| News from CQ Roll Call. ANALYSIS from Thomson Reuters. |
MAY 13, 2011 |
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Model ACO health centers skeptical of proposed rule The nation’s highest-profile healthcare centers — think of the Cleveland Clinic, the Mayo Clinic, Intermountain Healthcare or the Geisinger Health System — are the models for the Obama administration’s accountable care organization (ACO) proposal. But officials at those tightly organized institutions have so many concerns with the proposed rule to create ACOs, they doubt they will participate. The 2010 healthcare law created the authority to establish ACOs — networks of providers within the Medicare system that include physicians, hospitals and health systems. The aim of the integrated networks is not only to improve the quality of care but also to save money, with any savings to be shared by the government and the ACOs. The Centers for Medicare and Medicaid Services (CMS) released a proposed rule at the end of March that spells out the details of how the program will work, how much financial risk medical providers will face, and what type of data the organizations need to collect. Interviews with officials at integrated care organizations yield a similar reaction to the proposal: the idea behind the Medicare rule is a good one, but there have to be major changes to the details before the program would be workable. Even the most sophisticated healthcare systems in the nation, which have already adopted a number of the practices that Medicare officials want providers to carry out, say there isn’t enough incentive for them to apply to become an ACO under the Medicare proposal. “We think the principles and concepts are very good and very important and we’ve worked long and hard to provide accountable care,” said Patricia Simmons, the medical director of government relations at the Minnesota-based Mayo Clinic. “Are we interested? Absolutely. But is it feasible? There’d have to be substantial revisions for us to participate.” Oliver “Pudge” Henkel, the chief government relations officer at the Cleveland Clinic, said, “The assumption has been that Cleveland Clinics of the world are ideally suited for this. We are very supportive of the idea. It’s clearly the right way to go and the journey is a good one. But it’s a matter of recommending ways in which we think CMS can make the ACO model and its structure better.” Henkel said the clinic will soon send CMS officials a comment letter outlining what he called “constructive recommendations.” The current proposal contains a long list of barriers that clinic officials believe need to be reconsidered. A similar theme was struck by Thomas Graf, chairman of the Community Practice Service of Geisinger Health System in Pennsylvania. Geisinger is already participating in a different demonstration program and would only be eligible to join the ACO program after that concludes. But Graf said it’s unclear whether Geisinger officials would want to take part in the ACO program at that point. “The concept of the ACO program is certainly sound: the idea of improving quality while reducing cost,” said Graf. “It’s the regulations themselves that many organizations have a large number of concerns with. A lot of the detail-level work is problematic. It seems to be very prescriptive and restrictive with a fair amount of administrative and regulatory oversight.” CMS officials are well aware of the criticism. The written responses that came in during the first month of the comment period have been relatively pointed. Jonathan Blum, the CMS deputy administrator and director of the Center for Medicare, said at a briefing earlier this month: “We tried to signal as hard as we could we want feedback, we want comment.” And in private conversations, including a conference call with stakeholders, CMS Administrator Donald M. Berwick has stressed that the agency is interested in working with providers and wants the program to live up to its potential of transforming medical care in the United States. But the fact that even the institutions that were the inspiration for the program are reluctant to participate unless big changes are made shows that CMS officials face a tough task. Officials, who are weighing changes to the proposal before they finalize it later this year, will have to consider how far they want to go to attract interest. The complaints against the proposed rule are many and multi-faceted. One basic issue is that all institutions that sign up will face a financial risk if they do not generate savings required by the rule. The proposal suggests a two-track system. Providers could choose to get a bigger financial reward if they subject themselves to penalties starting in the first year. Or they could have the potential of a less generous reward if they choose to wait until the third year of the program to face penalties. Many providers had expected the program to offer a way for institutions to get bonuses without having to face penalties and were disappointed that the rule proposes a potential financial hit for any group that doesn’t find required savings. Another deterrent is that providers will have to collect 65 measures of quality. The quality metrics are a way to safeguard against the risk that doctors will