To Save Medicare, Talk to Patients and Stop Spending on Things That Don't Work
Just about every discussion on the Hill about "saving Medicare" these days is talk about decreasing reimbursements to providers and health plans. There's also a lot of talk about preventive care -- and yes, I'll say it -- prevention has little potential of saving money in Medicare. You can't prevent away heart disease or diabetes in elderly patients; you might postpone it but you will eventually pay. Medicare is still, fundamentally, an end of life program -- 1 out of 4 Medicare dollars are spent in the last 6 months of life. And it's unsustainable in its current form. So there's only two real solutions: to talk to beneficiaries about their wishes for their end of life care; and to stop spending money on things that don't work.
Last week in The Lancet Harvard researchers found that among 1.8 million Medicare beneficiaries who died in 2008:
- nearly 1 out of 3 had surgery in the last year of life;
- nearly 1 out of 5 had surgery in the last month of life;
- nearly 1 out of 10 had surgery in the last week of life.
Those are astounding numbers, and controversial. Of course many of those procedures were performed to relieve suffering or to prolong life. But the researchers said they know from experience -- as all of us do in eldercare -- that doctors often operate to fix something but that will not save a dying patient -- to avoid the difficult conversations with patients and caregivers about their prognosis and what they want. So often it's "cut to cure" fix-it docs and adult children, with too much drama and way too little information, driving these decisions -- not the patient, long in advance of the care episode.
The New York Times noted that In the last year alone, what researchers have found both useless and harmful, according to leading medical journals:
• Feeding tubes, which can cause infections, nausea and vomiting, rarely prolong life. People with dementia often react with agitation, including pulling out the tubes, and then are either sedated or restrained.
• Abdominal and gall bladder surgery and joint replacements, for those who rank poorly on a scale that measures frailty, lead to complications, repeat hospital stays and placement in nursing homes.
• Tight glycemic control for Type 2 diabetes, present in 1 of 4 people over 65, often requires 8 to 10 years before it helps prevent blindness, kidney disease or amputations. Most don't live long enough to reap the benefits, and so endure needle sticks and diet guilt in their last days.
We all have our own experiences and anecdotes. Medicare routinely pays for hip replacements for Alzheimer's patients, even though most couldn't complete physical therapy for rehab and resume activities of daily living. Last year my 96-year-old grandfather suffered through a $120,000 back fusion surgery he didn't want or need (he hasn't been out of his motorized scooter in 5 years) but his doctor and local community hospital insisted he have. What did he want? "A lethal dose paid for by Medicare Part D." Last month he failed his second suicide attempt. We just want him to find some peace -- and he'll never find it at the end of a surgeon's blade.
We don't talk enough about how we want to die in this country. I think we honor one's life by allowing them to die with dignity, the way they want to go. These are not conversations most doctors like to have, but they must occur if we're to bring any sense to Medicare expenditures. We no longer have the luxury of a wide-open entitlement program.
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. But Medicare Advantage plans are uniquely positioned to advance the cause of professional counseling for beneficiaries on their last wishes, preventing unnecessary surgeries based on the patient's preferences and likely clinical outcomes, and promoting the enthusiastic use of palliative care. A number of plans are leading quietly in this area, like UPMC in Pittsburgh, Excellus Blue Cross/Blue Shield in upstate New York (which actually has dedicated medical directors for end of life and palliative care), and any PACE site like On Lok in San Francisco. We have much to learn from them -- they should be applauded and emulated for their courage in the face of the politics of end of life care.
There are few more personal issues than end of life counseling and care. These are thoughts ... I'd love to hear yours.
Prescription Drug Abuse: A Growing Compliance Risk for Medicare Advantage Plans
The GAO recently released a report on fraud and prescription drug abuse in Medicare Part D. Prescription drug abuse is a serious and growing public health problem. According to the CDC, drug overdoses, including those from prescription drugs, are the second leading cause of deaths from unintentional injuries in the United States, exceeded only by motor vehicle fatalities. Unlike addiction to heroin and other drugs that have no accepted medical use, addiction to some controlled substances can be unknowingly financed by insurance companies and public programs, such as Medicare Part D.
The report released by the GAO describes beneficiary doctor shopping in the Medicare Part D program for 14 categories of frequently abused prescription drugs. The objectives were:
(1) To determine the extent to which Medicare beneficiaries obtained frequently abused drugs from multiple prescribers;
(2) To identify examples of doctor shopping activity;
(3) To determine the actions taken by (CMS) to limit access to drugs for known abusers.
