Posts Tagged ‘Obama administration’

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Senators Question CMS Rules for ACOs

Wednesday, August 24th, 2011

Some Senators want the rules for Accountable Care Organizations (ACOs) rewritten to increase their acceptance by providers. “An ACO model that can increase provider coordination and patient accountability would be a step in the right direction compared to today’s fragmented delivery system,” wrote the senators, led by Mike Enzi (R-WY) to Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Donald Berwick. “However, it is increasingly clear that this proposed rule misses the target.”

According to the Senators, the ACO rules have misaligned incentives and accountability, as well as an unclear return on investment for physicians and other providers. The Senators highlighted healthcare providers who have raised concerns about the ACO rules, including the American Hospital Association, which released a study that estimated six to 14 times higher start-up costs for the new entities than estimated by CMS.

The AHA study determined that the costs of elements to successfully manage the care of a defined population is considerably higher – $11.6 to $26.1 million – than the $1.8 million estimated by CMS in its proposed rule for start-up and one year of operations. “CMS’ estimate falls short of the mark,” said Rich Umbdenstock, president and CEO of the AHA. “The shared savings rate with ACOs should be adjusted to reflect these costs in order to encourage and enable participation in this important program.” Specific areas of concern include network development and management , care coordination, quality improvement and utilization management ; clinical information systems; and data analytics.

In addition to Enzi, the letter was signed by Tom Coburn (R-OK); Jon Kyl R-AZ); Mike Crapo (R-ID); John Cornyn (R-TX); Pat Roberts (R-KS); and Richard Burr (R-NC).  According to Coburn, who is also a physician, “The letter I signed today echoes the reservations of health professionals who have expressed deep concerns about the well-intended, but ultimately unworkable, ACO regulations recently proposed by the administration. It is certainly my hope that the administration will not misread this letter as partisan, but will work to address the underlying problems of misaligned incentives and regulatory uncertainty that have elicited such concern by a range of health care institutions and providers. If the administration withdraws the regulation, they will find strong bipartisan support among Congress and stakeholders to craft a proposal that encourages broad participation in innovative models to achieve lower costs and better care.”

Berwick and CMS officials believe that organizations that participated in demonstration projects will back the rules because the results showed that Medicare saved more than $38 million in the years of the pilot program; the medical groups that participated got performance payments from the feds totaling more than $31 million. Among the participants are some of the nation’s most prestigious medical systems, including The Mayo Clinic, The Cleveland Clinic and the Geisinger Health System in western Pennsylvania.

Part of the problem, according to The Hill, is that budgetary concerns were the elephant in the room when the Obama administration wrote the proposed ACO rule. This resulted in regulations requiring stringent quality improvements that offered no upfront funding for hospitals to change their procedures. According to regulators, the proposed regulation is open for public comment and can be fine-tuned. CMS recently unveiled new tools to help hospitals start care coordination efforts, for example, by giving them the money they’re supposed to save Medicare through more efficient patient care.

According to the letter, “We have been struck by the increasingly diverse chorus of concerns many of our nation’s leading health care institutions have raised in recent days. The concerns…from some of our nation’s most knowledgeable and innovative health care providers are clear. Incentives and accountability are misaligned. Detailed requirements are complex and return on investment is uncertain.”

Although the Senators complimented the work put into the ACO rules draft, the letter said that feedback received from providers around the country brought the Senators to the conclusion that the proposed ACO regulation will not fulfill its purpose.

Another perspective is offered by Robert Tennant, a managing associate with Health Directions, who says that “I’d like to offer another point of view. Certainly, for most healthcare organizations, transitioning to an ACO will create short-term expense and disruption. At Health Directions, we are finding that healthcare organizations are not dismissing ACOs outright, but they are first asking: What do we stand to gain? In some cases the answer may be either not clear or not favorable. Regardless, there is a potential upside if the focus remains on increasing quality and efficiency of care delivery. As we weigh the future of ACOs, let’s not throw the baby out with the bathwater. The point of discussion needs to shift from whether or not to become a formally organized ACO down the road toward a more focused evaluation of which ACO-type elements are worth adopting now. A commitment to achieving meaningful use with an electronic health record (EHR) is a step in that direction, as is participating in a quality-driven pay for performance program. Both have short-term, well-defined financial rewards attached to them and both will likely increase quality of care. The key is for healthcare organizations to remain focused on the underlying thought behind ACOs — improving care and reducing costs. And that really is worth getting excited about.”

