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April 9, 2012

Washington Health Policy Week in Review Archive e14e099b-8544-4389-bb98-90eb406ef168

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Automatic Enrollment of 'Duals' in Managed Care Plans Stirs Anxiety at MedPAC

By John Reichard, CQ HealthBeat Editor

April 5, 2012 -- Members of the Medicare Payment Advisory Commission (MedPAC) recently expressed concern about automatically enrolling "dual eligibles"—some of the sickest Medicare enrollees—in managed care plans as part of a series of health law demonstration programs to be launched next year.

MedPAC Chairman Glenn Hackbarth said the programs could entail moving people into care delivery arrangements that may or may not be a good match for a dual given such a patient's particular medical needs.

The duals are a population that is eligible for both Medicare and Medicaid. They may see a large number of doctors given their complex medical needs, and often there is little or no oversight of their treatment. They include people 65 or older with incomes so low they qualify for Medicaid. In many instances they are nursing home residents who have exhausted their assets, have many chronic medical conditions, and are physically frail. They may also be cognitively impaired.

About one third of the 10 million duals are below age 65 and disabled. They qualified for Medicare by virtue of having been disabled for two years. In many cases they are developmentally disabled.

Both Democrats and Republicans favor trying new arrangements for delivering health care services to the duals because they account for a disproportionately large amount of health care spending.

But getting the details right about how to better coordinate the care of duals is a major challenge and commissioners had many questions about how the demonstration programs would work. Since those details are the subject of negotiations between the Centers for Medicare and Medicaid Services (CMS) and the states, there are few answers right now. MedPAC is likely to summarize its concerns in the form of a comment letter to CMS officials at some point down the road.

Commissioner Raymond C. Castellanos said it seems unfair to automatically enroll a dual in a plan. "Perhaps we should be talking to {patient advocacy groups} more about this," he said. "I think you raise a good issue," replied Christine Aguiar, a MedPAC staffer who gave a briefing on the CMS demonstration programs.

MedPAC Executive Director Mark Miller helped frame the issue by noting that duals whose care has been delivered mostly under the Medicaid program have often struggled over a period of years to line up the appropriate providers. Access in Medicaid is a challenge because many doctors do not participate.

If duals are switched to a plan under the demos that requires them to go to different providers, their care might be disrupted, he suggested. They may then want to go back to their old providers.

CMS says the demos will enroll up to two million of the nation's 10 million duals. Twelve states have said they will conduct demonstration programs to better coordinate care of the duals.

Aguiar said that the states involved plan to enroll most if not all of their duals population. In California, for example, 700,000 duals will take part.

It's also likely that most of the states will automatically enroll duals in a plan in the demo without giving them a choice ahead of time. They will be able to opt out, however.

That sparked another concern on the part of the commissioners. Opt out to what? If a plan was a poor fit, would there be other options that were preferable? "People can opt out but they have to have something to opt into," said Castellanos. "Where the hell are they going to go?" Hackbarth said that if enrollment is going to be automatic there needs to be a way to properly match duals to the plan appropriate to their needs.

The commission also discussed the particular package of benefits in the demos. CMS officials are aiming for flexibility in that regard, the better to attract states to participate. But benefits could be too lean, commissioners fretted.

Uneasiness about the demonstration programs dominated the early part of last week's discussion but then the tide turned, with a number of commissioners emphasizing the importance of moving ahead with the programs. "The status quo is not adequate," one commissioner said, stressing the need to control the huge costs of treating duals.

Improved coordination of care could be a big improvement for duals, added another commissioner, Katherine Baicker. "This could very well be making everybody better off."

It's likely to take weeks and months for CMS officials to iron out the details of the program. It's being closely watched by industry and patient groups because of the large amount of money involved and the vulnerability of the population that will be enrolled. The duals discussion was one of the most heavily attended sessions ever at MedPAC.

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MedPAC Backs Cap on Out-of-Pocket Costs, Fee on Supplemental Insurance

By Rebecca Adams, CQ HealthBeat Associate Editor

April 5, 2012 -- Medicare beneficiaries would be protected from never-ending out-of-pocket costs under a recommendation the Medicare Payment Advisory Commission approved this past week.

