Thursday, January 31, 2013

Tick, Tock: Administration Misses Some Health Law Deadlines

KHN Staff Writer
Jan 31, 2013
Updated at 1:48 p.m. to reflect the administration's announcement that 500 groups will participate in a pilot program to change how doctors and hospitals are paid.
The Obama administration is late in implementing several provisions of the federal health overhaul intended to improve access to care and lower costs.
The programs, slated to take effect Jan. 1, were supposed to increase fees to primary care doctors who treat Medicaid patients, give states more federal funding if they eliminate Medicaid co-pays for preventive services and experiment with changes to how doctors and hospitals are paid by Medicare.
The administration also has delayed giving states guidance on a new coverage option known as the "basic health program," designed to help low and moderate-income people who don't qualify for Medicaid.  At least one state --Washington -- has already decided to not implement the program in 2014 because it won't have enough time. Washington, along with Minnesota and New York, are keenly affected by the federal inaction because they already have government subsidized programs to help cover such residents which expire at the end of this year. As a result, tens of thousands of people who now have coverage but who won’t qualify for expanded Medicaid could see their coverage become unaffordable next year.
Some of these deadlines appear to have slipped as the administration focuses on carrying out two of the biggest provisions in the health law designed to expand coverage to as many as 30 million people:  On Oct. 1, the federal government must have in place new online marketplaces that will offer government-subsidized individual and small group coverage in every state. Coverage in these marketplaces starts Jan. 1, 2014, when many states are also expected to expand their Medicaid programs for the poor.
Dr. Kavita Patel, a former health policy aide to President Barack Obama, said some delays are inevitable given staff turnover after the November election and the focus on emergencies such as Hurricane Sandy. "I am still impressed with the rate that they are going given all that is going on," said Patel, now a fellow at the Brookings Institution.
But the delays are already affecting some of the programs that states and their neediest residents had banked on.
Most states, including Texas, Florida and California, have not started offering the higher pay rates to primary care doctors who see Medicaid patients because the administration did not issue the rules until November and state officials said they didn't have time to carry out the change. While Medicaid fees vary by state, they are generally far below those paid by Medicare and private plans. The change means an average 73 percent average pay increase nationally, according to a 2012 study by the Kaiser Family Foundation (Kaiser Health News is an editorially independent program of the foundation.)
The two-year pay hike is intended to entice more doctors to treat the millions of residents expected to enroll in Medicaid in 2014.  "The delay doesn't help" states' efforts to recruit new doctors, said Anthony Wright, executive director of Health Access, a California patient advocacy group.
The Centers for Medicare and Medicaid Services (CMS) said doctors will be able to get the higher fees retroactively to Jan. 1, when states do implement the provision.
The administration has also lagged on paying states a 1 percentage point higher Medicaid matching rate if they eliminate requirements for co-pays for immunizations and other preventive services. About half the states charge people on Medicaid nominal co-payments for such services, which could be a barrier to care.
The federal government splits the cost of Medicaid with states, with the percent of funding varying by the wealth of each state. Every state receives at least a 50 percent match. The 1 percentage point increase would mean an extra $74 million in federal funding in Washington, said MaryAnne Lindeblad, director of the Washington State Health Authority, which runs the Medicaid program.
"In the great scheme of things, every little bit helps," she said.
It is unclear when the payments will begin to states that qualify because the administration has not issued the regulations.
The health law was also supposed to give states the option to set up a basic health program  that would offer lower cost-sharing for people who make too much to qualify for Medicaid, but who would be hard pressed -- even with new federal subsidies -- to afford the premiums and cost-sharing of plans offered in the new markets.  The law allows states to use federal dollars that would have gone to subsidies to pay instead for coverage for residents who earn up to twice the federal poverty level, or about $47,000 for a family of four.
Washington, Minnesota and New York are scheduled to end their programs later this year because it was assumed beneficiaries would get coverage through the health law. Massachusetts' program will expire in June.
Another advantage of the basic health program is that people won't have to worry about paying the government back if their incomes increase during the year in which they are enrolled, while people getting subsidies could face that prospect, Lindeblad said.
Washington hopes to offer the program in 2015, she said. 
An HHS spokesman said rules for the basic health program should be coming soon and offered no reason for the delay.
Lucinda Jesson, commissioner of the Minnesota Department of Human Services, said the basic health program is vital for states like Minnesota that were ahead of the federal government in expanding coverage.  More than 90,000 people might have to go from MinnesotaCare into the more high cost coverage in exchanges if the state can’t establish a basic health program in time for 2014, Jesson said.
"We don’t want to have people worse off because of the Affordable Care Act -- that is not what Congress intended."
Early Thursday afternoon, meanwhile, administration officials announced the start of the pilot program to change how doctors and hospitals are paid. Under the "bundled payments" initiative, participants in more than 500 provider organizations will be paid for "episodes of care," instead of separately for individual services. Such payments are seen as a way to encourage hospitals and doctors to work together to hold down costs and improve care.
“The objective of this initiative is to improve the quality of health care delivery for Medicare beneficiaries, while reducing program expenditures, by aligning the financial incentives of all providers,” said Acting CMS Administrator Marilyn Tavenner.

