By Rebecca Adams, CQ HealthBeat Associate Editor

October 12, 2012 --The New Jersey state legislature may soon send a bill creating a health benefits exchange to Republican Gov. Chris Christie, but the governor still plans to wait until well after the Nov. 6 elections to announce whether he'll sign it.

Christie vetoed an earlier version in May, in part because the Supreme Court had not yet ruled on the 2010 health care law (PL 111-148, PL 111-152). The governor also raised objections to some specifics in the earlier bill, such as $50,000 salaries for part-time exchange board members. The pay has been removed from the more recent version, which was passed by the state Senate. The legislation was approved by an Assembly committee last week and will next be voted on by the full Assembly, which is expected to back it.

But Christie has 45 days after a bill reaches his desk to decide whether to sign or veto it, said spokesman Kevin Roberts. And the governor is still undecided about what he will do.

States face a Nov. 16 deadline for submitting an application to the Department of Health and Human Services if they plan to operate their own state exchanges or state-federal partnerships.

"I won't make a decision until I have to," said Christie last week. "I don't have to make one until the 16th, so I want to make sure I'm as fully informed as I can be. That's ultimately our call. It's an executive branch call and we'll make the call."

Christie is facing a re-election contest himself next year. As he weighs whether to go along with the Democratic legislature on the exchange, he may be considering what the reactions of voters will be in the traditionally blue state. Christie also will have to decide whether or not to expand Medicaid as the health care law allows. He has criticized the idea of expansion but not said definitively that he would reject it.

New Jersey is one of several states that could decide to move ahead with their own exchanges after the elections if President Obama is re-elected.

Amanda Cowley, who deals with exchange implementation at the federal Center for Consumer Information and Insurance Oversight (CCIIO) said on Oct. 5 that the governors of 14 states already had sent in letters to HHS Secretary Kathleen Sebelius saying they will establish the exchanges.

State officials also can choose to create a partnership with the federal government or to allow the federal government to operate the marketplace.

The Kaiser Family Foundation, as of late September, had a tally of 16 states that have established state exchanges, three that were planning state-federal partnerships, eight have seen no significant action and eight have decided they won't create exchanges. Another 16 have seen some activity but are still studying their options before making a decision. Of those still considering their options, Minnesota is among the most prepared and capable of creating its own state exchange if state policy makers decide to do so. Democratic Gov. Mark Dayton appointed a Health Insurance Exchange Advisory Task Force last year that continues to meet and discuss regularly to discuss issues related to creating an exchange.

• Kaiser Map (pdf)

By Rebecca Adams, CQ HealthBeat Associate Editor

October 11, 2012 -- The Center for Medicare and Medicaid Innovation, which is in the process of reviewing applications for its bundled-payments initiative, has decided to postpone implementation of one of the four models that it originally proposed.

"We are moving forward with models 2 through 4 first, before model 1," a Centers for Medicare and Medicaid Services (CMS) official said. "We're reviewing to see how it [model 1] and the participants will fit with respect to the other models."

Under the bundled-payments initiative, which was announced in August 2011, CMS plans to tie payments for multiple services that patients receive during an episode of care. For example, instead of multiple providers generating different claims for a surgery, the entire team is paid with a so-called "bundled" payment that provides incentives to deliver health care services more efficiently while maintaining or improving quality of care.

Providers will have flexibility to determine which episodes of care and which services would be bundled together. The bundled-payment initiative is part of an effort by CMS to move away from volume-based fee-for-service care toward payments that are based more on quality.
The model that is being re-evaluated and not being implemented at this time is one of three of the initiative's four models that affect inpatient acute care hospital stays. The other model affected post-discharge services.

Under the stalled first model, the episode of care would have been an inpatient stay in the hospital. Medicare officials had planned to pay the hospital a discounted amount based on the payment rates established under the Inpatient Prospective Payment System. Under this variation of the bundling initiative, Medicare officials expected to pay physicians separately using the Medicare Physician Fee Schedule. Hospitals and physicians would have been allowed to share in any savings. CMS officials had already accepted applications for this model last year, several months before applications for the other three alternatives were due.

Some hospitals and physicians may be disappointed that the option is being pulled back for review instead of being implemented.

