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What would a rational DOG(gi)E do(o)?

By MATTHEW HOLT

DOGE, or Doggie as Kara Swisher has been calling it, has gone from being a meme about Shiba Inus to a crypto scam to a group tearing the Federal government apart.So I thought I would use the title of this piece to make a joke. Like Musk’s humor it’s puerile and not funny. What’s also not funny is what Musk’s team has done to small government agencies, like USAID & CFPB that really help people, not to mention the irrational firing of thousands of government employees that appear to be screwing up the NIH, the National Parks, the FAA and much more. But it’s all got me thinking, what in health care should an effort to quickly rationalize government spending do?

Now I’m not proposing that there’s anything OK with the way Musk and his team have been blundering around the Federal government, telling lies about what it does and indiscriminately firing the people who have the most important responsibilities and then desperately trying to get them to come back. This has been pure ignorance theater, and it would be hilarious if it wasn’t so damaging. Equally importantly the places DOG(gi)E has started are stupid because they don’t spend much money. But the government spends a lot on health care –between two and three trillion dollars, depending on how you count it.

So if you wanted to save some money and potentially change the system, what would you do? First you’d take a deep breath and get some real data, and improve your understanding about what is actually happening. There are some areas in health care where the issues are well understood and the data is clear and there are others where it’s less obvious.

Let’s start with a relatively small one–spending on Federal Employees health benefits. Chris Deacon’s Linkedin posts are a constant source of fun and games, and she has been highlighting screwups in the FEHBP administration for a long time. Essentially the government via the OPM pays lots of different insurance companies to manage Federal employees’ health care. There is very poor oversight of what happens in those programs and when the OPM’s OIG points that out, not much happens. The plans (including Horizon Blues in NJ and BCBSNC and many others) have been caught being sloppy or fraudulent but not much has happened. All DOG(gi)E needs to do is read the report on the audits, or look at what GOA said about $1bn being spent on ineligible members in 2022 and apply their recommendations.

Next let’s get into something that requires a little more investigation. In America we buy (and sell) drugs in a mind-bogglingly complex way.

Continue reading…

Fake News from MedPac on Medicare Advantage Needs to Be Corrected, Part 2

By GEORGE HALVORSON

Special Needs Plans Change Lives for The Lowest Income and Highest Need Patients

The people who benefit the most from Medicare Advantage are clearly the very low-income and high health-need people who are eligible for both Medicare and Medicaid as programs and who enroll as members in the Medicare Advantage Special Needs Plan programs.

There clearly aren’t any other programs existing in our country that do more good for large numbers of needing people than the Medicare Advantage Special Needs Plans do for those members.

Those people with that dual eligibility are in major need for care.

We have millions of retirees who are eligible for both programs who have gone through years of inequities, inadequacies, and deficiencies relative to our care systems for a number of reasons, and who are now in need of care and support at multiple levels in their lives.

The plans do extremely good things for those high-need patients.

Medicare Advantage Special Needs Plan programs now help and provide services to millions of people who’ve actually never had good or adequate care in their entire lives.

The Special Needs Plan programs for Medicare Advantage reach into people’s homes and provide layers of service and support that are life changing, badly needed, and the Special Needs Plans are much appreciated, with very high satisfaction levels from the patients they serve for that better care and far better life support levels.

We tend, as a country, to abandon and under serve people in too many settings and communities who are old and who have no money and who are in significant need of care. The Medicare Advantage programs do wonderful and badly needed things for many of those patients that we need to understand, appreciate, and then protect as we look at Medicare Advantage plans and the overall Medicare Advantage programs and approaches.

The people at MedPac who are trying so hard to reduce the benefit levels for Medicare Advantage members and who do shamelessly inaccurate, distorted, and clearly intentionally fake news pieces on the cost of Medicare Advantage plans are trying to undermine and weaken the Special Needs Plan program in order to somehow create a level playing field with higher income patients for Medicare for the patients who get the most benefits from those programs.

