Today's Datapoint

Roughly 6 million additional prescriptions were picked up by CVS Caremark Corp. as a result of the contract dispute between Walgreen Co. and Express Scripts Holding Co., according to CVS.

Understanding the Medicare Trust Fund

In their recently released report, the Medicare trustees have projected that the Part A trust fund, also known as the Medicare Hospital Insurance (HI) trust fund, will remain solvent through 2024. This is the same conclusion that the trustees made last year. Reforms included in the Affordable Care Act (ACA) have strengthened Medicare’s financial outlook and extended solvency through 2024. The Part A trust fund and its solvency are frequently misunderstood. The trust fund is a financing mechanism for Medicare Part A, which covers inpatient services such as hospital stays and skilled nursing facility care. The trust fund is financed through a combination of payroll taxes and other revenues. Although, as noted above, the trustees have recently reported that the trust fund is solvent through 2024; that does not mean that the trust fund or Medicare will cease to exist in 2025. The trustees found that the Part A trust fund will be able to cover 100 percent of the costs of Medicare’s Part A benefits through 2024. After 2024, the trust fund will still be able to provide coverage, though at a lesser rate. According to the Center on Budget and Policy Priorities (CBPP), starting in 2025, Medicare will still be able to cover 87 percent of all inpatient costs, and over the next 75 years, the trust fund, on average, will be able to cover 74 percent of Medicare’s inpatient costs. A number of factors can affect the Medicare Part A trust fund. For example, since the trust fund is partially paid for through payroll taxes, an economic downturn could result in less people paying into the system. As the economy recovers, so will the trust fund. Medicare Part B, which covers outpatient services such as visits to doctors’ offices, and Medicare Part D, which covers prescription drugs, are financed through beneficiary premiums and general revenues, not through the trust fund. While action will need to be taken to make up for the future financing shortfalls of Medicare Part A after 2024, it is important to recall that congress has been taking this kind of action since 1970 to extend the life of the trust fund to ensure that people with Medicare are able to access affordable, comprehensive and quality coverage. Unfortunately, supporters of drastic changes to Medicare, such as premium support, point to the potential insolvency of the trust fund to justify proposals that would shift substantially higher out of pocket costs onto beneficiaries and their families as well as undermine the consumer protections and guaranteed benefits that the Medicare program currently provides. Strengthening the Medicare trust fund can be done without gutting Medicare’s guarantees.

How Much Do The Nation’s Pre-Eminent Hospitals Cost Medicare?

By Jordan Rau MAY 14TH, 2012, 12:14 PM Can you cut health care spending without undermining the quality of care? It’s a major concern as Medicare prepares to prod hospitals to provide medical care more efficiently by giving bonuses to those whose patients cost less and taking money away from places that send the government higher bills. Last week, Capsules culled through the Medicare data to identify the hospitals whose patients cost Medicare the most, from the three days before admission to a month afterward. Here is an admittedly unscientific first pass at how the nation’s best-regarded hospitals rate in terms of their patients’ Medicare spending. Kaiser Health News looked at the 16 hospitals that U.S. News includes in its widely followed “Best Hospitals’ Honor Roll,” which is calculated based on a mix of quality indicators and reputation surveys. (One hospital, Johns Hopkins in Baltimore, was omitted because Medicare didn’t provide figures for Maryland hospitals.) As a group, the average cost to Medicare for a patient at a U.S. News top hospital was $17,808, or 1 percent below the national median spending of $17,988. The least expensive of these hospitals had patients who, on average, cost Medicare 5 percent below the median (represented as a ratio of 0.95). The most expensive hospital had patients who, on average, cost Medicare 3 percent above the median (1.03). • New York-Presbyterian Hospital (New York, N.Y.): $17,089 (0.95) • University Of Washington Medical Center (Seattle, Wash.): $17,089 (0.95) • Mayo Clinic St. Mary’s Hospital (Rochester, Minn.): $17,269 (0.96) • Mount Sinai Hospital (New York, N.Y.): $17,269 (0.96) • Ronald Reagan UCLA Medical Center (Los Angeles, Calif.): $17,628 (0.98) • UCSF Medical Center (San Francisco, Calif.): $17,628 (0.98) • Duke University Hospital (Durham, N.C.): $17,628 (0.98) • Cleveland Clinic (Cleveland, Ohio): $17,808 (0.99) • Barnes Jewish Hospital (Saint Louis, Mo.): $17,808 (0.99) • Vanderbilt University Hospital (Nashville, Tenn): $17,808 (0.99) • Stanford Hospital (Stanford, Calif.): $17,808 (0.99) • UPMC Presbyterian Shadyside (Pittsburgh, Penn.): $18,168 (1.01) • University Of Michigan Health System (Ann Arbor, Mich.): $18,168 (1.01) • Brigham And Women’s Hospital (Boston, Mass.): $18,348 (1.02) • Hospital Of University Of Pennsylvania (Philadelphia, Penn.): $18,348 (1.02) • Massachusetts General Hospital (Boston, Mass.): $18,528 (1.03) None were outliers among the 3,346 hospitals that Medicare evaluated. In fact, more than a quarter of the nation’s hospitals were more costly than all of the “honor roll” hospitals and another quarter of the hospitals were less expensive than all of the “honor roll” hospitals.

