Tag Archives: HHS

Getting Ready for the Insurance Exchanges

There’s been a lot of talk about the state-based health insurance exchanges set to debut in 2014 as part of the Affordable Care Act. How will they work? Will all states participate? Will they be ready on time?  Last week, the Department of Health and Human Services released a series of rules that aim to answer some of those questions.

One set of federal guidance that hasn’t gotten much attention is a final rule outlining the workings of the reinsurance, risk corridors, and risk adjustment programs in the health law. The final rule will be published in the Federal Register on March 23, the 2-year anniversary of the ACA.

Official White House Photo by Chuck Kennedy.

The 127-page document isn’t exactly a quick read, but it does shed some light on how the government is trying to remove any incentives health plans might have to try to avoid enrolling people with high medical costs. The programs also are designed to make health plan costs are predictable under the exchanges so that premiums will be relatively stable.

The ACA relies on one permanent and two temporary programs to guard against the premium fluctuations that could result if some health plans were flooded with the sickest patients, while others had only healthy customers. Under the permanent risk adjustment program, HHS is seeking to spread the financial risk of the health plans by providing payments to plans that attract higher risk patients. That risk will be offset by funds from health plans that have enrolled lower risk patients. The program will apply to all non-grandfathered plans in the individual and small group markets both in and out of the exchanges.

HHS also released details on the temporary reinsurance program, which aims to stabilize premiums in the individual insurance market during the early years of the exchanges, when officials expect a lot of people with chronic or expensive medical needs to be insured for the first time. From 2014 through 2016, all health insurers and self-insurance group plans will contribute to the reinsurance program to help cover these patients.

Another temporary program is the risk corridors program. It too is designed to reduce health insurers risk of being in the exchange early on. From 2014 through 2016, exchange plans that have costs at least 3% lower than previous cost projections will pay a percentage of those savings to HHS. The government will then pass the money on to health plans whose costs were at least 3% higher than projected.

— Mary Ellen Schneider

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Innovation Center Seeks to Renovate Medicare

Government officials have stood before doctors many times and talked about the need to change the perverse incentives that pay them more for caring for sick patients than for keeping people healthy to start. Dr. Richard Gilfillan, who runs the new Center for Medicare and Medicaid Innovation, had a similar pitch when he talked to more than 1,000 people who recently convened at a Washington, D.C. hotel for a day-long summit on health care innovation. The difference is, Dr. Gilfillan has some leverage.

Under the Affordable Care Act, his new center is charged with rapidly testing alternative payment and health care delivery models. If those pilot projects are proven to both improve the quality of care and bring down health care costs, the Secretary of Health and Human Services can roll out the program nationally. There’s a little more paperwork involved, but that’s the general idea.

Dr. Richard Gilfillan (R), with HHS Secretary Kathleen Sebelius and former head of the Centers for Medicare and Medicaid Services, Dr. Don Berwick, in November. HHS Photo by Chris Smith.

What that means is that in a relatively short amount of time, Medicare could fundamentally change the way it pays doctors. That is, if the pilot projects sponsored by the Innovation Center are successful.

Dr. Gilfillan offered an example: Let’s say the Innovation Center launches a project where it pays primary care physicians an extra $10 per patient per month to coordinate care. If officials at the Innovation Center can prove that the project improves outcomes and reduces costs, HHS can publish regulations to roll it out to primary care physicians around the country. “As you can see, this is a powerful tool for changing the way we deliver care,” Dr. Gilfillan said at the summit.

The Innovation Center has been around for about a year and officials there have been busy putting together a set of pilot projects that look at new ways to deliver primary care and home-based care. They are also testing other concepts like bundled payments and accountable care organizations. Check out the Innovation Center’s report on its first year for descriptions of all the projects.

One thing they are trying to do in each of the projects, Dr. Gilfillan said, is to work closely with private payers. The goal, he said, is to make life a little simpler for doctors by ensuring that when they find new payment mechanisms that work, all the payers, both public and private, will adopt it in the same way.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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HHS Cries Foul on Insurance Hikes

Nowhere in the thousands of pages of the Affordable Care Act does it give the federal government the power to stop insurance companies from charging excessive premiums. But the controversial health reform law does grant the Department of the Health and Human Services the right review some large rate increases and to tell consumers when they think health plans are charging too much.

HHS did just that today when it held a press conference to protest what it said were “unreasonable” rate hikes by Trustmark Life Insurance Company in five states. The company recently proposed premiums hikes of 13% or more for its plan members inAlabama, Arizona, Pennsylvania, Virginia, and Wyoming.