Wednesday, January 30, 2013

Personal physician shortage looms, experts say

January 29, 2013

One of the weaknesses of current U.S. health reform efforts is that they are counting on the idea that primary care doctors will continue to exist.
Witnesses delivered that message today in Washington at a hearing on the future of primary care that was organized by the Senate Health, Education, Labor and Pensions (HELP) primary health and aging subcommittee.
Dr. Claudia Fegan, chief medical officer at the John H. Stroger Jr. Hospital in Chicago, said she sees hundreds of people line up across the street at a walk-in clinic affiliated with the hospital every day.
Chicago residents "stand in line in the wee hours of the morning, hoping to be one of the 120-200 people who will be seen that day and, even better, hoping to be one of the 12 patients who will be assigned to a primary care physician and given an appointment so they won't have to come back," Fegan said, according to a written version of her remarks posted on the committee website.
The Patient Protection and Affordable Care Act of 2010 (PPACA) "promises to provide insurance coverage to more Americans, but I know there will still be 30 million people who will remain uninsured even after the Affordable Care Act is fully implemented," Fegan said. "So I know the need for the safety net and places like Cook County will remain."
There certainly still will not be enough primary care providers to care for all the patients who will need them, Fegan said.
The huge holes that already exist in the U.S. primary care network led to the current influenza epidemic flooding hospital emergency rooms with patients who should have been seeing primary care doctors, Fegan said.
Dr. Andrew Wilper, a medical school professor in Boise, Idaho, testified that the federal reimbursement formula system now pays primary care physicians about 30 percent to 60 percent less than it pays specialists.

In Massachusetts, a state that already has enacted a health insurance access expansion program, one result is that the coverage access program has led to an 82 percent in the length of time patients must wait to see primary care doctors, Wilper said.

"Without payment reform, it is unlikely that efforts targeting medical students and residents will succeed in bolstering the primary care workforce," Wilper said.

Uwe Reinhardt, a well-known Princeton University economist, said one solution would be for public and private health programs to make it easier for patients to see nurse practitioners for routine primary care needs.

Today, government programs often refuse to cover visits to nurse practitioners, or pay the nurse practitioners much less for the same services, and private insurers are often just as hostile to nurse practitioners, Reinhardt said.

When it comes to the primary care-specialist pay divide, "it can be asked...why private insurers have not led the way to raise the fees they pay primary-care physicians relative to those paid specialists," Reinhardt said. "Many and probably most of them simply have adopted the Medicare relative value scale underlying their fee schedules, although their absolute level of fees may be higher than Medicare fees."

Private insurers say Medicare must lead the way, because private insurers cannot act in unison to change the primary care-specialist pay gap without violating antitrust laws, Reinhardt said.

Dr. Fitzhugh Mullan, a public health professor at George Washington University, said the primary care shortage is likely to get worse because of the way the United States pays and trains doctors.

But public and private payers pay specialists more, and specialists tend to have more prestige, and many young doctors prefer to focus on practicing in specialties that will give them more control over their hours, Mullan said.

Meanwhile, hospitals run the residency programs that train recent medical school graduates, and "not surprisingly, hospitals recruit residents who fulfill the needs of the hospitals," Mullan said. "This tilts residency heavily toward medical and surgical specialties and subspecialties."

PPACA drafters tried to ease the primary care training gap by creating a Teaching Health Center Program to get more new physicians trained in primary care settings.

But the PPACA primary care teaching program is just demonstration program, and the money is set to run out in 2014, Mullan said.

"The absence of Medicare or Medicare-like permanent funding jeopardizes this small but enormously important new model of primary care education," Mullan said. 

Medicare Participation Options for Physicians

Revised January 4, 2013

Please note: The following was developed from documents provided by the AMA and contains excerpts from the AMA-published Medicare RBRVS: The Physician's Guide 2012.