Lawsuit Challenges Medicaid Managed Care Decision In Missouri

By ELANA GORDON, KCUR MAY 09, 2012 Which marketplace is better: a crowded one with lots of choices or a streamlined one with just a few options? Those competing ideals are the backdrop of a legal battle playing out this month in Missouri, where the state’s efforts to winnow contracts for its Medicaid managed care business are being challenged by one of the companies left out in the cold. Molina Healthcare is suing the state arguing that Missouri changed the rules in the midst of a competitive bidding process. Molina is one of five companies currently managing care for about 430,000 of the state’s Medicaid beneficiaries, who are mainly low-income children and pregnant women. Molina’s contract was not renewed for next year. Instead Missouri awarded contracts to two insurers already active in the state and one new company. Judge Bernhardt Drumm of Cole County circuit court could rule on the case any day now, and the dispute adds an element of uncertainty for beneficiaries, as it comes smack in the middle of open enrollment, which runs April 19 through June 16. In Missouri’s managed care system, instead of paying doctors and health facilities directly for services, the state contracts with companies to oversee patients’ care in 54 counties. “From the state’s point of view -- and this is why it [managed care] is attractive to the state -- it’s very easy for them to manage their costs,” says Dr. Corrine Walentik, a neonatologist in St. Louis and head of the state’s Medicaid oversight committee. The state pays these insurance companies a fixed member-per-month fee. The companies negotiate rates with a network of physicians and hospitals to provide that care. They also have people who specifically help enrollees navigate the system. The model is similar to an HMO, where patients have a primary care doctor who makes referrals when needed. “It becomes the managed care plan’s job to make sure they do a good job managing these patients, so that they don’t have their costs accelerated at a higher rate than they should, and run out of money. Cause then they’d go under,” says Walentik, who has worked with the managed care program since Missouri started it in the mid-90s, but was not involved in the state’s recent contract selection and review process For the first time, the state has limited the number of managed care contracts it awarded to just three, instead of granting a contract to any company that meets certain requirements. Having a cap could save the state $16 million over two years, according to officials with the state, through reduced administrative costs from having to work with fewer companies. . The state also expects money to be saved from better rates that companies will be able to negotiate with providers because each company will have more members and more leverage. Walentik says St. Louis may provide a good lesson for why less is better. When Missouri started its managed care program there in 1995, seven plans participated. “That was a disaster,” says Walentik. “There were too many plans and not enough lives. Part of way the it works in any place is you have to have a big enough population to spread the risk across the population.” She says three plans ultimately survived. The new awards, issued in February and effective July 1, didn’t include Molina Healthcare. Molina was founded in California 30 years ago, specifically to manage healthcare for low-income people in government health programs. It has been in Missouri for 16 years. The company currently manages about a fifth of enrollees in the program (including around 13,000 people in the Western