Courtesy Wikimedia Commons/FBI Buffalo Field Office/Public Domain

Gary Cohen, the Acting Director of Oversight at the HHS Center for Consumer Information and Insurance Oversight, said it wasn’t just that the increases were so high. HHS officials, after consulting with a team of outside analysts, concluded the rates were unreasonably high because the health insurance company was spending only a small percentage of its premium dollars on medical care and quality improvements. Trustmark also based its increases on “unreasonable assumptions,” HHS said. You can read more about HHS rate review authority here.

In its challenge to Trustmark, HHS called on the company to immediately rescind the rates, issue refunds to consumers, or publicly explain why they are standing by such a large rate hike.

It looks like Trustmark is going to stand by its rate increase. Following the HHS press conference, Trustmark issued its own statement saying that they disagreed with the federal government’s assumptions and conclusions. “Our premiums are driven by the rising cost and increased utilization of medical services,” the company wrote. “As a smaller carrier, our loss ratios can vary significantly from year to year, and we take that volatility into consideration.” As for spending too little of its premium dollars on medical care, the company said it has been in compliance with the federal Medical Loss Ratio requirements in that area. However, if they should fail to meet the federal standards, they will offer rebates to consumers.

So is this an effective strategy for bringing down health insurance rates? Share your thoughts on whether rate review by HHS and public disclosure will be powerful enough to force companies to keep premiums low or if you think insurers will be willing to ride out some bad press.

— Mary Ellen Schneider

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Here Comes the Super Committee: The Policy & Practice Podcast

photo courtesy of iStock

The names are in and the lobbying has begun. Physicians — and others — are weighing in with their priorities for the Joint Select Committee on Deficit Reduction — better known as the Super Committee. The group is charged with cutting $1.5 trillion of federal spending by Thanksgiving.

At the top of most doctors’ list: A permanent fix to the Sustainable Growth Rate (SGR) formula, which could lead to a 30% pay cut on Jan. 1. But physicians from several specialties have other concerns they want addressed as well.

Meanwhile, a federal appeals court in Atlanta ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional, pushing the law one step close to its much-predicted airing in front of the Supreme Court.

Regardless of legal wranglings, the feds are busy pushing ACA programs along, with announcements of more than $200 million worth of programs last week.

LISTEN:  For details, check out this week’s Policy & Practice Podcast. Let us know what you think.


—Frances Correa (@FMCReporting on Twitter)

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Examining the IPAB: The Policy & Practice Podcast

The Independent Payment Advisory Board, the new panel that will be charged with reducing the growth in Medicare spending, was the focus of intense debate on Capitol Hill last week. In the July 18 edition of the Policy & Practice podcast, we have all the details on the two House hearings held on the panel and why physicians are worried about its impact.

The Independent Payment Advisory Board (IPAB) was created under the Affordable Care Act to help keep Medicare spending under control. But most physician groups are calling on Congress to scrap the board or substantially change how it operates. Opponents, who include the American Medical Association, say that if the IPAB goes forward, physicians would be subject to two levels of cuts: one from the IPAB and one from Medicare’s Sustainable Growth Rate (SGR) formula. Physicians are already facing a nearly 30% Medicare fee cut next year from the SGR unless Congress steps in.

HHS Secretary Kathleen Sebelius tours Frager’s Hardware Store in Washington, D.C., before an event to announce new rules on health insurance exchanges. HHS photo by Chris Smith.

This week’s Policy & Practice podcast also has news on the new federal regulations for how states can set up health insurance exchanges. Those exchanges, which aim to make it easier for Americans to buy insurance, are slated to be up and running by 2014. And check out the podcast for the latest on the debt ceiling negotiations and how Medicare could be affected.

Take a listen and share your thoughts:


Check back with us next week for more on the debt ceiling legislation and the Institute of Medicine’s recommendations on what preventive services health plans should cover for women.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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Rolling Out Health Reform: The Policy & Practice Podcast

Many of the hallmarks of the Affordable Care Act, such as state-based health exchanges to purchase insurance, won’t go into effect until 2014. But, in the meantime, officials at the Department of Health and Human Services are plenty busy rolling out other provisions of the law, making adjustments to some of the law’s programs, and just promoting what they’ve done so far.

Recently, HHS officials announced that they would stop granting exemptions that allow limited-benefit health plans to keep in place low annual coverage limits that are at odds with the Affordable Care Act. HHS has been granting waivers to these so-called “mini-med” plans in an effort to keep the products affordable for consumers. But no more. Starting on Sept. 23, HHS will no longer accept waiver applications or extension requests from these plans. And, in 2014, all health plans will be barred from placing annual limits on coverage under the health reform law.

