The U.S. Senate has an opportunity next week to hammer the final nail in the coffin of the failed “sustainable growth rate” (SGR) formula for Medicare physician payment. At the same time, it can move the U.S. closer to a system that pays doctors for the quality of care they deliver, not the quantity.
Bear in mind that Medicare pays about a third of the tab each year for all physician services in the U.S.
For those who have not been following this issue (and I don’t blame you, it’s convoluted, even tortuous), here’s a quick recap:
The House in a rare bipartisan vote (392-37) voted on Thursday, March 26 to repeal the SGR formula, which has been in place since 1998. The formula, part of the Balanced Budget Act of 1997, was intended to constrain Medicare spending by pegging annual physician fee updates to a target based on the growth in overall physician spending and the gross domestic product.
The formula never worked. I’ll spare you the details on that. Suffice is to say that the disparities between the growth in physician costs and GDP over the period 2002-2013 were such that reducing physician fees each year by the amount the formula dictated were—well, let’s just say they were very politically distasteful. Continue reading “SGR. RIP, Hopefully”
Filed Under: THCB
Tagged: CBO, CMS, Doc Fix, Merit Based Incentive System, SGR
Apr 8, 2015
There are dozens of ways to take stock of the Affordable Care Act as it turns 5 years old today. According to HHS statistics:
- 16.4 million more people with health insurance, lowering the uninsured rate by 35 percent.
- $9 billion saved because of the law’s requirement that insurance companies spend at least 80 cents of every dollar on actual care instead of overhead, marketing, and profits
- $15 billion less spent on prescription drugs by some 10 million Medicare beneficiaries because of expanded drug coverage under Medicare Part D
- Significantly more labor market flexibility as consumers gained access to good coverage outside the workplace
Impressive. But the real surprise after five years is that the ACA may actually be helping to substantially lower the trajectory of healthcare spending. That was far from a certain outcome. Dubbed the Patient Protection and Affordable Care Act for public relations purposes, there were, in fact, no iron clad, accountable provisions that would in the long run assure that health insurance or care overall would become “affordable.”
ACA supporters appear to have lucked out—so far. Or maybe, just maybe, it wasn’t luck at all but a well-placed faith that the balance of regulation and marketplace competition that the law wove together was the right way to go.
To be sure, other forces such as the recession were in play—accounting for as much as half of the reduction in spending growth since 2010. But as the ACA is once again under threat in the Supreme Court and as relentless Republican opposition continues, it’s worth paying close attention to new forecasts from the likes of the Congressional Budget Office (CBO) and the actuaries at the Centers for Medicare and Medicare Services (CMS).
The ACA is driving changes in 17 percent of the U.S. economy that, if reversed or interrupted, would have profound impact on federal, state, business, and family budgets. A quick look at some important numbers follows:
Continue reading “Happy 5th Birthday, ACA”
Filed Under: THCB
Tagged: ACA, CBO, CMS, health reform, Medicare, spending
Mar 23, 2015
The US has spent several billion dollars on medical records, as part of the HITECH program. The goal of that spend was simple: portable medical records for patients. On our current path, we will have medical records, but without that magic word: “portable.” Ironically, the reason for this is identical to the root-cause of the problems with healthcare.gov
The root-cause of the initial failure of healthcare.gov was a lack of accountability and empowerment. There was no one person who was in charge of the operation, and those who were presumed to be in charge did not have the skill-set or political clout needed to make decisions about the project.
The result was the healthcare.gov train wreck. Thankfully, healthcare.gov was turned around.
That turn-around was the result of decisively fixing these exact issues.
Accountability restored, disaster averted.
You would think that the Obama administration and HHS would have learned the “accountability with empowerment” lesson well, if not for IT projects generally, then at least for projects involving Health IT.
Yet we are repeating this mistake with Meaningful Use. For those who are living in a cave with regards to healthcare reform, Meaningful Use is a set of standards designed to ensure that the money that the federal government spends on Electronic Healthcare Records (EHRs) for doctors results in clinically productive outcomes.
Continue reading “What Can Meaningful Use Learn From Healthcare.gov?”
Filed Under: Tech, THCB
Tagged: Accountability, CMS, Electronic Health Records, Healthcare.gov, Meaningful Use, ONC
Mar 2, 2015
This Year’s Meaningful Use “Sticks”: Not that Big
CMS reports that the majority of physicians who will be penalized this year for not having met MU requirements will lose less than $1,000 of their Medicare reimbursement; 34% of the penalties will be $250 or less, while 31% will exceed $2,000.
