APRIL 1, 2005 — The Agency for Healthcare Research and Quality announced online access Monday to data on how each state in the nation measures up on 14 standards of health care quality. The data allow each state to compare how it rates with national averages as well as with other states. AHRQ Administrator Dr. Carolyn Clancy shied away from naming individual states in announcing the online access. "This is not about ranking state health care systems from top to bottom on quality of care," she said.

"The picture is much too complex for that. There is no 'best state' or 'worst state.' Improvement is needed in every state."
As an example of how much states can improve, Clancy noted that "patients in the leading states are getting care at a level of quality that is many times higher than the lowest performing states. For example, nursing home residents were physically restrained at a rate almost 10 times higher in the lowest performing state, compared with the highest performing state."
The measures cover cancer, heart, respiratory and other diseases, as well as levels of preventive care. For example, the percentage of women receiving prenatal care in the first three months of pregnancy varied from 69 percent to 91 percent.

AHRQ wants to connect those who are improving health care "with those who still need the road map to improvement," she said Monday. "That's why today, I'm committing a million dollars this year to a new initiative—AHRQ QualityConnect—to help uncover what works and share 'lessons learned' with those at the front line of improvement."

APRIL 6, 2005 – With the two chambers, and factions of their party, still sharply divided over spending cuts, the top House and Senate budget writers met Wednesday morning to begin informal conference negotiations.

Rep. Jim Nussle, R-Iowa, and Sen. Judd Gregg, R-N.H., will have to come up with a number—and anticipated policy—that will satisfy House conservatives and moderate Republicans in the Senate.
The House budget blueprint calls for $68.6 billion in mandatory spending cuts over the next five years, about four times the $17 billion outlined in the Senate budget.

Budget experts say a small difference in the budgets' discretionary spending caps will be easily resolved and that the two sides are not too distant on tax cuts.

A floor amendment by Sen. Jim Bunning, R-Ky., raised the amount of tax cuts the Senate would protect from filibuster through the reconciliation process from $70 billion to $129 billion. But observers say the House and Senate are likely to negotiate between the $70 billion figure and the House's call for $45 billion in tax cuts under reconciliation. The overall House tax target, including cuts outside of reconciliation, is $106 billion.

For now, few in either chamber are drawing lines in the sand, but the gap on the spending side is significant.

The biggest difference between the two chambers' instructions to their authorizing committees to generate cuts in mandatory spending programs is an $18.7 billion assignment to the House Ways and Means Committee, which has jurisdiction over Social Security, Medicare, unemployment insurance, and the Supplemental Security Income program in addition to its command of the tax code.

Nussle has said that Ways and Means will generate some of its savings from cuts to the earned income tax credit (EITC), but Senate GOP aides says any such savings would generate perhaps $3 to 5 billion over five years while creating a parliamentary snag that could imperil GOP leaders' plans to advance tax cuts and spending reductions as separate bills.
House conservatives argue that the major entitlement programs must be changed.

Rep. Jeb Hensarling of Texas, the conservative Republican Study Committee's point man on budget issues, said that "unless we reform" Social Security, Medicare, and Medicaid, they will become the "three horses of the fiscal apocalypse."

Parliamentary problems bedevil efforts to advance the Bush administration's plan to shore up the financially troubled Pension Benefit Guaranty Corp. (PBGC) as part of the budget reconciliation process, though Senate GOP budget aides insist a modest plan by Gregg to generate about $5 billion in PBGC-related savings—only $2 billion or so via reconciliation—will pass muster with Parliamentarian Alan S. Frumin.

The obscure parliamentary situation arises because changes to both the EITC and PBGC premiums generally have effects on both outlays and revenues, which means any bill that includes changes to the programs is considered both a tax and spending measure. Since Frumin has opined that only one of each—tax and spending bills—can advance via the filibuster-proof budget reconciliation process, doing either policy in the first reconciliation bill would mean that both reconciliation slots would be used up and that there would not be a second bill.

"On PBGC—as with refundable tax credits, EITC, and other programs that involve both outlays and revenues—the Republicans' desire to have multiple reconciliation bills causes them a great deal of procedural difficulty," said a top Senate Democratic budget aide.

Republicans want separate tax and spending cut reconciliation bills in large measure because they do not want to mix in cuts to the Medicaid health care program for the poor or to the EITC program with tax cuts on dividend and capital gains income

"The optics of it are terrible," said an aide to a leading House GOP moderate.

But another House Republican aide said that is not an issue for conservatives.

"I don't think a lot of the conservatives are terribly concerned about those optics," the aide said. "Generally, conservatives view tax relief as being good anytime."
On another front, the Senate would like to use reconciliation to address the statutory debt limit without the possibility of a filibuster and extended debate on the debt. But the House has an automatic mechanism for passing a debt-limit measure upon adoption of the conference report on the budget. That allows lawmakers to avoid a politically difficult roll call vote on whether to allow for increased debt. A reconciliation bill would force a vote in the House.

