Trump’s Plan To Privatize Medicare

Trump’s Plan To Privatize Medicare

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Last week, President Donald Trump signed an executive order titled “Protecting and Improving Medicare for Our Nation’s Seniors.” The order is the latest example of how Trump says one thing while doing another. Rather than strengthening Medicare, Trump envisions turning large swaths of the 54-year-old program for the elderly over to the private sector while directing the federal government to dismantle safeguards on seniors’ health care access, shift costs onto beneficiaries, and limit seniors’ choice of providers.

Among other things, the executive order lays out a path to:

  • Shift the Medicare program toward private plans
  • Expand private contracting between beneficiaries and providers, putting seniors at risk for higher costs and surprise medical bills
  • Further restrict seniors’ choice of providers in Medicare Advantage
  • Expand Medicare Medical Savings Accounts as a tax shelter for the wealthy

President Trump rolled out the executive order in a speech at a retirement community in Florida, during which he echoed his administration’s previous attacks on progressive health reform proposals by referring to them as “Medicare for None.” In fact, several recent congressional proposals would offer new choices for coverage, expand the benefits of insurance, and strengthen Medicare benefits for the elderly. Unlike these Medicare for All-type proposals, Trump’s plan fails to address some more common problems in Medicare, such as high out-of-pocket costs or difficulties navigating Medicare Advantage networks.

A shift toward Medicare privatization

Today, about one-third of seniors are enrolled in private plans through Medicare Advantage; the other two-thirds are in traditional, fee-for-service Medicare. The share of beneficiaries enrolled in Medicare Advantage has grown over the past two decades. Medicare Advantage attracts a relatively healthier, less expensive pool of enrollees than that of traditional Medicare, and its per-beneficiary spending is lower. Some of that difference is attributable to lower health care utilization, although local market conditions and beneficiary health status also contribute. A number of studies have shown how Medicare Advantage plans profit from selection by attracting relatively healthier enrollees while also gaming the Centers for Medicare and Medicaid Services’ (CMS) risk adjustment program to make their enrollees appear sicker. Medicare Advantage plans also enjoy distinct advantages over the traditional Medicare program, including integrated plan designs and the ability to avoid providers involved in graduate medical education.

Last week’s executive order emphasizes so-called market-based approaches, signaling that President Trump envisions an even bigger role for the private sector in Medicare. In fact, Trump has already taken steps to accelerate enrollment in private plans. Last year, the administration bombarded beneficiaries with email messages promoting Medicare Advantage to such an extent that one former CMS official described the effort as “more like Medicare Advantage plan advertising than objective information from a public agency.”

The executive order directs the secretary of the U.S. Department of Health and Human Services (HHS) to ensure that traditional Medicare “is not advantaged or promoted over [Medicare Advantage] with respect to its administration.” For example, one way the administration could nudge more enrollees into Medicare Advantage would be to further relax CMS guidelines governing how plans market to beneficiaries. A more aggressive tactic to shift enrollees into private plans would be to make Medicare Advantage, rather than the traditional Medicare program, the default for more seniors. While auto-enrollment could result in lower costs for some beneficiaries, others could find themselves stuck in plans with limited networks or insufficient coverage for services they need. In addition, studies of the private drug plans offered through Medicare Part D have shown that seniors find it cumbersome to switch plans, even when the one they have is not the best value.

CMS’ existing Medicare Advantage auto-enrollment mechanism, though limited to a small subset of beneficiaries, caused enough problems that the agency suspended expansion of the process in 2016. In some instances, beneficiaries subject to “seamless conversion,” which allows insurance companies to auto-enroll their marketplace or Medicaid customers into Medicare Advantage, were unaware what type of Medicare coverage they had until they were assigned a new primary care doctor or they already had received out-of-network care. Even if a future Trump administration plan allowed people automatically enrolled in Medicare Advantage to opt back into traditional Medicare, the switch could cause seniors to miss enrollment deadlines for private Medigap plans. Unable to obtain supplemental benefits for traditional Medicare coverage, those people would effectively be stuck in Medicare Advantage.

