By Paul Keckley

The American Recovery and Reinvestment Act of 2009 (ARRA), sometimes called the Stimulus Act, was an $831 billion economic stimulus package enacted by the 111th Congress in February 2009 and signed into law on February 17, 2009 by the President.

It included $22 billion as incentives to encourage adoption of certified electronic medical records in hospitals and medical practices. The rationale behind the policy directive was clear: system-wide implementation of electronic medical records enables improvement in diagnostics and treatment coordination, fewer errors, and better coordination of patient care by teams of providers.

Almost immediately, the medical community cried foul.

Their primary beef: the cost to implement these new systems would not be recovered by the incentives.

Similarly, physicians pushed back on the conversion of the U.S. coding system from ICD-9 to ICD-10. They did not question the need for the upgrade: the increase from 19,000 to 68,000 codes is necessary to more accurately capture all relevant clinical aspects of a patient’s condition and align our data gathering with 20 other developed systems of the world where ICD-10 is already used.

That health insurers, medical groups, hospitals and others must use the same coding system that reflects advances in how we diagnose and treat seems a no brainer. But some physicians pushed back due to costs and disruption in their practices.

Last week, physicians won a battle: the Centers for Medicaid and Medicare Services (CMS) announced it was delaying the deadline for implementation of ICD-10 for a year, to October 1, 2015.

Continue reading “Health Information Technology: Sorry, There’s No Turning Back!”

By SAURABH JHA, MD

CMS released new data, shrouded thus far in needless secrecy: how much it pays individual physicians.

Unlike the Shroud of Turin, no one will question its authenticity. But authenticity doesn’t guarantee the data won’t intrigue, confuse, anger, perplex, confound and burn a few innocents at the stakes. That is before we conclude that more research is needed, or more colloquially stated, we still don’t have a clue.

Medicare bounty hunters, the modern day witch finders, are licking their lips for their share of the looted spoils. Academic researchers will be dissecting both wings of the bell-shaped curve of variation in payment to set the next battle between good and evil. But all eyes (pun intended) are upon Florida; specifically one particular provider.

The provider, an ophthalmologist, (you can look up the name) billed CMS for $21 million.

CMS paid ophthalmologists $ 5.6 billion. That’s more than the GDP of Burundi. CMS paid over a billion dollars for treatment of macular degeneration with Lucentis (Genentech).

Take a deep breath now. The treatment of one organ in over 65 year old American citizens is equal to the GDP of one African nation. Gini would have turned beetroot with embarrassment.

Diabolical? Scandalous? Shocking? Surprising?

None of the above, actually. If you think about it.

As we age, and age we do thanks to our lives being constantly “saved” by prevention, regulation and cures, arteries harden, brain atrophies and bones thin. And eyesight falters. Lens fog. Macula degenerates, reducing central vision making it difficult to read.

As we age, we consume more medical services. Yes, take that as an economic truism. And no, I’m not applying for membership of the Death Panel.

Here’s the thing. It’s nice to be able to see when you’re 75. It’s also nice to see when 85, and damn essential when 90.

Otherwise you might trip over the walking stick, fracture the neck of the femur, develop a clot in the deep veins, then a clot in the pulmonary arteries, then a raging pneumonia in ICU, followed by septic shock and a cardiac arrest. Then perhaps you may rest in peace. But not before a few interns have fractured half a dozen ribs during a well-intentioned but hopelessly misguided cardiopulmonary resuscitation that family members lobbied for to assuage their guilt for never visiting you in your nursing home.

Continue reading “It’s Raining Cataracts, Hallelujah”

By THCBist

Farzad Mostashari’s  post last week provoked a heated (to put it mildly) discussion between supporters and critics of the ACO model.

Farzad writes:

Commenters have raised several points regarding the early results of the Medicare Shared Savings Program that bear further discussion and clarification:

-The need for more details on the participants by name, along with their characteristics, actions, and outcomes.

I agree. We strongly encourage CMS to release more detailed information about the results of the program to date. As someone who’s been on the other side, I can attest however, that lack of transparency can occur despite the intentions of leadership, and even when there’s nothing to hide. CMS has taken great steps towards open data in recent years- unparalleled in its history (or in comparison to private sector payors and most states), but there is more work to be done to overcome institutional inertia, and concerns regarding the “privacy of providers”.

How is the MSSP different from an HMO?
A major similarity between managed care and “shared savings” programs is that physicians that make decisions about treatment, diagnostic, and referral options do have an incentive to reduce cost. I was trained in an era where we were not supposed to think about (or even be aware of) the cost implications of our care recommendations. I now believe that we need physician engagement in addressing the truly unsustainable rise in healthcare costs that threaten to bankrupt our nation.

However, policymakers have learned a few lessons from the backlash against managed care:

Quality Matters
Reducing cost cannot be the only outcome. In the MSSP, in the first year only can you qualify for savings simply by reporting quality measures. In future years, ACOs will have to not only reduce total cost but also perform well on measures of patient satisfaction, clinical quality, and utilization (such as ambulatory care sensitive admissions) to collect shared savings payments.