APRIL 1, 2005 — The nation has made significant preparations for big leaps forward in the quality of health care but now has to muster the gumption to jump. That was the message Monday from two leaders in the quality improvement field who lauded the health care system for real change but slammed it for huge shortcomings.

"I think a fundamental change is occurring" in health care quality, Dr. Carolyn M. Clancy, administrator of the Agency for Healthcare Research and Quality (AHRQ) said in a speech to the Health Care Quality Summit sponsored by the agency. "That change comes from what we've learned, and what we've done, to measure quality." Quality improvement guru Dr. Donald Berwick said "the lights are coming on," illuminating how and where change should occur. Berwick is CEO of the Institute for Healthcare Improvement in Cambridge, Mass.

But Clancy said health care professionals should feel "impatience, anger, and even outrage" at how "agonizingly short" health care is of where it could be. Berwick was more blunt. "It is a politically correct mantra to claim that the U.S. has the best health care system in the world. It does not." And Berwick had some harsh words for the latest thing in quality improvement—"p4p," or "pay-for-performance," at one point calling it "treacherous."

Both Clancy and Berwick lauded the public–private Hospital Quality Alliance that unveiled data last week comparing the quality of hospitals nationwide on measures of heart attack, heart failure, and pneumonia treatment.

The pair also praised the annual issuance of reports on the quality of the nation's care and on racial and ethnic disparities in access to care as major strides forward. But enormous gaps exist in the quality of care, not only within the United States but between it and other nations, the speakers said. And while measurement sets the stage for action, it shouldn't be confused with action itself, they warned.

"We need to summon up the energy that this difficult job demands," Clancy said. "As health professionals and as citizens, we should be feeling 'shock and awe' when we see these chaotic differences in quality of care."

Berwick faulted Washington for not investing more money in researching how to improve care and urged a national investment in giving doctors and hospitals technical help through information technology and other means to improve treatment practices. Berwick also took a swipe at the current trend toward holding individuals more responsible in the marketplace for health care spending decisions.

The argument that things will improve if more costs are pushed to consumers is an "unethical view of the relationship between suffering and health," he said. The responsibility of the individual "is a tiny, tiny piece" of what must be done to improve care, he said.

Berwick said pay-for-performance is a misunderstanding of what motivates doctors and called it insulting. Doctors need technical and financial help organizing systems to improve care, not a "wake up, dummy" approach that assumes paying a bit more is what it takes to make care better, he said. Doctors "need payment not for performance, but to support performance," he said.

Investment in technical help would assist the many doctors who provide health care in small group practices or in rural areas, he said. Berwick has advocated a model of helping such doctors along the lines of agricultural extension services that help individual doctors.

Just as the nation took real action to improve air quality, so too does it have the real power to improve care. "We can set a goal as a nation," he said. Strong leadership is key to the next stage in quality improvement, Berwick emphasized. Hospitals and doctors will respond if leaders give the health care field a specific focus as well as technical assistance, he said.
By way of example, Berwick pointed to the response to his institute's "100,000 Lives Campaign." By the end of the month it will meets its goal of signing up 2,000 hospitals in an effort to prevent 100,000 unnecessary deaths by June 2006, he said. The campaign began only a little over three months ago.
How are hospitals mobilizing to meet the goal? By committing to develop "rapid response teams" that respond more promptly to patients whose condition deteriorates; to adopt consistency in heart attack treatment procedures; and to add procedures to prevent adverse drug interactions, surgical infections, and ventilator-associated pneumonia.

The effort has been endorsed not only by the Centers for Medicare and Medicare Services, but also by the American Medical Association, the American Nurses Association, and the Joint Commission on the Accreditation of Healthcare Organizations, Berwick says. "I'm absolutely sure we can turn the corner," Berwick said. "Why? Because we're starting to."

In issuing her call to action, Clancy did not play down the need for added measurement, however. Clancy highlighted new data showing how individual states rate on different measures of care and announced that her agency is making available a million dollars to help states and other organizations learn from each other how to improve care.

APRIL 8, 2005 — A document dubbed by sources outside HHS as a "hit list" that the department is using in a federal crackdown on dubious Medicaid accounting tactics names 15 states as potentially using the techniques, 20 as having agreed to drop them, and 12 more whose use of the controversial techniques is still unknown.

CQ HealthBeat learned that HHS Secretary Michael O. Leavitt provided the document on a confidential basis last month to the House Energy and Commerce and the Senate Finance committees, as well as to the offices of Senate Majority Leader Bill Frist, R-Tenn., and Speaker of the House J. Dennis Hastert, R-Ill.

The existence of the list has been known for months but HHS has declined to release the names of targeted states to the public. "That there are states that may have inappropriate funding practices is not a big secret," said Gary Karr, spokesman for the Centers for Medicare and Medicaid Services. Karr said the states aren't being named publicly because "we're not trying to shame one state over another. We're trying to work constructively with states. We haven't compiled any hit list."

The list is of intense interest to states because they stand to lose hundreds of millions on dollars in the crackdown on what CMS refers to as "recycling." Critics charge that the tactic unethically or illegally inflates the amount of state money eligible for federal matching dollars under the Medicaid program, robbing taxpayers of hundreds of millions if not billions of dollars yearly.

