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MedPAC’s Proposed “Reforms” Should Be Tested Before They’re Implemented: CMS’s Hospital Readmissions Reduction Program Is Exhibit A

By KIP SULLIVAN JD Kip Sullivan about MedPAC’s Proposed Reforms

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 [1], punishment of hospitals for “excess” readmissions in 2007 [2], 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.
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When Health Insurance is Free

Did you know that an estimated one of every three uninsured people in this country is eligible for a government program (mainly Medicaid or a state children’s health insurance plan), but has not signed up?

Either they haven’t bothered to sign up or they did bother and found the task too daunting. It’s probably some combination of the two, and if that doesn’t knock your socks off, you must not have been paying attention to the health policy debate over the past year or so.

Put aside everything you’ve heard about ObamaCare and focus on this bottom line point: going all the way back to the Democratic presidential primary, ObamaCare was always first and foremost about insuring the uninsured. Yet at the end of the day, the new health law is only going to insure about 32 million more people out of more than 50 million uninsured. Half that goal will be achieved by new enrollment in Medicaid. But if you believe the Census Bureau surveys, we could enroll just as many people in Medicaid by merely signing up those who are already eligible!

What brought this to mind was a series of editorials by Paul Krugman and Robert Reichand blog posts by their acolytes (at the Health Affairs blog and at my blog) asserting that government is so much more efficient than private insurers. Can you imagine Aetna or UnitedHealth Care leaving one-third of its customers without a sale, just because they couldn’t fill out the paperwork properly? Well that’s what Medicaid does, day in and day out.

Put differently, half of everything ObamaCare is trying to do is necessary only because the Medicaid bureaucracy does such a poor job — not of selling insurance, but of giving it away for free!

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Good News for Uninsured Children Should Jumpstart Health Reform

In 2008, the number of uninsured children in the United States hit the lowest level in two decades.  If Congress weren’t in the middle of a fierce debate on health reform, there would be time for everyone to celebrate a remarkable achievement and maybe even pause to reflect on how it was accomplished.  To paraphrase David Byrne of the Talking Heads: “We might ask ourselves, how did we get here?” We got here with federal fiscal support, leadership, state ingenuity and a willingness to make a sustained effort to address the issue of uninsured children.  The states deserve a lot of credit.  It’s been impressive to see how state policymakers from across the political spectrum have rallied to support children’s coverage, despite facing tough economic obstacles in recent years.   Even in the midst of terrible fiscal problems, the vast majority of states have maintained children’s coverage in Medicaid and CHIP.  This year so far, a whopping twenty-three states found a way to expand or improve children’s coverage, proving what can be accomplished when the federal government is a strong fiscal partner.

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California Moves Backward on Covering Uninsured Children

During tough budget times, most states have maintained their commitment to covering uninsured children. At least eighteen states have even further strengthened coverage for uninsured children, despite budget problems, as the recession has increased the need.While many states have prioritized covering uninsured children, California lawmakers voted to deny coverage to nearly 800,000 children. This decision ignores strong public support for providing affordable health coverage to children and families. This decision also undermines California’s ability to access federal funds, just when the state needs them most. The Children’s Health Insurance Program Reauthorization Act of 2009 made the federal government an even stronger partner for states that prioritize covering uninsured children. California’s $144 million children’s coverage cut will cost the state $267 million in federal funds.This is a difficult time for state budgets but an even harder time for family budgets, and many states are responding to meet the need. Alabama, Washington, North Dakota, Colorado, Iowa, Kansas, Nebraska, Arkansas, West Virginia, and Montana have all expanded coverage; Oregon and Ohio are on the verge of doing the same. Other states have instituted reforms designed to make their CHIP and Medicaid programs more family-friendly, all with the goal of increasing access to affordable health coverage for children.California faces unique public policy challenges that have contributed to this step backward for children. The state was hit particularly hard by the economic and housing crises. More importantly, California has legal restrictions that put large shares of the state’s budget out of lawmakers’ reach, as well as supermajority requirements for passage of budget legislation.While the search continues for ways to help California restore affordable health coverage options for children and families and hope remains high that national health insurance reform will be enacted soon, California’s decision should not diminish the accomplishments of the other states. It is critical that states keep working to strengthen and maintain the gains they’ve made in offering affordable health coverage options to uninsured children and that the federal government remain a strong partner in their efforts.

The Tri-Committee Health Reform Bill: Implications for Children

A little more than two weeks ago the three major committees in the
House with jurisdiction over health reform put out a draft legislative
proposal, known as "The Tri-Committee bill."  We've now read the 852-page document
a few times, and think it would make giant strides in providing access
to coverage to millions more people and transforming the country's
health care delivery system.  Of particular note for kids, it includes:

  • Major expansions in access to affordable coverage for their parents and other adults.  (Click here for just a few of the articles showing a clear link between how children fare and the health and stability of their parents.);
  • Continued coverage of children through Medicaid with its strong, child-specific benefit package;
  • Increases in Medicaid reimbursement rates; and
  • A
    guarantee that no child born in a U.S. hospital leaves without
    insurance.  (For more details on these and other provisions, see our Fact Sheet on the Tri-Committee bill.)

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