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Medicare Accountable Care a ‘Learning Effort’: Burwell Pressure’s On Senate to Pass ‘Doc Fix” in Latest Blow to Fee-For-Service Medicine Next Generation ACO Model
March 2015
Published by Montdor Medical Media, LLC Co-Publisher and Managing Editors Iris and Michael Goldberg Contributing Writers
Zack Budryk Virgil Dickson Melanie Evans Beth Fitzgerald Nita Garg Ilene MacDonald Robert Pear Kati Phillips Lee H. Rosebush Darius Tahir Layout and Design - B&L Printing, Co. Inc. New Jersey Physician is published monthly by Montdor Medical Media, LLC., PO Box 257 Livingston NJ 07039 Tel: 973.994.0068 Fax: 973.994.2063 For Information on Advertising in New Jersey Physician, please contact Iris Goldberg at 973.994.0068 or at igoldberg@NJPhysician.org Send Press Releases and all other information related to this publication to igoldberg@NJPhysician.org Although every precaution is taken to ensure accuracy of published materials, New Jersey Physician cannot be held responsible for opinions expressed or facts supplied by its authors. All rights reserved, Reproduction in whole or in part without written permission is prohibited. No part of this publication may be reproduced or transmitted in any form or by any means without the written permission from Montdor Medical Media. Copyright 2010. Subscription rates: $48.00 per year $6.95 per issue Advertising rates on request New Jersey Physician magazine is an independent publication for the medical community of our state and is
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C O N T E N T S
Medicare Accountable Care a ‘Learning Effort’: Burwell CONTENTS
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Pressure’s On Senate to Pass ‘Doc Fix’ In Latest Blow to Fee-For Service Medicine
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Next Generation ACO Model
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‘Next Generation’ ACOs: How They Differ From Pioneer, MSSP Models
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Accountable Care Organizations in California: Promise & Performance
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How Medicaid ACOs Can Pave the Way For Population Health Management
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Medicare Advantage and Medicare Part D Changes for 2016 Released
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House Provision Offers Doctors More Protection Against Malpractice Suits
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CMS Issues Draft Stage 3 Rules for EHR Incentive Program
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Aetna, Hackensack Health Network Expand Accountable Care Relationship to another 10K
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Future of Medicaid Hospital Improvement Program in Doubt
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Cover Story
Medicare Accountable Care a ‘Learning Effort’: Burwell By Melanie Evans
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ew York’s Montefiore Medical Center, the most financially successful of Medicare’s most sophisticated accountable care organizations, may bypass what HHS officials are calling the next generation of the evolving payment model to instead concentrate on expanding its use of full capitation for patients. HHS Secretary Sylvia Mathews Burwell traveled to New York on Thursday to praise officials at Montefiore, which earned bonuses of $27 million during the first two years of Medicare’s Pioneer accountable care program, more than any of its peers. Burwell, in a press briefing, touted Montefiore’s performance and New York’s embrace of new healthcare financing models as she promoted rapid federal expansion of accountable care, including the newly announced “next generation” to begin next January. Details of exactly what provider risk the next generation will entail have been sparse. For Montefiore, however, the next iteration of Medicare accountable care may not be the best option, said Dr. Steven Safyer, the system’s CEO. Safyer said he would review the option, but Montefiore instead is working to aggressively expand its use of full capitation for patients and that will be its priority. Montefiore is seeking to have all Medicare and Medicaid patients under full capitation by 2018, he said. “We believe that comprehensive coverage, integrated coverage, reinforces integrated care,” he said. “The two go hand in hand. One enables the other.” Medicare’s next generation accountable care will offer nearly full capitation as one option, CMS Chief Medical Officer 6 Affiliated Practice
Dr. Patrick Conway said when he announced the plans this week. Other details are not yet available. Conway did not say how many other options would be offered or how much risk they would entail. The agency expects that up to 20 ACOs will join the new program in its first two years, Conway said. Under the model, patients can volunteer to join ACOs and will see changes to copays to encourage certain medical care. Montefiore’s ambitious push to increase its capitation comes as federal and state officials have set targets to increase use of accountable care. But remarks Thursday by Burwell and New York’s Medicaid director underscored the uncertainty of those efforts and how many questions remain as the public and private sector seek a working model. Burwell said Thursday that the new model underscores federal efforts to learn and adapt as organizations test accountable care, including those that have exited the program. Montefiore was among 32 ACOs in the Pioneer program when it started in 2012. Thirteen dropped out, with some exiting the program entirely. “We’re integrating the feedback that we’re getting,” she said. “This will be a learning effort. We want to continue to do that. We want to continue to improve.” Others have exited Medicare’s large and growing sharedsavings program—a second test of accountable care with roughly 400 ACOs. The largest Medicare ACO operator, Universal American, has pulled out of nine of 32 ACOs in the shared-savings program.