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Medicare Part D Costs Expected to Fall in 2012

Monday, August 22nd, 2011

Medicare Increased competition between Medicare Part D plans, greater generic drug use and more transparency for consumers are why the Center for Medicare and Medicaid Services (CMS) expects lower Medicare prescription drug premiums next year.  Next year, the average Medicare prescription drug plan premium will cost approximately $30, compared with an average of $30.76 in 2011, according to the Department of Health and Human Services (HHS).  CMS Administrator Dr. Donald Berwick said that the average premium is about 44 percent lower than what was estimated in 2003.

The Part D drug benefit,  enacted when George W. Bush was president, lets seniors and others on Medicare sign up for a privately administered, government-subsidized health plan to purchase their prescriptions.  The program enjoys high popularity with beneficiaries and has proven to be far less costly than budget analysts originally expected, partly because of competition among private plans and the growing use of less costly generic drugs.

HHS also announced that nearly 900,000 Americans in the Medicare Part D “doughnut hole” have benefited from a 50 percent discount in brand-name drugs in 2012.  HHS estimates that out-of-pocket savings on drug costs for Medicare beneficiaries to be about $461 million from January through June of this year.  The Obama administration has worked to strengthen the Medicare drug benefit with the help of the Patient Protection and Affordable Care Act (ACA).  The law phases out the coverage gap, long seen as one of the program’s weaknesses.  Last year, approximately four million seniors received $250 rebates because they fell into the gap in coverage.  This year, the law will provide 50 percent discounts on prescriptions for those who hit the doughnut hole.

Seniors can chose from a variety of Part D plans,  and Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, said competition “clearly helps” keep premiums from rising.  At the same time, he warned against overextending Part D.  HHS said 17 million seniors have received at least one preventive healthcare service without a co-pay.  The ACA eliminated co-pays for many preventive services under Medicare and will ultimately do the same for private insurance.

“This decline in the average creates more risk for plans like ‘Humana’ and ‘United Health’ that have a significant portion of the Part D members,” said Peter Costa, a Wells Fargo analyst.  Costa said one reason for the lower bids could be last year’s joint venture between Humana and Wal-Mart stores to offer Medicare drug coverage with the lowest premiums in the country.

“The Affordable Care Act is delivering on its promise of better health care for people with Medicare,” said HHS Secretary Kathleen Sebelius.  “People with Medicare who hit the doughnut hole are paying less for their prescription drugs, 17 million Americans have received free preventive services and prescription drug premiums will remain low.  These are important steps that are making a difference in the lives of millions of Americans right now.”

“Medicare beneficiaries will have more affordable prescription drug coverage next year as a result of vigorous competition in the Part D program and Medicare drug plans’ efforts to encourage seniors to choose the most affordable medicines,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans.  Ignagni noted that “taxpayers are also saving billions of dollars as the total cost of the program continues to be far below original projections.”

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Medicare ACOs Receive Mixed Reviews

Tuesday, August 16th, 2011

A Medicare pilot program started in 2005 chose 10 groups for an experiment in improving quality and controlling costs. This foreshadowed some of the cost-control rules in the Patient Protection and Affordable Care Act (ACA) , with groups given bonuses for meeting approximately 15 quality measures, and for spending at least two percent less than conventional Medicare.  This program is a forerunner to the Accountable Care Organization (ACO) model that is one of the prime means by which the ACA’s supporters expect it to control costs.  Now that the results are in, the quality issues were met, but the issue of cost proved to be far more difficult to achieve.

Writing in The Atlantic, Megan McArdle says that Donald Berwick, the head of the Centers for Medicare and Medicaid Services (CMS), says “he is optimistic about the potential of ACOs to lower costs by coordinating care, although he acknowledged that savings from the experiment ‘were unevenly distributed, and they were modest…if care is correctly coordinated, costs fall and quality rises.  To me, it’s a matter of how fast we will get there, not whether we will get there.’  He may be right; sometimes you just haven’t done a program correctly.  On the other hand, sometimes programs don’t work, were never going to work, and can’t be made to work.  Even in the latter case, you still hear the sort of thing that Berwick is saying from the proponents of said programs: we need more time, more money, more staff, more rules.  People have usually spent years, even decades, investing in their ideas; when contrary evidence comes in, their first instinct is rarely to say, ‘Well, that’s too bad–it sure seemed like it was going to work, but I guess it didn’t!’.  No, what they want to do is double down.”

