Tag: Medicare

Aetna Faces Slim Chance of Winning Humana Merger Appeal

Experts say Aetna is unlikely to win an appeal of a U.S. District Court judge’s decision to effectively block a $37 billion merger with Humana that would have altered the Medicare Advantage landscape.

An appeal by Aetna and Humana could allow the merger a chance to close in what some expect will be a more lenient antitrust environment under President Donald Trump’s administration. But some experts say Trump will have no bearing on the court’s ruling.

U.S. District Judge John D. Bates blocked the merger on antitrust grounds, claiming that it would substantially reduce competition in violation of antitrust law.

“Specifically, the proposed merger is likely to substantially lessen competition in the sale of individual Medicare Advantage plans in 364 counties identified in the complaint and in the sale of individual commercial insurance on the public exchanges in three counties in Florida identified in the complaint,” the order reads.

In those 364 counties, Medicare Advantage serves approximately 1.6 million seniors, nearly 980,000 of whom have enrolled with Aetna or Humana, according to the U.S. Justice Department’s complaint.

The Justice Department and healthcare industry associations applauded the decision.

“[This] decision is a victory for American consumers—especially seniors and working families and individuals,” Deputy Assistant Attorney General Brent Snyder, who is currently heading the Justice Department, said in a statement. “Competition spurs health insurers to offer higher quality and more affordable health insurance to seniors who choose Medicare Advantage plans and to low-income families and individuals who purchase insurance from public exchanges. This merger would have stifled competition and led to higher prices and lower quality health insurance.”

The “decision rightly puts the needs of patients first in ensuring they have access to health care coverage that is affordable,” Rick Pollack, president and CEO of the American Hospital Association, said in a statement. Dr. Andrew Gurman, president of the American Medical Association said seniors “were the big winners today.”

Aetna spokesman T.J. Crawford said the insurer’s lawyers are reviewing the 158-page opinion and “are giving serious consideration to an appeal after putting forward a compelling case.” Hartford, Conn.-based Aetna may owe Louisville-based Humana a $1 billion breakup fee if the merger ultimately falls through.

The court’s decision wasn’t a shock. Many analysts expected the court to block the merger, though Aetna executives have continuously reiterated their confidence in the merger. Ana Gupte, an analyst with Leerink Partners, had given it a 1-in-3 chance of being approved.

But the ruling does set an important precedent in how Medicare markets are defined.

Aetna and Humana originally announced their intent to merge on July 2, 2015. The Justice Department, along with eight states and the District of Columbia, sued to block the merger in July 2016, saying it would reduce competition and raise prices in Medicare Advantage plans—the private, managed-care version of traditional Medicare—as well as plans sold through the Affordable Care Act’s public health insurance exchanges.

The key issue in the trial that wrapped up at the end of December concerned whether traditional fee-for-service Medicare competed with Medicare Advantage. The Justice Department argued they were separate markets and did not compete, while the insurers argued the opposite. Humana is the second-largest Medicare Advantage insurer, while Aetna is the fourth-largest and is rapidly adding more members.

In the opinion, Judge Bates wrote that most evidence shows industry stakeholders and the public view Medicare Advantage and traditional Medicare as two distinct markets and not easily substituted for one another. Supplemental Medicare plans are also unlikely to alleviate anti-competitive effects of the merger, he said.

Most telling, Bates wrote, is data from the Kaiser Family Foundation on the number of seniors who leave Medicare Advantage plans for traditional Medicare plans. “The switching data presents a clear picture: Medicare Advantage enrollees rarely switch plans, but when they do, they overwhelming stay within Medicare Advantage.”

That Bates views the Medicare Advantage and Medicare fee-for-service markets as separate is a “significant setback to the industry from a consolidation perspective,” Barclays analyst Joshua Raskin wrote in a research note Monday. Because the Medicare Advantage market is already heavily consolidated, “There are few large combinations in the industry that would seem feasible,” he said.

While Aetna and Humana earlier this year agreed to sell some Medicare Advantage assets to Molina Healthcare to satisfy the government’s concerns, Bates decided the divestiture would not restore the competition lost by the merger. The court said Molina’s experience as primarily a Medicaid insurer is not likely to make it a successful competitor in Medicare Advantage.

Meanwhile, rival insurers Anthem and Cigna are waiting to learn if their $54 billion merger will be approved by U.S. District Judge Amy Berman Jackson. That case hinges on whether the merger will reduce competition in the national market, so it’s unlikely that the decision in the Aetna-Humana case will have much influence over Jackson’s decision, said Tim Greaney, co-director of the Center for Health Law Studies at St. Louis University.

