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September 10, 2012

Washington Health Policy Week in Review Archive 9529662a-d54c-4b96-b01b-228766d003b1

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IOM: Care So Complex Its Cost Can Only Be Cut Through a 'Learning System'

By John Reichard, CQ HealthBeat Editor

September 6, 2012 -- Reports abound on the need for better, cheaper health care in the United States, but Institute of Medicine (IOM) officials said a new one they unveiled last week marks a fresh approach to the problem by fully confronting the complexity of the system.

That complexity contributed to about $750 billion in wasted health care spending in 2009, said the report, released at a Washington, D.C., news conference. That total, roughly 30 percent of U.S. spending on health care that year, was, the report said, "wasted on unnecessary services, excessive administrative costs, fraud and other problems."

Wasted money isn't the only issue. "By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state," the IoM said.

Doctors now practice in a system in which about 800,000 new medical journal articles are published each year, said Mark D. Smith, chairman of the IOM committee that prepared the report. Seventy-five million Americans have more than one chronic condition, the report noted. Than requires "coordination among multiple specialists and therapies, which can increase the potential for miscommunication, misdiagnosis, potentially conflicting interventions."

Health care is now characterized "by more to do, more to know, and more to manage than at any time in history," the report observed.

"Incremental upgrades and changes by individual hospitals or providers will not suffice," said the IOM committee that produced the report. Achieving higher quality at a lower cost requires no less than transforming all of U.S. health care into a "learning" system, the panel said. That system "continuously improves by systematically capturing and broadly disseminating lessons from every care experience and new research discovery."

It will require "embracing new technologies to collect and tap clinical data at the point of care, engaging patients and their families as partners and establishing greater teamwork" in health care organizations. "Also, incentives and payment systems should emphasize the value of outcomes of care," the IOM said.

One of the themes of the report—the gap between what it known about how to improve care and actually doing it—is hardly new. It was well explored in an IOM report a dozen years ago that described the gap as a "quality chasm."

Smith said, however, that four new tools have been developed since then to better close the gap.

Computing power now exists "that's really beyond what anyone could have imagined" then, said Smith. It is "ubiquitous and affordable."

In addition, he said, "providers can be connected to one another, providers can be connected to patients, patients can be connected to one another."

Management science also has been improved to get waste out of systems and to improve quality, he said. And the fourth tool is "collaboration between teams of clinicians, and between clinicians and patients" made possible through computing power.

Mobile technologies and electronic health records exist that offer "significant potential to capture and share health data better," the report said. "Clinicians and care organizations should fully adopt these technologies," and patients should be encouraged to use tools such as websites that allow them to access their medical files, it added.

Lest the report seem so sweeping in its recommendations as to seem impractical, IOM officials pointed to concrete examples of systems that are doing what they recommend, such as Denver Health in Denver Colorado and the Virginia Mason health system in Seattle Washington.

"We see organizations that really have adopted that philosophical change" that emphasizes greater use of data to assure best practices, greater involvement of patients, and more teamwork, Smith said.

"Where you see it happen it's a profound cultural change," added Craig Jones, another member of the IOM committee that produced the report. Jones is the director of the Vermont Blueprint for Health, an effort by the state's government to improve the efficiency of care.

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Group Touts Benefits of Medical Homes

By Rebecca Adams, CQ HealthBeat Associate Editor

September 6, 2012 -- Medical homes can lower health care costs without jeopardizing the care that patients receive, according to a new compilation of academic and industry-supported projects by a coalition that supports the concept of such patient-centered initiatives.

The 41-page resource guide that was recently discussed at a Capitol Hill briefing lists a series of nearly three dozen experiments around the country and the results that have been reported by the participants. Most of the projects showed a reduction in costs, with many also documenting improvements in the quality of care provided to patients. The report by the Patient-Centered Primary Care Collaborative, an alliance of about 1,000 groups and individuals, described a range of public and private-sector initiatives.

At a time when public and private sector officials are looking for ways to improve coordination, efficiency and cost-effectiveness, the concept of the patient-centered medical home has gained traction and become a buzzword among health policy experts. The Obama administration has supported the development of team-based coordinated care, such as medical homes.

Marci Nielsen, executive director of the Patient-Centered Primary Care Collaborative, noted that 42 state Medicaid programs are testing out coordinated care projects, such as the patient-centered medical home idea.

"No matter what happens in November, transformation of the health delivery system is going to continue," said Carmen Hooker Odom, president of the Milbank Memorial Fund, a health policy foundation that helped pay for the report.

