increased 2.6% in 2015, up from an increase of 1.4% in 2014. It accounted for 11% of total spending. The report notes that as coverage has increased, more people are enrolled in high deductible health plans, which generally produce high out of pocket spending.
The report was disappointing news for the outgoing Obama administration, which had enjoyed a long stretch of historically low increases in health care spending, and had sought to credit its 2010 health care overhaul for taming costs. It’s a reality check for President-elect Donald Trump, who did not focus much on health care during his campaign and implied that problems could be easily fixed.
“You get back to this old problem we have of spending growing faster than the economy,” said Douglas Holtz-Eakin, president of the America Action Forum, a center-right think tank. “If you don’t solve the cost problem, it will undercut coverage expansions because they get too expensive.”
The HHS report was published online by the journal Health Affairs. The Associated Press contributed to this report.
HHS wants to capitalize on bipartisan interest to address opioid addiction and lack of access to behavioral health services by releasing a new report that shows Medicaid expansion could address the crises. The goal is to convince Republican holdout states to expand coverage.
An estimated 1.9 million uninsured people with a mental illness or substance use disorder live in states that have not yet expanded Medicaid under the Affordable Care Act and had incomes that could qualify them for coverage, according to the report released Monday.
The report found that if all states expanded Medicaid, an estimated 371,000 fewer people each year would experience depression, and 540,000 more people would report being in good or excellent health.
To date, 30 states and the District of Columbia have expanded Medicaid under the Affordable Care Act.
On a call with reporters Monday, a senior HHS official admitted that recent bipartisan interest in addressing mental health woes and substance abuse epidemics played some part in releasing the report.
“We thought it was good time to inject some new facts into that discussion,” said Richard Frank, assistant secretary for planning and evaluation at HHS.
Earlier this month, the Senate passed, 94-1, a bill aimed at combating opioid misuse and overdose deaths. The bill creates grant programs for states to build education programs, develop evidence-based treatment plans and strengthen prescription-monitoring programs. It also expands the availability of naloxone, which can reverse an opioid overdose.
However, Democrats said that without funding, the legislation is essentially powerless. The White House made a similar assertion.
And HHS’ own data shows Medicaid expansion is not a silver bullet as some behavioral health providers are unwilling to take any insurance, especially Medicaid.
For instance, a 2014 JAMA Psychiatry study posted on the National Institutes of Health’s website showed that psychiatrists’ Medicaid acceptance rates, at 43%, were lower than physicians of other specialties, who came in at 73%.
Just last month, the CMS released a report that found Medicaid enrollees were not getting the behavioral care they needed, noting that the results “suggest that states have substantial room for improvement.”
A CMS spokesman countered that there is also positive data about Medicaid beneficiaries getting the behavioral care they need.
A 2015 American Journal of Public Health study found that low-income adults with serious mental illness are 30% more likely to receive treatment if they have Medicaid coverage.
He also pointed to a 2015 Government Accountability Office report, which found that Medicaid expansion states reported greater access to behavioral health treatment.
Officials in Nevada noted that there were fewer delays in receiving care, and officials in West Virginia reported an increased availability of prescription drugs for individuals with behavioral health conditions.
Lawmakers have until Dec. 11 to pass an omnibus bill for fiscal 2016, and with extra money made possible by last month’s budget deal, HHS and the National Institutes of Health could see extra funding.
If they cannot get an omnibus passed, there could be another continuing resolution agreement to keep funding for a period of time. Otherwise, the government will shut down.
Analysts said lawmakers will add riders to the bill that will be the focus of negotiations and familiar disagreements and could impede a final agreement.
The budget deal raised the sequester caps by $80 billion in the next two fiscal years. For fiscal 2016, $50 billion of that is available and half will go to defense spending.
David Reich, senior policy consultant with the Center for Budget and Policy Priorities, said a shutdown is possible but an omnibus agreement is also not an unreasonable hope. A continuing resolution wouldn’t solve much.
“It’s a problem for agency operations to not know what their budget is well into the fiscal year,” he said.
Ellie Dehoney, vice president of policy for Research America, said a path to repealing the medical device tax, although it has received some bipartisan support, has not been forged.
It could be tied in with efforts to repeal the “Cadillac” tax on high-end health insurance plans but nothing concrete is in the works for that yet either, she said.
Reich said the extra money could go to departments throughout HHS, but lawmakers may get stuck on issues such as financing for the Affordable Care Act, some research agencies and Planned Parenthood.
The House appropriations bill calls for rescinding past funding of the ACA and eliminating most new spending. It would get rid of Title X family planning funds and also essentially eliminates the Agency for Healthcare Research and Quality and the Center for Medicare and Medicaid Innovation, he said.
Those provisions would be mostly unpalatable for Democrats and the White House, Reich said.
Dehoney said the NIH is likely to get more money than in previous years and it will probably not be earmarked but be used to bolster ongoing research.