Another part of the order asks the HHS secretary to align Medicare’s reimbursement rates with the prices paid by Medicare Advantage plans and commercial insurers. Broad application of market-based pricing in Medicare could raise expenses for beneficiaries and taxpayers and drain the Medicare trust fund: Bloated provider rates for commercial insurance show that the market does not work in patients’ interests and cannot be trusted to ensure fair prices. Dominant provider systems leverage their market power to demand prices well above the cost of care. A recent RAND Corporation study found that private insurance typically pays hospitals about 241 percent of Medicare rates, with wide variation across geographic regions. While Medicare Advantage plans’ negotiated rates for individual items or services can be lower or greater than those in the traditional Medicare fee schedule, reimbursement rates in the two programs are generally close, on average. The administratively set rates in Medicare keep the prices for hospital and physician services reasonable not only for traditional Medicare beneficiaries but also for those in Medicare Advantage plans. Allowing traditional Medicare prices to float up toward commercial rates while also delinking Medicare Advantage rates from Medicare rates could cause traditional Medicare premiums and the overall cost of the program to skyrocket and deplete the Medicare trust fund.

The executive order could also give new life to a deeply unpopular, longstanding conservative scheme to privatize Medicare. Under so-called premium support plans, seniors would receive vouchers that they would use to purchase either a private Medicare plan or traditional Medicare. Past premium support proposals differ in how they set the amount of the voucher: Some plans set the voucher amount arbitrarily, while others put a thumb on the scale to encourage beneficiaries to choose a private plan.

The executive order calls for using Medicare Advantage negotiated rates to set traditional Medicare rates and instructs the HHS secretary to develop a transition plan to adopting “true market-based pricing” for the traditional Medicare program, including through competitive bidding, which in the past has been a method for setting the voucher amount. Traditional Medicare—saddled with now-higher costs—would have to bid against private Medicare plans in order to compete for beneficiaries. Past premium support plans would then cap the yearly growth of the voucher, and as costs exceeded those caps, Medicare beneficiaries would pay a greater share of the costs of the program over time.

Expansion of private contracting would weaken Medicare’s financial safeguards

The executive order also directs the HHS secretary to “identify and remove unnecessary barriers to private contracts.” Today, Medicare protects beneficiaries from surprise medical bills by limiting the amount that doctors who see Medicare beneficiaries can charge these patients. Physicians may opt out of the Medicare program and enter into private contracts that set higher prices than Medicare will pay; in these cases, the patient is responsible for the entire billed amount. However, less than 1 percent of doctors have chosen to opt out of the program, in large part because Medicare’s rules protect consumers from these arrangements.

For example, doctors must give Medicare beneficiaries written notice that they have opted out of Medicare, and the patient must sign the document acknowledging that they understand they are responsible for paying the entire charge. Doctors may not enter into private contracts with patients who qualify for both Medicare and Medicaid or with patients experiencing a medical emergency. In addition, if a physician opts out of the Medicare program, they must do so entirely instead of cherry-picking beneficiaries or services. The opt-out period is a minimum of two years. Together, these limits protect beneficiaries by providing greater certainty about their doctors’ status and avoiding confusion about which visits and services Medicare will reimburse.

Loosening these rules could allow doctors to more easily circumvent Medicare consumer protections; opt out of Medicare; and charge higher prices to Medicare patients, who have lower incomes and greater health needs than privately insured individuals, on average. While wealthy beneficiaries might benefit from expanded access to nonparticipating providers, higher private prices could make it difficult for most Medicare patients to keep their doctors or afford to see other providers. Nevertheless, Trump’s first HHS secretary, Tom Price, sponsored legislation to permit private contracting and supported allowing doctors to balance bill Medicare beneficiaries.

Restriction of seniors’ choice of doctors in Medicare Advantage

During his Florida speech, Trump asked the crowd, “You want to keep your doctors, right?” Yet his order calls for changes that could restrict Medicare beneficiaries’ choice of doctors by favoring Medicare Advantage plans and by tinkering with the CMS network adequacy standards for those plans.

From a beneficiary perspective, a distinguishing feature of Medicare Advantage is that plans typically have restrictive provider networks. Under the Trump proposal, the network adequacy standards would take into account state laws affecting provider competition and the availability of telehealth services. If these changes lower the bar for Medicare Advantage plans and allow plans to include even fewer doctors in a particular area, a position the Trump administration has previously supported, they could make it harder for seniors to schedule in-person visits or see the provider of their choice. They could also increase costs for beneficiaries who need to see out-of-network specialists.

Lower-cost, narrower network plans could profit by cream-skimming healthier seniors because healthy individuals benefit most from the trade-off between lower premiums and fewer providers. Enrollees in traditional Medicare, including seniors who need the broad provider access that only traditional Medicare offers, could see their premiums rise as a result of a sicker risk pool and imperfect risk adjustment.

