New CMS HSD Guidance Issued - What's New?
In case you haven't studied the recent CMS HSD Guidance memo, let me save you some time (and pain). This is the first of my blogs on the new CMS changes that will impact all MA Plans filing this year for a 2013 product launch. Here's what caught my attention:
• County Designations Changed - This change could move a county from Major Metro to Metro; or the reverse. These changes may have an immediate impact on your network requirements. You may even want to revisit the counties you pulled last season and see if they now meet CMS standards. One Plan who examined the new standards found some of their CMS "Failed" counties now "Pass".
• Providers Dropped - CMS dropped Laboratory and Intestinal Transplant from the network requirements. Let's hope this trend continues next year. I'm sure, like me, you have a couple of specialties you'd like to see dropped.
• Physician's Assistants and Nurse Practitioners — Something is going on with CMS' view of these providers. In the guidance they now call contracting with these providers a "rare" occurrence and seem to narrow their use to rural areas where they can practice independently. We'll follow-up on this change for clarification.
• Geriatrics — CMS has clarified the specialty to those providers that have special knowledge and interest. No mention of a board specialty requirement.
• Cardiac and Thoracic Surgeons — CMS now appears to acknowledge that these specialties are governed by a single board academy. However both specialties continue to be required on the HSD Provider Table. I'm hoping what CMS has separated can be reunited next year.
• Hospital Based Providers — MA Plans are now officially relieved of contracting with Radiology, Anesthesiology, Pathology and Emergency Medicine providers. Plans must now only assure that members seeing these providers pay in-network co-pays.
We at Gorman are staying on top of these changes in CMS Network requirements so that we can assist you in making strategic decisions for MA expansion. Our Network development team is keeping abreast of specific market changes to maintain our edge on our market intel and give folks who work with us the latest impact knowledge.
Enjoy Some LOLZ with Jon Stewart's "Intervention 2012"
I love me some Daily Show and this week Jon Stewart offered up one of their best commentaries on the state of the Republican Presidential nomination. Having had the office next door to former House Speaker Newt Gingrich's when I worked for US Rep. John Conyers, I can heartily agree with the assessments of Senator Tom Coburn (R-OK), John Sununu, Susan Molinari, and Joe Scarborough herein. The rise of "The Gingrich" requires an Intervention. Enjoy.
If I want a Risk Adjustment Super Hero ....
Ask yourself: What would my 2012 member assessment strategy & timing look like if I want a Risk Adjustment Super Hero?
- Step 1: Compile data in February
- Step 2: Launch member evaluations in March
- Step 3: Complete 50% of your member evaluations by June 30th
- Step 4: Reduce dependence on chart review to .30 charts per member and increase member evaluations to 85% of the membership (for PFFS, PPO, and HMO plans)
- Step 5: Refine analytics and reduce zero HCC member evaluation percentage (should always be less than 30% but you want to push toward 15% if you are not reviewing your entire population)
- Step 6: Check year over year revenue increase Jan — June and July —December for member evaluations to ensure ROI and payment reconciliation
ACO: Change agent or fad?
Aetna recently published results of two studies suggesting that ACOs can indeed cut Medicare enrollee costs. The results came from two medical groups - one in Ohio and one in Florida. The Florida group reduced inpatient hospital days by 37% and hospital readmissions by 27%. The Ohio group reduced inpatient days by 30% and hospital readmissions by 27%. In each case the program started in 2009 - so not bad results for a 2 year program--right?
Recall that the goal of a Medicare ACO is to streamline care, reduce unnecessary care/procedures, focus more on patient health management than catastrophic treatment, thus leading to happier patients, more fulfilled providers and less medical cost per capita. So the concept seems to work and everybody is happy-right?