region), and was one of five companies currently with a contract in Missouri. The state instead awarded a new contract to Centene’s Home State Health Plan. Based in St. Louis, the company hasn’t had a contract in Missouri for six years. The other two companies awarded contracts – Missouri Care, an Aetna health plan, and HealthCare USA, a Coventry health care plan– are already operating in the state. In March, Molina filed a lawsuit, challenging the state’s contract decisions. “We believe the state changed the rules after proposals had been submitted and is illegally limiting the number of health plans serving Medicaid members in the state of Missouri,” says Amy Dobberteen, an attorney with Molina. Molina wants the court to put a halt on the new contracts. The contracts total about $1.1 billion (with the federal government footing about $700 million of the bill). Wanda Seeney, a spokesperson with the Missouri Office of Administration, said the state “conducted a competitive bid process for the managed care contract. Points were awarded for each bid based on quality; the method of performance; organizational experience; and most importantly, access to care.” Molina didn't score as high as the other plans on the various quality and access measures At least one provider concurs with the state’s motives to limit contracts. “We always felt having five options was more than necessary,” says Bob Finuf, an executive with Children’s Mercy Hospital, the main children’s hospital in Kansas City. “It’s not efficient and added complexity for providers.” The whole legal dispute comes at an inopportune time for beneficiaries. The state has already sent out information on the new contracts, and people are starting to choose plans for the coming coverage period. “I’ve had patients tell me they’re in Harmony but are switching to HealthcareUSA,” says Walentik. “So people are making decisions already.” As of late last week, the state had documented nearly 52,000 people enrolled in new plans, so the vast majority of the 430,000 beneficiaries still have to choose plans. Ian McCaslin, the state’s Medicaid director, said in a court deposition that putting a hold on these new contracts would cause “turmoil” and confusion in an enrollment process that’s already underway. He said the state could also have trouble extending its current managed care contracts. In the Kansas City area, the locally-based nonprofit insurance company, Blue Cross Blue Shield of Kansas City, also didn’t get a new contract, so the some 31,000 people who’ve been with the company are starting to choose a new plan. “We would be happy to continue to serve this population, to continue to serve these members until things are worked out,” says Bryan Camerlinck, a financial services director for Blue Cross, who was also disappointed the company didn’t get a new contract. He says some of the insurer’s Ob-Gyn providers may not be covered on the new plans. In St. Louis, Walentik worries about what would happen if the contracts are blocked. “It would really put things in chaos,” says Dr. Walentik. “Because I think it takes a while to get patients educated and to get providers up and running, and it would be really hard if we had to cancel everything that’s been done and start all over again." Monday marked the court’s deadline for all parties to file certain evidence and briefs, so Judge Drumm could now rule at any time on whether to grant an injunction to stop the enrollment process or dismiss the case. This story is part of a reporting partnership that includes KCUR, and Kaiser Health News. http://www.kaiserhealthnews.org/Stories/2012/May/09/missouri-medicaid-managed-care-lawsuit.aspx