Jackson has also likely already made up her mind in the Anthem-Cigna case and could rule any day, he said.

CMS Adds Opportunities for Clinicians Under the Quality Payment Program

On December 15, the Centers for Medicare & Medicaid Services (CMS) announced more new opportunities for clinicians to join Advanced Alternative Payment Models (APMs) to improve care and earn additional incentive payments under the Quality Payment Program, which implements the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Beginning in January and February 2017, CMS will open applications for new rounds of two CMS Innovation Center models for the 2018 performance year – for new practices and payers in the Comprehensive Primary Care Plus (CPC+) model and new participants in the Next Generation Accountable Care Organization (ACO) model. With these new opportunities, CMS expects that by the 2018 performance period, 25 percent of clinicians in the Quality Payment Program would be a part of these advanced models and may be eligible to earn incentive payments.

“The CMS Innovation Center, which the Affordable Care Act created, takes best practices from physicians and other clinicians and promotes them across the nation,” said CMS Acting Administrator Andy Slavitt. “Thanks to the bipartisan MACRA, more clinicians and their patients will benefit from being a part of these models. That’s good for the future of Medicare, the health of beneficiaries, and the satisfaction of clinicians with their work.”

For the 2017 performance year, under the Quality Payment Program, clinicians may earn a 5 percent incentive payment through sufficient participation in the following Advanced APMs:

  • Comprehensive ESRD Care Model (Large Dialysis Organization (LDO) arrangement)
  • Comprehensive ESRD Care Model (non-LDO two-sided risk arrangement)
  • CPC+
  • Medicare Shared Savings Program – Track 2
  • Medicare Shared Savings Program – Track 3
  • Next Generation ACO Model
  • Oncology Care Model (two-sided risk arrangement)

In 2018, CMS anticipates that clinicians may also earn the incentive payment through sufficient participation in the following new and existing models:

  • Medicare ACO Track 1+ Model
  • New voluntary bundled payment model
  • Comprehensive Care for Joint Replacement Payment Model (Certified Electronic Health Record Technology (CEHRT) track)
  • Advancing Care Coordination through Episode Payment Models Track 1 (CEHRT track)

These lists will continue to change and grow as more models are proposed and developed in partnership with the clinician community and with input from the Physician-Focused Payment Model Technical Advisory Committee.

“We are excited to build on the progress of comprehensive primary care, the foundation of a better health system,” said Dr. Patrick Conway, CMS Acting Deputy Administrator. “Our Next Generation ACO model is the future of accountable care where providers take on full accountability for total cost of care and quality for a population of patients. These models allow doctors and other clinicians to practice the way they want to, including spending more time with patients, and provide coordinated, patient-centered care to all beneficiaries.”

Today’s announcement is one in a series of Innovation Center initiatives that will expand opportunities for clinicians to participate in Advanced Alternative Payment Models under MACRA. CMS’ work in developing and expanding new payment models will continue to be guided by the following core principles:

  • Supporting innovative payment and service delivery models with strong potential to improve health care quality and lower costs.
  • Engaging with and listening to consumers, providers, and other stakeholders allowing for open and transparent dialogue, including through the appropriate use of notice-and-comment rule making and ombudsmen.
  • Evaluating results based on appropriately scoped and sized demonstrations and advancing best practices based on their impact on quality and cost.


This is part of the Administration’s effort to build a system that delivers better care, one in which clinicians work together and have a full understanding of patients’ needs, Medicare pays for what works and spends taxpayer money more wisely, and patients are in the center of their care, resulting in a healthier country.

CMS Cracks Down on Providers Steering Patients to Private Plans

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.

BREAKING: Final MACRA Rule Released, Clinicians Rewarded for Quality Patient Care

MACRA Final Rule ReleasedMACRA rule will accelerate health care system’s shift toward value

Today, the Department of Health & Human Services (HHS) finalized a landmark new payment system for Medicare clinicians that will continue the Administration’s progress in reforming how the health care system pays for care. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program, which replaces the flawed Sustainable Growth Rate (SGR), will equip clinicians with the tools and flexibility to provide high-quality, patient-centered care. With clinicians as partners, the Administration is building a system that delivers better care, one in which clinicians work together and have a full understanding of patients’ needs, Medicare pays for what works and spends taxpayer money more wisely, and patients are in the center of their care, resulting in a healthier country.

“Today, we’re proud to put into action Congress’s bipartisan vision of a Medicare program that rewards clinicians for delivering quality care to their patients,” said HHS Secretary Sylvia M. Burwell. “Designed with input from thousands of clinicians and patients across the country, the new Quality Payment Program will strengthen our health care system for patients, clinicians and the American taxpayer.”