"We are looking to you to embrace this concept" and translate it into public policy, Odom told the audience of mostly Capitol Hill staffers.

Justine Handelman, vice president of legislative and regulatory policy at the BlueCross BlueShield Association, said that the plans affiliated with the association are trying out different types of care delivery models in 47 states and the District of Columbia. She said that the Blues plans represent the nation's largest primary care medical home network, although each plan is tailored to a local market. More than four million of the insurance plans' members are participating in some version of coordinated patient-centered care.

"What we're seeing in the results is tremendous," said Handelman.

For instance, patients in a project sponsored by BlueCross BlueShield of North Dakota had 24 percent fewer emergency visits and 18 percent lower inpatient hospital admission rates than the general population.

"If you can do things in North Dakota, you can do them anywhere," said Handelman.

Other results from medical home-type experiments included:

  • In Colorado, well-care visits for kids in Medicare increased from 54 percent of children to 73 percent in 2009.
  • In Maryland, CareFirst BlueCross BlueShield saved nearly $40 million in 2011, according to an industry report.
  • In North Carolina, a Medicaid community care project saved $60 million in 2003, which grew to $382 million in 2010. There was also a 112 percent increase in flu inoculations.

PCPCC Report (pdf)

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States Try Different Routes to Cut Medicaid Eligibility

By Rebecca Adams, CQ HealthBeat Associate Editor

September 6, 2012 -- Earlier this year, Maine and Illinois officials had a similar goal: to scale back the number of people who were eligible for Medicaid in their states. But each took a different approach, and the outcomes couldn't be more different.

Each wanted to get around rules in the 2010 health care law (PL 111-148, PL 111-152) that require states to maintain, until 2014, Medicaid eligibility policies that are at least as generous as those in place when the overhaul was signed in March 2010. Many states have complained that those "maintenance of effort" rules are too restrictive at a time when state budgets are in turmoil and legislators are looking for cuts. But federal officials say the requirements have prevented millions of people from losing coverage during the national economic downturn.

The health care overhaul provides a way for states to bypass the maintenance-of-effort rules by getting an exception. To get one, state officials have to show that they are facing a budget deficit. They also cannot narrow eligibility for just anyone. State officials can only cut off coverage for adults who aren't pregnant or have disabilities and who have incomes higher than the federal minimum of 133 percent of the federal poverty level, which this year is $19,090 for a family of three.

Both Illinois and Maine could have used this route to drop people from their rolls.

But Maine Republican Gov. Paul LePage proposed more aggressive cuts than those allowed under the exceptions procedure. The state legislature passed a budget that included some of LePage's cuts.

So on Aug. 1, LePage sent the Centers for Medicare and Medicaid Services (CMS) a state plan amendment requesting $20 million in cuts. He asked CMS for a decision by Sept. 1 because the state budget assumed the cuts would take effect on Oct. 1.

When that didn't come, state Attorney General William J. Schneider filed a motion for injunctive relief in the First Circuit Court of Appeals asking that Health and Human Services officials approve the proposed amendment to the state plan or that, until the litigation is resolved, HHS pay Maine's state matching share for the groups that the state wants to cut.

"The First Circuit is expected to act quickly on the motion, but the exact time frame is unknown," said Brenda Kielty, special assistant to the attorney general.

For their part, CMS officials have noted that they have 90 days, and more if they need it, to review Maine's Aug. 1 request.

In the meantime, Illinois officials took a different route. Democratic Gov. Pat Quinn worked with federal policymakers to get an exception and implemented most of the state's proposed cuts on July 1.

Maine's Plan

The question of what will happen next in Maine is leaving state officials, medical providers, patients and others uncertain less than a month before the cuts are scheduled to take effect. The state's Medicaid agency has prepared notices to inform affected Maine residents that they will be cut off the rolls. But those notices have not yet been sent out.

Some of the planned cuts might fit the requirements of the exception provision, said Robin Rudowitz, associate director for the nonpartisan Kaiser Commission on Medicaid and the Uninsured, which is part of the Kaiser Family Foundation. But others do not.

Lowering eligibility limits for people earning 200 percent of the poverty level down to 133 percent of poverty would seem to conform to the rules in the health care law. That change would affect roughly 12,000 people in Maine.

But the Maine plan would impose deeper cuts than what the health care law appears to allow. It would reduce the eligibility income threshold to 100 percent of the federal poverty level. It also would restrict Medicaid coverage for 19- and 20-year-olds and reduce a program that helps seniors and people with disabilities get medical and prescription drug coverage.