Well not everybody! The Aetna study shows that ACO success can be defined in terms of less procedures, inpatient days and use of resources for a defined population. And the results point to the intrinsic benefits that accompany better outcomes as well as healthier patients and less patient exposure (sometimes harmful) to unnecessary procedures. But that is just part of the story because the Hospital and the Physician--the ones who are doing less procedures than before and the hospital that is seeing its inpatient volume shrink -, they are dealing with the reality of revenue loss unless it can be replaced through seeing more patients, increasing unit cost, cost-shifting to non ACO managed populations or limiting access to ACO participating patients, etc. -- all those consequences that are an anathema to ACO believers.
Thus individual ACO enterprises may meet all the goals set out by CMS and the private health care sector but medical costs on a consolidated basis will still go up unless.....
Unless we as an industry, choose not to wait for the next health reform shoe to drop. Instead, let us shift our attention away from experimenting on different populations with multiple cost cutting initiatives. Let us focus on health care delivery and pricing solutions that cut across all populations and funding sources with the goal of extracting involuntary practitioner and consumer behavior changes with respect to health care delivery and individual responsibility for lifestyle choices. Said differently: if everyone is riding the same train at full speed it becomes difficult and potentially harmful to jump off.
That brings me back to ACOs, the topic for this blog. I happen to think that ACOs, or rather the philosophical tenets that define an ACO, are here to stay and should and can become the foundation for the wholesale change required to change our approach to accessing and funding health care. More about that later.
It's the Providers' Turn to Make the Transformation
I just read Dr. Don Berwick's speech at the IHI National Forum and I am awed with his insight and inspiration. It reminds me of the speech that I heard Dr. Ken Kaiser give at a Veterans Administration conference that led to the transformation of the VA health system from "worst to first" in the 1990s.
Dr. Berwick discusses how our nation is at a crossroads on health care where "choice is stark — chop or improve." Everyone seems to agree that the political stalemate will continue during 2012 with the election and Supreme Court decision on health care reform. Experts expect paralysis until 2013 when real and substantial budget cuts will be unavoidable. Dr. Berwick is right that in the past the usual solution has been across the board cuts through budget reconciliation. Any cuts need to be thoughtful and support value improvement.
Dr. Berwick is hopeful that sensible solutions can be found by the provider community at the local level. He notes that government, payers and regulators cannot do what must be done. "Only people who give care can improve care." He recommends six areas where providers can cut costs and improve value — overtreatment, failures of coordination, failures of reliability, administrative complexity, pricing failures, fraud and abuse. He estimates that waste in these areas could be $1 trillion a year or one-third of the total cost of production in the health care system.
But is the provider community ready and willing? There is evidence that this is happening. A recent Leavitt report concluded that there were 164 "ACO entities" forming in the country. AHIP reports that there are 30 ACOs and 150 patient centered medical homes. And CMS is developing initiatives in Medicare and Medicaid that will build on these private sector efforts. Other leaders are trying to inspire change that avoids across the board cuts. At the recent Politico Policy conference, Dr. Ken Thorpe reminded us all that the focus needs to be on the patients with chronic illness, which will require moving away from provider silos to provider cooperation. Policy discussions at a recent Alliance for Health Reform focused on the next steps after the failure of the Super Committee. Experts noted the fundamental differences in opinions between the Republicans and Democrats on health care policy. Several experts agreed that many in the provider community understand that business as usual will not be possible and that the "gig is up". These providers are developing ACOs and medical homes and thinking about approaches to bundled payment. However it was noted that any savings from these initiatives will not be scored by CBO and that the timeline to implement these changes is longer than the Congressional budget schedule. One positive recommendation is that the CMS Innovation Center spend more time on the Hill while the providers in the community undertake the necessary transformation of the delivery system.
Berwick, Unshackled, Blasts "Death Panels"
Freed from the shackles of his Washington job, last week former CMS Administrator Don Berwick described for an audience of health policy wonks Washington's cynicism, epitomized by the "hogwash" claim that health reform included "death panels."
