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CMS Reevaluates Stark Law in Response to Value-Based Care Initiatives

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http://www.managedhealthcareexecutive.com/health-law-and-policy/cms-reevaluates-stark-law-response-value-based-care-initiatives?rememberme=1&elq_mid=2696&elq_cid=876742&GUID=A13E56ED-9529-4BD1-98E9-318F5373C18F

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On June 20, 2018, CMS and HHS issued a “request for information” (RFI) seeking input on strategies to reduce the burden of the federal physician self-referral law or “Stark Law,” including the law’s impact on the transition to value-based care.

In the RFI, CMS solicits information on the ways in which the Stark Law creates challenges for coordinated, value-based care, and the transition to alternative payment and delivery models; it also seeks ideas and input on how the Stark Law may be changed to facilitate these models.

What’s driving the RFI

The RFI is launched as part of the agency’s “Regulatory Sprint to Coordinated Care” led by HHS Deputy Secretary Eric Hargan, which is directed at addressing regulatory barriers to coordinated care.  As such, the Regulatory Sprint and the RFI represent the administration’s efforts to reduce regulatory burden, while also demonstrating a commitment to the transition to more value-based, coordinated care and risk-based payment.  In public statements, HHS and CMS officials have suggested that the Regulatory Sprint may support similar flexibility in other laws, including the Anti-Kickback Statute.

Although the agency does not commit to any specific regulatory changes in this document, it is notable that HHS issued a similar RFI in 2010 just before it issued sweeping waivers of the Stark Law and Anti-Kickback Statute for the Medicare Shared Savings Program.  While many of the questions focus on “Alternative Payment Models” under the Quality Payment Program, the RFI is not limited to these programs.  Instead, the RFI invites the public to propose new exceptions and revised interpretations of the statute to advance the goals of coordinated care.

What CMS wants to know

In the RFI, CMS poses twenty specific questions related to the Stark Law, Alternative Payment Arrangements, and delivery system innovation strategies. The topics and questions range from:

  • Requests for details on Alternative Payment Models and innovations considered or engaged in by healthcare delivery system participants, including details on the financial and operational details of the arrangements, such as financial risk;
  • Solicitation of ideas and input on additional and/or new exceptions to the Stark Law that would facilitate existing and innovative arrangements;
  • Thoughts on changes to existing provisions of the final rule implementing the Stark Law, such as definitions of “commercial reasonableness” and “fair market value,” and thoughts on other potential definitions and terms such as “Alternative Payment Model,” clinical and financial integration and others;
  • Comments on key concepts in the existing law including compensation formulas that do and do not take into account the volume or value of referrals or other business within the meaning of the Stark Law and other novel financial arrangements; an
  • Requests for information on the Stark Law’s compliance cost, the potential role of increased transparency to promote compliance and how CMS should assess the Stark Law’s effectiveness in achieving its underling policy goals related to improper financial incentives.

The RFI may represent an important opportunity for the healthcare industry to educate CMS on current experiences and challenges, and to shape the content of future rules implementing changes to the Stark Law, particularly in a time of industry integration across the continuum of care.  The RFI also offers tangible evidence of the administration’s commitment to continue a migration to value-based care, and potentially reflects an enhanced commitment and desire to migrate away from fee-for-service payment to arrangements involving financial risk.

 

 

Six Things Health Execs Should Know about Association Health Plans

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http://www.managedhealthcareexecutive.com/policy/six-things-health-execs-should-know-about-association-health-plans?rememberme=1&elq_mid=2696&elq_cid=876742

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Association Health Plans (AHPs) permit small businesses to band together and buy health insurance. “By allowing them to join together in associations, small companies can have the same buying power as a large employer,” says Diane Wolfenden, director, Sales and Client Services, East Region, Priority Health, Michigan’s second largest health plan.

In June, when the final rule governing AHPs was released, the Trump Administration emphasized that AHPs will provide small businesses with more choices, access, and coverage options.

Here are six things MCOs should know about AHPs.

1. Critics say AHPs may undermine ACA plans. The most commonly cited concern with new AHP regulations is that they may undermine the ACA marketplace because association plans aren’t required to comply with all ACA regulations. “The fear is that AHPs will siphon off younger, healthier individuals, and leave those with greater health risks and pre-existing conditions in ACA risk pools,” Wolfenden says. “Critics have stated that allowing AHPs will weaken some of the ACA’s protections for consumers and make coverage on the exchanges and through ACA markets more expensive.”