If networks become narrower, it may be increasingly hard for Medicare Advantage beneficiaries to identify and schedule visits with providers included in their plans. Moreover, online provider directories for Medicare Advantage are already filled with inaccuracies. A 2018 CMS report found that 45 percent of directories had inaccurate location information for providers. The CMS audit also found that 221 providers who were listed as in-network were not accepting new Medicare Advantage patients. This lack of accurate information, combined with Medicare Advantage’s relatively weak network adequacy standards, means that the Trump plan’s changes to the program could decrease, rather than increase, choice for seniors.

Savings accounts to benefit the wealthy and healthy

The executive order proposes wider access to Medicare Medical Savings Accounts (MSAs), which are available to those enrolled in high-deductible Medicare Advantage plans. Like health savings accounts (HSAs), the money in MSAs is tax-free and can be used toward health care costs, including dental, hearing, and vision. While high-deductible health plans and MSAs can be a good value for relatively healthy seniors who have high enough incomes to afford to fund these accounts, they may not provide adequate financial protection for those who need first-dollar coverage or have greater health needs.

President Trump has previously proposed turning MSAs into a tax shelter, which would chiefly benefit the wealthy. Trump’s FY 2020 budget proposed allowing seniors to deposit additional funds into MSAs beyond the plan’s contribution, as they can with HSAs. Data on HSA contributions show that higher-income individuals are more likely to contribute toward accounts and to benefit more from the tax exemption.

Trump sidesteps seniors’ most pressing concerns

A glaring omission in the president’s plan is any provision to directly take on one of seniors’ widespread concerns: the high cost of health care. Although Americans have overwhelmingly favorable experiences with the existing Medicare program, it is far from perfect. According to a report from the Commonwealth Fund, about 1 in 4 Medicare beneficiaries is underinsured, meaning their out-of-pocket health care costs are 10 percent or more of their income. A 2011 analysis by the Medicare Payment Advisory Commission (MedPAC) found that Medicare beneficiaries without supplemental plans, also known as “medigap” coverage, paid 12 percent of their medical costs out of pocket, on average.

For example, traditional Medicare has no limit on out-of-pocket costs. By contrast, the CMS limits out-of-pocket costs in Medicare Advantage to $6,700 for in-network services, and many individual plans offer lower out-of-pocket limits. In 2012, the MedPAC commissioners voted unanimously to recommend that Congress rework Medicare’s benefit design to include an out-of-pocket maximum. Doing so would give Medicare beneficiaries better financial protection against high health care costs.

President Trump claims that his executive order protects Medicare from “destruction.” In fact, not only would recent prominent Medicare for All and public option reforms proposed in Congress maintain the benefits of the existing Medicare program for seniors, but many also lay out improvements to the program in recognition of its shortcomings. For example, Sen. Bernie Sanders’ (D-VT) Medicare for All bill would almost immediately add an out-of-pocket limit for seniors in Medicare parts A and B. The Medicare for America Act, sponsored by Reps. Rosa DeLauro (D-CT) and Jan Schakowsky (D-IL), would also add out-of-pocket limits and strengthen Medicare Advantage network adequacy standards. And multiple proposals have provisions to lower beneficiaries’ prescription drug costs; eliminate the two-year waiting period for nonelderly disabled people; and add hearing, dental, and vision coverage to standard Medicare benefits.

Conclusion

President Trump has laid out a plan to privatize Medicare and undermine the program, breaking his promise that “no one will lay a hand on your Medicare benefits.” Furthermore, he is trying to scare seniors away from supporting congressional proposals that would genuinely improve Medicare beneficiaries’ access to health care and financial security. Although seniors need better protection against out-of-pocket medical costs and better access to care providers, the changes Trump has proposed will only make things worse.

 

 

DOJ breaks up alleged genetic testing fraud scheme estimated at $2.1 billion

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The defendants ordered unnecessary tests that were reimbursed by Medicare, with laboratories sharing the profit, DOJ says.

The U.S. Department of Justice has charged 35 people with unlawfully charging Medicare $2.1 billion in what it said is one of the largest healthcare fraud schemes in history.

The 35 alleged offenders were charged in five separate federal districts, and were linked to dozens of telemedicine firms and laboratories focused on genetic testing for cancer. The people charged, including nine doctors and one other medical professional, cumulatively billed Medicare billions for cancer genetic tests, the DOJ said in a press release.