Started in 2005 by the George W. Bush administration, the experiment offered “performance payments” to participants that met most of 32 measures of quality — half as many as in the proposed rule — and spent at least two percent less for Medicare patients.  Despite their spotty financial progress, all 10 medical groups in the experiment met the quality requirements.  Additionally the program promoted care innovations, according to administration officials, outside health policy experts and leaders of the groups.

The Obama administration recently announced new options for Medicare ACOs.  The new shared savings components complement the proposed rules that will be finalized this year, Dr. Berwick said.  This pioneering model has been in process for months and that the latest announcement was not in response to skepticism about the proposed rules.  “This is responsive to some of the concerns on how to get started faster,” Dr. Berwick said.  “That’s what we’re getting asked about a lot. The criticism is comment we’re welcoming.”

CMS’ announcement represents a step in the right direction, although additional changes to the shared savings program need to be included to assure physician involvement, said American Medical Association’s (AMA) Immediate Past President J. James Rohack, MD.  “The AMA is pleased that (the innovation center) is working to assist physicians at varying stages of readiness who want to participate in Medicare ACOs,” Dr. Rohack said.  “The benefits of this new care delivery model cannot be fully realized unless physicians in all practice sizes can be involved.”

The CEO of the Cleveland Clinic hates proposed federal rules for accountable care organizations, saying they create “significant barriers” and would discourage hospitals from adopting the new model of care.  Toby Cosgrove made the comments in an eight-page letter addressed to Donald Berwick, though Cosgrove stressed that the Clinic supports the concept of accountable care organizations (ACOs).

“Rather than providing a broad framework that focuses on results as the key criteria for success, the proposed rule is replete with (1) prescriptive requirements that have little to do with outcomes; and (2) many detailed governance and reporting requirements that create significant administrative burdens,” according to Cosgrove.

To be considered an ACO, organizations must agree to manage all of the health needs of a minimum of 5,000 Medicare beneficiaries for at least three years.  ACOs are appealing to hospitals because organizations that save Medicare money will be eligible to share in some of that savings themselves.  CMS is accepting public comments on its proposed ACO rules and will issue final rules later this year.  Like the Clinic, other leading hospitals have criticized the rules as being too burdensome and providing too little possibility of financial gain.

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Skeptical Federal Appellate Court Hears Arguments on the ACA

Wednesday, August 3rd, 2011

Attorneys representing 26 states – with Florida taking the lead – locked horns with the Obama administration in the U.S. Court of Appeals for the 11th Circuit over the constitutionality of the Patient Protection and Affordable Care Act (ACA).Florida, 25 other states and the National Federation of Independent Business claim that the “individual mandate” violates the Constitution’s Commerce Clause by requiring that Americans buy healthcare insurance or pay a penalty.

Arguing for the Obama administration was acting Solicitor General, Neal Katyal, who said “People are seeking this good already in untold numbers.  The good of healthcare.  It’s purely financing.  It’s about failure to pay.  Not about failure to buy.”  Katyal pointed out that the 50 million Americans who currently lack healthcare insurance too often end up in emergency rooms for medical treatment, driving up costs.  Defending the law, Katyal emphasized the special nature of healthcare and the insurance market today.  He said billions of dollars incurred by people without insurance are passed on to people who carry insurance.  Arguing for the states, attorney Paul Clement conceded that the government can enact laws that people acquire healthcare insurance, but not until they need medical care.  Prior to that, “they’re not engaged in commerce.  They’re sitting in their living rooms,” Clement said.

The three-judge panel seemed to be skeptical about the government’s position. “I can’t find any case like this,” Chief Judge Joel Dubina said.  “If we uphold this, are there any limits” to the federal government’s power?  Judge Stanley Marcus said “I can’t find any case” in the past where the courts upheld “telling a private person they are compelled to purchase a product in the open market…Is there anything that suggests Congress can do this?”

So far, three federal district judges have upheld the ACA while two have ruled it is unconstitutional.  Three cases were heard by appeals courts, with a fourth appellate panel planning to hold a hearing in September.  The current case has attracted the most attention because it involves 26 state attorneys general who jointly challenged the law.  Additionally the Atlanta-based 11th Circuit is considered one of the nation’s most conservative federal appellate courts.

If any appeals courts declare the law unconstitutional, the case likely would be heard by the Supreme Court — perhaps during the election year.  Legal experts believe the 11th Circuit is more likely to rule against the administration.

The hearing was a government appeal of a decision by Florida-based U.S. District Judge Roger Vinson that ruled against the insurance mandate and voided the healthcare law.  According to Vinson, the mandate exceeded Congress’ power to regulate commerce because, instead of involving the usual “economic activity,” it targeted “inactivity,” in other words, someone’s decision not to purchase insurance.  This case is high profile because it was brought by more than half of the states; additionally, it tests an unprecedented lower-court ruling that invalidated the entire law.

