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Government More Effective Than Private Sector at Controlling Health Care Costs

For the past dozen years, Medicare and Medicaid have done a better job of controlling rising health care costs than private insurers.

Since 2016, according to a new report from the Urban Institute, private insurers’ costs per enrolled member have risen an average of 4.4 percent a year.  By contrast, Medicare costs have risen an average of 2.4 percent per enrollee and Medicaid costs have risen just 1.6 percent per enrollee.

The primary driver of Medicare cost increases has been prescription drug spending.  For Medicaid the primary driver has been physician services and administrative costs.  For private insurers, the main reason for increasing costs has been spending for hospital care.

Learn more about the differences in cost containment in these different sectors and the implications of those differences in the Urban Institute report “Slow Growth in Medicare and Medicaid Spending Per Enrollee Has Implications for Policy Debates.”

MedPAC Mulls Direct Billing for Nurse Practitioners, Physician Assistants

Medicare would permit nurse practitioners and physician assistants to bill directly for their services under a proposal being considered by the Medicare Payment Advisory Commission.

Currently such services are billed as “incident to” physician services, but according to a report in Becker’s Hospital Review,

MedPAC staff told commissioners there are problems with “incident to” billing because it “obscures policymakers’ knowledge of who is providing care for beneficiaries,” “inhibits accurate valuation of fee schedule services,” and “increases Medicare beneficiary spending.”  Staff also said that physician assistants and nurse practitioners increasingly practice outside of primary care.

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

MedPAC commissioners are expected to vote on the recommendation next month.

Learn more about the billing recommendation in this article in Becker’s Hospital Review.

OIG: Medicare Advantage Plans May be Denying Access to Save Money

The Office of the Inspector General of the U.S. Department of Health and Human Services is concerned that Medicare Advantage plans may be denying their members access to services to save money and increase profits.

According to the OIG, those Medicare Advantage plans overturn 75 percent of their own denials of service upon appeal and independent reviewers are overturning still more denials.  In the OIG’s view, this high rate of service denials raises concerns that Medicare Advantage plans, which today serve more than 20 million seniors, are denying their members access to needed medical services so they can cut costs and make more money.

To address this problem, the OIG recommends that the Centers for Medicare & Medicaid Services increase its oversight of Medicare Advantage contracts, address problem plans it identifies, and do more to inform enrollees when their plans are performing in such a manner.

CMS agreed with these recommendations.

To learn more about how the OIG went about this work, what it found, and what it recommended, go here to see a summary of its report or go here to see the full report Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials Report, the complete OIG report.

 

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.

Administration Slows Movement Toward Medicare Quality Payments

The Trump administration is slowing Medicare’s movement toward making greater use of quality in its payment system.

The Obama administration’s goal of having 50 percent of Medicare payments made through a quality or alternative payment model by the end of 2018 now appears to be out of sight.  Instead, the Centers for Medicare & Medicaid Services has partially canceled two bundled payment programs – one for joint replacement and another for cardiac rehabilitation programs – and announced that before introducing new programs it wants to take a closer look at the successes and failures of the alternative payment model programs that have been implemented in recent years.

The Washington Post’s “The Health 202” feature offers an in-depth look at CMS’s current approach to Medicare quality programs and reimbursement system changes.  See it here.

CMS Unveils New Bundled Payment Program

The Centers for Medicare & Medicaid Services has announced the launch of a new bundled payment model called “Bundled Payments for Care Improvement Advanced.”  Under this new program – participation in which will be voluntary – participants can, as CMS explains

…earn additional payment if all expenditures for a beneficiary’s episode of care are under a spending target that factors in quality.

The following are a few highlights of BPCI Advanced.