It's unlikely that HHS officials will accept all of the proposed cuts, said some health policy experts in Washington.

"If you read the statute, it's hard to see how CMS would approve this request," said Alan Weil, executive director of the nonpartisan National Academy for State Health Policy (NASHP). "There's a lot of money at stake. If a state really pushes the federal government against the wall and says, 'We're going to violate the law,' you'd expect federal officials to come back and say, 'We're not going to permit this.'"

One of Maine officials' arguments is that the June 28 Supreme Court decision invalidated the maintenance-of-effort provisions of the health care law. But CMS officials have made clear that they do not agree. A memo from the nonpartisan Congressional Research Service said the provision appeared to remain in place.

Reductions Also Sought in Democratic States

Republican governors have been the most vocal in complaining about the maintenance-of-effort rules, but Illinois' Democratic governor is one of the few who successfully used the law's waiver process to circumvent them.

The Illinois Medicaid program has historically been more generous than many others around the country, but as the state tried to fill a large budget gap, Quinn deemed it necessary to reduce Medicaid costs.

State officials were able to show that most of the reductions they sought were allowed under the law. About 26,000 adults lost their coverage, said spokesman Mike Claffey.

A few proposals have not yet taken effect because CMS officials have not decided whether they meet the requirements for the exemption. Those left pending include tightening the eligibility for nursing facilities and for supportive living to those who have the least ability to function.

Illinois is not alone in seeking an exception. Hawaii's Democratic Gov. Neil Abercrombie also cut about 3,500 people by getting an exemption and dropping coverage from 200 percent of poverty to 133 percent.

In Wisconsin, Republican Gov. Scott Walker initially sought deep eligibility cuts. But during talks with CMS officials, the states ended up making other changes, such as adding or raising premiums.

In all, 19 states can show that they meet the first part of the test for an exception: that they cover adults over 133 percent of the federal poverty level, according to the Kaiser Family Foundation. Some of those will be facing budget deficits this year, which might allow them to argue that they could avoid the MOE requirements and seek reductions if they want.

However, officials at the National Association of State Budget Officers and other groups said they had not heard of any additional states that plan to seek an MOE waiver.

CMS spokesman Alper Ozinal was asked whether other states have sought exceptions, but he did not provide a list of states.

Weil said states often try to reduce Medicaid spending without touching eligibility, such as cutting rates to providers or adjusting benefits. Given the limited number of states that might qualify for an exception, Weil said he would not be surprised if no others tried to go through the exemption process.

If a state is going to try to restrict eligibility, going through the exceptions process has proven to be more successful than the more confrontational and far-reaching approach that Maine has tried.

But Weil said policymakers are often hesitant to make the decision to tell people who have been getting benefits that they no longer qualify.

"It's a political and a budget decision as to whether your budget is so tight you need to roll back eligibility," he said. "Given the difficult budget circumstances for states, which is part of the criterion for getting approved, I don't think the state's authority to get it is in question. It's the desirability of doing it that's in question."

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Next Stage of Meaningful Use Regulations Drawing Hill Scrutiny

By John Reichard, CQ HealthBeat Editor

September 4, 2012 -- Consumer advocates are giving good marks to the latest round of federal rules designed to spur the use of information technology to improve the quality and efficiency of health care. Hospitals and vendors? Not so much—but each for different reasons.

For their part, lawmakers haven't had much so to say so far, but at least one House committee may hold a hearing later this month to review the rulemaking program, which aims to promote the "meaningful use" of health IT by paying providers who employ the technology higher Medicare and Medicaid payments and paying less to providers who don't.

"We are pleased that the new rule gives patients the ability to go online and view, download and transmit their health information from the Electronic Health record to secure places of their choosing," said Christine Bechtel, vice president of the National Partnership for Women & Families. But Linda Fishman, an American Hospital Association official, said, "We are disappointed that this rule sets an unrealistic date by which hospitals must achieve the initial meaningful use requirements to avoid penalties."

Published last week in the Federal Register, the rule issued by the Centers for Medicare and Medicaid Services governs "stage two" of the meaningful use program. In stage one, in order to qualify for higher payments, doctors and hospitals have to begin recording health data digitally and provide patients with electronic copies of health information. About 120,000 health professionals and 3,300 hospitals have qualified for higher payments by meeting stage one requirements, according to a Health and Human Services news release.