Funding for capping catastrophic expenses would come partly from an additional charge on supplemental insurance plans, such as Medigap policies. Most seniors have some supplemental insurance to pay for medical costs that Medicare doesn't cover.

The proposal is expected to be included in the panel's June report to Congress.

The unanimous MedPAC recommendation said that Congress should tell the Health and Human Services secretary to develop and implement a new fee-for-service benefit design to replace the current one. Commissioners recommended that the plan include an out-of-pocket cap on expenses; a combined deductible for Part A inpatient and Part B outpatient services; and co-pays that may vary by the type of service and provider, instead of the current coinsurance that requires patients to pay a percentage of costs. HHS officials should have the authority to change or get rid of cost-sharing for high-value services, said the commissioners.

But the overall value of the total benefit package should not decline, said the recommendation.

"If anything, the existing Medicare benefit package is too lean, not too rich, particularly given the population covered by the program," said MedPAC Chairman Glenn Hackbarth. "We recognize, however, that there are fiscal constraints."

The commission has been kicking around ideas for changing Medicare's cost-sharing structure for years. However, it is unclear when or if lawmakers would advance the plan on Capitol Hill.

Commissioner Michael Chernew of Harvard Medical School said that unlike some proposals to change Medicare that have been advanced by lawmakers or health policy experts, the commission's desire is not just to save money but "to have a benefit package that works for beneficiaries."

The plan is intended to discourage seniors and other beneficiaries from getting unneeded or inefficient care. Supplemental insurance shields patients from the true costs of medical treatments and gives them little incentive to question whether all of the care is needed. Commissioners said that some of the plans, particularly those that give beneficiaries low cost-sharing, are driving up overall Medicare spending in part because the patients are not careful about limiting their use of services. The commission discussed the possibility of a 20 percent fee on plans, although the recommendation did not include a specific amount.

The change would have a major impact on Medigap supplemental insurance plans. Beneficiaries might switch plans or look for other alternatives that would help cover their costs. One commissioner, University of Maryland expert Bruce Stuart, predicted, "This is very likely to push the market toward MA [Medicare Advantage] plans."

Medicare is somewhat unusual in its lack of a cap on out-of-pocket costs. Many large employer-sponsored plans have a catastrophic limit. In the late 1980s, Congress passed a catastrophic cap but repealed it just a year later in the face of concerns from seniors, especially wealthier beneficiaries, who were concerned about new fees to pay for it.

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Payment Incentives May Be Key to Dropping Unneeded Procedures

By John Reichard, CQ HealthBeat Editor

April 4, 2012 -- Nine medical societies recently named a total of 45 medical procedures they say are often not necessary, with eight more specialty groups scheduled to release their own lists this fall.

It's a big step toward reducing unnecessary medical spending but the way doctors are paid is also key, analysts say.

Unnecessary medical spending is a big problem in the U.S. Experts say up to one-third of nation's health care tab is for wasteful care.

Reducing that spending is tough, partly because government attempts to cut out certain types of treatments lead to charges that medical care is being rationed. But with doctors themselves urging the changes, the rationing charge is one less obstacle to overcome.

There are others, however, particularly the reluctance of doctors to change their ways and the lack of payment incentives for them to do so.

The Choosing Wisely Campaign announcement last week represents an ambitious beginning because it names dozens of commonly used procedures and treatments that these groups say are ineffective or that doctors and patients should question. They include the use of antibiotics for most types of sinusitis, repeating colorectal cancer screening less than 10 years after a negative test except in certain cases, ordering a pre-operative chest x-ray for outpatient surgery and imaging for low back pain in the first six weeks.

Others include screening women under 65 for osteoporosis with DEXA (dual energy x-ray absorptiometry) scans, giving stress tests in annual checkups to healthy patients without cardiac symptoms and giving routine cancer screening tests to dialysis patients with limited life expectancies and no signs or symptoms of cancer.