The charges were a culmination of coordinated law enforcement activities over the past month that were led by the Criminal Division’s Health Care Fraud Unit, resulting in charges against more than 380 individuals who allegedly billed federal healthcare programs for more than $3 billion, and allegedly prescribed and dispensed approximately 50 million controlled substance pills in Houston, across Texas, the West Coast, the Gulf Coast, the Northeast, Florida and Georgia, and the Midwest.

These include charges against 105 defendants for opioid-related offenses, and charges against 178 medical professionals.

The investigation targeted an alleged scheme involving the payment of illegal kickbacks and bribes by CGx laboratories in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for expensive, and medically unnecessary, cancer genetic tests.

According to the DOJ, the targets of the scheme were primarily seniors, who were approached at health fairs, at their homes during door-to-door visits, or through telemarketing calls. The “recruiters,” as they were called, would approach seniors about supposedly free cancer screenings or generic cheek swab tests, and the recruiters would then obtain the seniors’ Medicare information for the purposes of fraudulent billing or identify theft.

The recruiter would then get a doctor to sign off on a genetic so a lab would process it, and then pay a kickback in exchange for ordering the test. The lab would process the test and bill Medicare, and once it was reimbursed, would share the proceeds with the recruiter, according to the charges.

Often, the test results were not provided to the beneficiaries, or were worthless to their actual doctors. Some of the defendants allegedly controlled a telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that affected victims across the U.S.

The defendants allegedly paid doctors to prescribe CGx testing, either without any patient interaction or with only a brief phone conversation with patients they had never met or seen.

WHAT’S THE IMPACT

In addition to the DOJ charges, the Centers for Medicare and Medicaid Services, Center for Program Integrity said it took adverse administrative action against cancer genetic testing companies and medical professionals who submitted more than $1.7 billion in claims to the Medicare program.

The DOJ Criminal Division, along with the U.S. Department of Health and Human Services Office of Inspector General and the FBI, spearheaded the investigation.

The DOJ calls the scheme one of the largest it has ever handled.

THE LARGER TREND

Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $16 billion.

In addition, CMS, working in conjunction with the Health and Human Services Office of the Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The newest Medicare fraud scheme is the second to be uncovered in the last month. Earlier in September, a telemedicine CEO pleaded guilty to one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks and one count of conspiracy to commit money laundering in a scheme estimated at $424 million.

ON THE RECORD

“Unfortunately, audacious schemes such as those alleged in the indictments are pervasive and exploit the promise of new medical technologies such as genetic testing and telemedicine for financial gain, not patient care,” said Deputy Inspector General for Investigations Gary L. Cantrell of HHS-OIG. “Instead of receiving quality care, Medicare beneficiaries may be victimized in the form of scare tactics, identity theft, and in some cases, left to pay out of pocket.  We will continue working with our law enforcement partners to investigate those who steal from federal healthcare programs and protect the millions of Americans who rely on them.”

“Healthcare fraud and related illegal kickbacks and bribes impact the entire nation,” said Assistant Director Terry Wade of the FBI’s Criminal Investigative Division. “Fraudulently using genetic testing laboratories for unnecessary tests erodes the confidence of patients and costs taxpayers millions of dollars. These investigations revealed some medical professionals placing their greed before the needs of the patients and communities they serve. Today’s law enforcement actions reinforce that the FBI, along with its partners, will continue to pursue and stop this type of illegal activity.”

 

Hospitals, insurers object to rule posting their negotiated rates

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CMS is proposing that hospitals make public their payer-specific negotiated charges for a limited set of “shoppable” services.

Hospitals and insurers have made clear their opposition to the Centers for Medicare and Medicaid Services proposed rule requiring the disclosure of their privately negotiated contract rates.

CMS is proposing that hospitals make public their payer-specific negotiated charges for a limited set of “shoppable” services or face civil monetary penalties, in a rule to go into effect on January 1, 2020. Comments were due by September 27.

Under the rule, hospitals would display payer-specific negotiated charges for at least 300 shoppable services, including 70 selected by CMS and 230 by the provider.

The American Hospital Association called it the wrong approach, even though it said it supported ensuring patients have the information they need, including knowing what their expected out-of-pocket costs would be. However, the AHA said, “Instead of helping patients estimate their out-of-pocket obligations, it would introduce confusion and fuel anticompetitive behavior among commercial health insurers in an already highly-concentrated insurance industry, seriously limiting the choices available to patients.”

America’s Essential Hospitals said, “We are particularly concerned that the agency’s proposals regarding the public posting of charges, in particular the posting of negotiated rates, offer little benefit to the consumer, add substantial burden to hospitals, and pose harm to competition, potentially driving up prices.”