One of the appellate judges asked Katyal if there are there any limits on Congress’s power to compel people to act. “Absolutely,” Katyal replied.  “We are not saying that Congress can force somebody to buy something and that failure to do so is economic activity.  People are seeking that good already,” he said.  Katyal said $43 billion is spent annually on care for the uninsured.  “That’s quintessentially economic,” he said.  Clement argued that the crux of the issue is whether the federal government can regulate individuals.  “For 220 years, Congress never saw fit to exercise that power,” he said.  “The whole reason we do this is to protect individual liberty.”  According to Clement, the Commerce Clause regulates people engaged in commercial activity and does not force them to engage.

Writing in The New Republic, Jonathan Cohn is reluctant to say how he thinks the court will rule.  “I didn’t hear the entire oral argument, which C-Span helpfully broadcast.  (Note to the federal judiciary: There’s this thing called the internet and it can transmit audio files.)  But I, too, came away genuinely uncertain how the court will rule.  The judges seemed a lot more ornery during the questioning of Katyal than they did during the questioning of Paul Clement, the former solicitor general arguing on behalf of the states filing the lawsuit.  But the actual substance of those questions – and some side comments that the judges made – suggested they were ready to reject essential pieces of the legal challenge.  Particularly striking were a series of comments from Frank Hull, in which she (yes, Frank is a ‘she’) stated repeatedly that she did not agree with the ‘activity-inactivity’ distinction opponents of the law have made.  As those of you following this case know, that’s really the heart of their argument:  They say the decision not to buy insurance is a form of ‘inactivity,’ which means the government may not regulate it.  Supporters of the law, including the government, disagree.  And Hull seemed to side with them, saying (roughly, given my sketchy notes):  ‘When I decide I would rather spend my money differently…that I would rather buy this product than pay for health insurance…that’s an economic decision…How can that be anything other than an economic decision?’”

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Obama Administration Reverses Itself on Patient Disputes With Insurers

Wednesday, July 13th, 2011

The Obama administration has fine-tuned rules that give patients greater clout in disputes with health insurers, changing the standards in ways that disappointed leading advocates for healthcare consumers.  The rules are designed to guarantee patients the same rights to appeal if their insurers do not cover care that is considered necessary.  The federal standards, part of the Patient Protection and Affordable Care Act (ACA), replace a patchwork of varying state policies.  The rules allow patients to protest to their health plans; if they do not succeed, they can take their complaints to an outside arbiter.  Department of Health and Human Services (HHS) officials issued the rules 11 months ago, but they have revised them.  Insurers and employers have long wanted limited appeal rights; conversely, consumer groups have argued for stronger patient protections.  In the new version, the grounds to protest an insurer’s decision are narrower than consumer groups prefer.

Writing on the Becker’s Hospital Review website, Rachel Field says that “The earlier rules governed consumers’ right to appeal denials by health plans.  The overhaul gave members in group and individual health plans the right to appeal the denial of coverage to an independent review panel.  The administration’s new rules give beneficiaries less time to prepare an appeal, less information about the reason for the denial and limitations on which denials can be appealed.  According to the report, patients can still appeal if their coverage is cancelled by an insurer, and decisions by external review panels are still binding.  Employer-sponsored plans that are self-insured will have to use at least two independent review organizations to make sure decisions remain unbiased.”

Because states lack the authority to regulate self-insured health plans, there has been no requirement allowing beneficiaries to appeal denials to an independent panel.  The health law extends that right to more than 44 million Americans covered by self-insured plans that will lose their exempt status this year.  “The right to an external appeal is considered one of the most important consumer protections that you can have,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the HHS.  “Consumers do not want insurance companies making medical decisions for them or for their families.”  According to Larsen, states will have extra time to revise local external appeals rules so that they can conform to the federal standards.  Insurers won’t have to comply with new state rules that incorporate federal requirements until January 1, 2012.

The revised rules come at an appropriate time.  Although few people want to a fight with their health insurer, it may be worthwhile.  A recent Government Accountability Office report found that more claims problems resulted from annoying but often clear-cut billing and eligibility issues than from disagreements over whether care was medically necessary.  Plus, the odds are about 50/50 that if a patient appeals an insurer’s decision, the patient will win.