On Wednesday, January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012. This new law prevented a scheduled payment cut of 26.5% in the Medicare Physician Fee Schedule conversion factor (i.e., payment rate) from taking effect on January 1, 2013.

The new law provides for a 0% update for such services through December 31, 2013. The law also delays, for two months, implementation of the Budget Control Act's sequestration provision, which could reduce Medicare payments by 2%.

To help ensure that physicians are making informed decisions about their contractual relationships with the Medicare program, the following brief overview explains the various participation options that are available to physicians. The AAFP is not advising or recommending any one of the three options described in this document. The purpose of the document is merely to ensure that physician decisions about Medicare participation are made with complete information about the available options.

Physicians wishing to change their Medicare participation or non-participation status for 2013 were required to do so between November 15, 2012, and December 31, 2012. Participation decisions were effective January 1, 2013, and are binding for the entire year.

The Three Options
There are basically three Medicare contractual options for physicians. Physicians may sign a participating (PAR) agreement and accept Medicare's allowed charge as payment in full for all of their Medicare patients. They may elect to be a non-PAR physician, which permits them to make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance for unassigned claims. Or they may become a private contracting physician, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves.

Physicians who wish to change their status from PAR to non-PAR or vice versa may do so annually. Once made, the decision is generally binding until the next annual contracting cycle except where the physician's practice situation has changed significantly, such as relocation to a different geographic area or a different group practice. To become a private contractor, physicians must give 30 days notice before the first day of the quarter the contract takes effect.

Those considering a change in status should first determine that they are not bound by any contractual arrangements with hospitals, health plans or other entities that require them to be PAR physicians. In addition, some states have enacted laws that prohibit physicians from balance billing their patients.
PAR physicians agree to take assignment on all Medicare claims, which means that they must accept Medicare's approved amount (which is the 80% that Medicare pays plus the 20% patient copayment) as payment in full for all covered services for the duration of the calendar year. The patient or the patient's secondary insurer is still responsible for the 20% copayment but the physician cannot bill the patient for amounts in excess of the Medicare allowance. While PAR physicians must accept assignment on all Medicare claims, however, Medicare participation agreements do not require physician practices to accept every Medicare patient who seeks treatment from them.

Medicare provides a number of incentives for physicians to participate:
·         The Medicare payment amount for PAR physicians is 5% higher than the rate for non-PAR physicians.
·         Directories of PAR physicians are provided to senior citizen groups and individuals who request them.
·         Carriers provide toll-free claims processing lines to PAR physicians and process their claims more quickly.
Medicare approved amounts for services provided by non-PAR physicians (including the 80% from Medicare plus the 20% copayment) are set at 95% of Medicare approved amounts for PAR physicians, although non-PAR physicians can charge more than the Medicare approved amount.

Limiting charges for non-PAR physicians are set at 115% of the Medicare approved amount for non-PAR physicians. However, because Medicare approved amounts for non-PAR physicians are 95% of the rates for PAR physicians, the 15% limiting charge is effectively only 9.25% above the PAR approved amounts for the services. Therefore, when considering whether to be non-PAR, physicians must determine whether their total revenues from Medicare, patient copayments and balance billing would exceed their total revenues as PAR physicians, particularly in light of collection costs, bad debts and claims for which they do accept assignment. The 95% payment rate is not based on whether physicians accept assignment on the claim, but whether they are PAR physicians; when non-PAR physicians accept assignment for their low-income or other patients, their Medicare approved amounts are still only 95% of the approved amounts paid to PAR physicians for the same service. Non-PAR physicians would need to collect the full limiting charge amount roughly 35% of the time they provided a given service in order for the revenues from the service to equal those of PAR physicians for the same service. If they collect the full limiting charge for more than 35% of the services that they provide, their Medicare revenues will exceed those of PAR physicians.