HHS has also been busy promoting the availability of free preventive services for Medicare beneficiaries. Starting at the beginning of this year, Medicare beneficiaries were eligible to receive recommended preventives services ranging from mammograms to smoking cessation counseling with no copays or deductibles under Medicare Part B.

Photo courtesy National Cancer Institute.

But seniors haven’t flocked to take advantage of the services. Only about one in six Medicare beneficiaries has accessed the free services, according to a government report. So HHS is launching a public outreach campaign that includes radio and TV ads. The government is also reaching out to physicians, asking them to discuss the preventive services with patients.

For more on the implementation of the Affordable Care Act, plus a recap of the American Medical Association’s House of Delegates meeting, check out this week’s edition of the Policy & Practice podcast.

Take a listen and share your thoughts:


The Policy & Practice podcast is taking a break next week, but check back on July 11for all the latest developments in health reform.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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A Sales Pitch for ACOs

There’s been a lot of criticism of the accountable care organization (ACO) concept lately, or more precisely, the federal government’s proposal to share Medicare savings with qualifying ACOs starting next year.

That proposed regulation, which was released at the end of March, outlined how qualifying ACOs could earn additional payments if they could save the Medicare program money. But there were plenty of caveats. The Centers for Medicare and Medicaid Services proposed that ACOs meet a certain threshold of savings before they could get any money back. And the rule also set rigorous standards for quality of care, requiring ACOs to meet 65 quality measures.

Since the rule came out, many physicians’ groups have criticized the proposal, saying that it made it too difficult for physicians to get involved. The steep up-front investment in technology, workflow redesign, and staffing, coupled with the uncertainty of achieving savings, would be too much for many practices, they argued. And even officials at the Cleveland Clinic, a health system that many viewed as a prime candidate for being a successful ACO, have said they see major problems with the Medicare plan for ACOs as it stands today.

Dr. Don Berwick. Photo by Laurie Swope.

Earlier this week, Dr. Don Berwick, the CMS administrator, defended the direction his agency is headed with ACOs. In a speech to participants at an ACO learning session sponsored by CMS in Minneapolis, Dr. Berwick said ACOs are one big step toward building a different, better health care system that promises to improve care for individuals and the population as a whole, all while lowing cost. But he admitted that it was a “very, very difficult step.”

There will be growing pains for everyone in the health care industry as they move forward with ACOs, he said. For instance, physicians, nurses, and other health care providers will have to learn to work together in teams to care for patients with chronic illnesses. Physicians working in the operating room and in the intensive care unit will need to truly embrace checklists. And everyone will have to grow used to their electronic health records and disease registries. Prevention, he said, must become an “obsession.”

And beyond those cultural changes, there are many other obstacles. There’s stranded capital, Dr. Berwick said, and a workforce that is underinvested in primary care and not well suited to supporting continuity of care. There are immature metrics to measure what goes on in an ACO and limited capacity to use the metrics that do exist, he said. Plus, there’s the problem that most of the money paid out by Medicare and private insurance is for the volume of care delivered, not the quality of care received.

But those aren’t reasons to shy away from ACOs or other fundamental reforms of the health care system, Dr. Berwick said. To help overcome some of the obstacles to the success of ACOs, CMS’s Innovation Center is holding learning programs like the one in Minneapolis. They are also experimenting with the idea of advancing funds to promising ACOs that lack start-up money. And they are working to get better data out of the Medicare system. “We intend to help,” Dr. Berwick said.

How many ACOs are likely to emerge next year when the program begins? Dr. Berwick said he doesn’t know, but he’s hopeful that officials at CMS can craft a final rule that will attract many organizations. He urged physicians, hospitals, and others to consider taking a leap of faith, despite the risks. “I ask you to think again about what you risk if, while the world shifts around you, you choose to stand still.”

So does Dr. Berwick make a convincing case for ACOs and the government’s shared savings program? Let us know what you think.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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Former Health IT Czar Starts New Chapter

Dr. David Blumenthal, the former National Coordinator for Health Information Technology, is taking on a new position at the Commonwealth Fund.

Photo courtesy HHS.gov

Dr. Blumenthal left his government post earlier this year after 2 years overseeing the federal government’s policy of expanding health IT use by physicians and hospitals. During his tenure, he presided over the implementation of the Health Information Technology Economic and Clinical Health (HITECH) Act, which offers incentive payments for physicians and hospitals to use health IT to improve quality of care; the program began this year. We conducted a Q&A interview with Dr. Blumenthal at the beginning of his time as national coordinator. Check it out here. And learn more about meaningful use incentives here and here.