“It’s time to modernize the Medicare physician payment system to be more streamlined and effective at supporting high-quality patient care. To be successful, we must put patients and clinicians at the center of the Quality Payment Program,” said Andy Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS). “A critical feature of the program will be implementing these changes at a pace and with options that clinicians choose. Today’s policies are designed to get all eligible clinicians to participate in the program, so they are set up for successful care delivery as the program matures.”

Today’s rule is informed by a months-long listening tour with nearly 100,000 attendees and nearly 4,000 public comments. A common theme in the input HHS received was the need for flexibility, simplicity, and support for small practices. And that’s what this final policy aims to provide. First, the new payment system creates two pathways. These paths let clinicians pick the right pace for them to participate in the transition from a fee-for-service health care system to one that uses alternative payment models that reward quality of care over quantity of services. Clinicians will choose between two options:

Option 1: The first path gives clinicians the opportunity to be paid more for better care and investments that support patients. It reduces existing requirements, while still emphasizing and rewarding quality care. In the first year, it also provides a flexible performance period, so that those who are ready can dive in immediately, but those who need more time can prepare for participation later in the year.

Option 2: The second path helps clinicians go further by participating in organizations that get paid primarily for keeping people healthy. For example, they could be part of an Accountable Care Organization where clinicians come together to coordinate high-quality care for the patients they serve. When they get better health results and reduce costs for the care of their patients, the clinicians receive a portion of the savings.



CMS is building the Quality Payment Program to evolve along with the health care system. Medicare has a plan for eligible beneficiaries to receive free diabetes prevention services, the quality of hip and knee replacements are being improved while lowering costs, and primary care clinicians are using flexibility to deliver the best outcomes with a payment system that rewards results. CMS intends to broaden opportunities for clinicians, including small practices and specialties, to participate in these kinds of initiatives. A major opportunity being considered for 2018 will be the new Accountable Care Organization Track 1+ model that provides more flexibility for clinicians. CMS is also reviewing reopening some existing Advanced Alternative Payment Models for application to allow more clinicians to join these types of initiatives. In 2018, CMS expects about 25 percent of eligible clinicians will be a part of the second path of Advanced Alternative Payment Models.



To further support small practices, MACRA provides $20 million each year for five years to train and educate Medicare clinicians in small practices of 15 clinicians or fewer and those working in underserved areas. Beginning December 2016, local, experienced organizations will offer free, on-the-ground, specialized help to small practices using this funding. In addition, Jean Moody-Williams, Registered Nurse and Deputy Director of the CMS Center for Clinical Standards and Quality (CCSQ), is leading an outreach effort to individual clinicians nationwide to help them prepare for the Quality Payment Program. In addition, CMS has launched a long-term initiative, led by Dr. Shantanu Agarwal, to improve the clinician experience with Medicare.

CMS has also launched a new Quality Payment Program website, which will explain the new program and help clinicians easily identify the measures most meaningful to their practice or specialty. There will also be a service center available by email and phone that will answer questions about the Quality Payment Program.


For more information about today’s rule, including a fact sheet, please visit: https://qualitypaymentprogram.cms.gov/education

Few Doctors Ready for Risk Under MACRA

Hospital boardrooms are beginning to sound more like those on Wall Street, with talk of upside and downside risk, capitation and a hefty addition of new acronyms.

Hospitals, health systems and physician groups are now in the process of deciding which of the two possible reimbursement paths they will take under the Medicare Access and CHIP Reauthorization Act, which replaced the rarely implemented sustainable growth-rate formula for determining physician pay.

“This is not practice as usual,” said Aric Sharp, vice president of accountable care at UnityPoint Health, based in West Des Moines, Iowa. “This is not what we’ve done for the past 10 to 20 years in group practice. This is a whole new world.”

There was much rejoicing in April 2015 when Congress replaced Medicare’s extremely unpopular SGR formula with an overwhelmingly bipartisan vote. The focus, however, was far more on the joy of getting rid of the annual doc fix to payment rates and all of its frustrations than it was on the system now set to replace it—MACRA.

Under MACRA, providers will use either the Merit-based Incentive Payment System, known as MIPS, or an alternative payment model. Under MIPS, physician payments will be based on a compilation of quality measures and the use of EHRs. HHS will announce the eligible measures, and providers will have some options on which to report. More on how this will work is expected in the final rule, which is likely to be published in November.

About 90 percent of physicians are expected to take this path.

