Tag: CMS

When Medicare “Cuts” are Medicare “Savings”

May 11, 2010• 19

By MAGGIE MAHAR

In a post titled “Slowing Down that Revolving Readmissions Door” the New America Foundation’s Joanne Kenen writes about avoidable readmissions. “I once interviewed a patient who literally could not remember how often he had been hospitalized within just a few months,” Kenen recalls, referring to a story published in the Washington Post last year.

There, she reported that “one of five Medicare hospital patients returns to the hospital within 30 days–at a cost to Medicare of $12 billion to $15 billion a year—and by 90 days the rate rises to one of three, according to an analysis of 2007 data by Stephen Jencks.” Within a year, two out of three are back in the hospital—or dead—says Jencks who consults on this issue for the Institute for Healthcare Improvement (IHI).

This is money that health care reformers could use as we expand care to the uninsured. It’s worth noting that what many call “Medicare cuts” are really “Medicare savings”—billions that could be reclaimed if we rescued patients from that revolving door.
Under reform legislation, hospitals with particularly high rates of avoidable readmissions will have Medicare payments reduced, beginning in 2011. I would guess that some private insurers will follow Medicare’s lead.

Don Berwick: An Activist Takes the Reins at CMS

Apr 2, 2010• 30

By BOB WACHTER, MD

While the health reform bill will have many effects, one of its most profound will be to unshackle the Centers for Medicare & Medicaid Services (CMS). Under the legislation, CMS is now far freer to undertake a variety of pilot programs and demonstration projects designed to improve quality, safety and efficiency, and to convert the successful ones into policy. And, if that wasn’t enough for those who have long been praying for a more activist CMS, we now learn that President Obama will select Don Berwick, the world’s most prominent advocate for healthcare quality and safety, to be the next CMS administrator. Although I’ve sparred a bit with Don over the years on matters of philosophy, I think he is a superb choice.

Don’s story is well known – a Harvard pediatrician and policy expert who became passionate about improving healthcare well before it was fashionable, he ultimately left his full-time academic perch to pursue his calling. In 1991, he founded the Institute for Healthcare Improvement, which ran on a shoestring for its first decade, fueled largely by the considerable power of Don’s vision and personality.Continue reading…

Dear Mr President, Medicare Stinks

Mar 17, 2010• 39

By ROB LAMBERTS

Dear Mr. President:

The physicians and management in our office had a discussion this morning about the upcoming audits physicians are facing from CMS. I had to wait for my blood pressure to get out of dangerous range to write this letter. The frustration, fear, and powerlessness I felt made me really question whether it is worth continuing to see my Medicare patients.

I am a primary care physician and about 20% of my patients are covered by Medicare. As a whole, they are wonderful people, but difficult patients. The elderly are truly a delight to talk to, learn from, and care for; I consider it an honor to be their doctor. But the complexity of a person’s medical problems goes up exponentially as they near the end of their life. This means that I spend more time per patient for my Medicare population – which is OK if I can be paid for my extra time and effort.

But here is the message we physicians are being given:

Medicare auditors will be knocking at our doors, and if there are “problems” with our charting we will be told to send money back to CMS for our whole Medicare population. We are obligated to prove that we did not defraud Medicare to reclaim the money for the work we did. This is, obviously, consistent with the cornerstone of the American legal system, “A person is presumed guilty unless they can prove that they are innocent.”

The “problems” they are looking for are inconsistencies in the charting and the billing we do. These “inconsistencies” are not just egregious attempts at stealing money from Medicare, they are little things like this:

A Backhanded Way to Make Policy

Feb 25, 2010

By PAUL LEVY

One of the arcane steps in government regulation of health care is the Physician Payment Rule. This is the manner in which CMS, the Medicare agency, annually allocates payment dollars among the various specialty services. The PPR effectively makes policy.

The construct for all of this is a zero-sum game. When CMS wants to raise fees for some specialties (e.g., primary care doctors), it is required to reduce the fees for others.Continue reading…

Careful What You Wish For

Jul 4, 2009• 25

By THE INCIDENTAL ECONOMIST

On the left are those who would like health reform to include a strong public plan, one that could negotiate large provider discounts, driving down the cost of medical care. On the right are those who think health insurance should be provided only privately. I’m neither left nor right. I consider myself a realist and an empiricist.