stint on care in order to save money. But very few institutions collect that kind of data now, so adding technology and training staff to track that information can be an expensive investment. Before a group of medical providers could join the program, they would have to meet financial solvency requirements that could be especially hard for smaller physician practices to meet. Mayo Clinic officials said they are concerned about some of the requirements about how the ACO would be governed. The proposal said that ACOs must be a certified legal entity recognized under state law, that ACO participants must have control of three-fourths of the governing body and that beneficiaries must be involved in overseeing the ACO. Officials at Mayo and the Cleveland Clinic also expressed concern that the financial starting point that providers must improve is based on the current expenses of providers. They say that low-cost, high-quality providers will have a more difficult time further reducing costs than would high-cost providers who haven’t already made improvements. A separate challenge is that providers won’t know for certain which patients are in the ACO until the year is completed. The assignment of patients is retrospective, and patients will continue to be able to see other providers if they want. Physicians and other providers will not be able to prevent patients from seeing other specialists or providers who are not in the ACO network. In other words, at the end of the year, CMS officials will look back and see which patients got a significant amount of their care, but not necessarily all of their treatment, from providers in the ACO. The experiences of those patients will count toward the evaluation of how well the ACO providers did, said clinic officials. Because of all of the concerns, many of the nation’s top integrated care institutions are concluding that the start date of Jan. 1, 2012, needs to be delayed. Health center officials say it will be hard to review the requirements in a final rule, which isn’t expected to be released before late summer at the earliest, meet financial requirements, set up quality metrics and enroll by Jan. 1. And some of the providers are already looking ahead to other opportunities that may come out of the CMS Innovation Center. Berwick has said that he wants to test new ways of delivering care, and many industry officials believe that the center will offer providers funding through demonstration projects that have not yet been announced. Those potential opportunities — which could include funding for providers that accept part or all of the reimbursements for patients based on a preset, fixed amount— could offer more benefits for some of the nation’s largest integrated care clinics than the ACO rule would. “I look at the ACOs coming out as almost fluff and distraction on the side, not that it’s not good but it’s just that the mainstream is already moving out there on the front line” to other ideas, said Brent James, the executive director for Intermountain Healthcare’s Institute for Healthcare Delivery Research. “We’re way past it.”
Senators question value of HHS patient safety initiative By Rebecca Adams, CQ HealthBeat Associate Editor May 5, 2011 The administration’s new initiative on patient quality is duplicative and a waste of money, a top U.S. Senate Republican said at a hearing. The program — known as the Partnership for Patients — was launched last month with a major publicity push. The program built on a broader strategy to improve quality that was released in March. HHS Secretary Kathleen Sebelius said that over the next three years the new public-private partnership will help save 60,000 lives and could save up to USD 35 billion in medical costs, including as much as USD 10 billion in Medicare. Over the next 10 years, agency officials say the program could reduce costs to Medicare by about USD 50 billion and produce billions more in Medicaid savings. But critics such as Senator Michael B. Enzi of Wyoming, the top Republican on the Senate Health, Education, Labor and Pensions Committee, aren’t buying it. Enzi said he will soon send a letter to the chief actuary of the Centers for Medicare and Medicaid Services asking him to conduct an independent cost analysis of the program to show how much it would save. At the hearing, Agency for Healthcare Research and Quality (AHRQ) director Carolyn Clancy, who is helping to carry out the effort, told Enzi that she has already informally provided information to the chief actuary, Richard Foster, for the estimate. “The Partnership for Patients program is providing funds to encourage providers to do the very things they should already be doing for their patients,” Enzi said. “I see very little evidence that it will actually change the fundamental problems that exist in the current system. It is time to make changes that really improve patient care.” HHS plans to spend up to USD 1 billion provided by the health overhaul law to implement the initiative. It has two objectives: decreasing preventable hospital-acquired conditions by 40 percent by the end of 2013 compared to 2010, as part of an effort to keep patients from getting injured or sicker, and decreasing hospital readmissions by 20 percent over the same time period. But Enzi