"The outrageous rhetoric about death panels — the claim, nonsense, fabricated out of nothing but fear and lies, that some plot is afoot to, literally, kill patients under the guise of end-of-life care. That is hogwash," Berwick said Wednesday to his old think tank, the Institute for Health Improvement's annual conference in Orlando. He went on to say that the death panel rhetoric "is purveyed by cynics; it employs deception; and it destroys hope. It is beyond cruelty to have subjected our elders, especially, to groundless fear in the pure service of political agendas...It is one of the great and needless tragedies of this stormy time in health care that the ‘death panel' rhetoric has denied patients the care that they want, denied caregivers the information they need to give that care, and denied our nation access to a mature, open, informed, and balanced discussion of the challenge of advanced illness and the commitment to individual dignity. It is a travesty."
It was a stunning departure in tone for Berwick, who was unfailingly polite throughout his 16-month tenure at CMS. And I couldn't agree more. End-of-life care is a personal crusade of mine and my mother, Dr. Susan Black, a prominent family physician and palliative care advocate.
You'll recall the ridiculous notion of death panels erupted when former Alaska Governor and GOP vice presidential candidate Sarah Palin said the health care law would mean seniors would have to stand in front of a panel of Federal regulators to find out if they were worthy of health care. It was beyond preposterous, but it stuck -- and arguably set the debate on end-of-life care back a decade. The issue dogged the administration long after the ACA was passed: in January, the administration yanked language on end-of-life planning for seniors from a Medicare regulation on annual physicals.
As I've said here before, since the Terri Schiavo circus we have lived in an age of distortions like "Death Panels," where open dialogue on end of life is politicized and limits on what Medicare will cover are demogogued as rationing. The only way out of Medicare's fiscal mess is a mature discussion about how we're going to address the 1 in 4 dollars Medicare spends today in the last 6 months of life. Let's hope the 2012 elections will bring us a fresh crop of "grownups" to have that dialogue.
CMS to Part D Plans: "Curb Use of Antipsychotics in Nursing Home Patients"
Medicare Sponsors' are failing to monitor the safe utilization of antipsychotic drugs among the elderly. CMS is stepping up its warnings to Medicare Plans to implement more effective management of these drugs. Plans can expect increased scrutiny. Will your plan meet the standard?
Patrick Conway, Chief Medical Officer and Director for the CMS Office of Clinical Standards and Quality, told lawmakers that Medicare officials need to do more to stop doctors from prescribing powerful psychiatric medications to nursing home patients with dementia, an unapproved practice that has flourished despite repeated government warnings.
The antipsychotic medications are prescribed to treat people suffering from schizophrenia and bipolar disorder, but they're also given to hundreds of thousands of elderly nursing home patients in the US to pacify aggressive behavior related to dementia. These medications increase the risk of death in seniors, prompting the Food and Drug Administration to issue multiple warnings against prescribing the drugs for dementia.
Medicare improperly paid about $116 million in the first half of 2007 for prescriptions filled in nursing homes for a class of drugs called atypical anti-psychotics, Daniel Levinson told the Senate Committee on Aging in a hearing. Nursing homes should be held accountable for inappropriately dispensing antipsychotic medications for Medicare beneficiaries and pay back the Part D program for those misused medicines.
Since the beginning of the Medicare Part D program, CMS regulations have instructed Part D sponsors to implement cost-effective drug utilization management processes to monitor and control for both under- and over-utilization §423.153(b). However, controls currently in place to address overutilization are largely limited to claim-level edits do not seem to effectively address the type of overutilization.
On September 28, 2011, CMS issued a bulletin entitled "Improving Drug Utilization Review Controls in Part D" stating that CMS expects Part D Sponsors to implement an enhanced retrospective drug utilization review process in which sponsors (and/or their PBM) of opioids, antiretrovirals, and atypical antipsychotics, by:
- Establishing clinical upper thresholds for appropriate dosing consistent with clinical guidelines through sponsor Pharmacy and Therapeutics (P&T) committees.
- Creating and monitoring beneficiary-level utilization reports that could identify unusual patterns of drug use at or near the established clinical thresholds;
- Assigning clinical staff, such as case managers, to review these reports and the beneficiaries‟ medication histories, and determine whether interventions are warranted;
- Address any exception requests through the exceptions and appeal processes.