2. The regulation seeks to prevent the forming of associations solely to provide health benefits. Under the new regulations finalized by the Department of Labor, an association must have a substantial purpose for existing in addition to offering health benefits. “Offering health benefits may be the primary reason for forming an association, but the secondary reason must be substantive enough that even without offering health benefits the association could continue to exist,” Wolfenden says.

Businesses can form AHPs in a specific city, county, state, or multi-state metropolitan area. “Therefore, chambers of commerce, trade groups, or businesses in the same geographic area can form or join an AHP,” says Sally C. Pipes, president, CEO, and Thomas W. Smith Fellow in Healthcare Policy, Pacific Research Institute, a free-market think tank. “Alternatively, cross-border AHPs can form for businesses or sole proprietors that occupy the same industry.”

The association needs to have an organized structure with a governing body and policies and procedures in place indicating governance, as well as legalization behind it, says Bryan Komornik, director of West Monroe’s healthcare practice, a business technology consulting firm. Like the ACA, individuals can’t be discriminated against if they have pre-existing conditions.

In addition, association members must be able to demonstrate the income they derive from their business is sufficient to cover the cost of their premium or that they work at least 80 hours per month at the business, Wolfenden says.

3. They could expand the number of insured patients. AHPs will not only give small employers more options for their employees, but they could also encourage some individuals to buy insurance when they may have gone without it otherwise. The Congressional Budget Office (CBO) estimates that 4 million current ACA enrollees in the individual and small group markets could shift their coverage to these new policies, Wolfenden says. Further, the CBO stated that about 10% of those 4 million people buying plans in 2023 and beyond would have been uninsured otherwise.

Individuals who join a coalition can obtain health insurance coverage for themselves, their spouse, and their children, or they can opt to only get coverage for themselves, Komornik says. If an individual’s spouse has an employer-sponsored health plan, the individual can still get coverage through the association if they qualify otherwise.

4. They might offer fewer benefits. AHPs are likely to offer lower premiums through skinnier plan design, sacrificing benefits for lower costs. “This means that consumers will need to have a better understanding of what will, and will not, be covered by their AHP policy,” Wolfenden says. Because AHP policies aren’t required to comply with ACA regulations, they may not cover prescription drugs or certain types of surgeries.

5. They could lead to more uncompensated care. Because AHP plans may offer leaner benefits, some patient advocacy groups are concerned that patients will end up with healthcare expenses that their insurance company won’t cover and the patient can’t pay. “These bills may end up going unpaid, leading to an increase in uncompensated care,” Wolfenden says. Uncompensated care has fallen in nearly every state since the ACA’s implementation based on the expanded coverage. “Increases in uncompensated care make it harder for providers to invest in new technologies and equipment and maintain enough capacity to care for patients. Transparency will become even more critical as providers will need to work closely with patients to ensure they understand what their insurance policy covers and what their share of the costs will be upfront.”

6. The new rule will have a staggered implementation schedule. The new rule will be phased in in three stages. It will first take effect for associations with fully-insured AHPs on September 1, 2018. It will become applicable for associations with existing self-insured AHPs on January 1, 2019. Finally, the rule will take effect for new self-insured AHPs on April 1, 2019, Pipes says.

 

‘Disrespected’: UC Davis health care workers say their proposed wage increase is ‘garbage’

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https://www.sacbee.com/news/local/health-and-medicine/article215886990.html

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Dietitians, physical therapists and other health care professionals at UC Davis Health say that, over nearly a year of bargaining, the university’s labor negotiators have been skipping sessions and have not offered raises of more than 2 percent a year.

Ahead of one bargaining session attended by a Bee reporter this spring, labor negotiator Dan Russell asked dozens of the rank-and-file members of the University Professional and Technical Employees-Communications Workers of America: “How does that offer make you feel?”

Voices rose above a murmur of discontent, yelling, “not good,” “insulted” and “disrespected,” among other things.

Physical therapist Rachel Hammond told the UC bargaining team that day: “You can go onto the Social Security Administration website, and if you average out over the last 40 years, the average (cost-of-living adjustment) is 4 percent per year, so your offer of 2 percent a year is garbage. … When are you prepared to give us a fair contract?”