Federal officials are contacting candidates that applied under the other three alternatives that CMS is moving forward on to go over the details of their proposals before announcing which applicants will participate in the program.

Model 2 of the initiative includes not only inpatient hospital stays but also post-acute care. The episode of care would last at least 30 days after a patient is discharged.

Model 3 does not include inpatient care. Instead, it would start when a patient leaves a hospital and last at least 30 days after discharge.
Model 4 would test out a broad option in which CMS would set one predetermined bundled payment to the hospital to care for a patient.

That payment would be expected to cover all of the services during an inpatient stay by the hospital, including physicians and other providers.

• Bundled care initiative 
• Bundled payment fact sheet (pdf)

By Rebecca Adams, CQ HealthBeat Associate Editor

October 11, 2012 -- Giving patients access to their medical records through an electronic portal could increase their adherence to treatment instructions without overburdening physicians, according to the findings of a yearlong pilot program supported by the Robert Wood Johnson Foundation and the National Cancer Institute.

At a briefing in Washington last week, participants said that they believe that the practice of providing patients with open access to medical notes will be commonplace in the future. Beth Israel Deaconess Medical Center in Massachusetts, Geisinger Health System in Pennsylvania, and Harborview Medical Center in Washington participated in the project. Patients were allowed to view notes and completed a survey about their experiences. The results of the study were outlined in an article in the Annals of Internal Medicine about a yearlong pilot program.

None of the systems chose to stop providing access to notes after the experimental period ended.

The biggest question that arose is whether patients would be able to comment on or edit the notes. One out of three patients said that they should be able to approve the notes' contents. But in surveys of physicians at the three sites, 85 percent to 96 percent of doctors disagreed.

At the three sites, a total of 11,797 patients opened and viewed at least one note. Of the 5,391 patients who opened at least one note and completed a survey, 77 percent to 87 percent (depending on the location) said that having access to the notes helped them feel more in control of their care; 60 percent to 78 percent of those taking medications reported increased medication adherence; and 26 percent to 36 percent had privacy concerns. Only one percent to eight percent said they were confused, worried or offended by the notes.

Health system executives in the project who spoke at the briefing said that there are several business-related reasons why letting patients view the notes could save money or attract new patients.

"There definitely is a financial case, and a business case, to be made for this," said Eileen Whalen, executive director of Harborview Medical Center near Seattle, echoing statements by other executives at the briefing. Most health systems in the future will adopt some way of electronically allowing patients to view their records, they said, and those who adopt the practice early on will be able to tout their transparency and differentiate themselves from competitors.

"Long term, I believe this will become the standard of care," said Kevin Tabb, president and CEO of Beth Israel Deaconess Medical Center in Boston. "I just want us to get there first."

Whalen noted that it also can be much more efficient to let patients read the notes rather than require physicians to answer individual questions that could be answered simply by reading the documents.

Whalen shared her personal experience as the sister of a man with Stage 4 cancer. She said she has nine siblings who want to keep up with his treatment, so it would be far more efficient to let them all read the oncologist's notes rather than ask her to field phone calls from family members.

Mark Zeidel, chairman of the Department of Medicine at Beth Israel Deaconess Medical Center in Boston, said that it was important to move quickly to implement the practice without taking too much time for additional study first. Just as physicians didn't spend a great deal of time trying to figure out if penicillin was good to treat pneumonia, he said, doctors should begin providing access to notes with the idea that studies can come later.

"We need to push this very hard," he said.

By Rebecca Adams, CQ HealthBeat Associate Editor

October 9, 2012 -- Researchers often puzzle over why medical practitioners often treat patients in ways that studies have shown to be ineffective or less effective than alternatives. A new article in Health Affairs identifies five reasons it takes so long for evidence-based practices to change what health care professionals do.

The article by RAND Corp. researchers suggests that perverse financial incentives, ambiguous results, biases among medical professionals, different goals for information and the limited use of tools that promote best practices in decision-making are common reasons why treatment is not always based on the best evidence.

"The nation is making substantial investments in new comparative effectiveness research in the hope the results will improve the quality of medical care and reduce its cost," said a statement from Justin Timbie, who along with Eric Schneider, was a lead researcher for the study. "Before we can achieve these benefits, we must address the issues that impede the translation of evidence into medical practice."

