DCMedical News: January 24, 2018
DCMedical News
Washington, D.C.
Wednesday, January 24, 2018
THE BIG STORY TODAY IN HEALTH CARE
The Senate is in session today to continue deliberating the nomination of Alex Azar (Lilly, Bush ‘43) to be Secretary of the Department of Health and Human Services. The House is not in session.
The cost of foregone revenue from deferring medical device, health insurance premiums and high-priced plan taxes is confirmed by the Joint Committee on Taxation, here. Other costs of the “shut-down” are discussed in the general media.
DOCTORS
Doubling Down
Doctors will be interested in the next contract period for the Maryland “all payer” global budget process (see story below). Having failed to demonstrate Medicare savings by controlling only hospital budgets, Maryland has a new contract with CMS (Centers for Medicare and Medicaid Services) which calls for the parties to control non-hospital outpatient services, as well.
A New Bundle
CMS has announced the new bundle, “BPCI Advanced,” Bundled Payments for Care Improvement. CMS’ description of the program can be found here. This is a voluntary program which requires participants to take on financial risk. It includes both inpatient and outpatient services associated with 32 defined clinical episodes. CMS has previously canceled mandatory bundled payments known as the Episode Payment Models and the Cardiac Rehabilitation Incentive pay model, and has limited the size of the Comprehensive Care for Joint Replacement demonstration. The first group of participants in the new BPCI Advanced bundle will begin October 1 this year, with a measurement period through the end of 2023. A second application opportunity will be available in January 2020.
CMS explains the philosophy: “A bundled payment methodology involves combining the payments for physician, hospital, and other health care provider services into a single bundled payment amount. This amount is calculated based on the expected costs of all items and services furnished to a beneficiary during an episode of care. Payment models that provide a single bundled payment to health care providers can motivate health care providers to furnish services efficiently, to better coordinate care, and to improve the quality of care. Health care providers receiving a bundled payment may either realize a gain or loss, based on how successfully they manage resources and total costs throughout each episode of care. A bundled payment also creates an incentive for providers and suppliers to coordinate and deliver care more efficiently because a single bundled payment will often cover services furnished by various health care providers in multiple care delivery settings.”
You are a doctor seeing a patient for the first time? Nope, in BPCI parlance you are an Episode Initiator (EI). If you are an EI, here is what happens: “In BPCI Advanced, Clinical Episodes will be attributed at the El level. The hierarchy for attribution of a Clinical Episode among different types of El is as follows, in descending order of precedence: (1) the PGP that submits a claim that includes the National Provider Identifier (NPI) for the attending physician; (2) the PGP that submits a claim that includes the NPI of the operating physician; and (3) the ACH [Acute Care Hospital] where the services that triggered the Clinical Episode were furnished. BPCI Advanced will not use time-based precedence rules.”
What will you be paid for your work as an EI? Here you go: “The Clinical Episode will end 90 days after the end of the Anchor Stay or the Anchor Procedure. Reconciliation will be a semi-annual process where CMS will compare the aggregate Medicare FFS expenditures for all items and services included in a Clinical Episode against the Target Price for that Clinical Episode to determine whether the Participant is eligible to receive a payment from CMS, or is required to pay a Repayment Amount to CMS.”
What about those quality measures? With reference to National Quality Forum (NQF) and Agency for Healthcare Research and Quality (AHRQ) Patient Safety Indicators (PSI) for definition, here is the list: All-cause Hospital Readmission Measure (NQF #1789); Advanced Care Plan (NQF #0326); Perioperative Care: Selection of Prophylactic Antibiotic: First or Second Generation Cephalosporin (NQF #0268); Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550) Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Coronary Artery Bypass Graft Surgery (NQF #2558); Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (NQF #2881); AHRQ Patient Safety Indicators (PSI 90).
Interested, doctor? The Application Portal is Open, and closes March 12.
A Pound of Flesh
Medical Economics has an update on the “2018 Payment Outlook, New Opportunities, Old Challenges,” featuring one of the oldest, losing weight, as part of the Medicare Diabetes Prevention Program (MDPP). Taking place over two years, the MDPP involves 16 group sessions. Adding payment for the “core sessions,” the “core maintenance session intervals” and the “ongoing maintenance session intervals,” total payment is $645, 27% of which is premised on the patient achieving 5% weight loss, but with payment increasing to $670 if the patient achieves 9% weight loss.