That’s a very bad practice, and protecting those high-income people is a very wrong functional priority for MedPac to have. But they have it year after year in uncaring, insensitive, and cold ways relative to those patients and they seem impervious to data and information from all of the plans about those patients and that care, and their need for those benefits and services in their lives.

We need MedPac to clean up their act relative to their lowest income people, and we need them to start telling the truth about the actual relative cost of Medicare Advantage.

And we very much need them to understand how much the lowest income members need those benefits.

We need them to stop saying that the plans are overpaid when they know better from having more than 6 million people enrolled as Special Needs Plan members and benefit levels, and when they know that two out of three of the lowest income Members are in plans, and it should be painfully obvious to even the most cold-hearted observer, that those people clearly need the care and benefits that they get there from the plans.

The Medicare Advantage attacks from MedPac in their current report now say that the total cost of Medicare Advantage is 22% higher than those members would have cost as normal Medicare members.

They actually say in their most recent report that if all of the Medicare Advantage enrollees were now actually enrolled in fee-for-service Medicare, those enrollees who are currently in the plans would cost 22% less money for the overall Medicare program.

That’s obviously impossible and it’s a complete fabrication that they do not support in their document with even a wisp of data.

They use that false information, and they use a very skillful and intentional fake news context to attack the plans with that information.

Continue reading…

Fake News from MedPac on Medicare Advantage Needs to Be Corrected, Pt 1

By GEORGE HALVORSON

MedPac has just released a report on Medicare Advantage that’s incorrect on multiple key points that need to be corrected.

Medicare Advantage currently enrolls the majority of Medicare members in the country, and it’s now the new basic plan for the Medicare program because of that majority enrollment level.

That’s very good news for Medicare because the average cost for those members is significantly less than those members would’ve cost under fee-for-service Medicare — and we can be comfortable and know that the lower cost is permanent because of the way we pay for the program.

The plans are paid a capitation for each member, and they’re not paid a fee for each piece of care that’s delivered to Medicare patients.

The capitation is an excellent purchasing approach for the program because it limits the amount paid for the enrollees, and when that amount, paid in capitation, is lower than the average cost of care for the traditional Medicare members, it guarantees that those lower costs will be paid for those members for the Medicare program, and that those costs will continue to be lower for Medicare.

The program that’s used to set the bids for the plans annually calculates the average cost of the traditional Medicare program in every county, and then lets the plans bid for the amount they will be paid for their members for the next year.

Those average costs for Medicare members are accurately calculated, and they’re based on consistent information that Medicare records, computes, and then reports on actual spending in every county by fee-for-service Medicare for the members every year.

The plans look at the information from the fee-for-service Medicare program in every county each year and then they each bid a capitation that’s always lower than that average cost, because those average Medicare costs are actually higher than the Plans need to provide the full set of required care for their members.

That bidding process guarantees that the plans will cost less than fee-for-service Medicare because it’s legitimately, appropriately and accurately based on the actual costs of that program in every county as the starting points for the bids each year.

We know that’s how much Medicare costs in every county using those numbers — and when the plans submit bids that are lower than that average cost, we know that the lower amount in those bids represents actual savings to the Medicare program.

In the world of insurance, having a bid that sets and determines the payment level for the coverage from every plan is a competent, appropriate, intellectually sound, financially legitimate, accurate, and fully functional payment approach and price for Medicare to spend on that coverage as a buyer.

Medicare is a buyer for Medicare Advantage and not just a payer as it is for the rest of the fee-for-service Medicare program.

Once the bid is set, all of the concerns, worries, risks, and uncertainties of the payment process that people used to have about the payments disappear, because that bid amount is exactly how much the plans will be paid for their members and it can’t be modified or changed in any way by the plans.

There are no possible upcoding approaches or risk pool manipulation processes or any possible subsequent plan fudging on the right cost for payments based on the risk levels of the patients that can happen for those payments because the capitation payment is the only one that Medicare will give to the plans, and that locks the cost in place.