In a separate article, Dartmouth professor Harold Sox argues that officials at the Patient Centered Outcomes Research Institute (PCORI) should develop a greater sense of urgency and "plan its research agenda strategically, so that it addresses research questions that comparative effectiveness research could answer quickly and decisively." That article is also included in the October issue of Health Affairs.

Barriers to Adoption of Best Practices

The RAND Corp. researchers noted that some treatment approaches changed quickly after new evidence emerged. However, the authors said that "translating evidence into changes in clinical practice is rarely rapid." For instance, prostate-specific antigen testing is still often used despite evidence that it offers little benefit, the authors wrote. And, they found, cost-effective treatments for patients with hypertension, such as thiazide diuretics, are not used as much as heavily marketed alternatives that are less effective.

One explanation is that "perverse financial incentives push both patients and providers to disregard the evidence and pursue aggressive treatments even if they are no more effective than more conservative treatment approaches," according to the study. Under fee-for-service systems, providers are paid well for performing procedures while they receive little or no compensation for the time it takes to counsel patients about varying treatment options.

Medical providers also might hear incomplete information about study results, in part because industry groups can finance biased publicity about research, and there is often little funding provided to disseminate results in an objective manner.

Another issue is that sometimes it's difficult for providers to sift through ambiguous results, which "become fuel for competing interpretations," the authors said.

In addition, medical professionals often have three kinds of cognitive biases: a tendency to accept evidence that confirms previous understanding and reject anything that upends pre-conceived ideas; a preference for intervention over inaction; and using newer technology, with the thought that newer technology is better.

A separate challenge is that sometimes clinicians and patients have different expectations about research. Some are interested in personalized medicine that can tailor treatments to the patients who will most benefit from an approach, while others "might prefer research whose results can be generalized to larger populations," the study said.

Decision-making support tools could help overcome providers' tendencies to ignore recent research, but they are not widely used, the study said.

The authors offered three ways to reduce barriers to the adoption of evidence-based medicine.

One idea is to get a consensus of a study's goals and the standards for interpreting the results before the research starts. The article said that most comparative effectiveness studies should conduct a consensus development process to debate the appropriate design of each study, reducing the chance that investigations are ignored after they are done.

Additionally, multidisciplinary teams should develop treatment guidelines, rather than such efforts being dominated by one kind of medical specialty.

The researchers said that a third way to push for more evidence-based care is to increase the use of payment systems that pay providers for the most effective treatments.

PCORI's Progress

The second article, by Sox, argued that the comparative effectiveness research should be focused on specific, high-impact questions, and should proceed quickly, given that authority for a major funding source for PCORI will expire in 2019 unless Congress reauthorizes it. The health care law (PL 111-148, PL 111-152), which created PCORI, said that a trust fund for it can no longer be used after Sept. 30, 2019.

"The fledgling institute's leadership has a difficult task," Sox wrote. "The institute is a start-up that has one year to scale up to an organization that dispenses a half-billion dollars in research funding each year and only seven years to win reauthorization."

Sox's concerns about the pace of PCORI's action echo those of others who would like the nonprofit to target questions that would help a large number of patients judge the effectiveness of different treatments. PCORI officials have decided to initially accept research grant proposals without limiting applications to specific medical dilemmas. Some critics say that they need to decide first which treatment questions they are most interested in rather than allowing applications for an unlimited array of issues.

"PCORI's actions have not conveyed a sense of urgency or strategic direction," Sox wrote. "The institute's first substantive utterance—its National Priorities for Research and Research Agenda—does not list high-priority research questions or specify research methods to address them. It leaves these important tasks entirely to the research community, to patients and to stakeholders. This approach could be effective in the long term, but it is not sufficiently responsive to the urgent circumstances dictated by the 2019 sunset date. PCORI must start now to implement a strategy to make the largest possible impact before its day of reckoning."

Joe V. Selby, PCORI's executive director, said in a statement that the institute "is aggressively developing a robust, systematic multi-stakeholder process for identifying and prioritizing research questions for targeted funding. We expect to issue a first set of targeted research funding calls within about 90 days, and to have a fully developed process in place early in 2013. Additional funding announcements designed to support specific research questions will follow." An aide to Selby said he had not yet read Sox's article.

