A Trump administration regulation issued just hours before the partial federal shutdown offers quiet hope for civility in government.
What happened, on its face, was simple: an update of the rules governing a particular Medicare program. In today’s dyspeptic political climate, however, what didn’t happen along the way was truly remarkable – and may even offer some lessons for surviving the roller-coaster year ahead.
A regulatory process directly connected to Obamacare and billions in federal spending played out with ideological rhetoric completely absent. And while there were fervid objections to the draft rule from those affected, the final version reflected something that used to be commonplace: compromise.
Think of it as Survivor being replaced by Mr. Smith Goes to Washington. Or, perhaps, a small opening in the wall of partisan conflict.
More on that in a moment. First, let’s briefly examine the specifics.
On the morning of December 21, I opened my copy of the New York Times to find an op-ed that said almost exactly what I had said in a two-part article The Health Care Blog posted two weeks earlier. The op-ed criticized the Hospital Readmissions Reduction Program (HRRP), one of dozens of “value-based payment” programs imposed on the Medicare fee-for-service program by the Affordable Care Act. The HRRP punishes hospitals if their rate of readmissions within 30 days following discharge exceeds the national average. The subtitle of the op-ed was, “A well-intentioned program created by the Affordable Care Act may have led to patient deaths.”
The first half of the op-ed made three points: (1) The HRRP appears to have reduced readmissions by raising the rate of observation stays and visits to emergency rooms; (2) the penalties imposed by the Centers for Medicare and Medicaid Services (CMS) for “excessive readmissions” have fallen disproportionately on “safety net hospitals with limited resources”; and (3) “there is growing evidence that … death rates may be rising.”
That’s exactly what I said in articles published here on December 6 and December 7. In Part I, I described the cavalier manner in which the Medicare Payment Advisory Committee (MedPAC) endorsed the HRRP in its June 2007 report to Congress. In Part II, I criticized the methodology MedPAC used to defend the HRRP in its June 2018 report to Congress, and I compared that report to an excellent study of the HRRP published in JAMA Cardiology by Ankur Gupta et al. which suggested the HRRP is raising mortality rates. In its June 2018 report, MedPAC had claimed the HRRP has reduced the rate at which patients targeted by the HRRP were readmitted within 30 days after discharge without increasing mortality. Gupta et al., on the other hand, found that for one group of targeted patients – those with congestive heart failure (CHF) – mortality went up as 30-day readmissions went down.
Fueled by Americans’ urgent need for better chronic disease care and insurers’ march from fee-for-service to value-based payments, innovation in population health management is accelerating across the health care industry. But it’s hardly new, and CareMore Health, a recent acquisition of publicly-traded insurer Anthem, has been on the vanguard of the trend for over twenty years.
CareMore Health provides coordinated, interdisciplinary care to high-need patients referred by primary care physicians in nine states and Washington, D.C. The care encompasses individualized prevention and chronic disease management services and coaching, provided on an outpatient basis at CareMore’s Care Clinics. It also includes oversight of episodic acute care, via CareMore “extensivists” and case managers who ensure effective coordination across providers and care sites before, during and after patient hospitalizations.
The majority of CareMore patients are covered by Medicare Advantage or Medicaid, and company-reported results, as well as a Commonwealth Fund analysis, indicate that the patient-centered, relationship-based model leads to fewer emergency room visits, specialist visits and hospitalizations for segments of the covered population. They also suggest that it leads to cost efficiencies relative to comparable plans in its markets of operation.
Leaders in hospitals and health systems as well as post-acute care providers such as skilled nursing facilities (SNFs) and Home Health Care (HHC) agencies operate in a complex environment. Currently, the health care reimbursement environment is largely dominated by fee-for-service models. However, acute and post-acute leaders must increasingly position their organizations to prepare for, and participate in, evolving value-based care programs—without losing sight of the current fee-for-service reimbursement structure.
With that said, the call to action for acute and post-acute providers working at both ends of the reimbursement spectrum is real. The time is now to innovate, test and adopt new post-acute care models to support each patient’s transition from hospital to post-acute settings, and eventually home to enable a better care experience for patients and their care teams.
This is especially relevant for Skilled Nursing Facilities (SNFs) and chains that meet the current Medicare requirements for Part A coverage. Increasingly, the SNF industry is under pressure from the Medicare program to improve coordination and outcomes. Medicare’s hospital readmission policy and value-based purchasing program (VBP), bundled payments, and ACOs encourage SNFs, and other post-acute settings, to avoid readmissions. In addition, earlier this year, the Centers for Medicare and Medicaid Services (CMS) finalized a new patient-driven payment model (PDPM) for SNFs, which will go into effect on October 1, 2019. The overhaul of the entire system will require significant staff focus and operational changes.
