Category Archives: Center for Medicare and Medicaid Services (CMS)

Did a high-profile program really slash hospital spending? Or was it a cautionary tale of ‘regression to the mean’?

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Health Policy Research, Process, Process Improvement, Randomized Control Trial (RCT), Regression to the Mean • Leave a comment

 

Did a high-profile program really slash hospital spending? Or was it a cautionary tale of ‘regression to the mean’?

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In the late 19th century, English polymath Sir Francis Galton noted that tall parents often had kids shorter than they were, while short parents often ended up with taller kids. He dubbed this regression to the mean — when something measured as extreme in a first instance is likely to be measured as less extreme later on.

That concept has important implications for health care policy today, one of which is that more health policymakers and health care researchers should use randomized evaluations to avoid problems of regression to the mean in estimating the effects of policies.

In the U.S. health care system, the very highest-cost patients — known as super-utilizers — have been a focus of attention. That is because this 1% of patients account for almost 25% of all U.S. health care spending. A spate of high-profile studies have reported dramatic reductions in health care spending from programs designed to keep super-utilizers out of the hospital through various means, such as coordinating their outpatient care and coaching them on managing their conditions and medications.

 

This work raises an important question: Does hospital use decline because of the programs or, due to regression to the mean, because high-use patients are likely to use care less in the future?

Several colleagues and I set out to answer that question in partnership with the Camden Coalition of Healthcare Providers. It had created a comprehensive health care delivery model that aims to meet the medical and social services needs of very high-use patients who have had at least two hospital admissions in the last six months and two or more chronic conditions, among other criteria. The coalition has been widely heralded as a promising approach for reducing costs and improving health. Dr. Atul Gawande profiled the program in the New Yorker and the  coalition’s founder won a MacArthur “genius grant.”

As a data-driven, learning organization, the coalition did not want to rest on its considerable laurels. To learn what its program was doing — and innovate based on the findings — it partnered with our research team to conduct a randomized controlled trial (RCT).

We randomly assigned patients who were eligible and who consented to participate to receive either the coalition’s program or status quo care. Randomization ensured that, at the start of the program, these two groups were similar. That way, the outcomes observed in the control group would tell us what would have happened over time in the intervention group in the absence of the program.

When we looked at patients in the intervention group, the results of the Camden Coalition’s program looked very encouraging: Participants in this group visited the hospital about 40% less in the six months after the intervention. But as we report in this week’s New England Journal of Medicine, we saw the same decline in hospital use among those in the control group. These results tell us that the improvements we saw in the intervention group were the result of regression to the mean, not the coalition’s program.

 

These results offer an important lesson: We wouldn’t have accurately measured the intervention’s impact if we hadn’t done a randomized controlled trial.

Since we learn more from RCTs than just the impact of an intervention on a single outcome, finding no effect doesn’t mean the end of the road. In the Camden Coalition trial, our results suggest that existing systems poorly serve the complex needs of the coalition’s patients. The Camden group (and others) are now exploring models involving more complete designs for providing care.

Regression to the mean isn’t unique to health care, but it is a particularly salient concern for studies of health care programs that are often (and understandably) implemented in response to extreme signals like advanced disease, high expenditures, or excessive prescribing. Fortunately, when randomized controlled trials are feasible and ethical, they provide a way to determine the effect of a program free from concerns about regression to the mean and other biases.

Concern about excessive prescribing presents another example where regression to the mean may lead to spurious findings but where an RCT can provide clear results. The Centers for Medicare and Medicaid Services recently partnered with researchers to conduct randomized evaluations of interventions designed to curb overprescribing of Seroquel, an antipsychotic drug. The researchers found that sending strongly worded letters that compared high prescribers’ behavior to their peers’ reduced overprescribing by 11%.

We can be confident that the letters are what caused the reduction in prescribing — rather than just regression to the mean (today’s extreme prescribers are less likely to be as extreme tomorrow) — because the trial included as a randomized control group prescribers who only received standard CMS outreach.