said that the program is essentially paying hospital officials to take steps that they already should be taking in order to avoid malpractice lawsuits and other negative results. Even committee member Senator Barbara A. Mikulski, Democrat of Maryland, a cheerleader for quality improvement efforts and a lead author of the provisions in the healthcare law, told Clancy that the agency needs to do a better job of demonstrating results for the USD 1 billion that is being invested in the initiative. “For USD 1 billion, either this is early or we could be getting a lot more value in this area,” said Mikulski, adding that she finds the expected results from the program “a bit thin.” Clancy said she would provide the committee with more information about the initiative, including how it compares with other quality improvement efforts already under way. The partnership will give hospitals information about best practices that have reduced complications or infections and lowered healthcare costs. So far, about 1,200 hospitals have agreed to join the safety partnership. When the program was launched, about 500 hospitals had agreed to participate. Outside of the hearing, Clancy said she felt that Enzi’s questions were more “straightforward” than “skeptical.” She said that the criticisms show that “we can be clearer about communicating” the value of the program. Clancy added that within the administration, there is a “tension, I’d say, between stating a minimal goal — getting the rocket off the ground — versus an aspirational goal — we’ll go to the moon.” Administration officials have articulated minimal goals so far, but Clancy said she believes that the new efforts have the potential to achieve far more than the basic benchmarks, such as saving 20,000 lives per year.
Tricare fees may rise, but major retooling needed to contain costs Defense healthcare analysts agreed this week that fees charged to retirees, working retirees and their families by Tricare, the Defense Department healthcare program for service members, are heading up. They said many more changes are needed to contain the system’s ballooning costs. “People are going to have to pay more,” David S. Chu, president of the Institute for Defense Analyses, told a panel on Tricare sponsored by the Center for American Progress, a left-leaning think tank. The debate, he said, is over how much more. Chu appeared at the forum with other analysts who agreed fees would rise but also said other cost-containing steps are necessary, such as prodding Tricare enrollees to use mail-order drugs rather than going to local pharmacies to fill prescriptions and re-engineering processes for delivering healthcare. The House Armed Services Committee plans to mark up a fiscal 2012 defense authorization measure that would address Tricare Prime fees charged to working military retirees. Tricare Prime is a health maintenance organization serving active duty personnel that is open to dependents and many retirees. Tricare Prime fees charged to working military retirees haven’t increased since 1995. Currently, families pay USD 460 a year for the healthcare program and individuals USD 230. The Obama administration has proposed raising the fees by USD 60 a year for families and USD 30 for individuals. The administration can act on its own to increase the fees. Although the authorization bill, introduced by Committee Chairman Howard P. “Buck” McKeon, Republican of California, apparently would go along with the fiscal 2012 increases proposed by the White House, it would make future increases a matter of law and not administrative action. It would also limit those annual increases to the rate of general inflation, rejecting an Obama administration proposal that they grow each year by the rate of medical inflation, now estimated at about 6 percent. Vice Admiral Norbert R. Ryan Jr., president of the Military Officers Association of America, said his 377,000-member group opposes raising future fees at the rate of medical inflation; instead the increases should be consistent with the federal “COLA,” or cost of living adjustment, he said. Tricare’s fees are far lower than civilians generally pay for healthcare under employer-sponsored health coverage. But Ryan said that the relatively low charges are given in exchange for the great sacrifices made by those who join the military. A Bush administration proposal several years ago to triple the fees led to an outcry on the part of military retirees, who said the proposed increase suggested they didn’t deserve the benefits. Lawrence Korb, a senior analyst at the Center for American Progress who served as assistant secretary of defense from 1981 through 1985, said the fees should be raised more than Ryan advocates. Ryan argued against that idea several times at the forum, but pointed to other ways to contain Tricare costs. He said that “billions” of savings go unrealized because the program makes little use of mail-order drugs. And he said billions more go unsaved because the program doesn’t practice efficient forms of healthcare delivery, such as those exemplified by the Geisinger Health System in Pennsylvania, a highly organized system that tries to ensure that care is delivered in the most cost-effective setting. CAP recently released a paper noting