Burwell said efforts would continue to evolve and stressed the necessity for federal, state and private sector insurers to adopt more incentives for quality and efficiency. She also called for more communication across sectors to rapidly promote change. “I think what we are feeling confident about is that moving toward value-based payments away from volume-based payments is what is needed and can work,” she said. But she acknowledged some efforts will falter. “Some will succeed,” she said. “This is new. So we will have examples of where they don’t and we know that.” Hospitals and medical groups must contend with the financial risks of accountable care, she said. “As one considers who stayed in or out and for different reasons, is it about willingness to take risk and how people want to take risk and how they manage toward that.” New York Medicaid Director Jason Helgerson on Thursday said the state would use three options as it shifts $50 billion into payment models that use performance on cost and quality to award bonuses and potentially penalties.
The state has set a target for 90% of its Medicaid reimbursement under accountable care and similar models within five years. Of that amount, New York will seek to have 70% paid under models that use penalties and bonuses as incentives, while the remaining 30% offer bonuses without penalties. HHS in January announced plans to move 50% of Medicare spending outside of managed care into accountable care, bundled payments and or other models that use incentives tied to quality and cost. Montefiore is eager to accept more risk for managing care and last year revived New York State insurance licenses. Safyer said he does not want to launch an insurance arm, but wants to keep the system’s options open. “My goal is not to be an insurance company,” he said. However, should insurance companies fail to pay enough per patient per month under capitation, he will expand into the market. “If I had to, I’d do it.”
Pressure’s on Senate to Pass ‘Doc Fix’ in Latest Blow to Fee-For-Service Medicine T
he Republican-led U.S. House of Representatives has joined the Obama administration and private insurance companies in the march away from fee-for-service medicine in passing a repeal to Medicare’s controversial sustainable growth rate formula. The legislation, which overwhelmingly passed by a 392-37 bipartisan vote in the U.S. House, will avert a 21 percent cut in Medicare payments to doctors while at the same time moving future reimbursement to pay-for-performance and away from traditional fee-for-service medicine. Congress has several times for more than a decade now merely made stopgap corrections to avert drastic payment cuts to Medicare payments under SGR, which was created by the Balanced Budget Act of 1997 in an effort to slow the growth of Medicare spending. This time, the legislation, which is supported by the White House, will increase payments 0.5 percent annually through 2019. But it would tie more Medicare payments to quality measures that include clinical care, patient safety and care coordination. “The bill brings about a fundamental change in how Medicare reimburses physicians - moving from a volume-based payment system to value-based where physicians receive payment based on quality, coordination and outcomes,” Mary Grealy, president of the Healthcare Leadership Council, a coalition of chief executive officers from companies like AetnaAET +0.86% (AET), Johnson & JohnsonJNJ +1.18% (JNJ), Merck (MRK) and Walgreens Boots Alliance (WBA) said in a statement to Forbes. Health insurance companies led by UnitedHealth GroupUNH +2.65% (UNH), Anthem (ANTM), Aetna (AET) and others are shifting billions of dollars in payments to providers away from fee-for-service medicine to value-based care as well. Critics of the fee-for-service approach say it leads to unnecessary medical tests and procedures and results in payments to doctors and hospitals no matter how the care turns out. March 2015 7
Sharp Questions Dominate Supreme Court Oral Arguments Regarding the Challenge to the Availability of ACA Premium Tax Credits Gerry Harris 46 Old Camplain Road Hillsborough, NJ 08844 Phone 908.707.1311 / Fax 908.707.4067 sales@blprinting.com
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n March 4, 2015, the Supreme Court of the United States heard oral arguments in King v. Burwell, the highest profile challenge to the Affordable Care Act (ACA) since the Supreme Court’s 2012 decision to uphold the law. The oral arguments featured sharp questioning of both sides. A decision is anticipated June to determine whether the high court will Your Info Hin ere maintain the status quo with respect to the availability of premium tax credits to lower-income exchange customers in all states. Your Info Here
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The plaintiffs in King seek to invalidate a May 2012 Internal Revenue Service (IRS) rule providing that health insurance premium tax credits will be available to all taxpayers nationwide, regardless of whether they obtain coverage through stateNon-Licensed based exchanges or federally funded exchanges (FFEs).i The plaintiffs argue that the plain language of the ACA limits the Prescription Pads New Patient availability of premium tax credits to health care insurance plans purchased through state exchanges. Only Forms 13 states and the District of Columbia have established state exchanges for 2015;ii the other 37 states will use FFEs in 2015.iii The plaintiffs’ argument is based on statutory language providing that premium tax credits are available only for health care plans that are “enrolled in through an Exchange established by the State under section 1311 of the [ACA].” Stationery, Envelopes, Case HistoryBus./Appt. Cards
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In 2013, two groups of individual taxpayers brought lawsuits contending that the IRS rule violates the plain language of the ACA. The government successfully defended the IRS rule before the U.S. District Court for the District of Columbia (in Halbig v. Burwell) and the U.S. District Court for the Eastern District of Virginia (in King) by asserting that the plaintiffs’ isolation of a phrase in the statute was inconsistent with the legislative history, structure and purpose of the ACA. The plaintiffs appealed both decisions to the U.S. Court of Appeals for the D.C. Circuit and the Fourth Circuit, respectively. On July 22, 2014, in Halbig, a divided three-judge panel of the D.C. Circuit struck down the IRS rule and held that the plain language of the ACA clearly restricted the availability of premium tax credits to consumers purchasing insurance through state-based exchanges. On that same day, a unanimous panel in the Fourth Circuit upheld the same IRS rule in King, concluding that it must defer to the government’s reasonable interpretation of the ACA reflected in IRS rule under Chevron.v Although the D.C. Circuit agreed to rehear Halbigen banc, which potentially could have rectified the circuit split, the Supreme Court granted the plaintiffs’ petition to hear King.