America’s Health Insurance plans said that forcing disclosure of privately and competitively negotiated rates will not provide consumers with information that is actionable or helpful. I

“Instead,”AHIP said, “it will hamper competitive negotiations and push healthcare prices and premiums higher for patients, consumers, businesses and taxpayers. This proposed rule also has significant implications for, and is interconnected with, other proposed rules regarding interoperability of health care data. We are concerned that unknown entities will have open access to the data, with few restrictions on how they may use it.”

WHY THIS MATTERS

CMS released the proposals on July 29 in the 2020 hospital outpatient prospective payment and ambulatory surgical center payment rule.

The rule also has three additional proposed policies that run afoul of the law, the AHA said.

Specifically, the AHA opposes completion of the phase-in of payment reductions for the hospital outpatient clinic visit in excepted off-campus provider-based departments to the “physician fee schedule equivalent” rate of 40% of the outpatient prospective payment system rate.

The AHA said the proposal “exceeds the Administration’s legal authority and should be abandoned.”

The AHA has already won a case in court on the government’s site neutral payment policy.

“On the clinic visit policy, we remind CMS that the agency was recently found by the courts to have exceeded its statutory authority when it cut the payment rate for clinic services at excepted off-campus provider-based departments,” the AHA said.

Hospitals also object to continuing the current policy that pays for separately payable drugs acquired through the 340B drug savings program at the rate of average sales price minus 22.5%.

And the AHA objects to the implementation of a prior authorization process for five categories of outpatient department services.

THE LARGER TREND

On September 17, a federal judge ruled in favor of the AHA and hospital organizations, saying CMS exceeded its statutory authority when it reduced payments for hospital outpatient services provided in off-campus provider-based departments that were grandfathered under the Bipartisan Budget Act of 2015.

The AHA, joined by the Association of American Medical Colleges and several member hospitals, had filed the lawsuit in December.

ON THE RECORD

America’s Essential Hospitals said, “These cuts deter hospitals from expanding access in communities with the most need for healthcare services and run counter to CMS’ goal of integrated, coordinated healthcare.

“Taken together, these proposals would have a chilling effect on beneficiary access to care while also increasing regulatory burden,” the AHA said.

 

 

 

 

 

 

 

 

 

Judge strikes down Trump administration’s site-neutral payments rule

https://www.fiercehealthcare.com/hospitals-health-systems/judge-strikes-down-trump-administration-s-site-neutral-payments-rule?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

Gavel court room lawsuit judge

In a huge win for hospitals, a federal judge has tossed the Trump administration’s rule instituting site-neutral payments.

District of Columbia Judge Rosemary Collyer ruled Tuesday that the Centers for Medicare & Medicaid Services (CMS) overstepped its authority when it finalized a plan to extend a site-neutral payment policy to clinic visits with the goal of paying the same in Medicare for evaluation and management services at physician offices and hospitals.

Hospital groups immediately rebelled against the plan. Within hours of the rule’s finalization in November, the American Hospital Association (AHA) vowed to challenge the change, as it would cut payment rates to hospitals significantly. AHA and the Association of American Medical Colleges formally did so about a month later.

CMS argues that the payment change would save Medicare beneficiaries $150 million per year, lowering average copays from $23 to $9. Those savings, however, are coupled with significant payment cuts to hospitals; the AHA estimated losses of $380 million in 2019 and $760 million in 2020.

In her order, Collyer said that the rule did not meet the standard of a method to control unneeded hospital use, as CMS argued in court filings.

“CMS believes it is paying millions of taxpayer dollars for patient services in hospital outpatient departments that could be provided at less expense in physician offices. CMS may be correct,” the judge wrote. “But CMS was not authorized to ignore the statutory process for setting payment rates in the Outpatient Prospective Payment System and to lower payments only for certain services performed by certain providers.”

Collyner did not require CMS to pay funds lost under policy change so far this year and instead requested a status report by Oct.1 from both parties to determine whether additional briefings are required to decide a suitable resolution.

In a statement, the AHA and AAMC praised the judge’s decision.

“The ruling, which will allow hospitals to maintain access to important services for patients and communities, affirmed that the cuts directly undercut the clear intent of Congress to protect hospital outpatient departments because of the many real and crucial differences between them and other sites of care,” the hospital groups said. “Now that the court has ruled, it is up to the agency to put forth remedies for impacted hospitals and the patients they serve.”