that Tricare’s budget has soared. It said the Defense Department’s fiscal 2012 budget includes a USD 52.5 billion request for Tricare — that’s 300 percent more than its fiscal 2001 budget. Tricare uses the military and civilian healthcare systems to deliver treatment. At one point, enrollees made much greater use of services provided by healthcare facilities at military installations, but with the closure of many bases more enrollees have turned to civilian healthcare. The program also has proved popular because of its very low fees. CAP’s report said that “as a result of this unprecedented cost growth in the Tricare system, nearly 10 percent of the baseline defense budget now goes to providing medical care for active duty, reserve and National Guard troops and their dependents, as well as military retirees of all ages and their dependents.” According to the report, “these skyrocketing health care costs will consume an increasingly large portion of the defense budget as the federal deficit forces the country to slow down projected increases in defense spending. The cost of military health care could eventually begin to divert funding away from other crucial national security initiatives.” The paper called for gradual increases in fees for military retirees, including a tiered fee structure for working-age retirees. It also called for cost-sharing for services delivered in order to discourage their overuse, and limiting double coverage for high-income retirees, among other steps. “Once fully implemented, we estimate that these steps could save the Pentagon up to USD 15 billion per year,” the Center said.
Medicaid health plan execs make case for more managed care Medicaid managed-care plan executives worked to convince congressional aides in a briefing this week that such plans are delivering more coordinated and lower-cost care than the traditional fee-for-service program. The outreach comes as state officials around the country are looking to lower costs in Medicaid, the federal-state program for those with low incomes. In Washington, the House of Representatives adopted a budget resolution in April that calls for dramatically reduced spending growth in Medicaid. The health plan executives told Congressional aides that a move to managed care could help save costs. Managed-care officials are well aware that lawmakers, and the congressional staff who advise them, could have a significant impact on their business. Many lawmakers are concerned that Medicaid costs are unsustainable. While Democrats in Congress have not traditionally been as vocal in their concerns about managed care in Medicaid as they have in Medicare, the program for seniors and people with disabilities, managed care executives want to build an image among lawmakers that managed care in Medicare can be part of the solution to escalating costs. “We see you as influential people,” said Michael Dudley, president of Sentara Health Plans in Virginia. Some consumer advocates say that some insurers save money by limiting medical services or requiring Medicaid beneficiaries to use a limited network of providers. “Managed care has been perennially a real mixed bag,” said Dee Mahan, the director of Medicaid advocacy for Families USA, a consumer advocacy group. “There are some good plans and some that are not good at all. A lot depends on what the incentives are for providers and how the plans are structured. In Medicaid, it’s particularly concerning given that you’re dealing with low-income populations and often very sick people.” The health plan leaders are seeking to dispel those concerns. Staffers listened as officials from four companies — AmeriGroup New York, the AmeriHealth Mercy Family of Companies, Molina Healthcare Inc. and Sentara Health Plans — walked through PowerPoint presentations of their achievements. For instance, Michael Rashid, the president and CEO of AmeriHealth, said his plans have saved the Pennsylvania health program almost USD 3 billion over five years and the South Carolina program USD 70 million since 2002. Gary Call, corporate vice president of Molina, said that by using case management, health plan officials had increased screenings of prostate cancer from about 17 percent of patients in 2006 to 63 percent in 2010 and cholesterol screenings from about 16 percent of people in 2006 to nearly 62 percent in 2010. Dudley, of Sentara, said that insurers haven’t been able to reduce the number of babies that require care in neonatal intensive care units but that NICU babies who are covered by health plans do have slightly higher birth weights, which could be attributed to better prenatal care. The executives said they were able to achieve better outcomes than fee-for-service Medicaid in part because they had case managers call or visit patients to make sure they were following physicians’ instructions and keeping appointments rather than going to emergency departments. At the end, one audience member asked how the plans conducted their marketing and enrolled people. The executives gave no hints of seeking to enroll healthier people who would keep costs lower than sick beneficiaries, a cherry-picking tactic that consumer advocates fear is essential to the business plans for insurers.
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