The analysis found that about 170,000 Medicare beneficiaries received prescriptions from five or more medical practitioners for the 12 classes of frequently abused controlled substances and 2 classes of frequently abused non-controlled substances in calendar year 2008. These individuals incurred approximately $148 million in prescription drug costs for these drugs, much of which is paid by the Medicare program. Most of these 170,000 Medicare beneficiaries who were prescribed prescriptions from five or more practitioners were eligible for Medicare Part D benefits based on a disability. Specifically, approximately 120,000 Medicare beneficiaries (about 71 percent) were eligible for Medicare Part D benefits based on a disability. Of these 170,000 beneficiaries, approximately 122,000 beneficiaries (72 percent) received a Medicare Low-Income Cost-Sharing (LICS) subsidy.
The Government Accountability Office (GAO) is a key driver for identifying issues of accountability in government agencies that translate into Congressional initiatives resulting in CMS auditing activity for Medicare Advantage Plans. CMS currently requires Part D plans to perform retrospective drug utilization review (DUR) analysis to identify prior inappropriate or unnecessary medication use and provide education, such as alert letters, to the prescribers involved. By analyzing historical prescription claims data, the drug plans can identify individuals who are likely obtaining excessive amounts of highly abused drugs or potentially seeking such drugs from multiple medical practitioners. However, according to CMS Part D program officials, federal law does not authorize Part D plans to restrict the access of these individuals, leaving little recourse for preventing known doctor shoppers from obtaining hydrocodone, oxycodone, and other highly abused drugs.
The GAO recommends for CMS to review the findings, evaluate the existing DUR program, and consider additional steps, such as a restricted recipient program for Medicare Part D that would limit identified doctor shoppers to one prescriber, one pharmacy, or both for receiving prescriptions. CMS should consider the experiences from Medicaid and private sector use of such restricted recipient programs, including weighing the potential costs and benefits of instituting the control. In addition to a restricted recipient program, CMS should consider facilitating the sharing of information on identified doctor shoppers among the Part D drug plan sponsors so that those beneficiaries cannot circumvent the program by switching prescription drug plans. Finally, in considering such controls, CMS should seek congressional authority, as appropriate.
Medicare Advantage often employs weak, ineffective DUR programs that fail to identify fraud and abuse in the Part D drug benefit or, once fraudulent or abusive patterns are identified, lack any systematic follow-up of the information. Plans can expect this to become a CMS Audit Hot Button. A relatively small percentage of the Medicare population impacts a significant financial impact. Clearly, there is a favorable ROI for plans to develop strong DUR programs. The Gorman Health Group can help in developing effective, proactive utilization management programs for your Medicare Advantage Plan.
Regulations, Duals and Stars
GHG recently posted our summary of the October 3 proposed rule on changes to the MA and Part D programs for FY 2013. Most of the provisions in this rule are codifying current policies or implementing ACA provisions without interpretation. However there are two provisions of special interest. The first is a proposal to allow fully integrated dual eligible SNPs (FIDE) to offer supplemental benefits that are targeted to the needs of their enrollees such as personal care services, custodial care or in-home meal delivery. This is an exciting opportunity for dual SNPs to provide even more meaningful integration of Medicare and Medicaid services and is consistent with the movement in CMS, Congress and the health policy community to find better solutions to providing more coordinated care for dual eligibles. AHIP has joined the bandwagon and recently released its proposal to "Achieve Medicare/Medicaid Integration for Dually Eligible Beneficiaries" through managed care solutions.
The other regulatory provision of interest is proposed authority for CMS to terminate or non-renew MA and Part D plans that do not achieve at least an overall 3 star rating for 3 consecutive years, beginning with contract year 2013 ratings. This would be a discretionary authority and low performing plans would not automatically be terminated from the program. CMS just released the 2012 plan ratings. The good news is that 9 MA plans received 5 star ratings for 2012 and overall plan ratings increased to 3.44 from 3.18. However there are almost 70 MA plans and almost 150 Part D plans that had overall scores under 3 stars for 2012.
Shared Savings in ACOs is not a fair game
In the proposed rules for ACOs, and in the rules for Pioneer ACOs, CMS has established a clear preference for ACOs to take down-side risk. CMS wants to be repaid if an ACO records costs that are higher than expected. This is proposed as a reasonable counter-balance to the proposed payments that CMS will make to an ACO if it succeeds in generating savings .
But the effect is to put ACOs at a disadvantage. Downside risk means that failure has a cost, in addition to the cost of providing administrative support to the ACO. There are two scenarios under which an ACO could fail, and be subject to down-side payments back to CMS. One is through intentional actions to increase charges, and the other is random events. But providers don't need to form ACOs to find ways to intentially increase their Medicare revenues, and it is hard to picture a scenario in which an ACO would be an appealing vehicle to do this. And, of course, many collective actions among providers to increase Medicare revenues could be illegal. So this leaves random events as the most likely cause of ACO failure.