• PCORI research agenda (pdf)

By Jane Norman, CQ HealthBeat Associate Editor

October 12, 2012 --Officials with the Centers for Medicare and Medicaid Services recently said that additional highly rated Medicare Advantage and prescription drug plans will be available to enrollees when open enrollment for Medicare begins.

Jonathan Blum, Medicare director, said that in 2012, people enrolled in Medicare had access to 106 four- or five-star Medicare Advantage plans; in 2013, there will be 127 insurance plans to choose from. The plans are private alternatives to fee-for-service Medicare and enrollment in them has been growing steadily.

Also in 2012, just 28 percent of enrollees were signed up for a four- or five-star plan, Blum said. In 2013, it's estimated that should increase to 37 percent, he said.

Stand-alone Medicare prescription drug plans that are deemed to be the top-rated also will be more widely available, said Blum. In 2012, there were 13 and in 2013 there will 26.

In 2012, just 9 percent of enrollees were enrolled in those highly rated Part D plans, but that is projected to double to 18 percent in 2013.

Overall, 51 percent of all beneficiaries have access to a four-star or five-star Medicare Advantage plan and that percentage will rise to 68 percent in 2013, he said. Virtually every beneficiary will have access to a four- or five-star prescription drug plan, he said.

Medicare Advantage also came up during last week's debate between Vice President Biden and Republican vice presidential nominee Paul Ryan. When Ryan said that 7.4 million seniors are projected to lose their Medicare Advantage plans, Biden responded: "That didn't happen." And, he said, "More people signed up."

The trend in Medicare Advantage indeed has been toward increased enrollment numbers, although CMS actuaries earlier had projected that participation would drop because of reductions in payments mandated under the health care law (PL 111-148, PL 111-152). Insurers also have warned that enrollees may begin shying away from Medicare Advantage as cuts are implemented in years to come.

"To our minds this is very good news—we are seeing tremendous quality jumps," Blum said of the increased quality effort. "We are using multiple tools to achieve this quality improvement, financial incentives and also non-financial incentives."

For example, beneficiaries who are in low performing plans—ones that score below three stars for three consecutive years—will get letters from CMS encouraging them to switch, Blum said. Low-performing plans are highlighted on the Medicare website, too.

Medicare officials have been working hard to steer seniors toward plans that receive either four or five stars on a one- to five-star scale, with five representing the highest level a plan can achieve. It's an effort that also drawn criticism and controversy in connection with an $8 billion CMS demonstration program to award bonuses to plans.

Blum said four- and five-star plans focus on health needs of enrollees, process claims quickly, hear appeal requests in a timely manner and administer drug benefits in line with federal rules. "We have great confidence that those plans that achieve four or five star ratings best serve their beneficiaries," he said.

By CQ Staff

October 9, 2012 -- Middle-sized businesses likely will face higher costs under the health care law because more employers in that group will be required to provide insurance coverage. But costs per employee will go down for small businesses, according to an Urban Institute analysis.

The analysis, released last week, drew on several previous institute analyses and used the think tank's Health Insurance Policy Simulation Model to draw conclusions.

It found that under the health care law (PL 111-148 PL 111-152):

• For mid-size businesses, those with 100 to 1,000 workers, costs per worker will increase. That reflects the penalties that as many as 5 percent of those employers will have to pay because they don't provide insurance coverage. Expanded enrollment of workers in health care plans is the main reason why costs would go up 9.5 percent overall for this group, the Urban Institute said.
• For small businesses, meaning those with fewer than 50 workers, average costs per insured worker will be reduced by 7.3 percent and spending for the group overall will decrease by 1.4 percent. Such businesses are exempt from penalties and may qualify for premium tax credits.
• The cost per employee will be virtually unchanged for large employers—those with more than 1,000 workers—who provide group insurance coverage. "Our analysis shows these employers already cover the vast majority of their employees, will continue to do so, and will retain the flexibility to define their own benefits," the Institute said. Overall costs are projected to rise by 4.3 percent due to more employees signing up for coverage due to the individual mandate.

 Urban Institute Report (PDF)