That protection against future up coding problems is clear and true because the bids are the final payment to the plans, and there’s no way of doing any kind of risk-pool manipulation after the fact to create any level of overpayment after that capitation payment is made to each plan.

CMS Uses Good Encounter Data to Get that Risk-Level Information

CMS now has very good information about the actual risk levels of the members because they competently, appropriately, effectively and completely eliminated all of the old coding systems that were using estimates from the plans that they previously used to get the patient risk-level information to create the payments.

They replaced that old data flow from the plans with actual encounter data from the care delivered to each patient with information about each actual encounter, and that encounter data at the point of care ties back to the actual medical records that exist and that are used in the care settings for each patient.

The risk levels of the members in the plans are now determined and set by an extremely accurate process that uses the actual care encounter reports for each patient that are filed with the Medicare program to get each diagnosis for each piece of care.

There were some earlier systems for paying the plans that were built on plans filing data about the risk levels of the members, and there were some instances where some plans did filings in ways that upcoded and increased their payment levels, but CMS has actually completely eliminated and cancelled those old processes and reports, and now gets the needed diagnosis data for the payment system from the actual encounters that are filed by the providers for each piece of care.

We now have very current data about the patients, and the reporting process is extremely accurate in its information flow.

Continue reading…

Medicare Advantage Has Saved Medicare

By GEORGE HALVORSON

The Program has also Helped Millions of Low-Income Retirees with Better Retirement Benefits and Needed Support Services

Medicare Advantage (MA) has saved Medicare. Half of those in Medicare are in MA and their care costs less on average. This means the Medicare Trust Fund is protected against future deterioration because MA’s cost increases continuously run below the average increase in Medicare Trust Fund revenue each year.

The capitation paid to MA plans for each member is based each year on the actual average cost of fee-for-service Medicare in every county. Payments to the plans are now running about 11% below that average cost.

The plans bid capitation levels that are below the average cost of fee-for-service Medicare every year because the plans deliver much better care. The functional truth that most policy people do not know or understand is that better care costs less money, when you design the system and the processes to achieve that result.

Fee-for-service Medicare is expensive and too often is poorly delivered. The fee-based payment model pays more for bad and failed care because when the caregivers are paid only by the piece, they have more pieces to deliver when care fails. They deliver and bill for even more pieces when the health of a member deteriorates. When inferior care creates complications and mishaps more pieces of care are needed for that patient.

Diabetic Blindness Reduced By 60% With Blood Sugar Control

MA plans bid capitation levels every year based on the financial opportunity created by that bad care in FFS. The plans know that diabetic blindness can be reduced by 60% or more if the patients have their blood sugar controlled. The plans set their capitation levels knowing that the average cost of care in every county includes the high level of blindness that happens when FFS providers do not help their patients achieve their blood sugar control goals and thus incur extra expenses for those patients.

The Medicare Advantage program has blood sugar control as a key focus point. That is important and relevant, because the plans can collect the capitation money that was created by no blood sugar controls, and then can and do reduce blindness significantly by achieving that goal. They spend significantly less money on those patients.

The MA payment program is set up to have the plans create financial surpluses from better care and then to have the plans use those surpluses to improve the benefits of their members. The plans create those surpluses and use them to pay for additional benefits–so the Medicare Advantage members have vision benefits, dental benefits, hearing benefits, and various social support benefits that do not exist in the traditional Medicare benefit package.

Those expanded benefits do not increase the cost of Medicare because they are created by the capitation cash flow that runs about 11%–17% below the actual average cost for fee-for-service Medicare in each county. That is a far better use of the Medicare dollar and it is not an additional expense for the program.

The plans identify which patients have congestive heart failure or asthma and then they work with those patients to significantly reduce their crisis levels and improve care for those patients. The MA members with those conditions have much better lives and they have less physical pain, stress, anxiety and damage because they avoid those crises. The better care results in 40% fewer days in the hospital for both of those conditions. Plans save money by having significantly better care for those patients.