Assignment acceptance, for either PAR or non-PAR physicians, also means that the Medicare carrier pays the physician the 80% Medicare payment. For unassigned claims, even though the physician is required to submit the claim to Medicare, the program pays the patient, and the physician must then collect the entire amount for the service from the patient.
Example: A service for which Medicare fee schedule amount is $100

Payment Arrangement 
Total Payment Rate 
Payment Amount from Medicare 
Payment Amount from Patient 
PAR physician 
100% Medicare fee schedule = $100 
$80 (80%) carrier direct to physician 
$20 (20%) paid by patient or supplemental insurance (e.g., Medigap) 
Non-PAR/ assigned claim
95% Medicare fee schedule = $95 
$76 (80%) carrier direct to physician 
$19 (20%) paid by patient or supplemental insurance (e.g., Medigap) 
Non-PAR/ unassigned claim 
Limiting charge/109.25% Medicare fee schedule = $109.25
$76 (80%) paid by carrier to patient+ $19 (20%) paid by patient or supplemental insurance
+ $14.25 balance bill paid by patient
Private Contracting
Provisions in the Balanced Budget Act of 1997 give physicians and their Medicare patients the freedom to privately contract to provide health care services outside the Medicare system. Private contracting decisions may not be made on a case-by-case or patient-by-patient basis, however. Once physicians have opted out of Medicare, they cannot submit claims to Medicare for any of their patients for a two-year period.

A physician who has not been excluded under sections 1128, 1156 or 1892 of the Social Security Act may, however, order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided the physician is not paid, directly or indirectly, for such services (except for emergency and urgent care services) services. For example, if a physician who has opted out of Medicare refers a beneficiary for medically necessary services, such as laboratory, DMEPOS or inpatient hospitalization, those services would be covered by Medicare.

To privately contract with a Medicare beneficiary, a physician must enter into a private contract that meets specific requirements, as set forth in the sample private contract below. In addition to the private contract, the physician must also file an affidavit that meets certain requirements, as contained in the sample affidavit below. To opt out, a physician must file an affidavit that meets the necessary criteria and is received by the carrier at least 30 days before the first day of the next calendar quarter. There is a 90-day period after the effective date of the first opt-out affidavit during which physicians may revoke the opt-out and return to Medicare as if they had never opted out.
Emergency and Urgent Care Services Furnished During the "Opt-Out" Period
Physicians who have opted-out of Medicare under the Medicare private contract provisions may furnish emergency care services or urgent care services to a Medicare beneficiary with whom the physician has previously entered into a private contract so long as the physician and beneficiary entered into the private contract before the onset of the emergency medical condition or urgent medical condition. These services would be furnished under the terms of the private contract.

Physicians who have opted-out of Medicare under the Medicare private contract provisions may continue to furnish emergency or urgent care services to a Medicare beneficiary with whom the physician has not previously entered into a private contract, provided the physician:
·         Submits a claim to Medicare in accordance with both 42 CFR part 424 (relating to conditions for Medicare payment) and Medicare instructions (including but not limited to complying with proper coding of emergency or urgent care services furnished by physicians and practitioners who have opted-out of Medicare).
·         Collects no more than the Medicare limiting charge, in the case of a physician (or the deductible and coinsurance, in the case of a practitioner).
Note that a physician who has been excluded from Medicare must comply with Medicare regulations relating to scope and effect of the exclusion (42 C.F.R. § 1001.1901) when the physician furnishes emergency services to beneficiaries, and the physician may not bill and be paid for urgent care services.
Sample Medicare Private Contract and Affidavit
The sample private contract and affidavit below contain the provisions that Medicare requires (unless otherwise noted) to be included in these documents.

Private contracts must meet specific requirements:
·         The physician must sign and file an affidavit agreeing to forgo receiving any payment from Medicare for items or services provided to any Medicare beneficiary for the following 2-year period (either directly, on a capitated basis or from an organization that received Medicare reimbursement directly or on a capitated basis).
·         Medicare does not pay for the services provided or contracted for.
·         The contract must be in writing and must be signed by the beneficiary before any item or service is provided.
·         The contract cannot be entered into at a time when the beneficiary is facing an emergency or an urgent health situation.
In addition, the contract must state unambiguously that by signing the private contract, the beneficiary:
·         gives up all Medicare payment for services furnished by the "opt out" physician;
·         agrees not to bill Medicare or ask the physician to bill Medicare;
·         is liable for all of the physician's charges, without any Medicare balance billing limits;
·         acknowledges that Medigap or any other supplemental insurance will not pay toward the services; and
·         acknowledges that he or she has the right to receive services from physicians for whom Medicare coverage and payment would be available.
If you determine that you want to "opt out" of Medicare under a private contract, we recommend that you consult with your attorney to develop a valid contract containing other standard non-Medicare required provisions that generally are included in any standard contract.

Hearing Loss May Hasten Mental Decline

Study found seniors who struggled with hearing had earlier problems with thinking skills
By Amy Norton

MONDAY, Jan. 21 (HealthDay News) -- Seniors who have trouble hearing may see their thinking skills slip away faster than others do, new research suggests.