A reasonable reading of the political tea leaves suggests that health insurance for the non-elderly will remain largely a private affair. (See the Debating the Public Option in The American Prospect by Paul Starr, Robert Reich, and Robert Kuttner.) Therefore, I’d like the private insurance market to work well. I’m also very familiar with the Medicare experience (and its problems) with both public and private provision of insurance.

So is Kerry Weems, the former acting administrator of the Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare and Medicaid. Weems was interviewed recently by John Iglehart, the founding editor of Health Affairs, a respected journal of health policy (Doing More With Less: A Conversation With Kerry Weems, Health Affairs, 18 June 2009). Based on his experience managing Medicare and Medicaid, Weems had some interesting things to say, some of which I summarize below.

In general he paints an ugly picture of a public plan. If you’re hoping health reform includes a strong public plan you should be careful what you wish for, and you should read the interview to see what problems a public plan might have. This is not to say a public plan is better or worse than private plans. It is just to say that one should expect that a public plan will likely experience certain types of problems. Now on to the summary of the Weems-Iglehart interview.

On Congress. Congress has not treated CMS well because funding it is not as sexy as funding other agencies overseen by the same appropriation subcommittees: the National Institutes of Health and the Centers for Disease Control and Prevention. A consequence is that CMS has insufficient resources to fight waste, fraud, and abuse. For example, according to Weems,

“CMS’ annual expenditures [are]…more than the economies of all but twelve nations, and CMS carries out its responsibilities with a staff of 4,600 people. Social Security is of comparable budget size and handles its dollars with about 66,000 people…”

On Medicare Advantage. Weems feels that private plans under Medicare advantage can offer “better care at lower or the same costs” as traditional fee-for-service Medicare.

On Payment Errors. Medicaid has a payment error rate of 24 percent, meaning that the payments paid to providers are either incorrect or unverifiable 24 percent of the time.

On Waste, Fraud, and Abuse. Investigations of waste, fraud, and abuse under Medicare and Medicaid have yielded a return of $17 for every $1 spent. However, far too little is spent in the fight. Therefore, a considerable amount of waste, fraud, and abuse exist under Medicare and Medicaid. (See the recent stories on fraud in Miami, Detroit, and Denver.)

On a Public Plan under Health Reform. Weems thinks a public plan is “a bad idea because the government has a difficult time selecting only those providers who deliver high-quality care. There is a risk that a lot of resources will be wasted on poor care.

On Political Pressure. CMS administrators get a lot of pressure from Congress to treat certain providers more favorably than they might deserve. Such political meddling is a handicap in properly administering a public insurance plan.

On Physician Payments. The American Medical Association (AMA) has considerable influence on physician payments through its Resource Based Relative Value Scale (RBRVS) Update Committee (RUC). Weems thinks the resulting payments have “contributed to the poor state of primary care in the United States.” (Weems’ anti-RUC statements sparked a blogosphere debate (hat tip: Kate Steadman of Kaiser Health News). Rebecca Patchin, Chair of the Board of Trustees for the American Medical Association wrote on the Health Affairs blog that CMS is under no obligation to follow the RUC’s recommendations and she cites examples where it has not done so. On the Health Care Renewal blog, physician and Brown University professor Roy Poses asks “why does CMS rely exclusively on the RUC to update the RBRVS system, apparently making the RUC de facto a government agency, yet without any accountability to CMS, or the government at large?”)

On balance, it is clear that Weems is not impressed with the public provision of health insurance under Medicare and Medicaid. Some of the sources of problems could in principle be remedied. However, if Congress were to implement a public plan under health reform there is no assurance it would not suffer from at least some of the problems that plague traditional Medicare and Medicaid. I think the most challenging are political pressures, including rent seeking on the part of providers, and a potential inability for a public entity to selectively contract based on quality.

The Incidental Economist holds a joint appointment at a major research
university and a federal government agency. In his current position,
he studies economic issues pertaining to U.S. health care policy with a
focus on Medicare. His writings can be found at www.theincidentaleconomist.com