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Although Justice Ginsburg raised the issue of standing within the first few seconds of the argument by Michael Carvin, counsel for the plaintiffs, the issue was brushed aside by the other justices and seems unlikely to be addressed by the Supreme Court. The government did not challenge the plaintiffs’ standing in its brief, and on the record before the Supreme Court there is no question that the challengers have standing. Mr. Carvin, counsel for plaintiffs, represented that there had been no factual change that would affect standing, and the Supreme Court appeared satisfied with his representation.
” THE MERITS: QUESTIONS FOR PLAINTIFFS’ COUNSEL x 11 r 8½ r Pape e The questions to Mr. Carvin primarily focused on two issues. Las First, Justices Breyer, Kagan, Ginsburg and Sotomayor repeatedly questioned Mr. Carvin concerning other provisions in the ACA that the government contends support its interpretation
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of the statute, read as a whole. In their questions, those justicesr smade ide clear that they supported the government’s interprepe 8 Affiliated Practice
Next Generation ACO Model B
uilding upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program (Shared Savings Program), the Next Generation ACO Model offers a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.
Background Medicare ACOs are comprised of groups of doctors, hospitals, and other health care providers and suppliers who come together voluntarily to provide coordinated, high-quality care at lower costs to their Original Medicare patients. ACOs are patient-centered organizations where the patient and providers are true partners in care decisions. Medicare beneficiaries will have better control over their health care, and providers will have better information about their patients’ medical history and better relationships with patients’ other providers. Provider participation in ACOs is purely voluntary, and participating patients will see no change in their Original Medicare benefits and will keep their freedom to see any Medicare provider. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
Initiative Details The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. It will allow these provider groups to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP). The goal of the Model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries. Included in the Next Generation ACO Model are strong patient protections to ensure that patients have access to
and receive high-quality care. Like other Medicare ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. This is in accordance with the Department of Health and Human Services’ “Better, Smarter, Healthier” approach to improving our nation’s health care and setting clear, measurable goals and a timeline to move the Medicare program — and the health care system at large — toward paying providers based on the quality rather than the quantity of care they provide to patients. In addition, CMS will publicly report the performance of the Next Generation Pioneer ACOs on quality metrics, including patient experience ratings, on its website. CMS expects approximately 15 to 20 ACOs to participate in the Next Generation ACO Model with representation from a variety of provider organization types and geographic regions. The Model will consist of three initial performance years and two optional one-year extensions. Specific eligibility criteria are outlined in the Request for Applications (PDF).
How To Apply CMS will accept ACOs into the Next Generation ACO Model through two rounds of applications in 2015 and 2016, with participation expected to last up to five years. For round one consideration, interested organizations must submit a Letter of Intent no later than 11:59p.m. EDT on May 1, 2015. Round one applications must be submitted electronically no later than 11:59p.m. EDT on June 1, 2015. Round two Letters of Intent and applications will be made available in March 2016. The round two Letter of Intent must be submitted electronically no later than 11:59p.m. EDT on May 1, 2016, and the application no later than 11:59p.m. EDT on June 1, 2016. To file an LOI and complete the online application, interested organizations may access the electronic submission portal. Questions regarding the Next Generation ACO Model can be directed to NextGenerationACOModel@cms.hhs.gov. March 2015 9
‘Next Generation’ ACOs: How they differ from Pioneer, MSSP models By Ilene MacDonald
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he Centers for Medicare & Medicaid Services’ newest accountable care organization model aims to address problems experienced by the Pioneer ACOs that caused many to drop out when they failed to achieve the performance benchmarks and financial savings. “Pioneer was designed so that one could exit but no one [new] could enter and that creates the problem [of] attrition over time,” Patrick Conway, M.D., chief medical officer and deputy administrator for innovation and quality at CMS, told reporters on Tuesday. The new model, dubbed the “Next Generation ACO,” will allow participants to take on more financial risk with more predictable financial targets and the potential to obtain a greater reward. CMS says the next generation offers financial arrangements with higher levels of risk and reward than either the Pioneer or Medicare Shared Savings Program because it uses refined benchmarking methods that reward attainment and improvement in cost containment, and that it “ultimately transitions away from comparisons to an ACO’s historical expenditures.” The new model also offers more payment mechanisms to transition away from fee-for-service reimbursements to capitation. The model will help “move the Medicare program — and the healthcare system at large — toward paying providers based on quality, rather than quantity, of care,” CMS wrote in its frequently asked questions document. In addition, the model includes several “benefit enhancement tools” to help ACOs improve patient engagement, including greater access to home visits, telehealth services and skilled nursing facilities. CMS also said it allows for greater collaboration between the agency and ACOs to improve communications with patients about the characteristics and potential benefits of ACOs in relation to their care. College of Healthcare Information Management Executives President and CEO Russell Branzell, in an interview with FierceHealthIT, calls the model the next logical step in the payment and patient management system that IT should be ready to support. “Talking to hospital CEOs and CIOs, this is something that’s been on their radar for a while,” Branzell says. “Generally, everyone knew this was coming. Hopefully someday we’ll get to a wellness model, but this is that next step out of fee-forservice to some level of risk capitation.” As to concerns expressed by existing ACOs that it becomes more difficult to earn savings every year, CMS says the new model addresses the problem by incorporating relative efficiency into the discount and through the development of a longterm benchmarking methodology for performance years four and five. Like current ACO models, the next generation ACOs will use historical expenditures to develop their baselines and benchmarks for the first three years. The baseline is risk-adjusted and trended before CMS applies the discount, which incorporates regional and national efficiency. “Under this approach, ACOs achieve savings through year-to-year improvement over historic expenditures [improvement], but the magnitude by which they must improve will vary based on relative efficiency [attainment],” CMS explains in the FAQ. “This recognizes past achievements of efficient ACOs.” Unlike the Pioneer model, the next generation will also have two application cycles. The first round of applications is due June 1; the second cohort of applications are due a year later on June 1, 2016. 