That study also shows how we can build on and learn from any finding, whether it is positive, negative, or null. The CMS overprescribing study built on a prior randomized controlled trial which found that the original peer comparison letters CMS had been regularly sending did not reduce prescribing of controlled substances. As a result, the researchers and CMS used psychological and other research to innovate and devise a different kind of letter to be sent to a different set of providers, which then did reduce prescribing behavior.

 

Randomized controlled trials can be used to study programs and policies across the health care industry. In my experience leading J-PAL North America’s U.S. Health Care Delivery Initiative, which funds and conducts randomized controlled trials of health care delivery interventions, RCTs have shed light on issues such as the effectiveness of clinical decision support alerts on ordering inappropriate medical imaging and nudges to improve consumers’ choices of health insurance. And there are ongoing RCTs of many more interventions, including food as medicine, home visits by nurses, and opioid buyback programs.

J-PAL North America is part of a growing movement of health systems, payers, providers, and more that are using randomized controlled trials to test and learn, whether through evaluations of whole programs or quick process improvements. Researchers at NYU Langone Health use rapid-cycle, randomized tests aimed at quickly evaluating simple process improvements to encourage best practices. This one medical center launched 10 trials in the first year alone and hopes to launch dozens more.

Finding solutions to address the complex medical and social needs of patients is a pressing issue. Yet all too often we don’t rigorously evaluate these solutions, which hurts patients we could be helping. Randomized clinical trials are essential tools for helping us learn, adapt, and move forward on innovative solutions that make peoples’ lives better.

 

The most expensive health care option of all? Do nothing.

Posted on by • Posted in 2020 Election Issues, ACA, Aging Population, Antitrust, Center for Medicare and Medicaid Services (CMS), Centers for Disease Control & Prevention (CDC), Health Insurance Coverage Adequacy, Health Policy, Life Expectancy, Medicaid, Medicaid Expansion, Medicare, Medicare for All, Monopoly, Monopoly Behavior, Mortality, Opioid Epidemic, Out of Pocket Expenses, Status Quo, Underinsured, Uninsured • Leave a comment

https://www.politico.com/news/2020/01/09/medicare-for-all-health-care-096367?utm_source=The+Fiscal+Times&utm_campaign=b67cf54986-EMAIL_CAMPAIGN_2020_01_09_10_31&utm_medium=email&utm_term=0_714147a9cf-b67cf54986-390702969

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‘Medicare for all’ debate sidesteps cost of current system.

The projected multitrillion-dollar cost of “Medicare for All” has pitted Democratic presidential candidates against each other as they argue about the feasibility of single-payer health care.

But the reality is the current health system may cost trillions more in the long run and be less effective in saving lives.

Spending on Medicare, Medicaid, private health insurance and out-of-pocket expenses is projected to hit $6 trillion a year — and $52 trillion over the next decade. At the same time, the number of people with insurance is dropping and Americans are dying younger.

Sen. Bernie Sanders and other single-payer advocates say Medicare for All would cost the government far less — between $20 trillion and $36 trillion over a decade — by slashing overhead, eliminating out-of-pocket costs and empowering federal officials to bargain directly with hospitals and drugmakers. But the streamlined system would have to care for millions of currently uninsured people at a significant cost to taxpayers, and experts disagree whether it would actually save money in the long run.

Centrist Democrats are pushing narrower plans that would, among other things, expand tax credits for people just above the Obamacare subsidy threshold. Virtually no one is arguing for maintaining the status quo, but that’s precisely what could happen given that congressional gridlock has stymied even popular, and bipartisan, causes like halting surprise medical bills.

“It’s really hard to see anything breaking through, especially when the industry interests and the money they’re willing to spend on lobbying and campaign contributions is just mind-boggling,” said Sabrina Corlette, a researcher at Georgetown University’s Center on Health Insurance Reforms. “And, without question, we are on an unsustainable trajectory.”

With Medicare for All and its price tag likely to come up in the next Democratic debate Jan. 14 in Iowa, here are five of the costliest consequences of inaction:

National health spending keeps rising

The Centers for Medicare and Medicaid Services estimates that nationwide health spending will hit $6 trillion a year by 2027 absent any changes in law. That would be nearly a fifth of the economy. In total, the United States is slated to spend about $52 trillion over the coming decade.