The Hospital Readmissions Reduction Program (HRRP), one of numerous pay-for-performance (P4P) schemes authorized by the Affordable Care Act, was sprung on the Medicare fee-for-service population on October 1, 2012 without being pre-tested and with no other evidence indicating what it is hospitals are supposed to do to reduce readmissions. Research on the impact of the HRRP conducted since 2012 is limited even at this late date , but the research suggests the HRRP has harmed patients, especially those with congestive heart failure (CHF) (CHF, heart attack, and pneumonia were the first three conditions covered by the HRRP). The Medicare Payment Advisory Commission (MedPAC) disagrees. MedPAC would have us believe the HRRP has done what MedPAC hoped it would do when they recommended it in their June 2007 report to Congress (see discussion of that report in Part I of this two-part series). In Chapter 1 of their June 2018 report to Congress, MedPAC claimed the HRRP has reduced 30-day readmissions of targeted patients without raising the mortality rate.
MedPAC is almost certainly wrong about that. What is indisputable is that MedPAC’s defense of the HRRP in that report was inexcusably sloppy and, therefore, not credible. To illustrate what is wrong with the MedPAC study, I will compare it with an excellent study published by Ankur Gupta et al. in JAMA Cardiology in November 2017. Like MedPAC, Gupta et al. reported that 30-day CHF readmission rates dropped after the HRRP went into effect. Unlike MedPAC, Gupta et al. reported an increase in mortality rates among CHF patients. 
We will see that the study by Gupta et al. is more credible than MedPAC’s for several reasons, the most important of which are: (1) Gupta et al. separated in-patient from post-discharge mortality, while MedPAC collapsed those two measures into one, thus disguising any increase in mortality during the 30 days after discharge; (2) Gupta et al.’s method of controlling for differences in patient health was superior to MedPAC’s because they used medical records data plus claims data, while MedPAC used only claims data.
I will discuss as well research demonstrating that readmission rates have not fallen when the increase in observation stays and readmissions following observations stays are taken into account, and that some hospitals are more willing to substitute observation stays for admissions than others and thereby escape the HRRP penalties.
All this research taken together indicates the HRRP has given CHF patients the worst of all worlds: No reduction in readmissions but an increase in mortality, and possibly higher out-of-pocket costs for those who should have been admitted but were assigned to observation status instead.
Egged on by the Medicare Payment Advisory Commission (MedPAC), Congress has imposed multiple pay-for-performance (P4P) schemes on the fee-for-service Medicare program. MedPAC recommended most of these schemes between 2003 and 2008, and Congress subsequently imposed them on Medicare, primarily via the Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
MedPAC’s five-year P4P binge began with the endorsement of the general concept of P4P at all levels – hospital, clinic, and individual physician – in a series of reports to Congress in 2003, 2004, and 2005. This was followed by endorsements of vaguely described iterations of P4P, notably the “accountable care organization” in 2006 , punishment of hospitals for “excess” readmissions in 2007 , the “medical home” in 2008 and the “bundled payment” in 2008. None of these proposals were backed up by anything resembling evidence.
Congress endorsed all these schemes without asking for evidence or further details. Congress dealt with the vagueness of, and lack of evidence supporting, MedPAC’s proposals simply by ordering CMS to figure out how to make them work. CMS staff added a few more details to these proposals in the regulations they drafted, but the details were petty and arbitrarily adopted (how many primary doctors had to be in an ACO, how many patients had to sit on the advisory committee of a “patient-centered medical home,” how many days had to expire between a discharge and an admission to constitute a “readmission,” etc.).
New rule, new culture
This process – invention of nebulous P4P schemes by MedPAC, unquestioning endorsement by Congress, and clumsy implementation by CMS – is not working. Every one of the proposals listed above has failed to cut costs (with the possible exception of bundled payments for hip and knee replacements) and may be doing more harm than good to patients. These proposals are failing for an obvious reason – MedPAC and Congress subscribe to the belief that health policies do not need to be tested for effectiveness and safety before they are implemented. In their view, mere opinion suffices.