10 Affiliated Practice
ClifGaus, president and CEO of the National Association of ACOs, told FierceHealthcare this morning that he is still reviewing the details surrounding the new model and couldn’t yet offer feedback on what it means for the future of ACOs. Blair Childs, senior vice president of public affairs, Premier, a healthcare performance improvement alliance of approximately 3,400 U.S. hospitals and 110,000 other providers, says in a statement that the organization is eager to work with its members to assess the model. CMS’ announcement “gives healthcare providers another Medicare payment op-
tion with substantially greater flexibility to provide innovative, high-quality care to a defined group of beneficiaries,” he says. In addition, Childs says it is important that CMS continue to provide a range of options for providers to test different payment models and organizational structures in an accountable care environment. “With this announcement, providers have even more choices, which will enable the market to both mature and evolve,” he says.
Accountable Care Organizations in California: Promise & Performance By Kati Phillips
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here is new evidence that California’s accountable care organizations (ACOs) are growing in size and number, serving more patients, and improving the quality of care—according to a report released today by the Berkeley Forum for Improving California’s Healthcare Delivery System. California has more ACOs (67) than any other state in the country, with particularly rapid growth over the past two years. The report estimates that, by February 2016, more than 1.3 million Californians will be receiving their care from ACOs. The growth is projected to occur in nearly all regions of the state. “The next few years are likely to bring continued growth and diversity in accountable care models that move increasingly toward being paid for meeting cost and quality targets,” said Stephen Shortell, lead author of the report and chair of the Berkeley Forum. ACOs are defined as medical groups that contract with Medicare and/or commercial insurers to care for a defined population of patients and that are held accountable to meet cost and quality criteria. In a 2013 report, Berkeley Forum leaders called for at least 50 percent of Californians to be receiving care under new payment models that encourage keeping people well by 2022; and having at least 60 percent of Californians receiving their care from integrated care systems, versus only 29 percent today. “California is fortunate to have many integrated healthcare delivery systems at various stages of development. The advancement of these systems into accountable care organizations and partnerships should be viewed as an important and very positive innovation in payment and health care delivery,” said Tom Williams, immediate past-president of the Integrated Healthcare Association and vice president of accountable care operations and strategy at Stanford Health Care. Emerging evidence suggests that the quality of care that ACOs provide is as good, and on some measures, better than that provided by other models of care. Further, patients receiving care from medical groups with ACO contracts had consistently higher satisfaction scores than patients receiving care from groups without ACO contracts. This included measures of access to care, overall coordination of care, actions to promote health, communication with doctors, helpfulness of office staff, and overall ratings of care. While full cost-savings data are not available, preliminary evidence from an ACO contract in Sacramento found savings of $20 million, with no increase in health insurance premiums for California’s CalPERS enrollees. The study also addressed the concern that as ACOs grow in size they may exert pressure to increase prices. “But at this point in time, our analysis indicates there is little evidence to support such concern”said Richard Scheffler, report co-author and Vice Chair of the Berkeley Forum. — cont’d March 2015 11
Based on existing and ongoing study, the UC Berkeley School of Public Health team identified six factors associated with more successful ACOs. These include: • Achieving sufficient size to spread costs, • Developing new models of caring for high complex/high risk patients, • Expanding the use of electronic health records, • Developing effective partnerships with post-acute care providers and specialists, • Motivating patients and families to become more engaged in their care, and • Using standardized and transparent quality of care data for the purposes of public reporting and internal quality improvement. The report also found that ACO location is positively associated with the number of HMOs in an area, which suggests
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that ACOs may be a competitive response to HMOs or that the knowledge needed to run a risk-based plan is more available in these areas. Counties with greater hospital concentration were negatively associated with having an ACO in the area and with ACO enrollment. The report notes the need for continued technical assistance for smaller physician practices, those serving the Medi-Cal population, and those providing care in rural areas. This is particularly true in regard to electronic health record capabilities, and encouraging greater participation in quality improvement training and quality improvement collaborations. The Berkeley Forum for Improving California’s Healthcare Delivery System is a partnership between private and public sector leaders in California to address the challenge of developing a more affordable and cost-effective healthcare system that will contribute to improved population health for all Californians. The University of California, Berkeley School of Public Health serves as a neutral facilitator for discussions and as the analytic staff for this effort.
