By Rebecca Adams, CQ Roll Call

May 26, 2015 -- Medicaid plans would have to spend a minimal amount of their revenues on medical costs rather than administrative expenses, under a long-awaited proposal that federal Medicaid officials recently released. 

The proposed rule would streamline regulations that were last updated in 2003. Since then, managed care plans have become grown to cover a rising portion of the Medicaid population, including an increasing number of people with long-term service needs or disabilities.

"A lot has changed in terms of best practices and the delivery of important health services in the managed care field over the last decade," said Centers for Medicare and Medicaid Services (CMS) Acting Administrator Andy Slavitt. "This proposal will better align regulations and best practices to other health insurance programs, including the private market and Medicare Advantage plans."

The rule will require plans to spend at least 85 percent of their revenues on medical costs for beneficiaries rather than administrative costs, similar to requirements for private plans in the Medicare Advantage program. The Medicaid program currently does not have such a requirement, known as a "medical loss ratio."

The rule also addressed the availability of information to the public. The proposed rule said that states should send consumers information on their right to disenroll from a plan, the basic features  of managed care, the service area of each managed care plan, covered benefits, provider directory information, cost sharing requirements of patients, care coordination services available, and measurements of the quality of each managed care plan. CMS officials proposed that a new ratings system of managed care plans be created.

The Government Accountability Office also has found CMS' oversight of the rates that Medicaid managed care organizations set to be inconsistent, so the regulators are trying to make sure that the rates are sufficient to cover beneficiaries' care but not too high. 

The existing rules for actuarial soundness require that plans' rates are certified by a qualified actuary. The proposed revisions to the rules for setting payment rates for Medicaid managed care plans would spell out the type of data to be used and the level of documentation that would be required so that CMS officials can more effectively review and approve rates.  

The proposal went to the Office of Management and Budget for review on March 19 and was cleared for publication on May 21.

The public has until July 27 to comment on the rule. 

By Kerry Young, CQ Roll Call

May 29, 2015 -- Rep. David McKinley is pressing for an overhaul of how Medicare pays for treatments of people who are recovering from serious injuries and illness, seeking to bring a new level of coordination to the care that patients receive after a hospital stay.

McKinley is far from alone in taking an interest in this field of medicine, known as post-acute care. Both the Energy and Commerce Committee, on which the West Virginia Republican serves, and the Ways and Means panel are taking a closer look at the sector, which is becoming increasingly expensive for Medicare. The program's direct spending on these services more than doubled to $59 billion in 2013 from $27 billion in 2001, according to the Medicare Payment Advisory Commission. This includes payments for stays in skilled nursing centers and inpatient rehabilitation facilities as well as home health services.

Congress last year passed a measure known as the IMPACT Act (PL 113-185) that pushes for more standardization of data collection about how people fare in different post-acute care settings. The information is intended to aid Congress in efforts to reshape Medicare payments for the services.

With his Bundling and Coordinating Post-Acute Care bill (HR 1458), known as BACPAC, McKinley advocates for CMS to move to a bundled payment system for Medicare patients. He wants to carve out a new niche for organizations that can serve as coordinators. These new entities, which might share in any savings that result from a more coordinated approach to care, would help patients and their families navigate the options for people leaving hospitals.

Currently, patients and their families often are confronted by confusing choices about which of several options to pick for this care, such as weighing whether the most intensive therapy offered by inpatient rehabilitation facilities is appropriate or considering what home health services may be available.

Rep. McKinley's bill overhauling post-acute Medicare payments could potentially become part of a larger budget deal if Congress moves to replace budget caps. The bill is likely to generate savings on policies that some members of both parties already have endorsed. The Obama administration included in its fiscal 2016 budget a proposal for putting a bundled acute-care payment in place in 2020, which it estimates could save $9.3 billion over a decade. McKinley envisions even bigger savings from his approach, giving an estimate of $20 billion to $50 billion. An official Congressional Budget Office score on the measure is expected within months.

By Kerry Young, CQ Roll Call

May 28, 2015 -- The Bipartisan Policy Center issued a call last week for greater use of economic analysis in making health care decisions, a move that could reinvigorate debate about cost-effectiveness research.