This has to stop. In this two-part essay I argue for a new rule: MedPAC shall not propose, and Congress shall not authorize, any program that has not been shown by rigorously conducted experiments to be effective at lowering cost without harming patients, improving quality, or both. This will require a culture change at MedPAC. Since its formation in 1997, MedPAC has taken the attitude that it does not have to provide any evidence for its proposals, and it does not have think through its proposals in enough detail to be tested. Over the last two decades MedPAC has demonstrated repeatedly that it believes merely opining about a poorly described solution is sufficient to discharge its obligation to Congress, taxpayers, and Medicare enrollees. Continue reading…
But ACOs could pave the way for more significant cost-cutting based on competition.
By KEN TERRY
The Medicare Shared Savings Program (MSSP), it was revealed recently, achieved a net savings of $314 million in 2017. Although laudable, this victory represents a rounding error on what Medicare spent in 2017 and is far less than the growth in Medicare spending for that year. It also follows two years of net losses for the MSSP, so it’s clearly way too soon for anyone to claim that the program is a success.
The same is true of accountable care organizations (ACOs). About a third of the 472 ACOs in the MSSP received a total of $780 million in shared savings from the Centers for Medicare and Medicaid Services (CMS) in 2017 out of the program’s gross savings of nearly $1.1 billion. The other MSSP ACOs received nothing, either because they didn’t save money or because their savings were insufficient to qualify them for bonuses. It is not known how many of the 838 ACOs that contracted with CMS and/or commercial insurers in 2016 cut health spending or by how much. What is known is that organizations that take financial risk have a greater incentive to cut costs than those that don’t. Less than one in five MSSP participants are doing so today, but half of all ACOs have at least one contract that includes downside risk.
As ACOS gain more experience and expand into financial risk, it is possible they will have a bigger impact. In fact, the ACOs that received MSSP bonuses in 2017 tended to be those that had participated in the program longer—an indication that experience does make a difference.
However, ACOs on their own will never be the silver bullet that finally kills out-of-control health spending. To begin with, 58 percent of ACOs are led by or include hospitals, which have no real incentive to cut payers’ costs. Even if some hospitals receive a share of savings from the MSSP and/or private insurers, that’s still a drop in the bucket compared to the amount of revenue they can generate by filling beds instead of emptying them. So it’s not surprising that physician-led ACOs are usually more profitable than those helmed by hospitals.
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.”Continue reading…
We missed our chance to do a Happy Hour Health in 2 Point 00 at Connected Health in Boston (but let’s be honest, those are usually not the most cogent pieces of information in health and technology). Join Jessica DaMassa as she gets my take on the conference starting with #S4PM’s event, where I met some incredible people, including Patty Brennan and Doug Lindsey, who spoke about their experiences with health care knowledge (deploying it and creating it!). Danny Sands and e-Patient Dave even had quite the musical performance there, singing about e-Patient blues. Susannah Fox, Don Berwick, Don Norman were at Connected Health 18, presenting their new initiative, L.A.U.N.C.H. I even interviewed Jesse Ehrenfeld, the chair elect of AMA, and his spoke to him about the digital health play book that the AMA just released. A company to take note of that wasn’t at #CHC is Devoted Health, who just raised $300m. Devoted is looking at building a better Medicare Advantage “payvider” for seniors. If you are interested in Guild Serendipity’s conference which empowers and engages female CEOs and Cofounders, come join us in San Francisco October 26-27, SMACK.health is sponsoring the women’s health houses – Matthew Holt
By KENNETH D. MANDL, MD; DAN GOTTLIEB MPA; JOSH C. MANDEL, MD
The opportunity has never been greater to, at long last, develop a flourishing health information economy based on apps which have full access to health system data–for both patients and populations–and liquid data that travels to where it is needed for care, management and population and public health. A provision in the 21st Century Cures Act could transform how patients and providers use health information technology. The 2016 law requires that certified health information technology products have an application programming interface (API) that allows health information to be accessed, exchanged, and used “without special effort” and that provides “access to all data elements of a patient’s electronic health record to the extent permissible under applicable privacy laws.”
After nearly two years of regulatory work, an important rule on this issue is now pending at the Office of Management and Budget (OMB), typically a late stop before a proposed rule is issued for public comment. It is our hope that this rule will contain provisions to create capabilities for patients to obtain complete copies of their EHR data and for providers and patients to easily integrate apps (web, iOS and Android) with EHRs and other clinical systems.
Modern software systems use APIs to interact with each other and exchange data. APIs are fundamental to software made familiar to all consumers by Google, Apple, Microsoft, Facebook, and Amazon. APIs could also offer turnkey access to population health data in a standard format, and interoperable approaches to exchange and aggregate data across sites of care.