How Medicaid ACOs Can Pave the Way for Population Health Management Milbank Memorial Fund issues report on how states can take advantage of accountable care collaboratives By Zack Budryk
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ccountable care organizations (ACOs) and similar models are a prime opportunity for states to bridge their population health and payment reform goals, according to the Milbank Memorial Fund’s new issue brief, which offers strategies to promote Medicaid ACOs. Although policymakers understand that meaningful population health management must address socioeconomic factors, the brief states, reforms are not feasible under fee-for-service payment models. However, the ACO model, which many states have already identified as a way to keep down costs within their Medicaid programs, offers numerous opportunities to address social health determinants, according to the brief. Medicaid ACO beneficiaries in particular will benefit from the model because they are more likely to have worse health outcomes and more complex socioeconomic needs. States that have expanded Medicaid eligibility under the Affordable Care Act particularly stand to benefit from providing incentives for population health improvement. For example, pre-expansion, children and pregnant women often left the program after aging out or giving birth. Post-expansion, the brief noted, many more beneficiaries will remain within the program. A number of Medicaid ACOs use models based on the Medicare Shared Savings Program, which provides incentives for saving through short-term health improvements among high-cost, high-need patients. In contrast, outcomes-based payment models provide incentives for broader population health. To implement such outcomes-based payment models, the brief suggests states take the following steps: • Establish ACOs with geographical boundaries for simpler care coordination • Establish population health-centered governance standards for ACOs • Determine existing population health needs by analyzing existing data A report from the Commonwealth Fund last week indicated that Medicaid ACOs in Minnesota, Colorado and Oregon have shown promising results, meeting their goals of generating long-term savings. For example, Colorado, which established a Medicaid ACO in 2011, has saved up to $33 million over a three-year period, FierceHealthPayerreported
March 2015 13
Medicare Advantage and Medicare Part D Changes for 2016 Released By Nita Garg and Lee H. Rosebush On February 6, 2015, the Centers for Medicare & Medicaid Services (CMS) released a final rule regarding changes to Medicare Advantage and Medicare Part D to take effect in 2016. According to CMS, this final rule “implements statutory requirements, improves program efficiencies, strengthens beneficiary protections, clarifies program requirements, improves payment accuracy, and makes technical changes for Contract Year (CY) 2016.” The final rule includes the following key provisions: • Revises the rule requiring efficient dispensing to Part D enrollees in long-term care facilities and expands quality improvement program regulations; • Requires Medicare Advantage Prescription Drug plans to establish and maintain a process with network pharmacies to ensure timely and accurate point-of-sale transactions; • Requires Medicare Advantage organizations and Part D sponsors to develop and implement business continuity plans meeting certain requirements; • Clarifies the responsibilities of Medicare Advantage organizations when health plan services are affected by public health emergencies or disasters; • Allows CMS to require Medicare Advantage organizations or Part D plan sponsors to hire an independent auditor to validate correction of CMS audit findings; • Codifies for Part D, language found in the Part C regulation that requires Medicare Advantage organizations and Part D sponsors to provide annual notice to CMS of changes to plan rules for marketing material review and to all enrollees at least 15 days prior to the annual coordinated election period for changes that are effective with a new plan year; • Finalizes the requirement that Part D sponsors offering employer group waiver plans provide applicable discounts to plan enrollees as determined consistent with the defined standard benefit; • Permits CMS to assign an entity, such as a Medicare Advantage organization or Part D sponsor, to act on its behalf to review good cause requests following involuntary disenrollment for non-payment of premiums and to effectuate reinstatements of beneficiary enrollment when criteria are met; 14 Affiliated Practice
• Imposes a two-year Part D applications ban on organizations approved by CMS as qualified to enter into standalone prescription drug plan sponsor contracts but which elect, after CMS’s announcement of the low-income subsidy (LIS) benchmark, not to enter into such contracts and withdraw their prescription drug plan bids; • Eliminates the requirement that agents and brokers be trained and tested with CMS endorsed or approved documents; • Creates a new step in the application and contracting process with newly contracted entities operating as standalone prescription drug plan sponsors or Medicare Advantage organizations offering Part D plans; • Requires a sponsor’s pharmacy and therapeutics committee to articulate and document processes for determining that certain requirements have been met, including those related to disclosure of financial interests that are conflicts of interest and management recusal due to conflicts; • Clarifies CMS’s intended standard for when it is appropriate for a Medicare Advantage organization to extend an adjudication time frame; • Establishes lawful presence or U.S. citizenship as eligibility criteria for enrollment in cost, Medicare Advantage and Part D plans; • Amends text to expressly apply the two-year prohibition to applications for service area expansions in addition to applications for new contracts. It is important to note that the final rule does not include the following provisions that appeared in the proposed rule: (1) lifting the protected class designation on three drug classes – antidepressants, antipsychotics and immunosuppressants for transplant rejection; (2) requiring Medicare Part D sponsors to include any pharmacy willing to accept the terms and conditions to participate in narrower pharmacy networks that offer preferred cost sharing to beneficiaries; (3) reducing the number of Part D plans a sponsor may offer; and (4) codifying CMS’s interpretation of the Part D non-interference provision. The final rule was published in the Federal Register on February 12, 2015 and will take effect 30 days after publication.