ACOs are being given this deal: spend money to find ways to reduce your Medicare revenues, and we'll share some of the savings with you. But, if random events wipe out your savings, you have to repay us a share. Where is the upside to this deal?
Another approach, capitation, has been shown to be an effective alternative payment model for a generation. Under capitation, CMS could calculate the capitation so it guarantees itself savings. Capitation converts Medicare from the open ended committment of FFS to a defined cost model. Providers can then modify internal payment arrangements within the capitated entity, to incent and recognize performance in a way that FFS Medicare cannot.
We're waitng to see if the final ACO regulations will take cognizance of decades of experience with capitation in the private sector, to provide an alternative to shared savings that really is a fair game.
To read GHG's summary on the CMS Final Rule for the Medicare Shared Savings Program, click here.
Costs Too High?
Well, more news and comments out lately about the cost of health insurance, or actually the premium trend being too high. Additionally, articles on the cost of healthcare and it being too high. So, let's give this some quick thought: What's the difference between "price" and how "cost" is often referred to?
To me, the price of a product or service is what you have to pay to get it. For example the price of a gallon of gas two weeks ago in Mendocino CA (there is only one station in this small and charming community on the northern coast) was$5.79 per gallon. No competition for gas up there so they seem to price accordingly. In healthcare the "cost of care" is commonly referred to when talking about a population such as "Medicare lives." Cost of care for a population is not driven by the price of a unit of service alone, but by the combination of the number or services (utilization rate) and the price per unit produced for that service. Well, then is the problem the price per unit or the number of units purchased, or a combination of both?
After years ihealthcare, my view is this: the price per unit is rarely the issue anymore, at least where major payment sources such as Medicare and Medicaid have either driven price reduction or prevented any meaningful price increase trend, as they control the payment amount. Certainly there are exceptions in both of those payment categories and in the private insurer marketplace, but generally the issue is not the price paid per unit of service. More significantly, the issue is the number of units of service incurred by individuals within these payment categories.
The issues driving this increase in utilization are fourfold:
- First an increase in need for services due to population aging and population health status;
- Second the drive of services on the supplier side. Providers operating at the margin of necessity of care often provide more services because they are financially encouraged to do so (aka income), and they want to avoid the risk of malpractice litigation for overlooking necessary care;
- The lack of price sensitivity to the person who receives those services. Most insured individuals don't pay out of pocket costs, and most care providers don't provide pricing information, so even if the individual were to seek competitor pricing information, it is nearly impossible to find the best combination of price and quality.
- And finally the improvement of technology, where today we are able to provide services and care unheard of even 10 years ago, with resultant impacts on both lives and healthcare cost.
So what is the solution to these challenges? My thoughts on that coming next time.
The Difficulty in Making A Thousand Flowers Bloom
Politico included a recent article on "Why Moving on Delivery Reform is so Difficult" that described the dilemma facing Henry Ford Health System, which resulted in a decision to withdraw their application for the Medicare ACO program. They would rather focus on participating in private sector initiatives, which offer more predictability and flexibility than demonstrations designed by CMS.
It has been hard to follow the many starts and stops from the Center for Innovation as they are rolling out ACA funding for delivery reform demonstrations. CMS has many more hurdles in initiating demonstration programs than private payers. For example, the process needs to be competitive and give all parties a chance to be considered. The demonstration design needs to address the policy questions, but also produce data for an objective evaluation. There is a large bureaucracy involved in clearing politically sensitive projects and it always takes longer than expected. And another complexity is that operational support depends on offices and staff outside the Innovation Center.
Two recommendations would improve the process for potential applicants who have limited resources and leadership time to make a commitment to a new way of doing Medicare business:
First a master schedule and work plan would be helpful so that applicants would know the range and timing of funding opportunities. For example, the recently released Primary Care Demonstration was unexpected and seemed to be a revival of the medical home demonstration that CMS put on the back burner last year. The bundled payment demonstration was of interest to many of the ACO applicants but the application process partially overlapped the Pioneer ACO demonstration process.
It would also be helpful to know all of the requirements in advance of submitting an application. As others have suggested, streamlining the number of quality reporting measures and making them more consistent with core measures used by the private sector would make the Medicare demonstrations more attractive.
Stars don't matter to real people
Kaiser Permanente published a study on Monday that found only about 6% of Medicare beneficiaries used the CMS star quality ratings to select a Medicare Advantage plan. And only 2% know what their plan's currnet rating is.