Amputation Five-Year Mortality Rate is Over 40%

A major expense for the Medicare program is amputations. We have some of the highest amputation rates in the world for our lower income patients.

MA plans know that 90% of amputations are caused by foot ulcers. You can reduce foot ulcers by more than 60% just by having dry feet and clean socks. So the plans save billions of dollars that create surpluses in their capitation cash flow and they significantly improve the life expectancy of those patients just by providing those services consistently and intentionally to their diabetic members.

The five-year mortality rate for the people who have amputations ranges from 40%–80%. In their attacks on the program MA’s critics never mention those amputation numbers and those important and real death rates .

Special Needs Plans Now Serve Over 6 Million People

MA Special Needs Plans (SNP) just had their enrollment grow to 6.5 million members in January of this year. SNP enrollees are eligible for both Medicare coverage and Medicaid coverage. They have some of the highest health care needs in the country and too often have some of the lowest levels of resources to deal with basic aspects of their lives and their care.

The critics also don’t mention that the SNPs do life changing and extremely beneficial work for the lowest-income and highest-need people in the Medicare program.

Millions of people enrolled in SMP plans have been badly impacted by various social determinants of health issues, as well as by care delivery failures for their entire lives. SNPs are often the first organized care related support that millions of those patients have had for their personal care.

People With Weak Retirement Plans Need the Additional Benefits

Those who look at the Medicare program need to understand and appreciate the fact that the expanded benefit package from the plans is often extremely important and directly relevant to the daily lives of millions of people. They are retired but have few assets and low levels of financial support for their retirement years.

We are no longer at the point where retirees in America can rely on a pension plan and basic retirement benefits after they retire. Fewer than half of retirees today have a pension payment or a deferred compensation plan of any kind. Most retirees have a low cash reserves to use to purchase needed services and benefits in their retirement years.

There is a solid set of reasons why almost 90% of our lowest income Medicare beneficiaries are now enrolled in MA plans. There are also obvious reasons why those numbers include more than 70% of African-Americans and more than 80% of Hispanics. Additionally, MA has language competency requirements for Hispanic enrollees that do not exist for fee-for-service Medicare.

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What does CVS’s new deal signify about Medicare Advantage?

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Meanwhile, it’s time for Matthew’s tidbits. A quick moment’s thought of course for the Queen, her family and semi-loyal subjects, of which I am (sort of) one. In fact in the last 7 days my ancestral homeland of the UK has got a new King, a new prime minister and a new manager at Chelsea FC. Still, two of three of those changes seem to happen about every 18 months so we shouldn’t be too surprised that they all happened at once.

Talking of changes, this week’s big American health care news was the other Matthew Holt pocketing a boatload of cash. Yes, Jess DaMassa is still hoping to upgrade her partner on Health Tech Deals without having to change the name on the intro (and ain’t shy about telling me!). The wrong Matthew Holt (from my bank balance’s perspective) has a fund called New Mountain Capital, which owns a lot of health tech assets. It was the majority owner of Signify Health–bought this week for $8bn by CVS, after being the subject of a bidding war between them, United & Amazon.

Signify is very interesting for what it does or doesn’t do. Almost all its business (having acquired and recently shut down a bundled care payments division) is now connected to sending nurses out to the homes of Medicare Advantage (MA) members on behalf of all the big payers (Aetna, United, Humana, etc) to do in-home health assessments of their members. Critics say that these assessments were used to upcode the health risk assessment factor (RAF) of those members, which causes CMS to pay more to those MA plans. MA’s defenders, including George Halvorson on THCB, say that this upcoding isn’t happening, or at least not in that way, and that the better care MA members get actually reduces overall Medicare costs.

Having read a lot and been talked at by both sides of this debate, it seems to me that both things are true. Many MA members have been “upcoded”, in many cases perhaps legitimately, and the CMS data–which is extremely murky & hard to parse–also seems to indicate that MA members’ treatment overall costs less than those in FFS. (I’ll spare you the CMS Trustees report but here is Milliman’s assessment–albeit paid for by MA proponents–using their data. MedPAC disagrees).