“I think it will lift all boats,” she said
The original House Labor, Health and Human Services Funding Bill would allocate $71.3 billion to HHS, which is a slight increase from the year before but about $4 billion below the president’s budget request for the agency.
It would also give $31.2 billion to the NIH, $7 billion to the Centers for Disease Control and Prevention and $6 billion to the Health Resources and Services Administration. It would provide $3.3 billion for the CMS, which is nearly $1 million below the president’s request.
Dehoney said the budget deal has changed the game, however.
“They’re definitely renegotiating all of this because they have extra money,” she said.
In 2013, a government shutdown over implementation of the ACA stalled medical research and FDA drug approvals.
The CMS says doctors tending to tens of millions of chronically ill Medicare patients aren’t taking advantage of federal dollars aimed at improving chronic care and reducing hospital readmissions and overall costs.
This year, Medicare began paying an average of $42 per patient per month for non-face-to-face chronic-care management services, such as consulting with other doctors caring for the same patient who might be dealing with dementia, heart disease or arthritis.
The CMS estimates 70% of Medicare beneficiaries—roughly 35 million—would be eligible, but CMS has only received reimbursement requests for 100,000 beneficiaries thus far, Kathy Bryant, a senior technical adviser in the Center for Medicare, said last week at an Advisory Panel on Outreach and Education meeting. She added that even that number may be too high as some could be duplicate claims.
One possible reason for the low interest is that doctors have to get permission from patients who are responsible for a 20% copayment each time their provider bills for the services.
“Getting bills for things when they haven’t seen a doctor is not something they are used to,” Bryant said.
Others said the CMS didn’t provide enough information on how to properly bill under the codes.
“Physicians are leery about using them because they don’t know if they are doing so correctly,” said Regina Mixon Bates, founder and CEO of the Physicians Practice S.O.S. Group, a healthcare consulting and education firm. Another reason could be the lengthy process on electronic health-record systems.
“There is a concern all this documentation, along with their regular workload, is not worth it for the money they would receive,” said Diane Calmus, government affairs and policy manager at the National Rural Health Association. “It’s just too many hoops they would have to jump through.”
A study from the Stanford University School of Medicine last month looked at how much chronic-care management could affect the typical primary-care practice.
The study found substantial increases in annual revenue, as much as $77,295 in year one, could be gained if they used registered nurses to conduct annual wellness visits and used other staff to handle more frequent management.
And a study released Tuesday by Smartlink found that less than 20% of 300 physicians interviewed are currently participating in the program. The vast majority of physicians who are participating in the chronic-care management program believe it is improving patient care.
The CMS hopes to raise awareness and interest among providers and beneficiaries, Bryant said.
The APOE suggested targeting nurses and case workers, as they would be the ones who would likely be billing under the codes. The panel also suggested engaging consumers through social media.
Some industry stakeholders believe that could help.
The American Academy of Family Physicians is also performing outreach on the codes, and is highlighting members who have successfully billed under it, according to Dr. Robert Wergin, board chair of the group.
Dr. Andrew Gurman, president-elect of the American Medical Association. said his group is educating medical practices on chronic-care management services, which he calls a “game-changer,” because doctors will be getting reimbursed for services they already provide.
And therein lies another rub, expert say. Many doctors and practices will have to inform patients that the case management they were doing for free will now cost patients a co-pay.
“Some doctors said they were concerned that their patients would be unwilling to pay the cost-sharing,” said Dr. Peter Hollmann, a Pawtucket, R.I., internist and member of the American Geriatric Society Board.
However, he said the biggest likely reason for the slow uptick is that this code is still relatively new.
“There is an expected delay in uptake of new codes, especially when the rules are complicated. This requires that a practice use an electronic record, get patient consent to bill, and have a written care plan in place. Then the practice needs to track the time in a calendar month. None of this is part of a practice routine and Medicare only has data on early months,” Hollmann said.
As expected, the CMS’ sweeping rule to modernize the regulation of Medicaid managed-care plans is drawing flak from state Medicaid directors and insurers who say it would impose heavy-handed federal control and could hurt patient care.
But some consumer advocacy groups responded favorably to the proposed rules, saying they offer guidance to states and Medicaid plans in developing provider networks that offer better access to beneficiaries.
The 653-page rule released in May would cap how much premium revenue private plans could allocate for administration and profits; require states to more rigorously supervise the adequacy of plans’ provider networks; encourage states to establish quality rating systems for plans; allow more behavioral healthcare in institutional settings; and encourage the growth of managed long-term care.
The proposed rule was considered long overdue because Medicaid managed-care enrollment has soared by 48% to 46 million beneficiaries, according to consulting group Avalere Health. By year-end the firm estimates that 73% of beneficiaries will receive services through managed-care plans.
Currently, 37 states and the District of Columbia contract with Medicaid plans, according to Medicaid Health Plans of America.