Not everyone agrees with the action. “The Obama administration gave in to the insurance industry and large employer lobby on rules that would, for the first time, give rights to patients with certain employer-paid health plans to challenge a healthcare denial.  These consumers need the protection of independent reviews the most because they usually have no legal remedy for a wrongful decision to deny care under an errant 1987 Supreme Court ruling.  Health reform was intended to strengthen the public’s ability to make insurers provide the coverage patients are promised.  The administration should reverse the changes in this regulation that undermine that promise,” said Carmen Balber, Washington director for Consumer Watchdog.

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AMA Reaffirms its Support for the Individual Mandate

Wednesday, July 6th, 2011

Despite strong opposition from some member doctors, the American Medical Association (AMA) supports a key element of the Patient Protection and Affordable Care Act (ACA) that requires Americans to buy health insurance.  By a 2 — 1 margin, the AMA’s policy-making House of Delegates voted to continue its support of the individual mandate, saying such responsibility for Americans who can afford to buy coverage was the best option to expand benefits to people who are currently uninsured.  The results of the vote were 326 in favor and 165 opposed.  Without an individual mandate, people will not purchase health insurance until they are sick; that would lead to a spike in premiums for all.

“The AMA’s policy supporting individual responsibility has bipartisan roots, helps Americans get the care they need when they need it and ends cost shifting from those who are uninsured to those who are insured,” said AMA president Dr. Cecil Wilson, a Winter Park, FL. internist.  “Important insurance market reforms, such as an end to denials based on pre-existing conditions, are only possible by having broad participation in the health insurance market.  The AMA reviewed alternatives and concluded that any approach to covering the uninsured that is in line with AMA policy cannot be fully successful in covering the uninsured without individual responsibility for health insurance,” Wilson noted.

After the civil, one-hour individual mandate debate,  Wilson said an “overwhelming” majority of physicians voted to continue the position the association has maintained 2006.  Some delegates raised the issue because the constitutionality of that portion of healthcare reform legislation is being challenged.  “Our concern is that if we are not able to have a requirement that people have an individual responsibility to purchase insurance, we’re not aware of another solution, except something that would say that the government would make a requirement and tax the individuals for that,” Wilson said.  “From our perspective, the concern would be raised that would take us down a path toward a government run system.”

Wilson criticized people who can afford health insurance but refuse to purchase it, “who then arrive in the emergency room having fallen off of their motorcycle – and they did not wear a helmet – and they end up with major life-threatening injuries, the treatment for which very few people could afford.  And the result of that is that all of pay for that, private as well as taxpayers.”  Those are the people who cause those who have health coverage to pay premiums that are “$1,000 a year more than they otherwise would be.”  The reaffirmation vote stipulates that for individuals and families who cannot afford health coverage, there would be government tax subsidies or credits inversely proportional to income.  When asked if the AMA might file an amicus brief to support the Obama administration’s fight to block challenges, Wilson said that is unlikely.

According to Wilson, the delegates’ vote emphasized that “We cannot walk away from the fact that some 32 million more Americans would be able to have insurance and who do not have it now, and that as a result of not having insurance, would live sicker and die sooner.”

Several physicians strongly opposed the mandate,  referring to constitutionality challenges, freedom issues, and the opposition of physicians and numerous medical organizations.  The AMA admits to having lost 12,000 members since 2009, many because of their endorsement of ACA.  “The AMA has turned 180 degrees since the 1950s, when it held that ‘the voluntary way is the American way,’” said Jane Orient, M.D., executive director of the Association of American Physicians and Surgeons (AAPS).  “Now it has adopted the ‘progressive’ left-wing stance of calling for compulsory purchase of government-prescribed insurance.”  People will no longer be able to choose how to pay their medical bills.  Many might opt for the most affordable way: self-payment of most bills, with low-cost, high-deductible insurance for the rare catastrophe.  “But that choice would deprive the government’s favored plans of some fat premiums,” Dr. Orient said.

With 250,000 of the nation’s physicians comprising its membership,  the influential AMA has historically been opposed to a bigger government role in healthcare.  Physicians who oppose the ACA attempted to convince colleagues that the AMA should change its position.  Some delegates have blamed the Association’s support of the individual mandate for a loss of membership in the AMA in their states.  “I believe that each state, working with the population it has and the specific problems it has, can craft a solution that works better for that state than perhaps the one next door,” said Michael Greene, M.D., a delegate with the Medical Association of Georgia.  Dr. Greene, a family physician, supported the amendment.