House Provision Offers Doctors More Protection Against Malpractice Suits By Robert Pear
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ASHINGTON — A little-noticed provision of a bill passed by the House of Representatives with overwhelming bipartisan support would provide doctors new protections against medical malpractice lawsuits.
The bill, which requires the government to measure the quality of care that doctors provide and rate their performance on a scale of zero to 100, protects doctors by stipulating that the quality-of-care standards used in federal health programs — Medicare, Medicaid and the Affordable Care Act — cannot be used in malpractice cases. The provision is nearly identical to legislative language recommended by doctors and their insurance companies. They contend that federal standards and guidelines do not accurately reflect the standard of care and should not be used to show negligence by a doctor or a hospital. Medicare, Medicaid and private insurers increasingly require doctors to report data that can be used to assess the quality of care. They then evaluate and pay them based on their performance. Medicare, for example, asks doctors: What percentage of tobacco users receive counseling on how to stop smoking? What percentage of patients develop infections after surgery? What percentage of diabetes patients haveblood sugar levels in the normal range? The government scrutiny of doctors is only expected to increase. Sylvia Mathews Burwell, the secretary of health and human services, recently announced an ambitious goal, calling for “virtually all Medicare fee-for-service payments to be tied to quality and value” within three years. But doctors are now concerned that the proliferation of quality metrics, some mandated by the Affordable Care Act, poses unintended legal risks to health care providers, and that patients and their lawyers can use such data in court to show that providers were negligent. That concern is not far-fetched. The website of a New Mexico law firm points consumers to a Medicare list of preventable injuries and illnesses — caused, for example, by transfusions of the wrong blood type or foreign objects left in patients during surgery. “If you or a loved one has suffered serious personal injury or wrongful death as a result of one of the medical errors on this list,” the law firm says, “you may very well have a medical malpractice claim.” Brian K. Atchinson, president of the Physician Insurers Association of America, a trade group for insurers, said the bill would “eliminate the uncertainty” about the use of federal guidelines and standards to establish the legal liability of doctors, nurses and hospitals. It would, he said, “simply preserve the status quo with respect to medical professional liability.” But Tom Baker, a professor and an expert on insurance law at the University of Pennsylvania, said the provision of the bill barring lawsuits based on federal guidelines “does not make any sense.” “Why wouldn’t you want to take these guidelines into consideration?” Mr. Baker asked. “They indicate what a reasonable doctor does and should do, just like guidelines adopted by a medical specialty society.” Consumer advocates and plaintiffs’ lawyers also expressed concerns. Kelly Bagby, a lawyer at AARP, the lobby for older Americans, said the malpractice provision was “very troubling.” The National Consumer Voice for Quality Long-Term Care, a consumer group, said the provision would make it more difficult for nursing home residents to vindicate their rights and to establish negligence by showing that a home had violated federal health and safety standards. — cont’d March 2015 15
James L. Wilkes II, a Florida plaintiffs’ lawyer, said he often used inspection reports showing violations of federal standards in lawsuits against nursing homes and their medical directors. When a nursing home violates federal standards and a resident is injured, Mr. Wilkes said, the patient should be allowed to cite the violation in court, to help demonstrate that the institution did not meet its “duty of care.” But Harry M. Dasinger, a vice president of the Doctors Company, which describes itself as the nation’s largest physicianowned medical malpractice insurer, said that the standard of care should be established by the testimony of experts, not by reference to federal guidelines. “What a doctor thinks is best for a particular patient is not necessarily what the government thinks is right for groups of patients with that condition,” Mr. Dasinger said. Since 2009, the Doctors Company has been pushing for legislation that would prevent federal payment guidelines from being used as evidence of negligence. The House-passed version of the health care overhaul in 2009 included such language, but it was dropped from the Senate version that eventually became law. The main goal of the House Medicare bill, cited by Speaker John A. Boehner as one of his most significant legislative accomplishments, is to establish a new way of paying doctors. The bill, approved in the House last week by a vote of 392 to 37, is considered an urgent priority for Congress. It would block a 21 percent cut in Medicare doctors’ fees scheduled to take effect in April. The Senate plans to take up the bill when it returns on April 13. Representative Michael C. Burgess, Republican of Texas and chief sponsor of the bill, said the new payment formula would help doctors “get out from under the constant threat of payment cuts” while shifting to a new payment system based on “quality measures.” “While taking these important steps toward ensuring quality care,” Mr. Burgess said, “the bill specifically states that these quality measures are not creating a federal right of action or a legal standard of care.” The American Medical Association has mobilized a campaign to secure passage of the Medicare bill, including the section on medical malpractice. President Obama has endorsed the bill. Dr. Robert M. Wah, president of the American Medical Association, said that federal guidelines and quality criteria “should not be exploited to invent new legal actions against physicians.” The Affordable Care Act established a number of “value-based purchasing programs.”
