Health Policy

Mrs. Verma Goes to Washington

By ANISH KOKA MD 

Seema Verma, the Trump appointee who runs Medicare, has had an active week. The problem facing much-beloved Medicare is one that faces every other government-funded healthcare extravaganza: it’s always projected to be running out of money. Medicare makes up 15% of the total federal budget. That’s almost $600 billion dollars out of a total federal outlay of $4 Trillion dollars. The only problem here is that revenues are around $3.6 trillion. We are spending money we don’t have, and thus there there is constant pressure to reduce federal outlays.

This is a feat that appears to be legislatively impossible.  The country barely is able to defund bridges to nowhere let alone try to reduce health care spending because, as everyone knows, any reduction in health care spending will spawn a death toll that would shame the black plague. The prior administration’s health policy wonk certified approach was to change the equation in health care from paying for volume to paying for value. This, we were assured, would allow us to get better healthcare for cheaper! And so we got MACRA, The Medicare Access and CHIP Reauthorization Act, that introduced penalties for doctors unable to provide ‘good’ care. Never mind that in some years good care means you treat everyone with a statin, and in others it means treat no one with a statin. When in Rome, live like the Romans. In 2018 parlance, that roughly translates to “check every box you can and everything will be all right.”

In the face of legislative paralysis, administrators have a tremendous amount of power in picking winners and losers in the healthcare landscape. The prior administration, fueled by New Yorker articles that spoke of academic medical centers filled with virtuous cardiologists doing preoperative evaluations for free, set up a system that made winners of large health systems.  Reimbursement for office work was slashed, and rewards were put in play for documenting value-based care that were best accessed by performance improvement departments. A wave of consolidation followed. Hospitals merged, and office practices found safe harbor by becoming hospital practices overnight.  Medicare noticed. They were paying more for the same services if beneficiaries ended up at hospital owned clinics. As a result, the Medicare Payment Advisory Commission (MEDPAC) would recommend equalizing payments between free-standing office practices and hospital-based outpatient practices. And every year CMS administrators failed to act. The politics of moving against hospitals was apparently untenable for many.

That was until Seema Verma came on the scene. On November 2 via tweet, the announcement finally came:

The cheering that followed the announcement came from independent physicians under constant pressure from reimbursement rich hospitals. It was good news following a lump of coal delivered to physicians by the same Seema Verma days earlier by collapsing three commonly used office billing codes for evaluation and management into one code.

This particular move was cast primarily as a move to reduce the documentation burden for physicians and address physician burnout.  The reality is that the surviving independent physicians that hadn’t opted out of Medicare survived in part by using their electronic medical record to generate templated notes that were audit-proof level 4 billing machines. It’s a cat and mouse game that has been going on since the inception of Medicare.

A closer look reveals these moves to be far less bold than advertised. Collapsing Evaluation and Management (E&M) billing codes and site-neutral payments are small potatoes. The E&M code changes don’t take effect until 2021, and the reduction in payment for even those mostly billing level 4 codes is $19-$37 per patient. That’s not an insignificant amount, but it’s also not an amount that is back-breaking. The same holds true for site-neutral payments and their effects on hospitals. The policy doesn’t cover procedures done in the outpatient setting — only E&M payments — and the average cut applied to the hospital setting amounts to about $30 per patient as well. Medicare stands to save ~ $380 million dollars in this move. This only sounds like a lot of money if you didn’t know that total Medicare spending in 2016 was $672 billion.

Nonetheless, this is some major action by a Trump appointee that comes on the heels of a number of other policy pronouncements related to drug pricing that could easily have been made by a Clinton appointee. It took Seema Verma to take on doctors and hospitals in a way her predecessors did or could not. E&M documentation changes have not been made since 1997, and MedPac’s recommendation on site neutral payments have been steadfastly ignored year after year.  One would think the health policy world would applaud these moves, but after four days Seema Verma’s site-neutral tweet has ten retweets. Meanwhile, Atul Gawande tweeting 5 years too late that Epic sucks goes viral.

It reveals major foundational issues with health policy that the self-proclaimed objective/neutral/empiricists are really a group of brittle partisans that are either too biased or too scared to applaud Verma’s moves. This performance stands in stark contrast to the grave pronouncements of what would happen to the nation’s health after the devastating election of 2016. While these policies do little for those seeking to overturn the current system, as symbolic gestures, they send a hopeful message that the balance of power in the healthcare landscape may be shifting.

Anish Koka is a Cardiologist in private practice in Philadelphia.  Follow him on twitter @anish_koka.

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dolly yadavPeterHealthViewXBarry Carolpjnelson Recent comment authors
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dolly yadav
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dolly yadav

Thanks For Sharing With Us-
Doctors Near By Me clinics

HealthViewX
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HealthViewX

A good read, well-written and very informative.

“Medicare makes up 15% of the total federal budget. That’s almost $600 billion dollars out of a total federal outlay of $4 Trillion dollars.”