The cost drivers include hospitals, physician and clinical services and prescription drugs. Some local health systems have become monopolies that can largely set prices as they please — leading to higher premiums and more out-of-pocket spending for consumers.

“Even the biggest insurance plans are not big enough to bargain down the cost of services, and they don’t have an incentive to,” said Wendell Potter, a former Cigna executive-turned whistleblower and single-payer advocate.

An aging population is driving up Medicare spending, but the rising cost of private insurance is the biggest factor. A recent Kaiser Family Foundation analysis found per capita spending for private insurance grew by nearly 53 percent over the last decade, or more than double the hike in per capita Medicare spending.

More people will be uninsured

The Census Bureau reported in September that the number of Americans without insurance grew by 2 million people since 2017 — the first increase in nearly a decade. Even with a healthy economy and low unemployment, more than 27 million people weren’t covered at any point last year. That could grow to 35 million by 2029, per the Congressional Budget Office, under current law.

The number of people enrolling in the Obamacare marketplace has declined, and more people are dropping employer-sponsored insurance due to cost and other concerns.

Part of this is President Donald Trump’s doing — the administration has slashed efforts to push Obamacare enrollment and rolled back the massive marketing effort that the Obama administration rolled out for years.

There are also more than 400,000 additional uninsured children than just two years ago — and 4 million in all — and states that haven’t expanded Medicaid are seeing the biggest spikes.

“What we also miss in the debate is the number of people temporarily uninsured, who miss open enrollment, who are between jobs, who fall through the cracks,” said Adam Gaffney, a Harvard Medical School researcher and the president of Physicians for a National Health Program. “I see people all the time in my practice in that situation who don’t fill prescriptions and experience serious complications.”

Going without insurance hits patients and health care providers: Average hospital spending on care for the uninsured was $13 million in 2018 up roughly 3 percent annually since 2016.

Coverage will be skimpier

As the cost of health care has skyrocketed, insurance companies have squeezed patients, charging higher premiums, deductibles and co-pays, and creating narrow networks of providers and aggressively billing for out-of-network care.

Since 2009, the amount workers have had to pay for health insurance has increased 71 percent, while wages have only risen 26 percent over that time.

More than 80 percent of workers now have to pay a minimum amount out of pocket before insurance kicks in — and the amount of that deductible has doubled over the last 10 years, now standing at an average of $1,655, though many workers have to pay a lot more.

These costs are putting care out of reach for millions.

A new Gallup poll found that a full quarter of adults have put off treatment for a serious medical condition due to the cost — the highest since Gallup began asking the question three decades ago. A full third say they’ve delayed or deferred some kind of health care service over the past year. Another Gallup and West Help survey found that 34 million people know at least one friend or family member who died over the past five years after skipping treatment due to costs.

 

Needed drugs will become more out of reach

U.S. patients pay vastly more for prescription drugs than people in other developed countries and the disparity is set to grow. The United States spent $1,443 per person on prescription drugs in 2018, while other developed countries fell somewhere between $466 and $939.

In just five years, national spending on prescription drugs increased 25 percent, according to the Government Accountability Office, and CMS expects that increase to “accelerate” over the next several years.

Increasingly, patients are responding by forgoing their medications. Gallup found in November that nearly 23 percent of adults — roughly 58 million people — said they haven’t been able to “pay for needed medicine or drugs that a doctor prescribed” over the past year.

This widespread inability to take needed medication, a government-funded study found last year, is responsible for as much as 10 percent of hospital admissions. And the Centers for Disease Control and Prevention estimates that medication nonadherence accounts for somewhere between $100 and $300 billion in national health spending every year.

 

Americans will continue to get sicker and die younger

The cost of maintaining the status quo is evident not only in dollars but in human lives.

Life expectancy in the United States has declined over the last three years, even as other developed countries around the world saw improvements.

Though the United States spends nearly twice as much on health care as other high-income countries, there’s been a stark increase in mortality between the ages of 19 and 64, with drug overdoses, alcohol abuse, suicide and organ diseases driving the trend. It’s cut across race and gender with the worst effects felt in rural areas.