Now that he is back in the private sector, he has signed on to chair the Commonwealth Fund’s Commission on a High Performance Health System. The commission has been in operation since 2005 and has produced a number of reports that lay out payment and system reforms aimed at improving the quality, safety, and efficiency of the health care system. Dr. Blumenthal takes over as chair from Dr. James J. Mongan, who died in May.

Dr. Blumenthal, who is a primary care physician, will have plenty of other doctors to keep him company on the commission. Among the commission’s 17 members are several physicians, including Dr. Christine K. Cassel of the American Board of Internal Medicine; Dr. Patricia A. Gabow, CEO and medical director of Denver Health, Dr. Neil R. Powe, vice-chair of medicine at the University of California, San Francisco; Dr. Martín-J. Sepúlveda, vice president of Integrated Health Services at IBM; Dr. David A. Share of Blue Cross Blue Shield of Michigan; and Dr. Glenn D. Steele Jr., CEO of the Geisinger Health System.

Stay tuned to see how Dr. Blumenthal puts his stamp on the commission.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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A New Face at the AMA

The American Medical Association has selected a new leader. The group has hired Dr. James Madara, the former CEO of the University of Chicago Medical Center, to be the new executive vice president and chief executive officer at the AMA.

At a press conference to announce the appointment, Dr. Madara, 60, said he is enthusiastic about taking on the post. And he immediately got to work defending the relevancy of the organization he will head starting July 1. The debate surrounding the Affordable Care Act and the subsequent uncertainty about the health care system highlights the importance of having the AMA act as a strong advocate for physicians and patients, he said. “I think this is a very unique time in American medicine where a physician voice is needed critically.”

Dr. James Madara. Photo courtesy of the AMA.

Dr. Madara has no shortage of experience. He is an academic pathologist and an expert on epithelial cell biology and gastrointestinal disease. He has also been a leader at major academic medical centers, including Emory University and the University of Chicago. Before taking on the role of CEO at the University of Chicago Medical Center, he was the longest-serving dean at the university’s Pritzker School of Medicine. Recently, he served as a senior advisor at Leavitt Partners, a health care consulting firm founded by Michael O. Leavitt, the former governor of Utah and Secretary of Health and Human Services under President George W. Bush.

Dr. Madara will have his hands full managing the AMA, which has garnered a lot of attention over the apparent divide within its ranks on health reform. But Dr. Madara is no stranger to controversy. As the CEO at the University of Chicago Medical Center, he spearheaded a program known as the Urban Health Initiative. It is a program aimed at connecting residents of Chicago’s South Side with preventive care from local physicians and hospitals. But critics accused the university of trying to unload poor, uninsured patients at other facilities.

Dr. Madara said his experience with the Urban Health Initiative taught him people are uncomfortable with change but that you can’t let that discomfort stifle innovation. We will follow Dr. Madara’s tenure to see what changes he brings to the AMA.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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Attestation: A New Milestone for the Medicare EHR Program

Starting today, physicians can begin submitting data to the Medicare program to qualify for thousands of dollars in bonus payments under the federal government’s new electronic health record incentive program. Physicians can attest to their use of EHRs through a new online portal set up by the Centers for Medicare and Medicaid Services.

The program, which was created under the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 and officially launched in January of this year, gives doctors a chance to earn up to $44,000 over five years through the so-called meaningful use of EHRs. In their first year of participation, they can earn $18,000 for successfully reporting that they have complied with the government’s standards for using EHRs. Physicians have until the end of 2012 to report on 90 days of meaningful use and still get the full first-year incentive. After that, they must report on a full year of data.

Image via iStock.

 

Since April 18 is the first day that physicians are able to report to CMS, it’s something of an early test of the incentive program. The program has been touted by the administration as a way to finally close the gap in physician adoption of EHRs, but it’s unclear if the incentives will be enough to motivate a large number of doctors to make the switch from paper records. Interest in the program is high, but many doctors still have their doubts.

While $44,000 is a lot of money, health information technology experts say it’s unlikely to cover the cost of a new EHR system. Even if it did, the CMS payments come only after physicians have made the up-front investment of purchasing and implementing the EHR systems.

And cost isn’t the only factor. There’s also the hassle of switching over to a new system, which may or may not have the functionality necessary to make the office workflow any better. This a concern often voiced by certain subspecialists, who say that most EHRs on the market are geared toward primary care.

What’s your view on the new EHR incentive program? Take our poll and share your thoughts.

Check back with Notes from the Road in the coming months as we follow the progress of the EHR incentive program.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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