Signify brought in over $640m in revenue for those home evaluations in 2021 and is forecasting over $1bn in revenue this year at a healthy EBITDA. But that still means CVS is paying 8 times future revenue & maybe 30-40 times earnings. It will indeed be interesting to see if health plans remain so keen on these home evaluations if (as George Halvorson says) CMS has actually stomped on them being used for RAF upcoding. It’s also not clear if those MA plans competing with CVS/Aetna will be keen on using a company owned by one of their rivals–which might put its thumb on the scale in ways they can’t know about.

Of course, it might just be that what Signify is doing is radically improving the experience and health of those seniors in Medicare Advantage by discovering what health and social issues they have, and helping their plans and providers manage their care better. Wouldn’t it be great if all seniors could get this type of care and attention? And wouldn’t it be great if the taxpayer knew it was both helping improve seniors’ health and reducing our costs? The challenge for Medicare (and the rest of us) is to get to a place where the incentives are transparently only for improving health, and where Medicare Advantage plans are regarded across the board as actually doing only that.

We are not there yet.

Medicare Advantage Saves Lives, Limbs, Sight, And Major Amounts of Money – (Part 1)

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BY GEORGE HALVORSON

Former Kaiser Permanente CEO George Halvorson has written on THCB on and off over the years, most notably with his proposal for Medicare Advantage for All post-COVID. He wrote a piece in Health Affairs last year arguing with the stance of Medicare Advantage of Don Berwick and Rick Gilfillan (Here’s their piece pt1, pt2). We also published his criticism (Part 1. Part 2. Part 3) of Medpac’s analysis of Medicare Advantage.  Now Medpac is meeting again and George is wondering why they don’t seem to care about diabetic foot amputations. We are publishing part one today with part two coming soon – Matthew Holt

We need to look honestly at some sad and grim realities about American Health Care and about the role that fee for service Medicare plays for too many people in our country today. 

Fee for service Medicare has the highest level of amputations and one of the highest levels of diabetic blindness of any country in the western world because it buys care so badly and so ineptly and then too often underperforms in multiple ways on the delivery of that care. 

Fee for Service Medicare only buys care and pays for care by the piece. It’s caregivers, both as a group and as individuals, actually can often make more money by performing, inadequate, unsuccessful and, far too often, even bad care, because bad care can result in more care being needed, purchased and paid for.

Many of the failures of care for the patients with the medical conditions that cause them to spend far too much time in the hospital, and in various other care settings, should not be happening—and we know that to be true because large numbers of the care failures are not happening to the patients who are enrolled in Medicare Advantage plans.   

Medicare Advantage plans all have basic care plans and approaches  for their patients that are linked to care related care processes of care—and a very high percentage of those processes do not exist for far too many of our fee for service Medicare enrollees  

The sad and unfortunate reality is that fee for service Medicare has no quality standards, no quality expectations, and that it is, in aggregate, a very expensive way to buy care because bad care often costs more money at several levels than appropriate care.  

Those accusations are easy to prove and they are easy to demonstrate.  

Continue reading…

MedPAC Got It Wrong (pt 3)

By GEORGE HALVORSON

This is the third part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. Part 1 is here. Part 2 is here. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

Risk status and RAF

What is on the MedPac radar screen and what keeps their attention and what actually takes up several long portions of the annual report this year is the other factor that changes the payment levels to the plans — the risk status of their enrollees.

The capitation levels that are paid to the plans are affected very directly by the health status levels of the actual enrollees.

Risk levels for the members set and change the payment levels for the plans. The very first capitation programs didn’t factor in relative risk status for the members, and it was possible for some care sites to make major profits on capitation just by enrolling healthier than average people and by being paid an average cost level for each area for the people they enrolled.