The study of older U.S. adults found that those with hearing problems were 24 percent more likely to develop mental impairment over six years.

The Johns Hopkins researchers don't know for sure whether hearing loss directly causes mental decline in some cases -- or whether using hearing aids might help. But they are planning to study that possibility.

"At this point, the particular neural mechanisms -- that is, the 'why' and 'how' -- that link hearing loss to dementia are unclear," said Daniel Polley, of the Massachusetts Eye and Ear Infirmary and Harvard Medical School in Boston.

What is clear is that older adults should take hearing problems seriously, noted Polley, who was not involved with the study.

"If there is a takeaway to this, it would be to encourage folks to have their hearing tested by a health professional," Polley said.

The findings, which appear in the Jan. 21 issue of JAMA Internal Medicine, are based on 1,984 adults in their 70s and 80s who showed no signs of impaired memory or thinking at the study's start. But the majority -- 1,162 in all -- did show some hearing loss.

Over the next six years, 609 men and women developed new signs of mental impairment -- based on a standard test of memory, concentration and language skills. And that risk was 24 percent higher among people who had hearing problems.

The researchers estimate that it would take a hearing-impaired older adult just under eight years, on average, to develop mental impairment, versus 11 years for their peers with normal hearing.

None of that proves cause-and-effect. However, the researchers did account for a number of factors that might have explained the link, such as people's education levels, smoking habits and health conditions such as diabetes, high blood pressure and a history of stroke.

There are reasons to believe that hearing loss could directly contribute to declines in brain function, said lead researcher Dr. Frank Lin, an otologist and epidemiologist at Johns Hopkins School of Medicine in Baltimore.

One is the fact that hearing loss can cause older adults to withdraw socially. When it becomes hard to hear what other people are saying, you might avoid going out or feel cut off from those around you, he noted.

"If you can't hear the person across from you at the dinner table, you won't be engaged in the conversation," Lin said.

That matters because a number of past studies have linked such social isolation and "loneliness" to an increased risk of dementia.

Another possibility, Lin said, is that hearing loss forces the brain to devote extra resources to processing the "garbled" signals it's getting from the ears.

"If you're redirecting brain resources to help with hearing," Lin explained, "that probably comes at the expense of something else -- like working memory."

There are a number of ways to help manage hearing loss, including hearing aids and assistive devices such as telephone amplifiers.

The "biggest question" now, according to Lin, is whether treating hearing loss can slow declines in brain function. He and his colleagues are planning a study to look at that question.

Hearing loss is common, affecting up to two-thirds of adults older than 70. But the fact that it's common doesn't mean it's harmless, both Lin and Polley pointed out.

"Hearing loss is more than an inconvenience or a source of embarrassment," Polley said. "Hearing represents a critical portal to conversation, a behavior that connects humans to one another socially and upon which our mental health greatly depends."

Doctors do not routinely screen older adults for hearing loss, so it's up to people to notice symptoms.

Some red flags include having trouble hearing when there is background noise or when more than one person is speaking; problems hearing over the phone; and having to habitually ask people to repeat themselves.

But hearing loss also creeps up on people "slowly and insidiously," Lin said. So it might not be you who notices it, but the people around you.

The study was funded by the U.S. National Institutes of Health. Lin is a consultant to Pfizer, which is developing a potential drug for age-related hearing loss, and has served as an unpaid speaker for Cochlear Europe, which makes cochlear implants to treat severe hearing loss.

More information
SOURCES: Frank Lin, M.D., Ph.D., assistant professor, Johns Hopkins School of Medicine, Baltimore; Daniel Polley, Ph.D., assistant professor, otology and laryngology, Harvard Medical School, Boston; Jan. 21, 2013, JAMA Internal Medicine
Last Updated: Jan. 21, 2013

Today's Datapoint

39 … new medicines were approved by the FDA in 2012, the highest total in 15 years, including 11 new oncology drugs.

Quote of the Day

“We are in for real sticker shock in the rates that will be charged in the individual and small group market, particularly in the individual market. The two biggest drivers will be the benefit ‘buy-up’ because individual policies are generally much slimmer in benefits than the new benefits requirements and because of the age-rating. Instead of the required 3:1, many markets are currently 5:1 and some even higher.”

— Robert Laszewski, president of Health Policy and Strategy Associates, told AIS’s Health Plan Week.

Tuesday, January 29, 2013

MedPAC Adopts Suggested Changes for SNPs, but Does That Matter?