 

 

 

Medicare Advantage is booming but not producing savings, report finds

https://www.healthcaredive.com/news/medicare-advantage-is-booming-but-not-producing-savings-report-finds/561187/

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Dive Brief:

  • Medicare Advantage is not producing any savings but spends between 2% and 5.5% more than traditional Medicare, a report in Health Affairs finds.
  • On the other hand, the report found Medicare’s accountable care organizations are reducing costs as compared to traditional Medicare. The Medicare Shared Savings Program, which includes accountable care organizations, saved about 1% to 2% in 2016. 
  • The authors suggest a number of changes for policymakers to consider if they want to improve competition and address flaws among the two programs.

Dive Insight:

As the popularity of programs such as Medicare Advantage grows, it’s important to understand the spending ramifications and whether the program is yielding any savings for taxpayers.

More and more seniors are choosing coverage options outside of traditional Medicare. Together, Medicare Advantage and the Medicare Shared Savings Program cover about half of all Medicare beneficiaries. In a six-year period, Medicare Advantage alone grew by 57% and as of 2018 covered nearly 20 million seniors.

Medicare Advantage allows private insurers to contract with the federal government to care for eligible Medicare beneficiaries. Private plans receive a fixed payment — typically a per member, per month allotment — to coordinate care for beneficiaries who choose MA plans. 

It’s these “predictable” payments that allow MA plans to invest in unconventional coverage options such as meal delivery and transportation to appointments, the authors said.

But despite the program’s popularity, it’s not yielding the savings that was originally expected.

“When a beneficiary joins MA, Medicare spends more, on average, than it would have if the patient had remained in traditional Medicare. We find the opposite in the MSSP: When a patient joins the Medicare ACO program, Medicare costs fall,” according to Health Affairs.

There are also differences between the two programs that should be fixed, the authors said. 

The MSSP is only punitive, which is not true for the star-rating program for MA. One way to achieve a more equitable ratings system is to “radically” reduce the number of quality measures, which have become a burden for physicians, the authors said.

“We propose limiting quality measurement to five measures that are outcome oriented: hospital and ER use, patient satisfaction, and diabetes A1c and blood pressure control.”

It’s also important to find a risk adjustment model that can be used for both MA and MSSP populations, the authors said.

CMS has committed itself to reducing the amount of burden on payers and providers, and paring down quality ratings overhead is a key part of that. The agency’s removed a number of measures across its reporting programs in 2018 as part of its “Meaningful Measures” initiative, and is currently looking at others in MSSP, MA and the Merit-based Incentive Payment System.

 

 

 

Trade Secrets Challenge Could Trip Up Trump Hospital Prices Plan

https://news.bloomberglaw.com/health-law-and-business/trade-secrets-challenge-could-trip-up-trump-hospital-prices-plan

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A legal fight is looming over a Trump administration proposal that would require hospitals to list their standard prices for medical services and their negotiated rates with insurance companies—prices some believe are proprietary.

Hospital and insurance groups are likely to sue if the administration moves forward with a final rule, and the litigation could raise thorny legal questions about a company’s right to be competitive and a patient’s right to make informed health-care choices.

One way hospitals and insurance groups may try to fight the rule is by claiming their negotiated prices are trade secrets, health attorneys say.

“We’ve been looking in our research group at whether health-care prices can be trade secrets, and the law is very unsettled on this issue,” said Jaime King, associate dean and professor of law at the University of California Hastings College of Law in San Francisco.

The Centers for Medicare & Medicaid Services issued the proposed rule July 29 as part of a Trump administration push to make health-care costs more transparent.

It would require hospitals to list their standard prices and what individual insurers have agreed to pay for 70 “shoppable” medical services—like psychotherapy, blood tests, MRIs and ultrasounds—that can be scheduled in advance.

The government’s goal is to give consumers the information they need to compare what hospitals charge for similar services and to help them understand their potential financial liability for services they obtain at the hospital. Hospitals that fail to comply would be fined.

Listing the negotiated price an insurance company will pay on a patient’s behalf will show consumers how effective different health insurers are at negotiating lower out-of-pocket costs, attorneys say.

“We believe that this, in turn, will enable health-care consumers to make more informed decisions, increase market competition, and ultimately drive down the cost of health-care services, making them more affordable for all patients,” the CMS said in its proposal.

Legal Authority Questioned

The American Hospital Association was quick to object, contending in a prepared statement that the plan “exceeds the administration’s legal authority.” If the proposal is finalized, the trade group said it would look at its legal options.