CMS has provided a roadmap to step up monitoring activity. Plans will face increased scrutiny by CMS for meaningful Drug Utilization Management (DUM) systems both concurrently and retrospectively to ensure appropriate use of antipsychotic drugs.
Some Daylight in the Medicare Reform Debate
This morning's New York Times featured a terrific editorial that provided some daylight for the left in the ongoing Medicare reform debate. Essentially the Times rejects House Budget Committee Paul Ryan's (R-WI) draconian approach but opens the door to examining "premium support" as thought of by Alice Rivlin, former President Clinton's budget director, which is structured more like Medicare Part D, or even the insurance exchanges envisioned in the ACA.
Members of both parties believe Medicare could offer a fixed amount of money to beneficiaries to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government. Rivlin urged the Congressional deficit "Super-Committee" to establish an insurance exchange for Medicare beneficiaries where private plans would compete with traditional Medicare and would have to provide the same benefits. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare.
Rivlin's approach is more "soft-hearted" than Ryan's and recognizes the fundamental premise behind the success of Part D: yes, the government can create an insurance market from a green field -- but it won't accomplish its goals in savings or quality unless CMS regulates the crap out of it. It's market forces plus the stiff arm of regulation that makes "premium support" work.
The Times editorial follows. Remember this sort of debate was unthinkable just a year ago, and we have President Obama and Speaker Boehner to thank for the daylight to examine this big idea.
December 3, 2011
What About Premium Support?
As the election campaign progresses voters can expect to hear a lot of hype — and if we are very lucky some good ideas — about how best to "reform" Medicare. It will take stamina and well-honed skepticism to sort it all out.
Republican politicians are touting the virtues of market competition and calling for a "premium support" plan that would give beneficiaries a set amount of money to shop among private plans for their own insurance. What they do not say is that private plans have long been more costly than traditional Medicare and have shown far less ability to slow spending. Nor do they admit that the most extreme versions of premium support — like the one championed by Representative Paul Ryan — would save the government money mainly by shifting costs to the beneficiaries, who would have to decide whether to forgo treatments or pay more for coverage.
Most Democrats have been fiercely opposed to privatizing Medicare. They believe the traditional system can be reformed to reduce costs without demolishing the whole structure. But with concerns about the rising deficit and the long-term sustainability of Medicare, some centrist Democrats are backing the premium support idea.
As Americans try to figure out who is right or wrong in this debate, here are some matters to consider:
HAS IT BEEN TESTED? The Massachusetts health care reforms already provide premium support to help low- and middle-income people buy private policies on an exchange. Unlike the Ryan plan, the program guarantees everyone a defined, comprehensive set of benefits, and officials bargain aggressively with private plans to keep their premiums down. As a result, annual cost increases have been held well below the premium increases for other private group insurance providing comparable benefits.
The Medicare prescription drug program provides support to help beneficiaries buy coverage from private insurers. The costs have been far less than initially projected, a fact that promoters of premium support trumpet. Market competition has helped, but costs have mainly been held down because many major drugs have gone off patent and have been replaced by cheaper generics.
Perhaps the strongest caution against overselling the benefits of competition is Medicare's own track record. What critics of the current program don't acknowledge is that over the past four decades, Medicare's spending per enrollee has risen much more slowly than private insurance premiums — an average of 8.3 percent a year between 1970 and 2009, compared with 9.3 percent for private premiums. And the private Medicare Advantage plans that cover roughly a quarter of all enrollees cost an average of 10 percent more than what the same coverage would cost in traditional Medicare.
The lesson from all this is that it is far too early to talk about scrapping traditional Medicare. At the same time, serious analysis and testing of premium support are clearly worth pursuing.