The opioid epidemic only accounts for a fraction of the problem. The National Research Council found that the United States has higher mortality rates from most major causes of death than 16 other high-income countries.

Researchers at USC estimate that if these trends continue, it would take the United States more than a century to reach the average life expectancy levels other countries hit in 2016.

 

 

Hospital M&A spurs rising healthcare costs, MedPAC finds

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Antitrust, Center for Medicare and Medicaid Services (CMS), Federal Trade Commission (FTC), Health Insurance Industry, Health Policy, Health System, High Deductible Health Plans, High Premiums, Horizontal Consolidation, Horizontal Integration, Hospital, Hospital Industry, Market Consolidation, Market Power, Medicare Payment Advisory Commission (MedPAC), Mergers & Acquisitions, Monopoly, Monopoly Behavior, Mortality, Out of Pocket Expenses, Quality, Quality of Care, Readmission, Vertical Consolidation, Vertical Integration • Leave a comment

https://www.healthcaredive.com/news/hospital-ma-spurs-rising-healthcare-costs-medpac-finds/566858/

Dive Brief:

  • Both vertical and horizontal hospital consolidation is correlated with higher healthcare costs, according to a congressional advisory committee on Medicare, in yet another study finding rampant mergers and acquisitions drive up prices for consumers.
  • The Medicare Payment Advisory Commission found providers with greater market share see higher commercial profit margins, leading to higher costs per discharge, though the direct relationship between market share and cost per discharge was not statistically meaningful itself.
  • MedPAC also found vertical integration between health systems and physician practices increases prices and spending for consumers. The top-down consolidation leads to higher prices for commercial payers and Medicare alike, as hospitals have more bargaining heft and benefit from Medicare’s payment hikes for hospital outpatient departments.

Dive Insight:

Hospital consolidation has become a major point of concern for policymakers, antitrust regulators and patient advocacy groups. A slew of prior studies have found unchecked provider M&A contributes to higher healthcare costs, with the brunt often borne by consumers in the form of higher premiums and out-of-pocket costs.

Since 2003, the number of “super-concentrated” markets has increased from 47% to 57%, according to the MedPAC analysis of CMS and American Hospital Association data. Those markets, with a high amount of consolidation, rarely see new providers enter, which stifles competition, and are rarely reviewed by the government.

There’s been little change in antitrust regulation since the 1980s and, though the Federal Trade Commission has won several challenges to hospital consolidation in the 2010s, the agency only challenges 2% to 3% of mergers annually.

MedPAC also found super-concentrated insurance markets actually led to lower costs per discharge compared to lower levels of payer concentration, deflating somewhat hospital lobbies’ arguments that payer consolidation is driving prices higher.

Committee members called for more analysis of how macro trends like an aging population and federal policy could be driving consolidation and impacting prices, leading some to call for a revamp of the hospital payment framework itself.

“We have to change the way hospitals are paid. I don’t see another solution,” said Brian DeBusk, CEO of Tennesse-based DeRoyal Industries, a medical manufacturer. “Are you going to undo a thousand hospital mergers? Are you going to enact rate setting? I don’t see another way.”

MedPAC also looked at vertical integration, where hospitals snap up physicians practices downstream. According to the Physician Advocacy Institute, only 26% of physician practices were owned by hospitals in 2012, but by last year that number had spiked to 44%.

Since 2012, billing has shifted from physician offices to hospital outpatient departments, especially in specialty practices. In chemotherapy administration, for example, physician offices saw almost 17% less volume between 2012 and 2018, while outpatient centers saw a 53% increase in volume, according to MedPAC.

Physicians in hospital-owned practices also refer more patients to the hospital’s facilities and, despite a common stumping point that integration improves quality through care coordination, its effect on quality is “ambiguous,” MedPAC analyst Dan Zabinski said Thursday at the committee’s November meeting.

Despite the mountain of evidence, the AHA published a widely-decried study in September claiming acquired hospitals see a reduction in operating expenses and a statistically significant drop in readmission and mortality rates. The study was criticized for not using actual claims data in its analysis among other methodological and conflict of interest concerns.