“I think it’s reasonable for hospital groups to be looking at potential challenges if the rule is finalized as proposed,” said Philo Hall, senior counsel in Epstein, Becker and Green LLP’s health-care and life sciences practice.

The Affordable Care Act amended the Public Health Service Act by requiring hospitals to make public their “standard prices” for items and services. Attorneys say the CMS is now interpreting standard prices to also include the privately negotiated rates for each individual insurer.

But neither Congress, the Department of Health and Human Services, nor hospital groups have ever considered the standard prices provision in the ACA to include commercial and financial information that is treated as confidential in a highly competitive industry, said Hall. Hall served as counsel to the George W. Bush administration’s HHS Secretary Michael Leavitt and worked closely in that role with Alex Azar, the current HHS chief.

“The concern that the government is overstepping is not frivolous,” said Michael Adelberg, a former senior CMS official who now leads the health-care strategy practice of the Faegre, Baker, Daniels Consulting.

“I don’t know if you can say to two entities ‘You can engage in a contract in a competitive market, but the most important terms of that contract are public,’” he said. “I don’t know if you can do that.”

In a statement, America’s Health Insurance Plans said the CMS proposal would make it harder for insurance companies to bargain for lower rates. The group said even the Federal Trade Commission agrees that making hospitals disclose their privately negotiated rates would create a floor—not a ceiling—for what hospitals would be willing to accept.

When the HHS Office of the National Coordinator for Health Information Technology indicated in a proposal that it was considering adding network discounts and pricing data to the definition of electronic health information, UnitedHealth Group told the agency the details of the negotiated rates and the overall cost of its networks is a trade secret.

“Although federal courts have upheld regulations compelling the disclosure of Medicare cost report information, there is a significant difference between government payment information held by the government and the internal, proprietary information that the proposed regulation would compel UHC to disclose,” the insurance company said in comments in June.

CMS Could Prevail

The CMS proposal is similar to an HHS rule that would have required pharmaceutical companies to disclose the list price of their drugs in TV advertisements. A federal district court judge in July said the rule exceeded the administration’s regulatory authority and blocked it from taking effect.

In the drug pricing rule, the agency pointed to two provisions in the Social Security Act that tell the HHS secretary to make rules necessary for the “efficient administration of the Medicare and Medicaid program” as the source of authority.

But the U.S. District Court for the District of Columbia said there’s nothing in the law’s text, structure, or context to indicate Congress intended to give the HHS the power to issue a rule that forces drugmakers to disclose their list prices.

Attorneys say the agency’s authority to issue the hospital pricing rule is more explicit in the ACA.

“In this case, we have a different statutory provision that delegates the agency with a more specific task,” a former HHS attorney, who asked not to be identified, said in a conversation with Bloomberg Law.

“We’re not talking about a general statute concerning the efficient administration of the Medicare program to drug companies,” the former HHS attorney said. “We’re talking about an explicit statutory provision that directs the agency to require federally funded hospitals to disclose their ‘standard charges.’”

On that, the former HHS attorney said, the CMS could prevail. But it depends on how the agency defines “standard charges.” The agency could ultimately decide not to include negotiated rates after it considers the public comments.

In a statement, the CMS said its proposal is consistent with the ACA and responsive to patients and their advocates who say knowledge of negotiated rates is necessary for individuals to be able to determine their out-of-pocket costs for hospital services.

“All Americans have the right to know the price of their health care up front,” an agency spokesperson said. “Health-care prices shouldn’t be a mystery and consumers will be able to shop for health care just like they do for everything else they buy.”

 

 

 

Trump Shift, Backed by States, Fuels Fear of Too Few Medicaid Docs

https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2019/08/07/trump-shift-backed-by-states-fuels-fear-of-too-few-medicaid-docs?omnicid=CFC1662263&mid=henrykotula@yahoo.com

Stateline Aug7

Dr. Barbara Ricks is a pediatrician in Greenville, Mississippi, whose patients are nearly all on Medicaid. The Trump administration proposed eliminating an Obama-era rule that aims to ensure that patients can find a doctor who accepts Medicaid.
Rogelio V. Solis/The Associated Press

The Trump administration wants to drop an Obama-era rule designed to ensure that there are enough doctors to care for Medicaid patients.