Also published were criteria that electronic health records must meet to be certified as eligible for the meaningful use program. Issued by the HHS Office of the National Coordinator for Health IT, the criteria allow technology certified in 2011 to be used until 2014. The IT office also said it is modifying the certification program to cut red tape.

"The stage two rules we issued last week include new standards that will help to make sure that electronic health record systems are interoperable, which means that vendors will need to develop and sell EHRs that can talk to one another," said Peter Ashkenaz, a spokesman for National Coordinator's office. "Interoperability means that there is robust health information exchange that will help to improve care coordination between providers."

Bechtel in particular expressed satisfaction with the stage two requirement that consumers be given online access to their medical data. "The fact that this is now a core requirement, and will apply to the hospital setting as well as to physicians, is key to finally recognizing the critical role patients play as partners in their own care," she said.

Bechtel added, "It is good that the new rule also recognizes the essential role that providers and their staff play in encouraging patients to use this online access. It does that by holding physicians and hospitals accountable for ensuring that 5 percent of their patient population logs in once during the year."

That may seem like a low percentage, but HHS officials say it prods providers to adopt the technology that makes such access possible, and that many more than 5 percent of patients may take advantage of it.

Bechtel added that "the rule's requirements that a summary of care document be sent from one provider to the next for at least one of every two transitions of care or referrals is a good step. CMS also is requiring 10 percent of those transmissions to be electronic."

But Joel White of the Health IT Now coalition, which represents health care purchasers and IT vendors, was disappointed that the stage two rule doesn't do more to push wider exchange of electronic information to help providers better manage the cost and quality of health care. "The technology can support that today," he said.

AHA meanwhile said that although CMS has pushed back compliance with stage two requirements from 2013 to 2014, the agency is asking for too much too fast and suggested that some facilities, particularly in rural areas, won't be able to comply. "We do believe that when you take all of the requirements together this is a very significant lift," said AHA's policy director, Chantal Worzala. She also expressed concern that clinical quality measures CMS is requiring to show meaningful use in stage two are excessive.

The House Committee on Science is considering whether to hold a hearing on the meaningful use program, possibly on Sept. 13, CQ HealthBeat has learned.

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MedPAC Sidles into Debate over Premium Support

By John Reichard, CQ HealthBeat Editor

September 7, 2012 -- The key group that Congress relies on for advice on Medicare policy has begun moving cautiously into the politically charged debate over "premium support," the GOP-backed overhaul strategy that Democrats are doing their best to derail by calling it "vouchercare."

The Medicare Payment Advisory Commission (MedPAC) can hardly ignore the issue. After all, President Obama is facing a troubled economy and may not be re-elected. And his presidential rival, Republican nominee Mitt Romney, is all in when it comes to premium support, which would give seniors a limited amount of money each year with which to shop for health insurance from a menu of options.

If lawmakers decide to convert Medicare to such a system, they'll be relying heavily on MedPAC for technical policy advice. And MedPAC hasn't really addressed premium support before.

That changed late last week—only the commission isn't using the term "premium support." Instead, it's referring to "competitively determined plan contributions." MedPAC Chairman Glenn Hackbarth explained that he's avoiding the term because he wants to start "with a blank sheet of paper so that we can structure the conversation in a way that we think makes sense to us."

Existing premium-support proposals "are already ideas that have content attached to them," he said. "What I want to do is free us from those already existing ideas."

Hackbarth observed that MedPAC has long endorsed the idea of giving seniors a private plan alternative to the traditional fee-for-service Medicare program.

The private plan alternatives that exist now in Medicare, called Medicare Advantage plans, are paid based on "administered pricing," he noted.

Payments to those plans are based on average per capita costs in traditional Medicare, which decides on its own what rates it will pay providers for health care services rather than relying on market forces to determine what it wants to pay.

But another way to decide how much the government contributes financially to plans is to have them bid competitively on how much they'll charge to provide Medicare benefits, hence the term "competitively determined plan contributions," or CPCs. Hackbarth said he's under no illusions that the term will spread beyond MedPAC. "I'm not trying to cast a new label that the world is going to latch on to," he said.

MedPAC staffer Julie Lee presented commission members with various design issues to consider in developing their take on what the outside world calls premium support or vouchers. For example, should seniors be offered a standard benefits package, or should plans be allowed to vary benefits? Should the federal contribution vary locally or be the same nationally?

Should the federal contribution be based only on an average of what the private plans bid, or should the costs of the traditional Medicare fee-for-service program be included in determining the average bid used to set the government's financial contribution? Doing so would lead to a lower average bid in geographic areas where Medicare beneficiaries make relatively little use of medical services, Lee noted. But the average would be higher in parts of the country where beneficiaries use more health care.