By James Gutman - January 25, 2013
Medicare Payment Advisory Commission (MedPAC) Chairman Glenn Hackbarth runs a tight ship. Without a single dissenting vote from the many commissioners present — and without any comments allowed from the many stakeholders attending the meeting — MedPAC on Jan. 10 adopted four major recommendations prepared by the chairman for the future of Medicare Advantage Special Needs Plans (SNPs). One of them would involve the expiration of the authorization for chronic care SNPs (C-SNPs) after the end of 2013, except those for a small number of conditions. Now the question is whether Congress will adopt — or even vote on — these recommendations.
MedPAC was created by Congress and reports to it, and by all accounts Congress respects the commission’s work. But Congress often doesn’t adopt MedPAC’s recommendations, and, in the current case, it partly pre-empted the C-SNP one by including in this month’s “fiscal cliff” law a provision extending the authorization for all SNPs by one year through 2014. The MedPAC recommendations on SNPs did get changed, partly in ways the MA industry wanted, as they made their way through the commission’s process and dealt with concerns raised by both individual commissioners and the SNP Alliance trade group. However, the recommendations, which will be included in MedPAC’s report to Congress in March, still would mean some major changes for the industry.
C-SNPs, for instance, would be folded after a three-year transition period into regular MA plans, which would be allowed to enhance benefit designs so that benefits can vary based on the medical needs of members with chronic conditions. And SNPs for Medicare-Medicaid dual eligibles (D-SNPs) would be reauthorized permanently — but only those that fit the definition of an integrated product, which many current D-SNPs don’t for various reasons. Those D-SNPs would have to change, and some of these changes would depend on actions states would have to take.
What do you think Congress will do with these recommendations? What should Congress do with these recommendations? Does Congress even care enough about SNPs, given all the time-sensitive financial game-changing items on its plate, to look into this issue in 2013? If not, is that good news or bad news for the SNP industry?

Today's Datapoint

$28.8 billion … were UnitedHealth’s fourth quarter 2012 revenues, up from $25.9 billion for the same quarter in 2011, to yield full-year 2012 revenues of $110.6 billion, up 9% from 2011.

Monday, January 28, 2013

Quote of the Day

“I think there will be a move to delay implementation of the insurance exchanges by a year in hopes that more states will take on the role of running them, but this won’t happen until later in 2013 because they will try to keep states’ feet to the fire until then….”

— Roy Ramthun, president of HSA Consulting Services, told AIS’s Health Plan Week.

Today's Datapoint

22% … was the increase in spending in 2012 on oral oncology drugs, according to Peter Wickersham, senior vice president, cost of care for Prime Therapeutics.

Friday, January 25, 2013

Quote of the Day

“Aetna has already declared that they do not believe their future is selling health insurance coverage in an environment where margins and profits are regulated by an 85% medical loss ratio. They believe their revenues and earnings growth will be from the sale of their intellectual and system assets to the ACOs and exchanges and from offshore opportunities. Cigna has expressed similar strategies.”

Peter Hayes, principal at the consulting firm of Healthcare Solutions, told AIS’s Health Plan Week.

Citing Cost Reductions, Highmark to Expand PCMH Initiative

John Commins, for HealthLeaders Media , January 24, 2013
The success of a year-long pilot program of patient centered medical homes has prompted Pittsburgh, PA-based Highmark Inc. to broadly expand the initiative in two states.

"Our goal is that in about a year from now 75% of all our doctors in our network will be part of a patient-centered medical home, and will be working effectively and efficiently amongst themselves as primary care physicians and with their specialist colleagues," Paul Kaplan, MD, senior vice president of provider strategy and integration at Highmark, told reporters at a teleconference Wednesday afternoon.

The PCMH model began in 2011 with 160 primary care physicians in 12 practices, covering about 45,000 Highmark members. Effective this month, the program will be expanded to include nearly 1,050 primary care physicians in 100 practices covering 171,000 Highmark members in Western and Central Pennsylvania and West Virginia, Highmark says.

Michael Fiaschetti, president of health markets at Highmark, told reporters that the pilot project saw a nearly 2% reduction in costs per member per month while traditional care delivery programs within Highmark saw cost increases. The demonstrated savings, he says, will serve as a catalyst to greatly expand the PCMH model in the coming years.