State health officials say the rule, which requires states to monitor whether Medicaid reimbursement rates are high enough to keep doctors in the program, forces them to spend a lot of time collecting and analyzing data with little benefit. Health care advocates, though, fear that dropping the regulation would enable states to set those payments at a level that would cause some of the 72 million Americans who rely on Medicaid to scramble for health care. Research shows that when reimbursement rates drop, fewer providers agree to accept low-income Medicaid patients.

Although the Medicaid Access Rule, adopted in 2016, pertains to Medicaid fee-for-service plans, the Trump administration also is seeking to relax requirements on how states determine whether Medicaid managed care organizations have enough providers.

If reimbursement rates are too low, there’s a risk that health care providers would see fewer Medicaid patients or even refuse to treat Medicaid enrollees altogether. That, in turn, could lead to longer wait times to see providers still participating in Medicaid or force patients to travel longer distances to reach providers remaining in the program.

Medicaid, the government health plan for low-income U.S. residents, covers 1 in 5 citizens. It is jointly administered and financed by the federal government and the states.

The rule, the Centers for Medicare and Medicaid Services (CMS) said, “excessively constrains state freedom to administer the program in the manner that is best for the state and Medicaid beneficiaries in the state.”

According to Matt Salo, executive director of the National Association of Medicaid Directors, scrapping it would eliminate a bureaucratic headache for states that, in the end, hasn’t improved patients’ access to providers.

“Nobody is moving the goal of improved access,” Salo said.

Some health care advocates disagree, pointing out that the rule hasn’t been in place very long and that getting rid of it fits the Trump administration’s overall mission of giving states more freedom in operating Medicaid.

“The Trump administration’s approach to Medicaid has been state flexibility, giving states a lot more discretion to do what they want without a lot of attention to what beneficiaries need,” said Abbi Coursolle, a senior attorney with the National Health Law Program, a group based in Washington, D.C., that works to protect access to health care for low-income populations.

CMS last year called for a significant watering down of the Obama rule. Last month, the agency proposed to scrap it altogether. The comment period on elimination of the rule runs through next month, after which CMS will announce its decision.

The initial proposal to weaken the rule generated plenty of opposition. Among those objecting were hospital and physician organizations, groups that advocate for health care access for all, and organizations created to support those living with certain diseases and to raise funds for research into those conditions.

Among the latter was the Epilepsy Foundation, which warned in its public comment that weakening the rule would deprive CMS of information it needed to monitor and enforce Medicaid beneficiaries’ access to care. State reimbursement rates, the foundation said, are crucial to ensuring enough willing providers are available to treat Medicaid beneficiaries.

Shawn Martin, senior vice president of the Academy of Family Physicians, said scrapping the rule would make states more likely to set reimbursement rates too low, prompting practitioners to stop taking Medicaid patients or cut back. “A low reimbursement would affect how many beneficiaries providers are willing to see.”

Just as adamant on the other side, however, are many states that complain that the Obama rule is cumbersome and ineffective at ensuring access for Medicaid beneficiaries.

At the Maryland Department of Health, Tricia Roddy, a research director, said the rule doesn’t do much to help gauge the fees’ effects on access to care.

Similarly, at the Colorado Department of Health Care Policy and Financing, Marc Williams, a spokesman, said his state uses other strategies to ensure Medicaid beneficiaries’ access to the health services they need.

According to Salo of the Medicaid directors group, states of both political stripes, red and blue, are delighted that the Trump administration is moving to abolish the rule.

“It was creating many bureaucratic burdens without accomplishing anything concrete,” Salo said. The rule, he said, “is insanely micro-managed and overly bureaucratic.”

The 1965 law establishing Medicaid has been amended through the years to ensure that enough doctors, nurses and other providers are available to serve beneficiaries. Congress in 1989 passed an amendment making clear states’ obligation to pay providers enough to ensure Medicaid enrollees have access to care.

Medicaid pays doctors about three-fourths as much as Medicare, the government program for senior citizens, according to a 2017 analysis by the Urban Institute, a nonpartisan think tank in Washington, D.C. And Medicare pays much less than private insurers.

When Medicaid and Medicare payments, or reimbursement rates, go down, research shows that patients make fewer doctor’s visits and more trips to the emergency room.

According to a 2017 Kaiser Family Foundation report, only about 70% of office-based physicians accept new Medicaid patients. The results vary from 39% in New Jersey to 97% in Nebraska. By comparison, the study found, 85% of doctors accept new patients with private insurance.

The 2016 rule required states to tell the agency every three years how providers from various geographic regions and specialties were participating in Medicaid, and how reimbursement rates were affecting that participation.

 

 

 

 

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