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CMS Issues Draft Stage 3 Rules for Ehr Incentive Program By Darius Tahir
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raft regulations the CMS issued Friday would make significant changes to the federal incentive program that requires doctors and hospitals to adopt and meaningfully use electronic health records.
With some exceptions, hospitals, physicians and other eligible professionals would be expected to conform to the rules (PDF) by 2018. Physicians and hospitals have lobbied aggressively for the CMS to relax the program’s parameters. The agency said in January it would issue separate regulations narrowing the reporting period to 90 days for attesting to meeting the requirements for 2015. The proposed rule would require nearly all providers to report on a full calendar-year cycle beginning in 2017 and would require electronic reporting of clinical quality measures beginning in 2018. “The release of today’s rule demonstrates that the agency continues to create policies for the future without fixing the problems the program faces today,” the American Hospital Association said in a statement Friday. “It is difficult to understand the rush to raise the bar yet again, when only 35% of hospitals and a small fraction of physicians have met the Stage 2 requirements.” Physicians and other eligible professionals who fail to meet the requirements are expected to pay $500 million in Medicare penalties between 2018 and 2020, according to the proposed rule. The agency said it expects all hospitals to achieve meaningful use by 2018. Upgrading EHRs to meet the requirements, the agency estimates, will cost physicians $54,000, plus $10,000 in annual maintenance costs. That’s at the high end of what the Congressional Budget Office calculated in 2008. The CMS said upgrades would cost hospitals $5 million, plus $1 million for annual maintenance. The rule would give providers three options for ensuring patient engagement with their care, of which providers must fulfill two: access to their own records; secure messaging between patients and providers; and collection of patientgenerated health data.
The first two elements had attracted consistent criticism from providers in previous stages of the program, but the exact impact is unclear. In the Stage 2 rules, 5% of patients would have to view, download or transmit data from their records, which providers said made them responsible for the engagement regardless of whether patients were interested. The new rule would raise that engagement threshold to 25% of patients downloading or transmitting their health data. But providers can now satisfy the requirement with an application programming interface, or API, that allows third-party developers to access the data on their patients’ behalf. The rule would also impose a similar increase in the rate of secure messaging: from 5% in Stage 2, to 25% in Stage 3. Meanwhile, the provision would compel providers to collect patient-generated health data in their EHRs from devices such as Fitbits or mobile apps developed with Apple’s HealthKit API. Providers would have to capture data from 15% of their patients to comply. The digital health industry pushed aggressively for the CMS to push providers to collect the data their products generate. “I’m beyond pleased and finally vindicated,” said Robert Jarrin, Qualcomm’s senior director of government affairs. The proposal also raises the thresholds for “computerized physician order entry,” which allows doctors to send requests for drugs, lab tests and imaging electronically. Providers would be expected to order 80% of medications electronically, up from 60% under Stage 2 of the program. The requirement for electronic lab and imaging orders would rise to 60% from 30%. For imaging, the proposed rule expands the requirement from radiology to a broader array of tests, including ultrasound, MRI and CT scans. Separate regulations proposed by HHS’ Office of the National Coordinator for Health Information Technology overhaul the certification program (PDF) for healthcare IT, which is intended to give healthcare providers certainty that the software they buy can perform the functions required under the meaningful-use program. March 2015 17
Aetna, Hackensack Health Network Expand Accountable Care Relationship to Another 10K By Beth Fitzgerald
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he movement toward “value-driven” health care, in which health care providers get financial incentives for meeting clinical and efficiency goals, took another step forward Wednesday. Health insurer Aetna and the HackensackAlliance accountable care organization announced a new accountable care agreement and Medicare collaboration that will cover more than 10,000 Aetna commercial and Medicare Advantage members in Bergen and Hudson counties. This agreement expands the existing relationship between Aetna and the Hackensack University Health Network, which belongs to the new Aetna Medicare NNJ Prime Plan launched in New Jersey last October. The HackensackAlliance ACO has 575 physicians and care providers who use health information technology to coordinate care, and are accountable for cost, quality and patient satisfaction for the health care they provide. “This new agreement with the HackensackAlliance ACO — like others that have preceded it over the last seven years — aligns with the federal government’s recent call for more value-based models of care,” said John Lawrence, president, Aetna – New Jersey. “Step by step, Aetna and progressive health care providers like the HackensackAlliance ACO are changing the business model for health care delivery, and delivering strong results for members.” 18 Affiliated Practice