States have turned to Medicaid managed-care plans hoping to reduce costs and get more budget predictability. Insurers, however, have faced criticism for offering inadequate provider networks and denying needed care to pad their bottom lines. Because of the wide variation in how states run their Medicaid managed-care programs, there have been “inconsistencies” and “less-than-optimal results,” the CMS said when it issued the proposed rule.
Last year, HHS’ Office of Inspector General reported that states were not enforcing their own rules to ensure Medicaid plans had enough providers to care for their patients.
The last federal regulation governing such plans was issued in 2002. The proposed rule received nearly 900 comments by the July 27 comment deadline.
The National Association of Medicaid Directors said in its written comments that the rule would reduce the role of state Medicaid agencies in supervising how Medicaid managed care operates in their states. “The overarching framework of the regulation appears to shift the balance of authority for Medicaid managed care to the federal government, driving a top-down model that runs counter to the goal of a modernized regulatory framework,” the group said.
That approach, the group added, “removes the ability of states to drive innovation in managed-care delivery, to fully leverage the relationship to improve plan performance, or to tailor the approach to reflect the needs and expectations of the local population.”
A CMS representative did not respond to a request for comment for this article.
The Medicaid directors criticized a provision that would require states to offer Medicaid beneficiaries at least 14 days of initial coverage under traditional fee-for-service Medicaid, during which time they could choose a managed-care plan. “This policy fails to recognize that many states no longer have (fee for service) delivery models in their program,” the group complained.
Medicaid plans objected to the CMS’ proposal that they be required to spend 85% of premium revenue on medical care, a threshold known as a medical loss ratio. The Affordable Care Act set minimum medical loss ratios of 80% and 85% for individual and large-group plans in the commercial sector; money spent on administrative costs and profit above those limits must be rebated to consumers or employer purchasers. As of 2015, health plans doing business with Medicaid and the Children’s Health Insurance Program are the only ones that are not subject to such thresholds.
The health insurance industry had lobbied against inclusions of a minimum medical loss ratio, but experts said the proposed Medicaid requirement would not have much effect on large national insurers. About three-quarters of states with Medicaid managed care already require average medical loss ratios of at least 85%, according to the Kaiser Family Foundation.
Still, the Blue Cross and Blue Shield Association argued in its written comments that the benefits and services offered by managed-care organizations do not easily fit into the commercial medical loss ratio calculation. For example, managed-care plans spend significant resources on beneficiary outreach, partnering with local organizations for health promotion activities, and services to enhance patient compliance with treatment plans.
“Accounting for these expenditures in the MLR methodology may be challenging,” the Blues association said. “In addition, federal and state Medicaid reporting requirements require significantly more administrative resources beyond what commercial and Medicare programs require, making meeting an 85% MLR more difficult.”
To ensure that Medicaid beneficiaries have adequate access to care, the CMS is proposing that states establish time and distance standards for enrollees’ access to providers. The agency mostly left the development of these standards to the states.
At a minimum, Medicaid plans’ provider networks must meet such standards for certain types of providers, including hospitals, primary-care physicians and OB-GYNs, according to the proposed rule. The CMS said time and distance more accurately capture whether beneficiaries have adequate access to care than provider-to-enrollee ratios. States must also consider whether plans offer an adequate number of providers who speak languages other than English. In addition, the CMS encouraged states to include pediatric primary, specialty and dental providers in their network rules because of the large number of children covered under Medicaid and CHIP.
But Medicaid plans warned such requirements could hurt care for beneficiaries. “Requiring that states establish access standards based on the travel time and distance to a provider’s office relies on outdated notions of ‘traditional’ models of care delivery and does not take into account the variety of ways in which patients now commonly access healthcare, including via telemedicine,” Kaiser Permanente, which operates Medicaid plans, said in its comments. “Mandating the use of time and distance standards works to preserve the structure of geographically dispersed, disjointed provider networks and would do nothing to improve the quality of care provided to Medicaid beneficiaries.”
Geography-based standards also could discourage integrated delivery systems like ACOs, plans said.
But the National Health Law Program, a consumer advocacy group, praised the network adequacy provisions. “For too long, the Medicaid managed-care program has lacked specific network adequacy standards aimed at ensuring that consumers can access care from their Medicaid plans,” the group said. “These proposed provisions add significant detail to guide states and Medicaid plans in developing their networks to ensure adequacy.”
Medicaid Health Plans of America criticized a proposed provision eliminating the requirement that Medicaid plan enrollees provide written consent for a provider to file an appeal on their behalf following an adverse benefits decision. The CMS said requiring Medicaid enrollees to provide written consent is inconsistent with standards for the Medicare Advantage program.
“The language in the proposed rule may encourage providers to use the appeal process as a way to file claims payment disputes, which is not the intent of the grievance or appeal process,” the health plan group said in its comments.
Anthem wrote that “we believe that the proposed approach could potentially result in providers operating in furtherance of their own self-interest.”
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