Republican leaders in the House Energy and Commerce Committee asked MedPAC to study provider consolidation in August, and the body’s full findings will be included in its March report to Congress.​

 

 

 

 

 

South Carolina is the next battleground for Medicaid work requirements

Posted on by • Posted in 2020 Election Issues, ACA, Center for Medicare and Medicaid Services (CMS), District Court, District Court of Appeals, Health Policy, Medicaid, Medicaid Expansion • Leave a comment

https://www.axios.com/south-carolina-medicaid-work-requirements-f8c52243-d1de-47bf-bf47-5ea82326cea4.html

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The Trump administration is losing the legal battle over Medicaid work requirements — one of its most impactful and controversial health care policies — but it is leaning into that fight even more aggressively.

Driving the news: The Centers for Medicare & Medicaid Services formally signed off yesterday on South Carolina’s work requirements. Medicaid recipients in the state will have to perform 80 hours per month of work or community service, unless they receive an exemption.

Why it matters: Other states have primarily sought work requirements as a condition of their Medicaid expansions, but South Carolina will impose its new rules without expanding.

Where it stands: A federal judge has already ruled against work requirements in Arkansas, Kentucky and New Hampshire, arguing that they’re inconsistent with Medicaid’s statutory goals.

  • Judge James Boasberg has leaned heavily on the fact that work requirements would cause thousands of people to lose their Medicaid coverage.
  • That will also happen in South Carolina, and those coverage losses will be a factor in the inevitable lawsuits over these rules.

Yes, but: Those rulings are working their way through the appeals process, and rather than change course or slow down in the face of legal setbacks, the administration is getting work requirements on the books wherever it can and hoping for an eventual win in the courts.

 

 

 

Hospitals win back $800 million from Medicare

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Medicare, Medicare Site Neutral Payment • Leave a comment

https://www.axios.com/hospitals-medicare-trump-administration-regulation-c7161fba-51b8-421b-b1d6-3e4615dd265c.html

Illustration of a statue of Justice wearing a doctor's coat and a stethoscope

The Trump administration is backtracking on a major policy that cut payments to hospitals while the policy is stuck in the courts.

The big picture: The hospital industry is getting back almost $800 million, and the Trump administration has failed to implement another regulation — one that most experts support, too.

Details: Any hospital that was paid a lower amount for a routine clinic visit in 2019 will automatically be paid the difference from the older, higher amount, the Centers for Medicare & Medicaid Services said in a bulletin on Thursday.

  • CMS wanted to create a level playing field, arguing that hospitals should not be paid more for these standard checkups when they could be done for far less in an independent doctor’s office.
  • Hospitals naturally hated the idea, took the government to court, won, and are now fighting to eliminate the policy from future years.

 

 

 

 

A big clue for 2021 Medicare Advantage plans

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Insurance Industry, Health Policy, Medicare Advantage • Leave a comment

https://www.axios.com/newsletters/axios-vitals-3635dfb2-f6b2-4986-b8f0-15acd9436ea4.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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Spending levels for people in the traditional Medicare program are expected to rise by 4.5% in 2021, the Centers for Medicare & Medicaid Services said in a memo sent this week.

Why it matters: This growth rate is the key number government actuaries use when figuring out how much to pay Medicare Advantage plans, Bob writes.

  • A 4.5% rate “is a very strong starting point for reimbursement and a continued reflection of a MA-friendly Republican administration,” health care analysts at Barclays wrote to Wall Street investors.
  • The early estimate also is almost always revised higher once final rates are released in April, meaning another large pay raise is in store for insurance companies that sell MA plans.

Go deeper: The war over Medicare Advantage audits heats up

 

 

Critics say ‘junk plans’ are being pushed on ACA exchanges

Posted on by • Posted in 2020 Election Issues, ACA, Center for Medicare and Medicaid Services (CMS), Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, Out of Pocket Expenses, Preexisting Conditions, Short Term Health Insurance, Skinny Health Plans • Leave a comment

https://www.washingtonpost.com/health/2019/11/20/critics-say-junk-plans-are-being-pushed-aca-exchanges/

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The Trump administration has encouraged consumers to use private brokers, who often make more money if they sell the less robust plans.