Health care law increases payments to doctors for primary care

Primary care providers received additional Medicare payments in 2011; will receive boost in Medicaid funding in 2013 and 2014 Primary care physicians serving Medicaid patients would see their Medicaid payments rise under a proposed rule announced today by Health and Human Services (HHS) Secretary Kathleen Sebelius. Thanks to the Affordable Care Act, the increase would bring Medicaid primary care service fees in line with those paid by Medicare. The boost would be in effect for calendar years (CY) 2013 and 2014. States would receive a total of more than $11 billion in new funds to bolster their Medicaid primary care delivery systems. Secretary Sebelius also announced today that, in 2011, over 150,000 primary care providers nationwide received almost $560 million in higher Medicare payments thanks to the Affordable Care Act. This is another way the Affordable Care Act rewards doctors, nurse practitioners, physician assistants, and other primary care providers who are central to our health care system. “Promoting high-quality primary care is a pillar of the Affordable Care Act, and this proposed rule helps States and physicians provide every American, no matter where they live, access to the care they need to stay healthy,” Secretary Sebelius said. “This new rule can help improve health and reduce costs by preventing illnesses before they happen and catching small problems before they turn into big ones.” Today’s proposed rule would implement the Affordable Care Act’s requirement that Medicaid reimburse family medicine, general internal medicine, pediatric medicine, and related subspecialists at Medicare levels in CY 2013 and CY 2014. The increase in payment for primary care is paid entirely by the federal government with no matching payments required of States. “The payment increase proposed today will be an important tool for States to ensure their primary care networks are prepared for increased enrollment as the health care law is implemented,” said Marilyn Tavenner, Acting Administrator for the Centers for Medicare & Medicaid Services (CMS). “Today’s action will help encourage primary care physicians to continue and expand their efforts to provide checkups, preventive screenings, vaccines, and other care to Medicaid beneficiaries.” Today’s announcement is another piece of the Obama Administration’s efforts to support the primary care workforce and ensure every American has high quality affordable care, including preventive services. It comes shortly after Secretary Sebelius announced Affordable Care Act grants to help build and expand community health centers across the country. The health care law also includes other initiatives to bolster primary care and support the primary care workforce, including efforts to boost primary care residency slots, physician assistant and nurse practitioner training, and the National Health Service Corps. For more information about today’s proposed rule visit: https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-11421.pdf or www.ofr.gov/inspection.aspx. For additional information click here for the CMS Fact Sheet: http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4359

Putting a New Face on Medicare Advantage Beneficiaries

By James Gutman - May 4, 2012 Let it not be said that the health insurance industry is easing off the throttle in its campaign to save Medicare Advantage plans in the coming battles on what to cut when it's time to slash the federal budget deficit. The newest evidence of this campaign is a report put out by the America's Health Insurance Plans trade group May 3 showing the high proportions of minority groups and very low incomes among seniors who enroll in MA plans. In a wonkish sort of way, the study offers kind of a populist "MA beneficiaries are us" approach to defend the plans from anticipated future attempts to use MA as a piggybank for budget cutters. Specifically, the study uses data from CMS's own Medicare Current Beneficiary Survey (MCBS) to show that MA plans "were a vital source of coverage for low-income and minority beneficiaries in 2010," the most recent year for which data are available. The researchers found that while 26% of all Medicare beneficiaries were enrolled in MA plans then, 29% of African-American seniors and 36% of Hispanic beneficiaries were in MA. Moreover, 43% of beneficiaries in MA plans had incomes of $20,000 or less, compared with 39% of all Medicare beneficiaries. And among "active choosers," which are defined as beneficiaries not enrolled in Medicaid or employer-based supplemental coverage, 46% of those with annual incomes between $10,001 and $20,000 in 2010 chose MA plans, compared with 23% purchasing Medigap supplemental policies and 31% in just basic Medicare fee-for-service alone. What do you think of this kind of a campaign? Is it likely to be effective in convincing federal policymakers not to cut MA plan payments further by showing such cuts would disproportionately affect already disadvantaged seniors? Or has the train already left the station, and the only question is by how much will MA plans be cut in the next round of budget fixing?

Statement of Michael J. Astrue, Commissioner of Social Security

Monday, May 7, 2012 Press Office For Immediate Release 410-965-8904 press.office@ssa.gov Statement of Michael J. Astrue, Commissioner of Social Security, on the Initial Success of the New Online Social Security Statement I am pleased with the public’s initial response to our new online Social Security Statement. Since our May 1 launch, more than 130,000 people have successfully created an online account to access their Statement information, with the first 100,000 coming online in less than three days. Our new online Statement is simple and easy-to-use, and the initial satisfaction scores from users prove it. According to the American Customer Satisfaction Index, users are giving the online Statement a score of 89, making it competitive with our other top-rated, best-in-government online services. The online Statement is a very useful financial planning tool. It provides estimates for retirement, disability and survivors benefits. It also provides workers a convenient way to determine whether their earnings are accurately posted to their Social Security records. This feature is important because Social Security benefits are based on average earnings over a person’s lifetime. Now people as young as 18 can access their Statement for the first time, as well as find links to important information and online services. People should get in the habit of checking their online Statement each year -- around their birthday, for example. To learn more about it, or to try it yourself, please go to www.socialsecurity.gov/mystatement.