MIPS consolidates three highly unpopular incentive pay programs: the Physician Quality Reporting System, or PQRS; the Physician Value-based Payment Modifier; and the electronic health record meaningful-use program. Providers will now be graded on quality, resource use, clinical practice improvement and meaningful use of certified EHR technology. Medicare revenue would be affected by as much as 4 percent in 2019, the first year the payment changes take effect, and increase to up to 9 percent in later years.

Most providers will choose MIPS because they are not ready to take on the other option, a qualifying alternative payment model that requires a hefty amount of risk. Many don’t have the capital to set one up or to risk losing money with subpar performance. Although MIPS requires putting some profits on the line, it is much less of a gamble than heading into an APM without experience and confidence that quality measures are high.

But a few large groups are planning to accept payment adjustments based on their performance under already existing alternative payment models. To qualify for that track, providers must bear “more than nominal financial risk.” They will receive a lump sum incentive payment and higher annual provider payment as benefits. They will also be exempt from the MIPS reporting measures.

UnityPoint decided relatively early on that it would participate in an APM because of the success of the Pioneer accountable care organization in one of its regions. The system’s other eight regions were in track one of the Medicare Shared Savings Program, and that track is not eligible as an APM under MACRA.



Most physicians and physician practices will opt for being measured on quality under Medicare’s new payment system since they’re not ready to assume the downside risk of alternative payment models.

The system began its shift toward value-based pay about five years ago and has extensive experience with taking risk. Executives viewed MACRA as a nudge to push themselves toward an APM model because they believe the change is necessary and inevitable, Sharp said. “It could continue to move our culture forward from volume-based to value-based and that was very important to us,” he said.

But most physicians aren’t ready to take on that level of risk. Dr. Lisa Bielamowicz, chief medical officer of the Advisory Board Co., said the “average doctor on the street can barely tell you what MACRA is.” And indeed, a survey released in July by Deloitte found that about half of non-pediatric physicians had never even heard of MACRA, much less understood its implications.

The transition to MIPS may not be too difficult for those groups that have been pursuing value-based payment methods previously and have reporting mechanisms in place. But APMs are a different story.

Blair Childs, vice president of public affairs at the healthcare consulting company Premier, said moving to an alternative payment model is a big step that many providers are not ready to take. Some may just plan to stay in MIPS for the foreseeable future.

No matter what path they choose, physician practices, whether part of a hospital system or independent, will have major decisions to make in the months ahead.
Organizations also need to consider how they will be supporting their community of physicians and helping them succeed with the new model, Childs said. Most of those who choose MIPS should begin trying to transition to an APM—perhaps a no-risk track ACO—so that the eventual change is as smooth as possible. “It’s a question of how you want to scale and how you want to build your model,” he said.

Doctors May Do a “Brexit” from Medicare, States the Association of American Physicians and Surgeons (AAPS)

association-american-physicians-surgeonsAmerican physicians have already been declaring independence from Medicare, states the Association of American Physicians and Surgeons (AAPS), but the imposition of new payment methods may lead to a rush to imitate the British in exiting the regime of a remote, unelected, unaccountable bureaucracy.

MACRA (the Medicare Access and CHIP Reauthorization Act of 2015) replaced the threatened but never implemented annual fee cuts of the Sustained Growth Rate formula with a complex system of bonuses and penalties. The Centers for Medicare and Medicaid Services predicted that 87% of solo practice physicians would be penalized.

According to a Medscape Medical News survey, almost four in 10 physicians in solo and small group practices predict an exodus from Medicare within their ranks because of the program’s new payment plan.

The 962-page Final Rule received more than 2,200 comments. AAPS noted that:

  • A physician’s “compliance score” is tied to “resource use.” Physicians will be increasingly pressured to make decisions that save resources for Medicare instead of decisions that are in the best interest of their individual patients.
  • Compliance is also tied to mandatory use of government-certified electronic health records, which are harmful to patient medical privacy and also detract from face-to-face patient care. The government would gain even greater ability to access patient medical records.
  • The rules allow ALL insurance-based care, not just Medicare, to be phased in to these harmful payment models.

AAPS executive director Jane M. Orient, M.D., commented: “It is impossible to practice medicine under this rule, for ethical and practical reasons. The rule makes it impossible to protect confidentiality, and one is in a constant conflict of interest: What is best for the patient may be bad for the financial viability of the practice. It would take a dedicated team of legal specialists to even attempt compliance. Full compliance is probably impossible even with such a team, which is beyond the means of a small practice.”

She concluded: “Physicians need to withdraw from Medicare or any other program that subjects them to this rule.”