What about patient choice?
If the patient doesn’t like the care they’re getting, they can get care elsewhere. This is a sore point for many ACOs, especially those that have been successful in managed care arrangements, but the current regulations in no way limit patients’ ability to seek care elsewhere. MSSPs are required to notify patients that they have formed an ACO, and patients have the option of opting out of the sharing of their claims data with the ACO.

Shared Savings versus capitation
Finally, the MSSP program is indeed layered on top of fee-for-service payments (versus prospective payments/ capitation), and most MSSPs have opted for the “upside only” track for the first three years. We acknowledge that where the ACO includes a hospital sponsor, they must contend with “demand destruction” on their fee-for-service lines of business if they reduce procedures, admissions and emergency department visits. However, physician-led ACOs are not similarly encumbered, and this model provides them with a “safe” transitional path towards taking risk. It is also worth noting that “one-sided risk” during the riskiest early transition period would tend to reduce the likelihood of a physician having to choose between limiting needed care and going bankrupt.

Continue reading “The ACO Hypothesis: Farzad Mostashari Responds”

By Dan Haley

At HIMSS 2014, the health information technology’s (HIT) largest annual confab, the bestest-best news we heard from a policy perspective, and maybe even an industry perspective, was the Centers for Medicare & Medicaid Services’ (CMS) dual announcement that there will be no further delays for either Meaningful Use Stage 2 (MU-2) or ICD-10.

Perhaps we should have immediately directed our gaze skyward in search of the second shoe preparing to drop.

As it turns out, CMS de facto back-doored an MU-2 delay by issuing broad “hardship” exemptions from scheduled MU-2 penalties. To wit: any provider whose health IT vendor is unprepared to meet MU-2 deadlines, established lo these many months ago, is eligible for a “hardship” exemption.

Few would disagree with the notion that it’s unproductive to criticize policy without offering constructive ideas to fix the underlying problems.

Here,  the underlying problem is easy to define: it is in point of irrefutable fact fundamentally unfair to penalize care providers for their vendors’ failings—especially when the very government proposing to penalize them put its seal of approval on the vendors’ foreheads to begin with.

CMS’s move to exempt providers from those penalties is correctly motivated, but it seeks to ease the provider pain without addressing its cause.

Instead of issuing a blanket exemption for use of unprepared vendors, CMS should:

1. Waive penalties only for those providers who take steps to replace their inferior technologies with systems that can meet the demands of the 21^st century’s information economy;
2. Publish lists of health IT vendors whose systems are the basis for a hardship exemption, along with an accounting of how many of those 21 billion dollars have been paid to subsidize those vendors’ products; and
3. Immediately initiate a reevaluation of the MU certification of any vendor whose products form the basis for a hardship exemption.

This proposal might seem bold, but if we’re truly looking to advance health care through the application and use of EHR, then what I’ve outlined above simply represents necessary and sound public policy. Current practice rewards vendors whose products are falling short by perpetuating subsidies for those products.

The federal government should stop paying doctors to implement health IT that cannot meet the standards of the program under which the payments are issued. That’s just a no-brainer.

An EHR should not be a federally-subsidized “hardship.”

Continue reading “Congratulations, Doctor, On Your Federally-Subsidized “Hardship””

By Farzad Mostashari, MD & Ross White

Last month, the Center for Medicare and Medicaid Services (CMS) reported first-year results from the Medicare Shared Saving Accountable Care Organization Program (MSSP).

As noted in a previous post, shifting to an accountable care model is a long-term, multi-year transition that requires major overhauls to care delivery processes, technology systems, operations, and governance, as well as coordinating efforts with new partners and payers.

Participants in the MSSP program are also taking much more responsibility and risk when it comes to the effectiveness and quality of care delivered.

Given these complexities, it is no surprise that MSSP’s first year results (released January 30, 2014) were mixed. The good news? Of the 114 ACOs in the program, 54 of the ACOs saved money and 29 saved enough money to receive bonus payments.

The 54 ACOs that saved money produced shared net savings of $126 million, while Medicare will see $128 million in total trust fund savings.

At the time, CMS did not provide additional information about the ACOs with savings versus those without.

While a more complete understanding of their characteristics and actions will be necessary to understand what drives ACO success, the recent disclosure of the 29 ACOs that received bonus payments allows us to offer some preliminary interpretations.

Continue reading “The ACO Hypothesis: What We’re Learning”

By Paul Keckley

Late last Friday after the financial markets closed, the Centers for Medicare and Medicaid Services (CMS) issued its annual notice of 2015 payments to private insurers who sell Medicare Advantage plans to seniors. Its determination that a 3.55% cut is in order was spelled out in a complicated 148-page explanation of its methodology.

The net impact of changes to “coding intensity” adjusted for geographic variation essentially means insurance companies would see a 1.9% cut in their payments per Avalere’s calculations.