In a new report, the nonprofit center's Prevention Task Force recommended that the Centers for Disease Control and Prevention and the National Institutes of Health include a requirement for cost-effectiveness analysis in grant applications. The recommendation is included in a package of proposals that are meant to shift the American medical system away from its longstanding fee-for-service approach, which is seen as a culprit in driving up costs while often doing a poor job in preserving or improving people's health.

"These recommendations will help develop new financing mechanisms and integrated programs and services that will shift America's health care system toward disease prevention and wellness," said former Senate Majority Leader Bill Frist, a doctor who serves as an adviser to the center's Prevention Task Force. 

By Kerry Young, CQ Roll Call

May 28, 2015 -- Hospitals may be saving as much as $459 million a year partly because a doctor on a weekend shift once too often witnessed a nutritionist having to dictate orders to a busy resident instead of handling them directly. In his weekday job as a top Centers for Medicare and Medicaid Services (CMS) official, Patrick Conway was well positioned to change the federal rule that blocked hospitals' nutrition experts from entering the information on their own.

"One of the things that triggered that is that I was watching for about the 100th time a dietitian tell the resident what to enter into the computer because only the resident, who is a physician, could enter diet orders," said Conway, CMS' chief medical officer, in a recent interview.

Conway, who also leads major quality-improvement and innovation initiatives within CMS, cited this as an example of how his decision to continue practicing medicine influences his work on health policy. A pediatrician, Conway said he works weekend shifts at Children's National Medical Center in Washington, D.C., about once every six weeks. That clearly takes some schedule juggling, as Conway also is the married father of three young children. But he said the weekend hospital shifts recharge him and he described the practice of medicine as "a calling."

"It keeps me connected in a very important way," Conway said. "It informs everything from payment policy to clinical standards."

Nutritionists had pressed for several years for a change in hospital rules, which CMS has great sway over nationwide through the conditions that the agency sets for coverage and participation in its programs. With Conway's help, the agency last year finalized a rule that makes it clear that dietitians can enter orders directly. The change could save as much as $291 million a year in labor-related costs, plus another $168 million from an expected reduction in the cases of inappropriate use of nutrition given by tube, CMS estimated in the final rule. The Academy of Nutrition and Dietetics, which represents about 75,000 registered dietitian nutritionists and other professionals in the field, greeted the new rule as a "major policy success."

"You're enabling people to practice to the top of their license," Conway said of the change.

The weekend hospital shifts give Conway a first-hand look at the medical profession in the midst of what he described as "a long-term transformation." CMS is a key driver of these changes, which include greater use of electronic health records and other steps that have caused grumbling among medical professionals. By continuing his own hospital work, Conway can relate more easily to colleagues facing pressures and inconvenience associated with these changes.

"I actually use the electronic health record in care delivery," Conway said. "There's a credibility factor. If you are still practicing, I think it helps you to communicate in a more credible way with physicians."

Conway is also clearly comfortable on the wonkier side of medicine. After graduating from Baylor College of Medicine, he earned a graduate degree focused on health services research at the University of Pennsylvania. He's listed along with CMS' chief data officer Niall Brennan as one of the highlighted speakers for Health Datapalooza 2015, a major conference that starts May 31.

At CMS, Conway said he finds his days often filled with "a lot of meetings." To try to improve efficiency within his parts of the agency, Conway is borrowing the "lean" method pioneered by automaker Toyota, with a focus on improving the effectiveness of processes and eliminating waste. For the clinical standards and quality unit that he oversees, this has dropped the contract modification time by 50 percent from 8 weeks to 4 weeks. In the Center for Medicare and Medicaid Innovation that Conway oversees at CMS, the time for providing technical assistance to participants in certain pilot programs fell by approximately 4.5 months, according to Conway.

The $10 billion innovation center was created by the Affordable Care Act, and Republicans have questioned its effectiveness. In his work, Conway seems to seek to stay out of the continuing conflicts about the law. He spends his time instead searching for better ways to deliver health care, said Mark McClellan, who led CMS during the Bush administration.

"He is really good about trying to reach out to a wide range of different perspectives, trying to do what's what right for patients and for the program and not focus on any partisan or political issues, but really try to make Medicare a stronger program for the future," said McClellan, now a scholar at the Brookings Institution and a member of the board of directors of health giant Johnson & Johnson.