The adjustments will impact approximately 257,000 eligible providers. While no one likes losing money, the CMS penalty “stick” is pretty small compared to the overall cost of implementing an EHR.
Mayo Provides Dr. Google with 2nd Opinion
Google consults with the Mayo Clinic to expand its healthcare information for 400 medical conditions.
Given that 20% of all Google searches are related to health conditions, the change will no doubt shake up what Americans find when searching for medical information. The update includes the addition of illustrations for each condition, plus a full list of search results from sites such as WebMD and Wikipedia.
Continue reading “HIT Newser: The Not-So-Big Meaningful Use Stick”
Filed Under: Uncategorized
Tagged: Allscripts, CMS, Deloitte, DOD, HIT Newser, ICD-10
Feb 17, 2015
Barring a Republican landslide in 2016, it looks like the Affordable Care Act (ACA) is here to stay. By and large, we think that is a good thing. While there are many things in the ACA that we would like to see changed, the law has provided needed coverage for millions of Americans that found themselves (for a variety of reasons) shut out of the health insurance market.
That being said, since its passage the ACA has evolved and the rule makers in CMS continue to tinker around the edges. We are especially encouraged by CMS’ willingness to relax some of the restrictions on insurance design, but remain concerned about some of the rules governing employers and the definition of what is “insurance.” In the next few blogs we will examine some of the best, and worst, of the ongoing ACA saga.
We start with one of CMS’s best moves—encouraging reference pricing. The term reference pricing was first used in conjunction with European central government pricing of pharmaceuticals. Germany and other countries place drugs into therapeutic categories (such as statins or antipsychotics) and announce a “reference price” which insurers (either public or, in Germany, quasi-public) that insurers will reimburse for the drug. Patients may purchase more expensive drugs, but they were financially responsible for all costs above the references price. Research shows that reference pricing helps reduce drug spending both by encouraging price reductions (towards the reference price) and reducing purchases of higher priced drugs within a reference category. Other research has found suggestive evidence of similar results for reference pricing for medical services.
While the ACA does little to govern pricing in the pharma market, the concept of reference pricing can and should be extended other medical products and services. In particular, insurers can establish reference prices for bundled episodes of illness such as joint replacement surgery. Under the original ACA rules set forth by CMS, insurers were free to establish a fixed price for bundled episodes. They could even require enrollees to pay the full difference between the provider’s price and the reference price. But there was a catch. It wasn’t clear if any spending above the reference price would count to the enrollees by enrollees out of pocket limits (currently $6,600 for individual plans and $13,200 for family plans). Obviously, allowing the out of pocket limit to bind on reference pricing would limit the effectiveness of this cost control measure.
Continue reading “Where Does the ACA Go From Here?”
Filed Under: Economics, THCB
Tagged: ACA, CMS, reference pricing
Feb 5, 2015
Of the many hidden gems in the Affordable Care Act, one of my favorites is Physician Compare. This website could end up being a game changer—holding doctors accountable for their care and giving consumers a new way to compare and choose doctors. Or it could end up a dud.
The outcome depends on how brave and resolute the Centers for Medicare and Medicaid Services (CMS) is over the next few years. That’s because the physician lobby has been less than thrilled with Physician Compare, and, for that matter, with every other effort to publically report measures of physician performance and quality.
I’d give CMS a C+ to date. Not bad considering it’s the tough task. The agency has been cautious and deliberate. But after the many problems with Hospital Compare, Nursing Home Compare, Home Health Compare, and Dialysis Facility Compare—not to mention the shadow of healthcare.gov’s initial rollout—that’s understandable. They want, I hope, to get this one right from the get-go. And competition from the private sector looms.
Continue reading “What’s Next For Physician Compare?”
Filed Under: Tech, THCB
Tagged: CMS, Healthcare.gov, Physician Compare
Jan 23, 2015
Omnibus Bill Impacts HIT
The 2015 federal budget includes about $60.4 million for the ONC, which is less than the $75 million requested and on par with the 2014 budget. Congress allocated an additional $38.8 million to the HHS Office for Civil Rights, the agency that enforces HIPAA. Also in the bill: a controversial requirement for the ONC to decertify products that block health information sharing.