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What’s at Stake? Medicaid, Not Medicare

Monday, June 27th, 2011

Seventy percent of Americans oppose cuts to Medicare and 57 percent are against cutting Medicaid, even when they are aware that the programs constitute an outsized weight in the federal deficit.  Of the two wildly popular programs, Medicaid is the most vulnerable.

Writing in the Washington Post about a report from the Kaiser Family Foundation about the health of Medicare and Medicaid, Ezra Klein says “It doesn’t matter whether Eric Cantor says he’s bargaining for the Ryan budget or not.  The GOP cannot privatize and voucherize Medicare.  They can’t even get close.  It’s too easy an issue for Democrats, too dangerous an issue with seniors, and too slipshod a policy even for Michele Bachmann.  The attack on Medicaid, however, is another story.  That one might actually work.  And if it does, it’ll actually be worse.  ‘in-the-know political circles,’ says Chris Jennings, who ran President Bill Clinton’s healthcare reform efforts, ‘it’s just assumed Medicaid is going to be hit.  No one is going to want to touch Medicare.  Medicare is where the political juice is.  But we’re going to need savings.  So that leads to Medicaid.’  There are two reasons Medicaid is more vulnerable than Medicare.  The first is who it serves.  Medicaid goes to two groups of people: the poor and the disabled. Most of the program’s enrollees are kids from poor families, though most of the program’s money is spent on the small fraction of beneficiaries who are disabled and/or elderly.  These groups have one thing in common: They’re politically powerless.”

It’s a little-known fact that Medicaid covers more people than Medicare. In 2010, according to the Department of Health and Human Services, Medicaid covered 53.9 million people, compared with Medicare’s 47.3 million.  Additionally, Medicaid patients are also among society’s most vulnerable.  “Kids (and) pregnant women are the vast majority,” according to Health and Human Services Secretary Kathleen Sebelius.  “But then older seniors, many of whom are in nursing homes…and very disabled individuals” are also covered by Medicaid.

Although states and the federal government share the cost of Medicaid, what grates on some governors is the rules that come with the money.  “Governors just want flexibility to run our states,” said Republican New Jersey Governor Chris Christie at the annual National Governors Association meeting in February. “We don’t want to pay 50 percent of the cost of Medicaid and have zero percent of the authority.  And I don’t think that’s an unreasonable thing to be asking for.”  Governor Haley Barbour of Mississippi agrees.  “If I could get total flexibility, I would take a two percent cap in a heartbeat,” he said.  Barbour’s preference is to receive a lump sum – what it gets now from the federal government, plus two percent to fund Medicaid.

Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, (CMS) said “There’s a right way to reform Medicare and a wrong way,”  Berwick believes that the direction he is taking — modeled on his successful patient safety campaigns at the Institute for Healthcare Improvement – will bring about needed healthcare change.  The Obama administration’s efforts to improve patient safety are more or less bipartisan.  There is little cause to dispute CMS’ data: the agency spent $4.4 billion in 2009 caring for patients harmed in hospitals and an additional $26 billion on patients who were readmitted within 30 days.  The Partnership for Patients, funded through the Patient Protection and Affordable Care Act (ACA), seeks to reduce preventable injuries by 40 percent and cut hospital readmissions by 20 percent in just two years.  According to CMS, achieving the Partnership’s goals will result in 1.8 million fewer patient injuries, allow more than 1.6 million patients to recover complication-free and save up to $35 billion in health costs.

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius described contentious portions of the ACA as the inaugural steps toward entitlement reform.  Sebelius criticized proposals to transform federal Medicaid funding into block grants for states.  When some lawmakers asked her to speak about the Obama administration’s alternative proposal to rein in entitlement spending, Sebelius pointed to two provisions of the new law.  The ACA created a new board of independent experts that will recommend Medicare payment cuts.  Its recommendations will take effect automatically unless Congress blocks them — and proposes equivalent savings.  According to Sebelius, the panel represents “a big step in terms of entitlement reform that actually doesn’t potentially cause harm to our seniors.”  She also pointed to an HHS effort to create new methods of dealing with people who are eligible for both Medicare and Medicaid because those patients represent a lopsided share of the programs’ costs.

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ObamaCare Covers Pre-Existing Conditions: So Why Are So Few People Enrolling?

Monday, June 20th, 2011

Premiums and eligibility standards for many federally run state-based pre-existing insurance pools will be cut, according to the Department of Health and Human Services (HHS).  The changes will impact some- of the state-based insurance programs, which have attracted fewer enrollees than the Obama administration originally estimated.  The plan will reduce Pre-Existing Condition Insurance Plan (PCIP) premiums between two percent and 40 percent in Washington, D.C., and in 17 of the 23 states where the federal government runs the program.  Another 27 states run their programs by using federal funding through the Patient Protection and Affordable Care Act (ACA).