The Trump administration is encouraging consumers on the Obamacare individual market to seek help from private brokers, who are permitted to sell short-term health plans that critics deride as “junk” because they don’t protect people with preexisting conditions, or cover costly services such as hospital care, in many cases.

Consumers looking at their health insurance options on the website for the federal marketplace, called healthcare.gov, may be redirected to other enrollment sites, some of which allow consumers to click a tab entitled “short-term plans” and see a list of those plans, often with significantly cheaper premiums. Short-term plans were once barred from the exchanges because they were considered inadequate coverage and do not meet the insurance requirements laid out under the Affordable Care Act. If consumers select a short-term plan, they are directed to call a phone number to finish signing up, according to screenshots provided to The Post.

Critics say that both the sale of short-term plans through private brokers and consumers’ ability to select such plans are the latest examples of Trump administration efforts to weaken the ACA after failing to repeal and replace the law in Congress. The president has repeatedly contended that short-term plans provide “relief” from expensive individual market insurance plans that are unaffordable to many consumers. The rule allowing the sale of such plans was finalized late last year, just weeks before open enrollment, so this is the first year they are widely available.

In addition to these efforts, the administration is also seeking to void the law in court, siding with a group of Republican state attorneys general who argue it is unconstitutional since Congress zeroed out the penalty for not having insurance in its 2017 tax overhaul legislation. A trial court in Texas ruled the entire law invalid late last year, and an opinion is expected at any time from the U.S. Court of Appeals for the 5th Circuit. The law is likely to end up in front of the Supreme Court for a third time, possibly amid the 2020 presidential election.

Under the ACA, all health insurance plans have to cover 10 essential health benefits, including maternity and newborn care, prescription drugs, emergency room services and mental health. Short-term health plans do not have to cover those services, can discriminate against those with preexisting conditions and set caps on how much they are willing to pay, which is prohibited for Obamacare plans.

Brokers often make higher commissions on short-term plans, health policy experts said, which gives them an incentive to sell them. They are supposed to present ACA-compliant plans to consumers, but are allowed to provide other options, including short-term plans. Some brokers make clear that such plans are not as comprehensive as ACA plans, but experiences differ.

“The whole business model is signing people up for coverage and getting a cut of what they sell, and the place they’re going to make their money is selling these short-term plans,” said Nicholas Bagley, a professor of law at the University of Michigan and proponent of the ACA. Consumers “don’t fully understand the lack of protections if they go over some annual or lifetime [insurance] limit. These plans don’t cover preexisting conditions.”

The administration’s use of outside brokers has prompted nearly two dozen Senate Democrats, including Democratic presidential candidates Elizabeth Warren, Kamala D. Harris and Amy Klobuchar, to send a letter to CMS on Wednesday expressing their concern over the promotion of short-term health plans.

“We are concerned that [CMS] is not only failing to conduct sufficient oversight to protect customers, but is actively emailing consumers to encourage them to obtain coverage through third-party agents and brokers instead of the HealthCare.gov website,” the senators wrote in a letter. Democratic New Hampshire Senator Jeanne Shaheen orchestrated the effort.

Such plans were previously available for periods of three months or less and could not be renewed, but the administration late last year finalized a rule that allowed for the plans’ availability for up to 12 months, with the option to renew them for up to three years. A federal judge sided with the administration in a court challenge to their expanded availability and upheld the rule in July. Consumers still cannot use government subsidies to purchase short-term plans, however.

“For most of the people buying on the exchanges, this would be worse than what they’ve been buying, especially because the majority of people who buy on exchanges get help with their premiums,” said Allison Hoffman, a law professor at the University of Pennsylvania Law School.

The Centers for Medicare and Medicaid Services has sent at least five emails so far to individual market consumers encouraging them to use outside brokers, including through a service called Help on Demand, to sign up for health insurance, according to emails obtained by The Post from a recipient of ACA market emails. The agents and brokers must be registered with the federal exchanges, CMS said in a statement, and they help consumers sign up for individual market plans.