Appalling Meaningful Use Penalties
CMS reports that more than 257,000 eligible professionals will face penalties in 2015 for failing to meet Meaningful Use requirements. The AMA quickly announced it was “appalled by the news.”
Another Call to Cut Reporting Period
A group of 30 Republican House members call on HHS to shorten the 2015 Meaningful Use reporting period from 365 days to 90 days. A number of professional groups, including the AAFP and CHIME, support the extension.
From Foes to Financiers
Former Allscripts executives Glen Tullman and Lee Shapiro invest in Lightbeam Health Solutions, a population health management solution provider. Pat Cline, the founder and former president of NextGen, is currently Lightbeam’s CEO.
ATA Offers Accreditation
The American Telemedicine Association launches an accreditation program for providers offering online, real-time consults to patients.
Continue reading “HIT Newser: Appalling Meaningful Use Penalties”
Filed Under: Uncategorized
Tagged: AMA, CMS, HIT Newser, HITNewser
Dec 23, 2014
CMS Gives Hospitals One Month Attestation Reprieve
CMS extends the deadline for eligible hospitals and critical access hospitals to attest for MU from November 30 to December 31, giving hospitals more time to submit MU data for the 2014 program year in order to receive payments under EHR incentive programs. CMS also pushed back the deadline for hospitals to electronically submit clinical quality measures to December 31.
VA Issues RFP for New Scheduling System
The VA issues an RFP to replace its 30 year-old appointment scheduling system with a commercially available solution to integrate with its existing VistA platform. The proposal deadline is January 9 and potential bidders will not be required to have prior experience working with the agency.
CareTech Solutions Negotiating Sale to HTC Global Services
HIT service provider CareTech Solutions files an “intent to sell” to HTC Global Services, a provider of IT services for multiple industries. Continue reading “HIT Newser: Alarm Issues Top Health Hazard List”
Filed Under: THCB
Tagged: CMS, HIT Newser, Practice Fusion, USDA, VA
Dec 1, 2014
A No Way for Allscripts and MyWay
A North Carolina arbitration panel rules that Allscripts must pay Etransmedia $9.7 million for a breach of their partner agreement in violation of the state’s Unfair and Deceptive Trade Practices Act. The panel found that Allscripts unfairly profited by inducing Etransmedia to buy MyWay software licenses and assuring Etransmedia that it would make the product Meaningful Use-compliant. Allscripts later announced that rather than update MyWay it would phase out the product, leading the panel to rule that Allscripts “deliberately sabotaged” Etransmedia’s sales efforts.
The recent Republican sweep of the House and Senate may bode well for health IT, predict several industry pundits. One issue that will likely be discussed: the reduction of Stage 2 MU reporting requirements from 365 days to 90 days. Also look for renewed interest in issues around interoperability, telemedicine, and regulation of medical devices, software, and mobile apps.
Stage 2 Attestations Numbers: Disappointing but Predictable
CMS reports that only 4,656 EPs and 258 hospitals have attested for Stage 2 MU through the end of September. That’s less than 17% of the nation’s hospitals and a mere two percent of EPs (though EPs have until the end of February to report their progress.) Officials from the AMA, CHIME, HIMSS, and MGMA called the results disappointing yet predictable, and renewed calls for a shortened MU reporting period in 2015 and more program flexibility. Continue reading “Health IT Newser”
Filed Under: THCB
Tagged: CHIME, CMS, HIT Newser, Meaningful Use Stage II, MyWay
Nov 10, 2014
One of the big questions since the inception of the Medicare Shared Savings Program has been whether the model would only work in regions with extremely high baseline costs. Farzad’s state-level analysis of earlier MSSP results suggested that ACOs in higher-cost areas were more likely to receive shared savings. It’s one of the questions that Bob Kocher and Farzad received in the wake of the op-ed on Rio Grande Valley Health Providers last week.
So we decided to dig into the data.
We’re still waiting for CMS to make baseline costs for ACOs – and the local areas they serve – public. But in the meantime, we linked each ACO to a Hospital Referral Region using the main ACO address provided by CMS – and took a look at the region’s per capita Medicare costs as a predictor of ACO success.
Continue reading “Why ACO Savings Aren’t About Location.”
Filed Under: Tech, THCB
Tagged: Accountable Care Organizations, CMS, Medicare Shared Savings Program, Rio Grande Valley
Oct 8, 2014