"Our goal a Highmark over the next three-to-five years is to transform the way we interact with physicians, hospitals and all healthcare providers," Fiaschetti told reporters. "We want to move from a pure or straight fee-for-service environment where we pay for volume and move to a pay-for-value environment. This is a foundation to that movement - the patient-center medical home is foundational to accountable care organizations or any other type of pay for value program that we do."
"Our goal would be that in the future, physicians who drive value—meaning higher quality indicators and an overall more reasonable trend or cost—will get more money than they do today in a fee-for-service system. But they will be paid based on that value and not on just driving more units of service. That is what we want to get to."

Highmark said the results from the pilot program showed that:
  • Inpatient acute admissions dropped on average for the pilot practices by 9%
  • 30-day readmission rate dropped on average for the pilot practices by 13%
  • Seven-day readmission rate dropped on average for the pilot practices by 14%
  • There was a 5% decrease in total per-member-per-month costs for coronary artery disease members and a 3.5% decrease for diabetics during the pilot
Fiaschetti says the key to success with the PCMH is to get physicians to embrace the team approach, and for the payers to reward success.

"In their offices they would have care coordinators who would spend more time with the chronically ill patients and get them the right level of care, get them the right education, and coordinate their care in a more intense fashion," he says.

"In exchange, we are going to provide higher incentives for better managing those patients based on certain quality and cost parameters. Quality will always be 50% of the incentive equation. We aren't going to compromise quality for cost. This isn't the old days where that may have happened 20–25 years ago in some of the old HMOs. It is very much a blend of cost and quality."
Fiaschetti said the quality indicators would be designed around nationally recognized benchmarks, particularly as they related to chronic illnesses such diabetes and congestive heart failure.

"The overall cost will be around the total per capita cost per member and the incentives will be different," he says. "Physicians can earn more money for better care and overall there will be a huge return because we will eliminate emergency visits, unnecessary admissions and readmissions, all those things that raise costs and frankly aren't good for the patients."

"We hope the outcomes are better health for the patients at a lower cost for the patient and the system," he says. "We believe that there is a huge return on this and what it is going to take is a different approach, a much tighter alignment than we've had in the past. We will be exchanging much more data about services that have been provided to these members, data about clinical information around these members."

Adam Powell, a healthcare economist and president of Payer+Provider Syndicate, a Boston-based consulting firm, says Highmark's recent findings from its PCMH pilot are consistent with the positive results seen at Blue-sponsored PCMH initiatives in South Carolina and North Dakota.

"While the additional care coordination resulting from the expansion of the PCMH initiative will likely improve the quality of care, it is important to maintain a bit of caution about the potential cost savings," Powell wrote in an email exchange with HealthLeaders Media.

"Similar savings will only likely be seen in the recently added practices if the practices in the pilot were representative of typical practices contracting with Highmark. Furthermore, the benefits of PCMH are still a bit murky. A July 2012 report by [the Agency for Healthcare Research and Quality] found insufficient evidence to precisely determine the clinical and economic benefits of the PCMH model."

"Quantifying the benefits of PCMH has been hampered by variation in the way that it is implemented. Given that Highmark has approximately 5 million members, expanding access to PCMH to include less than 5% of total membership represents a conservative approach. The lessons learned from this modest expansion will help Highmark be successful in its quest to cover 75% of its members with pay-for-value arrangements by 2015," Powell wrote.

John Commins is an editor with HealthLeaders Media.

Medicare Initiative Cuts Hospitalizations

By David Pittman, Washington Correspondent, MedPage Today
Published: January 24, 2013
Reviewed by F. Perry Wilson, MD, MSCE; Instructor of Medicine, Perelman School of Medicine at the University of Pennsylvania