A GOOD APPROACH The best proposal for premium support is one that gives beneficiaries choice while protecting them from any added costs if competition does not keep prices down. Enrollees would be given a set amount of money to buy a plan comparable to what Medicare now provides. If they chose a plan that cost less, they could pocket the difference. If they wanted better benefits, they would have to pay the added premium themselves. But if market competition failed to restrain costs, the federal government would increase the support given. So far, this idea has found no support among leading politicians, who apparently have less confidence in market forces than they claim.
SOME BAD APPROACHES Versions of premium support backed by Congressman Ryan and other conservatives have one primary goal: pushing down growth in federal spending on Medicare, even if it means that beneficiaries have to pay far more for coverage. These proposals tie increases in premium support to indexes, like the gross domestic product or the consumer price index, that historically have risen far more slowly than health care costs.
Proponents hope competition will lead private plans to reduce their premiums and that beneficiaries will think seriously about whether they need a costly CT scan. While competition and cost-sharing by beneficiaries could help curb overuse of services, we are skeptical that patients who are chronically ill or nearing the end of life, who account for a huge chunk of Medicare's spending, would second-guess their doctors and choose cheaper care.
The Congressional Budget Office concluded that the Ryan plan would force new enrollees in 2022 to pay thousands of dollars out of pocket for benefits similar to those currently provided by Medicare.
THE NEXT TEST The health care reform law, starting in 2014, will provide premium support subsidies to help people with modest incomes buy private policies on new insurance exchanges. That will be the next big test of whether premium support can work to hold down costs while providing good coverage. With so many uncertainties, it would be rash to weaken or jettison the traditional Medicare program now. The good news is there is some time to get it right.
Risk Adjustment: Are you driving a Pacer or an Audi R8?
How can you tell if your risk adjustment program is a high performance machine?
Here is the quick test:
1. Did you hit your volume target for member evaluations for 2011?
2. Did you hit your revenue target for chart review and member evaluations for 2011?
3. Are you planning for a 2012 Quarter 1 launch for member evaluations?
4. Do you have best in class analytics with a constant 5 to 1 ROI or higher for member evaluations?
5. Are you reducing your dependence on chart review?
6. Are you scrubbing your claims based HCCs for validation & confidence levels?
7. What is your percentage of zero HCCs found in your member evaluation program?
8. What is your percentage of zero HCCs found in charts?
9. Do two different coders agree on your findings?
10. Are any of your vendors on corrective action plans with you?
We have a few more questions for you. If you want to morph your program into a high performance machine, now is the time for best practices discussion, strategic planning, and program improvement.
The Doc Fix Returns
The collapse of the Congressional Deficit "Not-So-Super-Committee" ushered in the return of the "doc fix". With only days left in the Congressional session, lawmakers will be scurrying to address several key healthcare issues, including the imminent 27% physician cut to Medicare FFS rates to physicians, and also the 2013 sequestration across the board cuts to Medicare of 2%. 2012 is an election year. The last thing the President and Members of Congress want is 600,000 members of the American Medical Association declaring war on January 2.
The most time-sensitive remains the doc-fix, as the 27% cut goes into effect on December 31, 2011, if lawmakers do not offset it. Every year since 2002, Congress has "kicked the can" a year or two down the road with temporary fixes. A permanent fix holds a price tag of almost $300 billion, and the hope was the "Supers" would get to it. They didn't, and a permanent fix is WAY out of reach now.
What seems likely is another retroactive adjustment early next year. Lawmakers are considering a 1- or 2-year fix costing $20.6 billion and $38.6 billion, respectively, with possible offsets including reductions to other providers. I'd expect another string attached will be that docs that don't hit their quality measures will take the cut, while high-performing providers will get the fix. This is an important issue way beyond physicians: if Congress doesn't get a fix done, Medicare Advantage rates will get hit in 2013 by as much as 1-2%.
While the doc fix will be addressed as soon as this week, don't expect any "holiday surprise" of a grand bargain on the sequestration cuts or deficit reduction given the political chasm between the parties and the upcoming election. Congress will do the bare minimum to avoid a "white-coat insurrection" but will punt the broader debate on austerity measures for Medicare and Medicaid to the voters next year.