“While agents and brokers are required to provide assistance with Exchange, Medicaid and CHIP coverage and are directed to enroll consumers in such coverage options whenever possible, they are not prohibited from sharing information on other coverage options, such as those offered off-Exchange,” a CMS spokeswoman said.

Some critics of the policy say the expanded sale of short-term plans may be one of the factors depressing enrollment in Obamacare plans, which dropped 13 percent in the first three weeks of the sign-up period, compared to the same period last year, according to federal data released Wednesday. During the 2019 open enrollment, 1,924,476 people signed up for individual market plans in the first two weeks of enrollment, compared to 1,669,401 for 2020. Open enrollment ends on Dec. 15.

CMS said it has used Help on Demand for three years, but the agency has increasingly encouraged consumers to seek their advice through emails directing them to the service’s website.

The Trump administration has drastically cut federal funding for “navigators” — grass roots organizations that help people sign up for ACA plans, including those who may not otherwise know they are eligible for coverage. .

Premiums for the most common type of Obamacare plan dropped by 4 percent for 2020, CMS said last month, and the vast majority of consumers on the individual market qualify for government tax subsidies that help cover the cost of their insurance. However, consumers complain about high deductibles and premiums in individual market plans.

 

CMS pitches ramped up oversight of Medicaid payments, promises block grant guidance

Posted on by • Posted in 2020 Election Issues, America's Essential Hospitals, American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Block Grants, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.healthcaredive.com/news/cms-pitches-ramped-up-oversight-of-medicaid-payments-promises-block-grant/567135/

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UPDATE: Nov. 13, 2019: This brief has been updated to include comments from provider groups.

Dive Brief:

  • CMS proposed a new rule Tuesday that would establish stricter requirements for states to report information on supplemental Medicaid payments to providers in a bid to clamp down on spending and promote transparency.
  • The agency will also soon release guidance on how states can test alternative financing approaches in the safety net program like block grant and per-capita cap proposals for “certain optional adult populations,” CMS Administrator Seema Verma said Tuesday at the National Association of Medicaid Director’s annual conference in Washington, D.C.
  • Later this year, CMS will also issue guidance on how states can promote value-based payments and social determinants of health factors in Medicaid, Verma said. The Center for Medicare and Medicaid Innovation is currently developing several new payment models to push providers to take on more risk for their patient populations in those programs.

Dive Insight:

The moves are in line with sweeping changes from the Trump administration moving more power to the states and asking more from recipients. The CMS administrator teased late last month the agency would soon release new guidance for states to inject flexibility into their Medicaid programs.

“We shouldn’t ration care but instead make how we pay for care more rational,” Verma said Tuesday. “Medicaid must move toward value-based care.”

Speaking to the Medicaid directors Tuesday, Verma said the changes are aimed preserving Medicaid for future generations.

“Going forward there will be no new [State Innovation Model] grants, no more open-ended one-off district waivers,” she said. “We must move forward with a more unified, cohesive approach across payers, across CMS, across states.”

The proposed rule, called Medicaid Fiscal Accountability (MFAR), will add more scrutiny to supplemental payments, which are Medicaid payments to providers in addition to medical services rendered to Medicaid beneficiaries, such as payments supporting quality initiatives or bolstering rural or safety net providers.

Some states rely heavily on these additional payments to offset low Medicaid reimbursement or support struggling hospitals. Provider lobbies did not take kindly to the new rule.

“We share the government’s desire to protect patients and taxpayers with transparency in federal programs, but today’s proposal oversteps this goal with deeply damaging policies that would harm the healthcare safety net and erode state flexibility,” Beth Fledpush, SVP of policy and advocacy for America’s Essential Hospitals, said in a statement.

AEH, which includes more than 300 member hospital and health systems, many of which are safety net providers, asked CMS to withdraw the proposal. The American Hospital Association told Healthcare Dive it was still reviewing the rule and declined comment.

However, government oversight agencies like the Government Accountability Office and the Office of Inspector General have recommended changes to these payments, which have increased from 9.4% of Medicaid payments in 2010 to 17.5% in 2017, according to CMS.