  • It encompasses 32 types of clinical episodes (29 inpatient and three outpatient).  These episodes, of 90 days, may change in the future.
  • Participating providers can waive the Medicare requirement that patients spend at least three days in a hospital before Medicare will cover nursing home care.
  • The program includes a waiver of geographic requirements for Medicare reimbursement for telehealth services.
  • Participating providers will be required to assume downside financial risk from day one, currently scheduled for October 1, 2018.
  • The program will run from October 1, 2018 through 2023, with a second opportunity for providers to apply to participate in 2020.
  • CMS considers BPCI Advanced an alternative payment model (APM) under MACRA), which exempts participating physician groups from possible Medicare reimbursement cuts.

Find additional information about BPCI Advanced from CMS’s news release announcing the program and from the BCPI Advanced web page.

GAO Urges Medicare Action on Opioids

The Centers for Medicare & Medicaid Services is not doing enough to oversee the prescribing of opioids to Medicare beneficiaries.

Or so concludes the U.S. Government Accountability Office.

According to the GAO, CMS provides guidance to Medicare drug plans “…but does not analyze data specifically on opioids.”  Also, according to the GAO,

…CMS does not identify providers who may be inappropriately prescribing large amounts of opioids separately from other drugs, and does not require plan sponsors to report actions they take when they identify such providers.  As a result, CMS is lacking information that it could use to assess how opioid prescribing patterns are changing over time, and whether its efforts to reduce harm are effective.

To address these and other problems, the GAO report recommends that CMS

  • gather information on the full number of at-risk beneficiaries receiving high doses of opioids
  • identify providers who prescribe high amounts of opioids
  • require plan sponsors to report to CMS on actions related to providers who inappropriately prescribe opioids

Learn more in report Prescription Opioids:  Medicare Needs to Expand Oversight Efforts to Reduce the Risk of Harm, which can be found here, on the GAO web site.

Profile of Nominee to Head CMS

President-elect Donald Trump has nominated Seema Verma, a health care consultant, to serve as administrator of the Centers for Medicare & Medicaid Services. That agency runs the Medicare and Medicaid programs.

vermaIn this capacity she would have enormous influence on the development of new Medicare and Medicaid initiatives, including many proposals for change from the incoming administration and Congress – all matters of vital concern to the nation’s private safety-net hospitals.

Go here to see a Kaiser Health News profile of Ms. Verma and learn more about her past work, especially on Medicaid issues.

 

CMS Proposes FY 2017 Outpatient Payments

The Centers for Medicare & Medicaid Services has revealed how it proposes paying hospitals for Medicare-covered outpatient services in 2017.

Among other matters, the 764-page proposed regulation addresses:

  • proposed rate increases for outpatient and ambulatory surgery center services;
  • new site-neutral outpatient payment policies;
  • changes in the value-based purchasing program;
  • changes in hospital outpatient quality reporting requirements;
  • electronic health record policies; and
  • changes in ambulatory surgical center quality reporting requirements.

law booksNAUH members have received a detailed memo describing the proposed policies.  Representatives of other private safety-net hospitals may request a copy of that memo by clicking on the “contact us” link at the top of this screen.

Interested parties have until September 6 to submit written comments to CMS. The final rule will be published later this year and take effect on January 1, 2017. To learn more about what CMS has proposed for Medicare outpatient payments go here to see a CMS fact sheet and here to see the proposed regulation itself.

 

 

CMS Proposes Changes in Terms of Medicare, Medicaid Provider Participation

The Centers for Medicare & Medicaid Services has proposed changes in the terms under which hospitals may participate in Medicare and Medicaid.

Among those changes, hospitals must:

  • cmsestablish an infection prevention and control program with qualified leaders
  • establish an antibiotic stewardship program with qualified leaders
  • establish policies prohibiting discrimination based on race, color, religion, national origin, general, sexual orientation, age, and disability
  • incorporate readmission and hospital-acquired conditions information into their Quality Assessment and Performance Improvement program
  • improve their medical record-keeping and provide for patient access to those records

Learn more what CMS has proposed and why it has proposed it in this CMS news release and this CMS fact sheet. CMS is accepting comments about the proposed changes until August 15. Find a link to the proposed rule itself here.