Sponsored by the non-partisan ABIM Foundation, the campaign relies on Consumer Reports to help educate patients about the need to question their doctors about the procedures. AARP and eight other organizations, each with the potential to reach at least a million consumers, will help with the consumer education efforts.

Robert Berenson, a senior fellow with the Urban Institute, said that it takes doctors a long time to adopt best practices.

"When I started my medical training hormone replacement therapy was recommended, then it was not recommended, then it was recommended, and now it's not recommended except a recent study suggests well, maybe it should be, at least for some women. So there is conservatism with is partly warranted," Berenson said.

Nevertheless, Berenson does not dispute that a substantial part of medical treatment is wasteful. But he says the issues facing physicians when they make treatment decisions often are not black and white but fall into a gray area. And in the gray area, "payment incentives matter a lot" in terms of whether or not a doctor performs a test or service. That speaks to the importance of moving away from fee-for-service payment that rewards doctors for doing more rather than for doing what is appropriate, Berenson said.

Berenson, said, for example, that stent placement for stable chronic coronary disease hasn't fallen off despite recommendations by the cardiology specialty society that in many instances other approaches should be used instead. "So relying just on what specialty societies [recommend] may not be enough to actually change behavior when you've got financial incentives that cut the other way," Berenson said.
Daniel Wolfson, chief operating officer of the ABIM Foundation, said payment "is a big issue and Bob, as always, is right."

But payment incentives are not the immediate focus of the campaign. "We're asking the specialty societies to do the right thing and to be good stewards of physician resources," Wolfson said. The societies "are the most influential individuals to talk about unnecessary tests."

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More Education Means Better Health, Annual County Health Rankings Confirm

By Nellie Bristol, CQ HealthBeat Associate Editor

April 3, 2012 -- The third annual release of county health rankings shows a decided correlation between more education and better health, researchers from the Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute indicated last week.

In particular, areas with the highest number of residents having attended at least one semester of college showed the fewest premature deaths and fewer reports of being in poor or fair health. Patrick Remington, associate dean for public health at the University of Wisconsin, said education levels are "a well-established risk factor for premature death" and part of the "web of causation" in determining long, healthy lifestyles both for individuals and communities. Higher incomes, lower unemployment rates and having insurance are other related factors.

The rankings rated more than 3,000 counties and the District of Columbia. They took into account the physical environment, including air quality and access to recreational facilities. They also included social and economic factors such as employment and income, along with access to and quality of medical care, as well as health behaviors such as diet and exercise and alcohol use. In addition, researchers for the first time this year included levels of physical inactivity and the number of fast food restaurants in a county. The data show how a county compares to others in its state and against a national benchmark.

Researchers hope the information will change the conversation about health from medical care to more community-based activities. "We want to get people talking about why some places are healthy and others are not," Remington said. They hope to involve a wider range of participants in community health conversations, including businesses and local leaders.

Wider involvement is needed everywhere; even relatively healthy areas have room for improvement, researchers said. "Healthier counties (those where people live longer and have a better quality of life) have lower rates of smoking, physical inactivity, teen births, preventable hospital stays, unemployment, children in poverty and violent crimes, and higher levels of education, social support and access to primary care physicians," according to a press release on the study. "Healthier counties are no more likely than unhealthy counties to have lower rates of excessive drinking, obesity or better access to food options."

Distinct regional patterns found in the data include:

  • Higher rates of excessive drinking in the Northern states;
  • Higher rates of teen births, sexually transmitted infections and children in poverty in Southern states;
  • Lowest unemployment rates in the Northeastern, Midwest and central Plains States;
  • And fewest motor vehicle crash deaths in the Northeastern and Upper Midwest states.

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Obama Blasts Medicare, Medicaid Elements of House GOP Budget

By Dena Bunis, CQ HealthBeat Managing Editor

April 3, 2012 -- President Obama maintained last week that the House Republican budget would "ultimately end Medicare as we know it" and that it includes the largest cut ever to Medicaid.