Peter
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Peter

“The problem facing much-beloved Medicare is one that faces every other government-funded healthcare extravaganza: it’s always projected to be running out of money.” As opposed to patients/insured running out of money to pay for care? “Medicare makes up 15% of the total federal budget. That’s almost $600 billion dollars…” $100 billion spent on sports in 2017. The 100 highest-paid athletes earned a collective $3.11 billion over the last 12 months (2017 Forbes). Just a couple of sobering comparisons. Think what we could save if it was Medicare for all and care providers had to charge at Medicare rates. How come… Read more »

Paul @ Pivot ConsultingLLC
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Paul @ Pivot ConsultingLLC

North Carolina state treasurer Dale Folwell is in charge of the state employee active and retiree health care plans. He is shaking things up. “Folwell said BCBSNC and UNC Health Care refuse to give the state billing data to determine what the health plan is paying for, and whether charges are legitimate. Blue Cross says the state plan is bundled with other clients and revealing the information would expose trade secrets.” and ” Folwell announced the State Health Plan would transition from a commercial-based program to a reference-based government pricing model which indexes provider payments to Medicare rates.” excerpts from… Read more »

Barry Carol
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Barry Carol

Check out the recently reported settlement of an antitrust case brought against Atrium Health in Charlotte, NC. This could be a big step forward for price transparency.

https://www.justice.gov/opa/pr/atrium-health-agrees-settle-antitrust-lawsuit-and-eliminate-anticompetitive-steering

Paul @ Pivot ConsultingLLC
Guest
Paul @ Pivot ConsultingLLC

Thanks for the news, I had not seen it.
” language in its agreements with health insurers that had restricted the insurers from creating plans that steered patients to competitors offering lower prices, ”
In my experience the Blue i dealt with fought me in setting up such a plan…but that was a while ago.

HealthViewX
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HealthViewX

Very well-written and a great read. Yes, more care options mean increased access with lower costs. #StrengtheningMedicare

Paul @ Pivot ConsultingLLC
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Paul @ Pivot ConsultingLLC

It appears to me abundantly clear that the legislatively empowered (MACRA/HITECH) central planners have tremendously damaged the noble profession of Medicine with their authority to foist untested/unpiloted interventions upon the system. If Verma etal can roll even some of that back we will be collectively better off. But many rent seekers have figured out how to benefit…a nd they will fight to keep every clever dollar in their fists.

pjnelson
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pjnelson

It should have been clear long ago when the National Academy of Science (aka National Academy of Medicine) contracted with the Rand Institute to study the benefits of a computer based medical record. It was funded by EPIC, General Electric and CERNER. We have lost the ability to establish trust, cooperation and reciprocity with each patient-person as a result of our competing, preoccupation with the cognitive dissonance occurring from an inscrutable set of data files and order sets.

Barry Carol
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Barry Carol

I’ll offer some encouraging news on Medicare spending. In its most recent Monthly Budget Review, the CBO reported net Medicare spending for the past three fiscal years as follows: 2016, $592 billion; 2017, $595 billion; and 2018, $585 billion despite growth of about 2% per year in the number of beneficiaries. These numbers are net of Part B beneficiary premiums, IRMAA surcharges and state payments on behalf of dual-eligible beneficiaries which the government accounts for as offsetting receipts. Second, I attended a panel discussion on dealing with dementia last weekend where one of the speakers was an elder care attorney… Read more »

pjnelson
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pjnelson

Just a few moments ago, I received the weekly e-mail edition from the CDC of its MMWR (morbidity and mortality weekly report). Its always interesting because of the broad variety of its reports. Included this week, the CDC described an analysis of how its Advisory Committee on Immunization Practices evaluates evidence. A list of members from the ACIP “Evidence Based Recommendations Work Group” appeared on the MMWR report: 26 members of which 4 were former members, 3 from Canada, 1 from Germany, 3 from the World Health Organization, and 6 were directly employed by the CDC. Among the Best Practices… Read more »

Steve2
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Steve2

The current administration, fueled by visions of markets curing everything, is really good at making announcements. Lets wait and see what really happens. This is the same administration that announced everyone was going to have health care, it would be cheaper, it would be great and it would be easy. I guess it is kind of nice that you are not cynical or skeptical and believe everything the current administration tells, but I will wait.

Steve

Paul @ Pivot ConsultingLLC
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Paul @ Pivot ConsultingLLC

Outstanding piece explaining the “inside baseball” of CMS bureaucrats and hospitals gaming and counter gaming. It even explains my primary care doc staring at the EHR screen and pushing this or that screening etc.: “, The Medicare Access and CHIP Reauthorization Act, that introduced penalties for doctors unable to provide ‘good’ care. Never mind that in some years good care means you treat everyone with a statin, and in others it means treat no one with a statin. When in Rome, live like the Romans. In 2018 parlance, that roughly translates to “check every box you can and everything will… Read more »