MFAR would also propose new definitions for “base” and “supplemental” payments in order to better enforce statutory requirements around and eliminate vulnerabilities in program spending.

Verma has long teased CMS support of block grants, an idea popular with conservatives, but Tuesday’s speech solidifies the agency’s support of such proposals. A handful of red states have been mulling over capped spending to gain more clarity around budgets.

In September, Tennessee unveiled its plan to move to a block grant system that would set a floor for federal contributions adjusted on a per capita basis if enrollment grows. Any savings would be shared between the state and the government.

Tennessee must submit a formal application to CMS to later than Nov. 20. If approved, it would become the first state to use a block grant funding mechanism in Medicaid. Additionally, Utah submitted a waiver application seeking per-capita Medicaid caps in June; Oklahoma Gov. Kevin Stitt, a Republican, is reportedly considering such a program; and Alaska and Texas have both commissioned block grant studies.

 

 

 

CMS retains 340B, site-neutral payment cuts in final hospital payment rule

Posted on by • Posted in American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), District Court, District Court of Appeals, Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicare, Medicare 340B Drug Discount Program, Medicare Site Neutral Payment, Outpatient Prospective Payment System (OPPS), Safety Net Hospitals, Safety-Net Providers • Leave a comment

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billing statement from a doctor's office

The Trump administration finalized a hospital payment rule Friday that retains proposed cuts to off-campus clinics and the 340B drug discount program. 

The changes outlined in the hospital Outpatient Prospective Payment System (OPPS) rule come despite both cuts being struck down in legal challenges and amid major pushback from providers.

Site-neutral payments

The agency decided to move ahead with the two-year phase-in of the cuts to outpatient services for clinic visits furnished in an off-campus hospital outpatient setting. The goal is to bring payments to off-campus clinics in line with standalone physicians’ offices.

“With the completion of the two-year phase-in, the cost sharing will be reduced to $9, saving beneficiaries an average of $14 each time they visit an off-campus department for a clinic visit in [calendar year] 2020,” the Centers for Medicare & Medicaid Services (CMS) said in a fact sheet.

However, the two-year project that was supposed to start in 2019 has been halted because of a federal court ruling.

CMS decided to move forward with the cuts for off-campus clinics.

“The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal the final judgment,” the agency said.

The American Hospital Association (AHA) said that the site-neutral payment rule was misguided and that CMS ignored the recent court ruling. 

“There are many real and crucial differences between hospital outpatient departments and the patient populations they serve and other sites of care,” said Tom Nickels, executive vice president of the AHA, in a statement.

CMS also finalized a proposed cut for the 340B program that cuts payments by 22.5% in 2020.

CMS has installed prior cuts in 2018 and 2019 to the program that requires drug companies to provide discounts to safety-net hospitals in exchange for getting their products covered on Medicaid.

However, a court ruling has struck down the cuts, and CMS is currently appealing the decision.

CMS said that it hopes to conduct a 340B hospital survey to collect drug acquisition cost data for 2018 and 2019, and the survey will craft a remedy if the appeal doesn’t go their way.

“In the event the 340B hospital survey data are not used to devise a remedy, we intend to consider the public input to inform the steps we would take to propose a remedy for CYs 2018 and 2019 in the CY 2021 rulemaking,” the agency said.

Hospital groups commented that CMS should drop both the 340B and site-neutral cuts because of the legal challenges.

Several groups weren’t happy that the cuts were still there.

“The agency also prolongs confusion and uncertainty for hospitals by maintaining unlawful policies it has been told to abandon in clear judicial directives,” said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals, in a statement Friday.

The hospital-backed group 340B Health added that CMS needs to stop this “unfunny version of ‘Groundhog Day’ and restore Medicare payments for 340B hospitals to their legal, statutory level.”

 

 

 

Trump’s Plan To Privatize Medicare

Posted on by • Posted in 2020 Election Issues, Adverse Selection, Center for Medicare and Medicaid Services (CMS), Graduate Medical Education (GME), Health Insurance Coverage Adequacy, Health Policy, Medicare, Medicare Advantage, Medicare Payment Advisory Commission (MedPAC), Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

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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.