HackensackAlliance ACO physicians are affiliated with Hackensack University Medical Center, HackensackUMC at Pascack Valley and HackensackUMC Mountainside. Aetna said its members who receive care from HackensackAlliance ACO physicians will experience more coordinated care, and will benefit from the improved flow of information to physicians, particularly those patients with chronic or complex conditions. Aetna nurse case managers will work with the ACO to assist in care coordination, outreach and follow-up services. “We are proud to partner with Aetna,” said Robert C. Garrett, chief executive officer and president of Hackensack University Health Network. “We are committed to developing strong partnerships that will improve the level of care coordination provided — ultimately improving the results for our network and patients.” Garrett noted that the federal government found that HackensackAlliance ACO has generated $10.75 million in savings for Medicare, and to date is one of just three ACOs in the state that will receive a share of the money that Medicare saved via the ACO program. This Aetna/Hackensack agreement includes a shared savings model that rewards HackensackAlliance ACO physicians for meeting certain quality and efficiency measures such as:
• The percentage of Aetna members who receive recommended preventive care and screenings; • Better management of patients with chronic conditions such as diabetes; • Reductions in avoidable hospital readmission rates; and • Reductions in unnecessary emergency room visits. Aetna said it’s working with health care organizations nationwide to advance value-driven, patient-centered care. The company said about 3.2 million of its members receive care from doctors committed to the value-based approach, with 28 percent of Aetna claims payments going to doctors and providers who practice value-based care. Aetna said its goal is to increase that to 50 percent by 2018 and 75 percent by 2020. Aetna said that, in New Jersey, nearly 230,000 — or 21 percent — of its members are in value-based collaborative arrangements, including ACOs, with the intent to reach over 400,000 — or 35 percent — of its New Jersey members during 2015.
Future of Medicaid Hospital Improvement Program in Doubt By Virgil Dickson
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or years, Santa Clara Valley Medical Center in San Jose, Calif., faced a problem with sepsis in patients.
There was a concentrated effort to screen for sepsis when patients arrived in the emergency department. But once patients were admitted, there was no consistent screening or treatment approach. And there was no facility-wide training effort, said Kathy Madlem, a nurse who serves as sepsis quality improvement coordinator at the safety net hospital. Hospital leaders wanted to improve their care for these patients, but the safety net hospital was hamstrung by lack of financial resources. Then in 2011, the hospital launched a campaign to improve the early detection and treatment of sepsis. That year, 14.6% of patients with sepsis died. By June of last year, the mortality rate had dropped to 6.5%. The improvement program was made possible by California’s Delivery System Reform Incentive Payment (DSRIP) program, a federally approved waiver program that allows federal Medicaid funding to be used to create financial incentives for providers to pursue delivery-system reforms. Those reforms involve infrastructure development, system redesign and clinical-outcome and population-focused improvements. Under these programs, the initial focus is on meeting process-type metrics in setting up the reforms; in the later years, the focus shifts to outcomes-based metrics such as population health improvements.
In 2010, California became the first state to win federal approval for and launch a DSRIP initiative as part of a broader Medicaid Section 1115 waiver. The waiver programs provide states with significant funding to support hospitals and other providers in reforming how they deliver care to Medicaid beneficiaries. “We needed support and incentives to get to the place we wanted to be,” said Dr. Susan Ehrlich, CEO at San Mateo (Calif.) Medical Center. The DSRIP initiative is important for safety net hospitals because they often have lagged their richer cousins in launching strong population-health-management programs. Additional CMS waivers including DSRIP programs were approved for Texas in 2012, Kansas in 2013, and New Jersey and New York in 2014. Similar provider incentive programs were approved in Massachusetts in 2011 and New Mexico in 2014. Alabama and Illinois have pending Medicaid waiver requests that include DSRIP programs. The DSRIP initiatives typically are part of a broader Medicaid transformation waiver, where the other initiatives aim to produce savings. For instance, California and Texas used their broader waivers to shift beneficiaries to Medicaid managed care. From 2010 up to this year, California public hospitals could earn up to $3.3 billion in federal incentive payments for achieving care and quality milestones. The state’s waiver is set to expire in October, followed by Texas’ in September 2016. The broader Medicaid waivers must be budget-neutral—the CMS can’t spend more in Medicaid funds than it would have spent without the waiver. So in exchange for agreeing to allocate a certain amount of federal Medicaid funds to be spent in a more flexible way, states must promise that the changes will create offsetting savings. The program is important for safety net hospitals because they have lagged their richer cousins in improving care coordination and patient service to improve their management of the health of the populations they serve. In the seven states with DSRIP or similar programs, the CMS has dedicated nearly $30 billion for the programs. But it’s unclear whether the Obama administration will renew the DSRIP programs in California and other states. That’s at least partly because evidence is mixed on whether these programs have truly improved care for large numbers of Medicaid beneficiaries and uninsured patients. Critics say the states have set lax performance targets and have not used uniform metrics to track progress. “We’re still doing a lot of analysis,” said Robin Rudowitz, an associate director at the Kaiser Commission on Medicaid and the Uninsured. March 2015 19
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