In a seething election year speech, Obama went after the Republican budget and restated Democratic opposition to the Medicare proposal engineered by House Budget Chairman Paul D. Ryan, R-Wis.

After acknowledging that Medicare is "one of the biggest drivers of our long-term deficit,'' Obama went after what he called the solution "proposed by the Republicans in Washington and embraced by most of their candidates for president."

"Instead of being enrolled in Medicare when they turn 65, seniors who retire a decade from now would get a voucher that equals the cost of the second-cheapest health care plan in their area. If Medicare is more expensive than that private plan, they'll have to pay more if they want to enroll in traditional Medicare,'' Obama said, explaining the so-called "premium support" plan that Ryan has proposed. Ryan's plan is a variant of a bipartisan proposal developed by former Congressional Budget Office head Alice Rivlin and former Sen. Pete Domenici, R-N.M. The original premium support plan that Ryan devised did not allow seniors to maintain traditional Medicare. But his revised plan, co-written with Democratic Sen. Ron Wyden of Oregon, would give Medicare recipients that choice.

"If health care costs rise faster than the amount of the voucher—as, by the way, they've been doing for decades—that's too bad," Obama said. "Seniors bear the risk. If the voucher isn't enough to buy a private plan with the specific doctors and care that you need, that's too bad.

"So most experts will tell you the way this voucher plan encourages savings is not through better care at cheaper cost,'' he said. Rather, he said, under the Ryan plan, insurers would cherry-pick the young and healthy seniors and those who are sick would stay with traditional Medicare, where they could get better access to care. Obama said that, in the end, health care costs would increase and any money the government saves would be on the backs of seniors. He called the whole notion "a bad idea."

Ryan has repeatedly said that without significant changes, Medicare is not sustainable. He points to trust fund reports that say the program is expected to run out of money within 10 years. In his proposal, Ryan said Medicare's "failed reliance on bureaucratic price controls, combined with rising health care costs, is jeopardizing seniors' access to critical care and threatening to bankrupt the system—and ultimately the nation."

Obama also assailed the GOP preference to block-grant Medicaid, something the president maintains would be a bad deal for the states.
"They would have to be running these programs in the face of the largest cut to Medicaid that has ever been proposed: a cut that, according to one nonpartisan group, would take away health care for about 19 million Americans—19 million," Obama said, referring to a May 2011 issue paper by the Kaiser Commission on Medicaid and the Uninsured.

A GOP aide pushed back on the president's use of the 19 million number, saying that refers to the number of new people who would be put on Medicaid under the health care overhaul (PL 111-148, PL 111-152), not people currently on the program.

"Forcing another 20 million Americans into a broken Medicaid system is one of the many reasons Republicans opposed the President's health care law and continue to support its repeal,'' said Gerrit Lansing, a Budget Committee aide. "Turning power over Medicaid to the states would result in a better program that more effectively serves those it is intended to help.''

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CMS Allows 3 Percent Growth Rate for Medicare Advantage, Part D

By Jane Norman, CQ HealthBeat Associate Editor

April 2, 2012 -- Officials at the Centers for Medicare and Medicaid Services recently announced that the estimated annual average reimbursement growth rate for Medicare Advantage and Part D prescription drug plans in 2013 will be 3.07 percent.

The average plan increase is likely better news than last year's increase for the private health plans that serve Medicare patients; the reimbursement increase then was 0.4 percent on average. This year's uptick, beginning Jan. 1, will promote a "stable" landscape for the plans' insurers, officials said.

Specific increases will vary by plan and geographic area.

In addition, Medicare officials said that there will also be improved "doughnut hole" coverage for seniors as authorized under the health care law (PL 111-148, PL 111-152). In 2013, seniors who spend so much that they reach the coverage gap will pay 47.5 percent of the costs of covered brand-name drugs. This year they paid 50 percent.

In Part D, the deductible will be $325 in 2013 compared to $320 in 2012. Total drug costs after the deductible, but before the doughnut hole, will be $2,970 in 2013 compared to $2,930 in 2012.

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