But there’s more to the story than the Medicare Advantage payment adjustment. The difference between last year’s Round One rate negotiation and this year’s Round Two is significant.

Background

Medicare Advantage (MA) plans enroll 28% of seniors. It is popular: enrollment increased from 5.3 million in 20104 to 16 million today—a 9% increase last year alone.  MA plans are required to offer a benefit “package” at least equal to Medicare’s covering everything Medicare allows, but not necessarily in the same way.

Continue reading “Medicare Advantage Round Two: Negotiation Will Not Be the Same”

By Dan Diamond

Since CMS’s Center for Medicare and Medicaid Innovation launched three years ago, its staff have been frequently hailed for undertaking an ambitious research agenda.

But a New York Times story this week was eye-catching for a different reason: author Gina Kolata mostly assailed Medicare’s researchers for how they’re choosing to do that research.

“Experts say the center is now squandering a crucial opportunity,” Kolata wrote in a front-page article. ”Many researchers and economists are disturbed that [CMMI] is not using randomized clinical trials, the rigorous method that is widely considered the gold standard in medical and social science research.”

But many researchers and economists that I talked to at this week’s Academy Health conference say that’s not the case at all. (And some were disturbed to learn that they were supposed to be disturbed.)

“RCTs are helpful in answering narrowly tailored questions,” Harvard’s Ashish Jha told me. “Something like—does aspirin reduce 30-day mortality rates for heart attack patients.”

“However, for many interventions, RCTs may be either not feasible or practical.”

“While RCTs may be the gold standard for testing some hypotheses, it is not necessarily the most effective or desirable model for testing all hypotheses,” agrees Piper Su, the Advisory Board’s vice president of health policy.

CMMI’s ambitious goals

On its surface, Kolata’s article is built around a reasonable conclusion: RCTs offer plenty of value in health care, and we’d benefit from more of them.

• As Jha alludes to, think of a double-blinded pharmaceutical study where half the participants randomly get a new drug and the other half get a placebo; that’s an RCT.
• The famous RAND study that found having health insurance changes patients’ behavior: An RCT.
• The ongoing Oregon Health Insurance Experiment: Also, an RCT.

And it’s fair to examine how CMMI is pursuing its research, too.

Continue reading “What the New York Times Got Wrong about Medicare’s Innovation Center”

By Leah Binder

President Obama rarely shies away from an opportunity to tout successes in U.S. health care, but in last night’s State of the Union oddly omitted any mention of the new and optimistic report about U.S. health spending from actuaries at the Centers for Medicare and Medicaid Services (CMS).

The finding: from 2009 through 2012, health care spending in the U.S. grew at the slowest rate since the government started collecting this data in the 1960s.

The actuaries found that in 2012 spending “stabilized,” growing by 3.7 percent in 2012, and health care accounted for a slightly smaller percent of GDP than the prior year, 17.2 percent versus 17.3 percent in 2011.

Perhaps an actuarial report proclaiming stable growth doesn’t make for much of an applause line for a State of the Union speech. But for confessed policy wonks like me, it’s as good as a Hollywood blockbuster.

So get out your popcorn, here are five Hollywood moments in the report.

1. Ninja Combat

When the report came out in early January, the Obama administration quickly ascribed the good news to Obamacare. But, lo and behold, the actuaries wielded their slide rules like weapons.

They respectfully disagreed with their president, pointing out that few of the provisions in the health reform law were actually in place during the slow-growth years in question. The actuaries conclude that most of the cost stability results from the economic recovery process.

Given the silence in the State of the Union, they may have been given the last word on the subject.

Continue reading “Why Didn’t the President Mention the Latest Good News on Health Costs?”

By John Halamka, MD

Karen DeSalvo started as the new National Coordinator for Healthcare Information Technology on January 13, 2014.   After my brief discussion with her last week, I can already tell she’s a good listener, aware of the issues, and is passionate about using healthcare IT as a tool to improve population health.

She is a cheerleader for IT, not an informatics expert.  She’ll rely on others to help with the IT details, and that’s appropriate.

What advice would I give her, given the current state of healthcare IT stakeholders?

1.  Rethink the Certification Program - With a new National Coordinator, we have an opportunity to redesign certification. As I’ve written about previously some of the 2014 Certification test procedures have negatively impacted the healthcare IT industry by being overly prescriptive and by requiring functionality/workflows that are unlikely to be used in the real world.

One of the most negative aspects of 2014 certification is the concept of “certification only”. No actual clinical use or attestation is required but software must be engineered to incorporate standards/processes which are not yet mature.   An example is the “transmit” portion of the view/download/transmit patient/family engagement requirements.

There is not yet an ecosystem for patients to ‘transmit’ using CCDA and Direct, yet vendors are required to implement complex functionality that few will use. Another example is the use of QRDA I and QRDA III for quality reporting.

CMS cannot yet receive such files but EHRs must send them in order to be certified.   The result of this certification burden is a delay in 2014 certified product availability.

Continue reading “A Little Advice for Karen DeSalvo”