States heatedly deny they are doing anything illegal, and say the added money overwhelmingly goes for legitimate purposes including funding health care for people who otherwise would not get care.

One example critics cite as an abusive state technique is to have local governments claim they pay far higher rates for health care than they actually do. The added federal dollars obtained by overstating payment rates are then recycled to the state government for other uses, critics say.

The HHS document provided to Capitol Hill names the following states as "potential" recyclers, adding that the states themselves may disagree with that characterization: Alabama, Alaska, California, Georgia, Idaho, Illinois, Iowa, Massachusetts, Minnesota, Mississippi, North Carolina, North Dakota, Tennessee, Virginia, and Washington.

States identified as having agreed to revise their accounting to drop "recycling" are: Alabama, Arkansas, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Washington, and Wisconsin.

Some states appear on both lists because they may have dropped recycling for one type of health care spending but not for another.

APRIL 5, 2005 — Preferred provider options (PPOs) may be offered to Medicare beneficiaries in as many as 21 of 26 regions throughout the country next year, government officials said Tuesday. Critics had charged there might be very few PPOs offered on a regional basis, but the new applications—if they receive CMS approval—may defy such predictions. In addition, over 90 percent of Medicare's 41 million beneficiaries could have access to Medicare coordinated health care plans and other plan options this year, according to CMS.

In testimony Tuesday before a Senate panel, CMS Administrator Mark B. McClellan said he was "confident that, throughout the country, beneficiaries will have access to prescription drug plans on schedule." The full drug benefit begins next Jan. 1.

McClellan also told the Senate Homeland Security and Government Affairs Subcommittee on Oversight of Government Management that the "fallback" provision in the drug bill (PL 108-173) would not be needed "because all areas of the nation are on track for having sufficient health plans."

The "fallback" provision requires the government to provide beneficiaries with Medicare drug coverage if private plans do not do so. McClellan said Tuesday CMS has received over 130 new Medicare Advantage plan applications in 2005, including 50 plans completely new to the Medicare program and about 80 new PPOs. The agency has also received more than 70 proposals for expanded service areas, with Medicare Advantage plans operating in 49 states this year.

"And it's not just in the big cities anymore—three-fourths of rural beneficiaries will have access to a Medicare Advantage plan, and one-third of rural beneficiaries will have access to a coordinated care plan," McClellan said.

Late Monday, CMS officials announced that on average Medicare payments to Medicare Advantage plans would rise 4.8 percent in 2006. Plans that enroll sicker beneficiaries may receive higher rates as part of CMS' ongoing effort to use "risk adjusters" to account for differences in expected drug costs based on patient demographics, chronic diseases, low-income status, and institutional status.

In 2005, the average increase in Medicare Advantage payment rates was 6.6 percent and in 2004 it was 10.6 percent.

One health insurance industry source said Tuesday that plans may leave Medicare Advantage at the end of 2007 if they "find that they can not attract enough enrollment to recoup their start up costs and make a profit."

Many of the new local HMOs and PPOs enter into markets that are already crowded and they cannot succeed, he said.

Mohit Ghose, vice president for public affairs at America's Health Insurance Plans, a trade group representing insurers, said the high number of health plans now participating in Medicare Advantage demonstrates the industry's willingness to "maintain and build on the public–private partnership for Medicare beneficiaries."

Lawmakers' Concerns
During Tuesday's hearing, Democrats on the panel said the drug benefit could hurt poorer beneficiaries who now receive coverage under Medicaid but will be forced to get their drug coverage under Medicare once the drug benefits begin.

Some Democrats also criticized the "video news releases" that the Department of Health and Human Services (HHS), CMS' parent agency, had used to promote the drug law.
Last May, the Government Accountability Office, then known as the General Accounting Office, ruled that HHS violated federal laws when it produced and distributed videotaped segments touting the new Medicare prescription drug law (PL 108-173). GAO said that portions of television spots HHS distributed to local broadcasters amounted to "covert propaganda" and thus violate federal statutes. A subsequent Department of Justice ruling said HHS did not violate federal law.

Sen. Daniel K. Akaka, D-Hawaii, said Hawaii residents who now receive drug coverage under Medicaid would have to make copayments under the new Medicare drug plan, which could create a hardship.

Akaka also expressed concern that formularies in the Medicare drug plans—lists of drugs approved for coverage—would exclude some drugs that Medicaid beneficiaries currently rely on.

McClellan responded that CMS is working to identify "dual eligible" beneficiaries now in hopes of helping them and their caregivers identify a Medicare Advantage plan that meets their needs. He also said CMS officials want to make sure that "medication transitions [are] handled efficiently" for beneficiaries.

Concerning video news releases, McClellan said CMS will "fully comply with the law" as interpreted by the Justice Department, which interprets the law for the executive branch.

Sen. Frank R. Lautenberg, D-N.J., who asked GAO to investigate the matter, said CMS should clearly label any video as provided by the government and refrain from calling any government-issued materials news releases.

"It's not news," Lautenberg said. "It's government propaganda."