How such design questions are answered will determine how much of the premium the government will pay on behalf of beneficiaries and the willingness of plans to compete in different parts of the country, so MedPAC has much to ponder. MedPAC staff is expected to do research to help commissioners weigh the merits of the different design options. Hackbarth didn't mention a specific timetable for developing panel recommendations, if any. But the commission clearly wants to start getting ready if it's called on to provide more detailed advice.

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Studies Give Mixed Grades to Health Law Payment Innovations

By John Reichard, CQ HealthBeat Editor

September 7, 2012 -- Studies in the latest issue of the policy journal Health Affairs are a mixed bag for two forms of payment innovation promoted in the health care law: value-based purchasing and medical homes.

Value-based purchasing won't live up to hopes that it will improve the quality and efficiency of care, says one study. But when it comes to medical homes, new research published in the journal says that they show promise in reducing costly hospital admissions.

A study by Rachel Werner and Adams Dudley used 2009 performance data on the quality of care at 3,018 hospitals to predict how much facilities will be paid under the Medicare hospital value-based purchasing program that launches in October. "Despite differences across hospitals in terms of performance, expected changes in payments were small, even for hospitals with the best and worst performance scores," the study found. "Almost two-thirds of hospitals would experience changes of just a fraction of 1 percent."

Werner is a researcher at the Philadelphia Veterans Affairs Medical Center and Dudley a health policy professor at the University of California, San Francisco.

The purchasing program assigns performance scores to each hospital based on how well it does on such measures as timely care for heart attacks and administering antibiotics before surgery to prevent infections. Patient satisfaction with care also figures into the tally, based on whether doctors and nurses were respectful and answered questions fully, among other things.

Hospitals already are assessed on these measures, but the results haven't shaped how much they are paid—until now. The Centers for Medicare and Medicaid Services (CMS) is taking one percent from the operating payments of hospitals to create an $850 million pool to fund bonus payments for those facilities that perform well.

"Based on 2009 performance, 1,581 hospitals (51 percent) would receive increased Medicare payments under this pay-for-performance program, and the remaining, 1,437 would receive decreased payments," the study authors said.

"The average absolute change in payment for the hospitals would be $125,000 for hospitals with the largest percentage loss and $55,381 for hospitals with the largest percentage gain in Medicare payment," they added. "The majority of hospitals (65 percent) would see a change in Medicare payment between 0.25 percent and 0.24 percent."

"Such small changes in payment might be only a weak stimulus to improve performance," they observed.

The researchers compared the results to findings from a test program conducted by the hospital group Premier. That program resulted in "small but statistically significant improvements in hospital performance," the study said. Participating hospitals got bonus payments averaging $35,000 per year.

But the purchasing program about to begin could have a weaker influence on quality than the smaller pilot, according to the researchers.
The small program was voluntary, "which may have led to the enrollment of hospitals that were more motivated to improve than the typical hospital," the authors said. But the new program is mandatory. Also, the improvements in the smaller pilot were "transitory," according to the study.

On the other hand, "the fact that the current program puts hospitals at risk of losing current levels of payment" could spur hospitals to improve, the authors acknowledged. "People are generally more motivated by the desire to avoid losing what they consider theirs, as will happen when the full Medicare payment is reduced [to fund the pool of bonus payments], than they are by the desire to gain something of equal value that is perceived as extra, such as in increase in payment."

The study said the program could be changed to better spur changes in hospital behavior, for example, by increasing the percentage of payment used to fund the bonus pool or paying hospitals more for each patient whose care met a certain performance standard.

Other analysts, however, have been more upbeat about the potential of the new program.

A CMS official said "the Hospital Value Based Purchasing program is already working to assure that people with Medicare get high-quality care while in the hospital and we are confident that success will continue as we work together with hospitals to learn more and more about how to better prevent hospital-acquired infections, and improve care for Medicare patients."

Other studies published in the journal were more upbeat. "They appear to show that paying a team of primary care providers in new ways—not to mention paying them more—results in more active management of chronically ill patients that leads, among other outcomes, to far less use of costly hospitalization," summarized Health Affairs Editor Susan Dentzer in a preamble to the journal. Examples including a medical home program developed by Aetna and NovaHealth, a physician association in Maine, and a program developed by the insurer Wellpoint. Earlier this week, a collaborative of medical home projects said they can reduce costs without jeopardizing care.

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