Claire Doan, a spokeswoman for the UC Office of the President, confirmed that the university system had offered raises of 2 percent a year over the life of a four-year contract. She said administrators also had offered to sweeten raises for employees in certain classifications, based on local market wages, to help ensure that pay for UC health care professionals remains competitive.

“Despite multiple proposals presented by the university, it took union leaders months to finally respond with a counter-proposal,” she said in a statement emailed to The Bee.

“UPTE leaders are demanding double-digit pay increases that are unreasonable and out of line with what other UC employees receive: 16.5 to 22 percent over the term of the agreement.”

Doan said President Janet Napolitano and other UC leaders would have no further comment because they believe the proper venue for detailed discussion of wages and related issues is at the negotiating table, not the media.

While pay is a huge issue for the health care professionals in UPTE-CWA, they are just as concerned about what they see as UC’s attempts to treat them like second-class employees, said senior dietitian Greg Wine, a labor representative for 800-plus UPTE Local 6 UCD Medical Center employees.

One example is how the university system rewards UPTE-CWA health care professionals when it comes to holiday pay, said Brandon Sessler, a physician assistant at UC San Francisco. The union’s members receive overtime pay for just six holidays, while nurses get overtime for nine such days.

Respiratory therapists, physical therapists and other UPTE-CWA members are working side-by-side with nurses on those three additional holidays, he said.

Union representatives said UC negotiators have come to only six of 16 bargaining sessions.

Wine said UC Davis negotiators told him they are too short-staffed to show up, though he said they have done so for talks with the California Nurses Association and AFSCME 3299. The attendance record didn’t change, he said, until he voiced complaints to UC Davis Chancellor Gary May and UC Davis Medical Center CEO Anne Madden Rice.

“Our clinical lab scientists are working 16-hour, back-to-back shifts,” Wine said. “They don’t tell units that they are understaffed and we cannot perform their blood work. … We cannot say to the oncology ward or our cancer patients: ‘Because of our lack of staffing … we cannot provide any services to you for the next several months.’”

Wine and other UPTE-CWA members said their departments at UCDMC are severely understaffed because the university has a hard time recruiting since salaries aren’t comparable to Kaiser or Sutter in the Sacramento market.

Neurology dietitian Erin Lavin, a UC Davis graduate, said she came back to work at UCD because she had loved being part of research there during her years as an undergraduate and wanted to have the opportunity to continue doing it while also helping patients.

Lavin said she’s taught nutrition classes in the community and at UCDMC, but always on her own time, because UC Davis doesn’t offer her professional leave for that. That would be more palatable, Lavin said, if she at least earned as much as her peers at other local health systems.

“I want to be the best dietitian I can be, and I’ll never stop doing that,” she told UC negotiators, “but I would hope that you would also try to be the best you can be for me.”

Wine said that the university had offered to increase wage ranges for new hires in some occupations beyond the 2-percent-a-year offer, but they did not propose adjusting salaries for any current employees such as he and Lavin.

The university system wants to be competitive when it comes to labor recruitment, Wine said, but once employees are hired, the university has no mechanism to address market inequities in pay.

Wine and other UC union representatives said they are all facing demands from the UC president that would shift risk from the UC system onto employees.

The UPTE-CWA health care professionals contract, which expired in October, was one of the last of six UC labor agreements to lapse without prospect for settlement, Wine said. UPTE-CWA also represents technical workers and research-support professionals — roughly 15,000 UC employees in total — and both of those contracts expired in September 2017.

About 14,000 registered nurses at UC have been without a contract since September, when an extension ran out. They are represented by the California Nurses Association. AFSCME 3299 represents 24.000 workers in the UC system: Its patient-care workers saw their contract expire in December, and its service-unit agreement lapsed in June 2017.

All of the unions worry that UC wants to move new union hires into 401(k)-style retirement plans and away from the traditional pension that promises set income for retirement.

In a traditional pension, companies make all payments to the retirement plan and take on all investment risk. In a 401(k), workers must contribute money from their salaries toward retirement and assume the investment risk.

Pension money managers have traditionally outperformed 401(k) money managers, and although some companies have reneged on their obligation, most have proven to be more effective contributors to pensions than U.S. workers have been to their 401(k) plans. A survey of 2,003 adults by Northwestern Mutual found that one in five Americans have nothing saved at all for their golden years, and one in three have less than $5,000 put away.