According to HHS, the changes will bring the premiums closer to the individual insurance market rates in each state.  The change will not affect premiums in states where they are “well-aligned” with the individual insurance market premiums.  “That means real savings for people across the country,” HHS Secretary Kathleen Sebelius said.  “The Pre-Existing Condition Insurance Plan changes lives, and in many cases, literally saves lives.  These changes will decrease costs and help insure more Americans.”

Changes include allowing adults — beginning July 1 — to qualify for the program if a physician, physician assistant or nurse practitioner provides a letter from the last year stating that the individual has had “a medical condition, disability or illness.”  The change no longer requires that applicants provide an insurance company denial letter, although the programs will still require citizenship or legal residency and no health insurance coverage for the previous six months.  PCIP provides comprehensive health coverage, including primary and specialty care, hospital care, prescription drugs, home health and hospice care, skilled nursing care and preventive health and maternity care.  It limits yearly out-of-pocket spending and does not carve out benefits the people need.  Eligibility is not based on income and people who enroll are not charged a higher premium because of their medical condition.

According to the MyHealthCafe.com blog, the move is a good one.  “Based on PCIP enrollment so far, it may not be an issue.  California may have a budget to provide health insurance coverage for 20,000 in its PCIP, but so far only 513 Californians have enrolled in its PCIP.  That is still more than the paltry 101 residents of Missouri who have enrolled for health insurance coverage in that state’s PCIP.  In contrast, Pennsylvania, which is running its own PCIP and is limiting health insurance premiums to a comparably affordable $283 a month, has enrolled 1,657 in its PCIP, 1,000 more than any other PCIP in the nation.  Overall, only 8,000 Americans have enrolled in a PCIP so far.  Although Americans with pre-existing conditions were expected to stampede into the newly-formed PCIPs, applications for most of the PCIPs have only trickled in so far.  It is astonishing to many who predicted that the PCIPs would be flooded with applications from Americans with pre-existing conditions who have been long-denied health insurance.  Experts questioned whether the $5 billion dollars would be enough to cover the 375,000 expected to enroll until 2014,when all health insurers will be required to offer insurance regardless of pre-existing conditions.”

As an example, HHS said that a 50-year-old Floridian can now get comprehensive health coverage for as low as $270 per month. “This option became available to children under age 19 in February, and we are extending this pathway to all applicants regardless of age,” Sebelius said.  “Applicants will no longer have to wait on an insurance company to send them a denial letter.”

“These changes will get more people covered,” said Steven Larsen, the director of the Center for Consumer Information and Insurance Oversight.  “We’re encouraged by recent increases in enrollment and we’re excited to build on these efforts and reach even more people.”

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Electronic Health Records Are Great, But What About Privacy?

Wednesday, June 15th, 2011

Americans will be given a tool that helps them keep their personal information private if a proposed Department of Health and Human Services (HHS) rule is adopted.  The change in federal healthcare privacy laws proposed by HHS would give patients the right to see the name of any person who accessed their electronic health records, and what he or she did with them.  The “access reports” would be available from some healthcare providers as soon as January 1, 2013.  It would be similar to a free credit report — consumers would have the ability to request one report for free every year.  The move is the latest in an effort by the Obama administration to update and streamline the nation’s medical records system.

The proposed “access report” right has its roots in a provision of the 2009 stimulus package passed by Congress to start the economy moving and which contained $30 billion to encourage development of electronic healthcare records, called the Health Information Technology for Economic and Clinical Health (HITECH).  To ease concerns about the security of online health records, Congress told the HHS’  Office of Civil Rights (OCR) to strengthen consumer disclosure rights included in the Health Information Portability and Accountability Act (HIPAA).

“This proposed rule represents an important step in our continued efforts to promote accountability across the healthcare system, ensuring that providers properly safeguard private health information,” OCR Director Georgina Verdugo said.  “We need to protect peoples’ rights so that they know how their health information has been used or disclosed.”

In the proposed rule, HHS said the majority of providers oppose the change, because they believe it would be costly to implement and provide minimal consumer benefit.  Tena Friery, a HIPAA expert with the Privacy Rights Clearinghouse advocacy organization, disagrees, noting that the potential to identify who accessed a health record would be a significant disincentive to potential snoops.