HOSPITALS AND HEALTH CARE FACILITIES; HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
CMS has approved Maryland’s application to continue its all-payer model for hospitals through the end of next year. Under Maryland’s recent model, Medicare and Medicaid pay their “full share” of hospital costs. As a result, commercial health insurance does not have to pull additional weight to offset government shortfalls. Maryland changed what had been called an “all payer” system under which the State limited price growth by setting hospital rates for all payers. In 2014, Maryland began limiting hospital expenditures by establishing global hospital budgets. In its new agreement with CMS Maryland agrees to keep per capita hospital expenditures below 3.58% per year, and to find additional “savings” for Medicare, as well. To achieve these goals, Maryland has announced plans to seek approval to apply a similar plan to doctors, skilled nursing facilities and rehabilitation centers, essentially attempting to limit expenditures for all nonhospital clinical and institutional health care spending.
A recent overview of the Maryland experience can be found here. Maryland, the only state with such a system and such an agreement with CMS, is well studied by the health policy community. Earlier reports can be found here and here. A possible application of “all payer” theory to safety net hospitals can be found here.
Maryland is required to “lower their annual Medicare costs by $330 million” and has contended that expanding the program is the way they intend to achieve that goal. Studies in the literature doubt that the Maryland program has had any effect on utilization of services (“delivery system reform”). This study found: “We did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years. Evaluations over longer periods should be pursued.” So, more study needed.
Historically, Maryland benefitted by an unusual alliance of the hospital association, led by Richard Davidson, later chief executive of the American Hospital Association, and economist Harold Cohen, essentially the father of the Maryland Health Services Cost Review Commission, a summary of whose thoughts can be found here. The initial agreement (in 1976-7) nevertheless saw Maryland become a high-cost state, with high cost per Medicare beneficiary, high hospital admission rates, even with elimination of a volume penalty in 2001. Rather than a victory lap, in other words, extension of the Maryland waiver is seen by some as “the state’s final opportunity to deliver improvements in health care delivery to retain its waiver with CMS.” (Galarraga, Pines, here). Sarah Kliff has written about Maryland’s system possibly becoming a “back door” to a single-payer health system.
When Maryland enacted its all-payer rate setting system, the price of a hospital admission in Maryland was 26 percent above the national average. By 2007, after three decades of the rate-setting approach, it had fallen to 2 percent below the national average. In this way, Maryland's rate setting scheme has been seen as a success: it's held the price of each medical admission down by bringing insurers together to negotiate en masse. But much like other states that abandoned rate-setting, there's also evidence that Maryland's system hasn't slowed overall health care spending growth — that “admissions to Maryland hospitals have grown so quickly that they negated the really slow growth in price.” Kliff summarizes the “Maryland Exceptionalism” studied by economist Mark Pauly, “He found that per person hospital spending grew 5.1 percent in Maryland between 1990 and 2009. Over the same time period, per person health spending in the rest of the country grew by 4.7 percent.”
Efforts by leading hospitals to contend with “transformation” issues have developed extraordinarily complex efforts (see, for example, Johns Hopkins’ efforts in 2015, here), as well as an equally complex state regulatory apparatus (found at http://www.hscrc.state.md.us/Pages/default.aspx), complex hospital-state agreements (sample here), a 200+ page chart of accounts (here), etc.
See also comments on the history of the Rochester, NY, Hospital Experiment Program (business pressure on hospitals), and on the parallel of Maryland’s “all hands” negotiations to the German “quasi-negotiated” all payer-system, together with many other useful notes from commentators to Austin Frakt’s September 14, 2011 article on the claims of the “Maryland Miracle,” here. AEI economist Benedic Ippolito penned a piece entitled “Maryland’s Medicare experiment needs to end” in the August 31, 2016 Baltimore Sun, contending that “Forty years is long enough to prove that Maryland’s Medicare experiment doesn’t work,” found here. So Maryland with its new agreement becomes “the first statewide initiative in the US that transforms hospital payments to incentivize investments in population health,” doubling down, moving on to the next “policy-by-slogan,” with the implicit peril that hospitals will not learn to “coordinate” care, but, rather, to limit it.
EVENTS & MEETINGS
Your January & February Calendar:
January 25: 8:30 a.m. MACPAC, 1800 M. Street, Suite 650, Washington, D.C., and continuing to Friday, January 26
January 29: 8:30 a.m. COGME, at https://hrsa.connectsolutions.com/cogme-council/, also January 30
February 1: 9:00 a.m. Health Affairs, kick-off for cost control series, sponsored by National Pharmaceutical Council (!)
OTHER PUBLICATIONS
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Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com