With this sort of record, Wine said, Medi-Cal — and that means taxpayers — could end up paying to care for UC retirees who choose a 401(k) option. But this is not the only shifting of risk that UC is attempting during current contract negotiations, Wine said.

“They want to eliminate any cap on the shared cost of our health benefits, and they want to eliminate any cap on parking costs for their employees,” Wine said. “When you do that, what cost-of-living increase are you really getting?…Currently, we believe if we accepted the 2 percent and we accepted elimination of these caps to the costs of benefits and parking, we believe the employee would actually take home less (money).”

Both UPTE leaders and UC officials said they will continue talks in hopes of bringing negotiations to a close with a fair agreement. Wine noted that during the last contract negotiations with UC, however, UPTE-CWA members went nearly three years without a contract before an agreement was reached.

 

 

One big thing people don’t know about single payer

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https://www.axios.com/one-big-thing-people-dont-know-about-single-payer-1513306567-26ab72cc-0fa9-4fcc-82c1-835a1793698d.html

It is generally assumed that the biggest obstacle to a national health plan like Medicare for All will be the large tax increase needed to pay for it. But new polling shows another challenge: Almost half of the American people don’t know that they would have to change their current health insurance arrangements if there was a single-payer plan.

Why it matters: Current insurance plans leave a lot to be desired for many people, and it is entirely possible that some people would want to switch to a Medicare for All style plan. But the public has resisted being forced to change their health care in the past — don’t forget the uproar over the cancelled plans at the launch of the Affordable Care Act.

So requiring people to change could trigger blowback and would certainly provide a talking point to help opponents scare people about single payer.

The details: Overall, the general idea of a national health plan is pretty popular, with 53% of the American people favoring a national health plan — 30% strongly favoring it and 23% somewhat favoring it. On the other side, 31% strongly oppose it and 13% somewhat oppose it. Democrats and Republicans split on the idea, as expected.

But as the chart shows, somehow, 47% of the American people think they would be able to keep their current health insurance — even though a single payer Medicare for All style plan would do away with employer-based insurance.

  • 52% of Democrats, the group most supportive of single payer as an idea, think they will be able to keep their plan.
  • Notably, 44% of people with employer-based insurance think they would be able to keep their current plan.

Advocates of single payer consider it a virtue that employer-based health insurance would be eliminated. Health reformers on the right would also do away with employer-based insurance, but they would replace it with tax credits for private insurance, not a government plan.

There are also more targeted public insurance proposals for people who can’t get Medicaid or marketplace coverage — including a government-run public option, a Medicare buy-in for 50-64 year olds, or a Medicaid buy-in option on the ACA marketplaces. They wouldn’t threaten people’s current health care arrangements, but they are far from the rallying cry for some progressives Medicare for All may be, and they’re no slam dunks in the current political environment.

The bottom line: There is no sweeping health reform plan without tradeoffs, as we learned with both the ACA and the Republican repeal-and-replace plans. The fact that so many people don’t know that a national health plan would require them to change their insurance arrangements underscores the challenge of making the transition from a popular idea to a reality for a single-payer national health plan.

 

 

 

ACA Marketplace Premiums Grew More Rapidly In Areas With Monopoly Insurers Than In Areas With More Competition

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https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2018.0054?utm_term=Jessica+Van+Parys+of+Hunter+College%2C+City+University+of+New+York&utm_campaign=Health+Affairs%5Cu2019+August+issue%3A++Medicaid%2C+Markets+%2526+More&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On+Software-_-email-_-Health+Affairs%5Cu2019+August+issue%3A++Medicaid%2C+Markets+%2526+More-_-Jessica+Van+Parys+of+Hunter+College%2C+City+University+of+New+York

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 It pays to have an insurance monopoly
Also from Health Affairs: The level of competition among insurance companies has affected Affordable Care Act premiums more than any other factor.

By the numbers: Premiums are 50% higher this year in areas with just one insurer than in areas with two insurers.

  • “The presence of a monopolist insurer was the strongest, and most precise, predictor of 2018 premiums,” the study says.
  • Other factors commonly associated with higher premiums — like hospital concentration and the health of the people who live there — showed significantly smaller effects.

How it works: Jessica Van Parys, the Hunter College economics professor who conducted the study, suggests that insurers underpriced their ACA offerings in the first few years to capture market share, then raised their prices over the years.

  • Costs and regulatory uncertainty largely kept new competitors from entering those monopolized markets.