Action Points
·         Note that this pre-post study performed in multiple communities across the U.S. showed a reduction in hospitalization rates among Medicare beneficiaries in communities where quality improvement measures to improve transitions of care were implemented.
·         Be aware that although 30-day readmissions were reduced, this appears to be due to a lower number of total admissions rather than an improvement in the readmissions-per-discharge -- a critical metric.
A community-wide quality improvement program led by Medicare's Quality Improvement Organization (QIO) helped reduce all-cause hospitalization and 30-day rehospitalizations, a study showed.
Hospitalization dropped on average by 5.74% and rehospitalization by 5.7% per 1,000 Medicare beneficiaries in 14 communities during a 2-year intervention period, according to the study, published in the Jan. 23 Journal of the American Medical Association.
At the same time, hospitalizations decreased on average by 3.17% and rehospitalizations dropped 2.05% in 50 comparison communities.
"However, the widely used measure of rehospitalizations as a percentage of hospital discharges did not change during the study period," wrote Jane Brock, MD, MSPH, medical director at the QIO, and colleagues.
The study sought to analyze the effectiveness of the QIO, which is run by the Centers for Medicare and Medicaid Services (CMS) and aims to improve transition of care between healthcare providers and social services.
CMS has piloted various ways to improve care transitions, which can reduce costs and rehospitalizations if done well. Many Medicare beneficiaries have serious illnesses and receive care from multiple providers and facilities, increasing the difficulty of smoothly transitioning from one provider to the next.
An intervention was defined broadly as "an activity introduced into clinical care processes that was intended to improve the quality of care transitions." It included evidence-based improvements with hospitals working with other hospitals, nursing homes, home health agencies, and the Area Agency on Aging.
The 14 selected intervention communities developed a baseline of hospitalization and rehospitalization rates from 2006 to 2008, and then implemented the interventions for 2 years beginning in 2009. The study also included 50 comparator communities who didn't implement interventions. The studied communities combined accounted for more than 22,000 beneficiaries, and the comparison communities for more than 90,000.
Rehospitalizations dropped from 15.21 per 1,000 Medicare beneficiaries per quarter at baseline to 14.34 in 2009-2010. That compared with a drop of 15.03 to 14.71 in the 50 comparison communities, Brock, who is also chief medical officer for the Colorado Foundation for Medical Care, and others found.
However, rehospitalization as a percentage of all hospital discharges fell by 0.06% in the study group compared with an increase of 0.15% in the comparison cohort (P=0.14). The authors claimed no significant difference in the pre-post between-group differences.
"One possibility for these findings is that enhancing coordination of care across a community might reduce overall hospitalization rates by preventing unnecessary hospitalizations, but not change rehospitalization rates because presumably only sicker patients are hospitalized, and these patients are at greater risk for rehospitalization," Mark Williams, MD, of the Northwestern University Feinberg School of Medicine in Chicago, wrote in an accompanying editorial. "Nonetheless, the overall decrease in all hospitalizations among a community population of Medicare patients is a noteworthy finding."
Williams noted that the findings will be difficult to replicate because the researchers did not provide concrete examples of interventions. "The researchers do not provide a well-defined intervention that others can adopt, but instead the description of a process," he wrote.
Martin Padgett, president and chief executive of Clark Memorial Hospital in Jeffersonville, Ind., said that working to reduce readmissions is a tough task for hospitals.
"What it is doing for us is forcing us to partner and collaborate and work with other post-acute or pre-acute care delivery systems such as our medical staffs, such as our pharmacies, home health agencies, nursing homes," Padgett said at an American Hospital Association event in Washington Thursday. "It will be a great thing for us, but it is also more difficult than accomplishing objectives just inside of our four walls."
Verde Valley Medical Center in Cottonwood, Ariz., holds a quarterly summit with area nursing homes and home health agencies so they can work to prevent readmissions, according to Harry Alberti, MD, chief medical official at the hospital.
"We have to look at who is taking care of our patients when they are outside of the hospital, so that they can help us and work together to prevent those readmissions," Alberti said at the same event.
Hospitals began losing money last year -- to the tune of $300 million nationally in the first year -- when CMS began instituting penalties for excess readmissions, Williams noted in his editorial. That number could triple by 2014 when new provisions of the Affordable Care Act take effect, he said.
The study should raise awareness among physicians that the increasing fragmentation of patient care has negative consequences, Williams wrote.
"Individual patients now see an increasing number of physicians, increasing the possibility of medical error, duplication of services, reduced quality, and increased cost ... This has likely been driven, at least in part, by the marked expansion in the number of subspecialists, who now outnumber primary care physicians by about 2 to 1."
Brock reported links with the Alliance for Home Health Quality and Innovation, Ramona VNA and Hospice, the Lewin Group, CHRISTUS St. Vincent Regional Medical Center, George Washington University, and the Hebrew Home of Greater Washington. Co-authors reported links with several organizations, including the Wisconsin Hospital Association, LeadingAge Wisconsin, Kauffman & Associates, the Institute for Healthcare Improvement, Texas Medical Foundation, Lilly, Insignia Health, National Quality Forum, Health Insight, and the Centers for Medicare and Medicaid Services.
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David Pittman is MedPage Today’s Washington Correspondent, following the intersection of policy and healthcare. He covers Congress, FDA, and other health agencies in Washington, as well as major healthcare events. David holds bachelors’ degrees in journalism and chemistry from the University of Georgia and previously worked at the Amarillo Globe-News in Texas, Chemical & Engineering News and most recently FDAnews.