What is important to customers regarding their insurance companies? Pay my claims. Fix problems quickly. Don't let problems happen. Don't raise my premiums too much. Otherwise, I don't want to know you are there.
What does CMS measure? Two years ago 90% of a plan's members got their flu shots. What does that mean to me? I get flu shots from my doctor, not from the health plan. And, if I like my doctor, I assume I'm getting good care. One thing I'm sure of: I don't want my health insurance company in the exam room with me.
The star rating system is based on what CMS thinks should be important for Medicare beneficiaries. I haven't found any evidence that CMS surveyed beneficiareis to discover what is actually important to them.
Kaiser Permanente concludes that plans need to do more to inform beneficiareis about the star ratings, so they can make informed choices. I think CMS should scrap the whole thing and start over with the four or five things that really matter to health insurance consumers.
OnStar for Risk Adjustment: Are you Okay?
Did you just hit something — a bump in the road or another car? Is there a calm voice coming from your car, asking if you are okay?
If only there were OnStar for risk adjustment. It is almost year end and if there were an OnStar for risk adjustment this is what she would be asking you today:
• Do you have at least 75% of your chart review done?
• Is your coding accuracy over 85%?
• Do you have at least 70% of your member evaluations completed?
• Have you scrubbed your claims based HCCs for validity or code confidence?
• Have you checked the health plan RAPs filtering process, not just for duplicate, but for complete compilation? Put another way - have you reconciled all the codes from your claims, chart review, and evaluations in the RAPS submission?
• Do you have a strong reconciliation process to ensure accurate payment when you get your RAPS return?
• Do you have an EDPS plan in place?
• Are you moving from retrospective chart review to current year chart review for 2012?
• Are you reducing your chart review strategy for 2012 and replacing it with member evaluations?
• Have you combined your member evaluations with your wellness exam criteria?
• Are you improving member outcomes and your HEDIS & STARS score with your integration of risk adjustment findings?
• Are you tracking the closing of your members' gaps in care?
If you need some roadside risk adjustment assistance, now is the time to ask.
The Continuing State vs. Federal Struggle to Manage Dual Eligibiles
I was just beginning to believe that the states, CMS and the health policy community were finally recognizing a larger scale opportunity for managed care to integrate Medicare and Medicaid funding and care for the most expensive and vulnerable beneficiaries, thus reducing costs and improving quality.
After decades of demonstration projects and waivers, a discussion at the Alliance for Health Reform yesterday revealed that only 250,000 dual beneficiaries are enrolled in integrated delivery systems where the services and funding streams are coordinated around the patient and not the payer. Even Medicare Advantage plans including Special Needs Plans have had difficulty working with state Medicaid agencies to get full funding for services under both programs. Now the light bulb has gone off as states are seeing managed long term care services and supports and shifting duals into managed care as a significant solution to Medicaid budget woes.
I remember discussions at CMS where the difficulties of integrating the funding streams was stymied by political issues with state vs. federal control. And yesterday the Robert Wood Johnson Foundation and the Urban Institute recommended that Medicare should take the lead for dual eligibles in recognition that the federal government already finances most of the care costs and has the most to gain with improved integration of care and care coordination.
"Lean and Clean" is Key to Survival for Medicare Plans -- Join the exclusive GHG Compliance Forum November 2-4 in Las Vegas
New regs every other week. 500 HPMS notices a year. RADV audits and Star Ratings surveys. Intermediate sanctions and the threat of termination for poor Stars performance. And now a new, uncoordinated CMS Central Office/Regional Office audit approach that could result in multiple government reviews in a calendar year. "Lean and clean" must define a cultural and management revolution among Medicare plans. If you aren't on the compliance train in these next several years, you're going to be under it.
Tell your compliance staff about our latest Gorman Health Group Compliance Forum. This exclusive GHG event is designed for Medicare Advantage health plans and will provide an intensive examination of the state of compliance in MA, with focus on the changing regulatory environment surrounding both Parts C and D. The meeting is limited to GHG client health plan staff ONLY. No vendors, no CMS representatives, to ensure a frank and open discussion about the way forward.
You'll want your team to be in the room to hear the latest from GHG's compliance experts on:
- Practical tips for implementing a fully-integrated compliance program
- Best practice Sales Oversight strategies that have cross-functional impact
- Part D pitfalls and action steps for oversight and monitoring
- Lessons learned from risk areas in compliance, including sales/marketing, enrollment reconciliation and risk adjustment
For registration information and more details, click here.
To check out the preliminary event agenda, click here.
Have a question? You can always reach our team at ghg@ghgadvisors.com.
I'll look forward to seeing you and your team in Las Vegas.