Disclosure reports would summarize medical information transfers to entities such as law enforcement, judicial hearing or public health investigations, but would not explain the reason for the transaction.  Under the proposed rule, exchanges of medical information made via an electronic health records systems would not be included in a disclosure report.  “After careful consideration of this option, we concluded that accounting for such disclosures at this time would be overly burdensome when compared to the potential benefit to individuals,” the proposed rule states.

So just how prevalent are unauthorized views of Americans’ healthcare records?  The New York Times reports that the personal medical records of at least 7.8 million people have been improperly accessed in the past two years.  The Office of Civil Rights has a website dubbed the “wall of shame“ which lists 300 hospitals, doctors and insurance companies who have reported significant breaches of medical privacy.  The list reveals that major HMOs such as Kaiser Permanente Medical Care Program, New York Presbyterian Hospital and Columbia University Medical Center have experienced medical records security breaches.  These can occur when a laptop or other portable electronic device is lost or stolen.  An employee of Massachusetts General Hospital left the paper records of 192 patients on a Boston subway train.  Other reasons may be improper record disposal; hacking; and the unauthorized accessing of computer records.

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Medicare Cuts To Total $120 Billion

Tuesday, June 7th, 2011

The Patient Protection and Affordable Care Act will save Medicare $120 billion over the next five years as a result of lower payments to insurers and hospitals.  According to the Obama administration additional steps to cut fraud and abuse are providing promising results.  Medicare Deputy Administrator Jonathan Blum said that the healthcare overhaul is working, resulting in real savings and making program more efficient.  Payment reforms are improving quality, performance and slashing costs.  When President Barak Obama signed the healthcare bill, one major goal was to cut spending on Medicare.

“Just a year after passage, we are seeing savings in Medicare begin to materialize from provisions in the Affordable Care Act,”  said Donald Berwick, M.D., administrator for the Centers for Medicare and Medicaid Services (CMS).  “This work is laying the groundwork for a larger transformation of Medicare and our healthcare delivery system, from simply paying for the volume of services provided to rewarding the quality of care delivered.  We remain committed to achieving a healthcare system that pursues better care, better health, and lower cost through improvement.”

In addition to the projected savings, Medicare is on track to improve the quality of care members receive.  CMS has implemented quality improvements and delivery system efficiencies including providing new preventive benefits, tying payment to quality standards, investing in patient safety and offering new incentives to providers who deliver high-quality, coordinated care.  “These actions will produce savings, create incentives for greater efficiency in care delivery and lay the groundwork for a long-term transformation of our healthcare system as well to make it safer and prevent injuries and unnecessary readmissions to hospitals which not only harm patients but increase overall healthcare costs,” according to a CMS analysis.

Cutting Medicare spending was a priority of the healthcare overhaul that President Barack Obama signed into law in March 2010.  The law is projected by the Congressional Budget Office to reduce deficits by $143 billion, partly through almost $500 billion in cuts and savings from the Medicare program over a 10-year period.  Blum said the savings are in line with expectations by the Obama administration.  “We’re very much consistent with where we thought we would be,” he said.

The savings come at a cost, of course.  Cuts in physician reimbursement represent a 31 percent reduction. If the cuts are adjusted for practice-cost inflation, the American Medical Association says Medicare payment rates to physicians in 2013 will total less than half of what they were in 1991.  “If we can’t fix this, the impact on physicians and physician practices is going to be devastating,” said Alan C. Woodward, M.D., Massachusetts Medical Society president.  “Many practices are barely surviving now.  Coupled with the ongoing problem of soaring professional liability costs, Medicare reimbursement is a critical issue for physician-practice viability,” Dr. Woodward said.  “Failure to solve the Medicare problem will only further endanger older patients’ access to needed healthcare services.”

Writing on the White House Blog,  Deputy Chief of Staff and healthcare czar Nancy-Ann DeParle says that “Many of these reforms were made possible by the Affordable Care Act.  The new law rewards doctors and hospitals for providing high-quality care and offers new tools to help law enforcement and the Medicare program crack down on waste, fraud and abuse.  Other steps like improving care for patients with disabilities and bringing down the cost of durable medical equipment build on initiatives undertaken at CMS that will also reduce costs.  And we recently announced the launch of the Partnership for Patients, a new public-private partnership that will help improve the quality, safety, and affordability of health care for all Americans.  Already, more than 3,000 organizations, including 1,500 hospitals, have signed a pledge to become part of the Partnership for Patients.  This has the potential to save up to $10 billion for Medicare through 2013.”

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