That initial payment process has evolved very intentionally into having diagnosis-based cost factors that attempt to link the health status of the members and a fair payment level for the plans. The plans identify for the risk filing process the diagnosis levels for the members and their payment levels as plans are directly affected by the risk levels they report for their members.

People have had some concern about whether some parts of that coding process have been done badly, incorrectly or with purely avaricious intent.

There have been significant levels of concern expressed about whether the plans might be able and willing to produce and present inaccurate and distorted information in the process. That alarm was triggered in part by the fact that some of the plans made getting that information into their annual filings a high priority and some were more successful than others in that process.

It is good to have accurate diagnosis information.

We actually should as a nation and a health care macro system want to see an expansion of our data base and our medical records on basic levels of diagnostic information.

As a nation and as a macro care system we should definitely want to have full diagnosis information for each patient. Care can be better when caregivers have the right diagnosis for all of their patients.

How CMS  has changed Risk Adjustment

CMS just did a brilliant thing and completely eliminated the filing system and process for risk coding and data.

The CMS Hierarchical Conditions Categories Risk Adjustment Model was just killed. CMS just took the system that has created the vast majority of concerns and churn about the issues of coding intensity and shut it down.

It no longer is a factor for any risk scores. CMS will still look at the relative risk levels of patients but will get that information completely from patient encounter filings and direct patient information and not from any plan filings or reports.

An entire industry of organizations working to enhance risk scores just became obsolete and irrelevant.

Continue reading…

MedPAC Got It Wrong (pt 2)

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By GEORGE HALVORSON

This is the second part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage.Part 1 is here. The final part will be published on THCB later this week. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

We clearly do have significant levels of quality data about the MA plans because we have extensive levels of quality programs and recognitions that exist in MA . Those programs get better every year — and MedPac should be reporting and even celebrating each year how many additional plans are achieving high scores in those areas as part of their report.

MedPac should be describing and celebrating progress that is being made in that five-star space and the members of the Commission don’t seem to know that information exists.

In fact, they sink lower than that pure denial in their report this year. They actually say in this year’s report that they have deep concerns about the quality of care for MA and they say clearly that they have no useful data to use for thinking about how MA is doing relative to quality issues.

Saying that there is no quality data about the plans is another MedPac falsehood (MPF) and, as they so often are, that particular falsehood is disproved quickly and easily by their own documents. In the final section of this year’s report where they were asked by Congress to do a report on the quality of care in the Special Needs Plans. The MedPac writers achieve that explicit goal in large part by using the easily available HEDIS quality data for those patients and for the other patients in the plans and by comparing both sets of numbers to relevant populations.

So this year’s report has that set of NCQA quality data for the MA plans included in it. MedPac is using it now even though they say no data exists and that means that’s another falsehood to say it doesn’t exist.

We know what the quality data of the five-star program is and we know what the HEDIS Scores are for the MA plans, and we also know how much MA costs us in every county because the bids give us that information.

We know that the plans bid below the average county fee-for-service Medicare costs in every county and we know what the total costs are by person for each county.

We need to know what the real costs are and we need to look at how we get the very best use of the Medicare dollar. MedPac should make it a priority to figure out how to get the best use of the Medicare dollar using both bids, capitation, and various kinds of ACO-related payment processes. ACOs all create better care than traditional fee-for-service Medicare, and the people who are critical of ACOs for not saving enough money should rethink their priorities. They should be happy with any use of the Medicare dollar that gives more for the member and patient

If an ACO that has team care and patient centered data flows just breaks even on costs relative to fee-for-service Medicare, that should be celebrated and supported as being a much better use of the Medicare dollar.

We should make patients our top priority. ACOs make patients their priority. MA Plans clearly set up benefits and care practices around the patient’s the top priority. Only fee-for-service Medicare completely lets the patient down by being rigid on benefits, rigid on service, and making costs a higher priority than people’s lives and doing that badly and inefficiently. We should be working through MedPac each year to see which approach to buying care actually gives us the very best use of our Medicare dollar.

Continue reading…

MedPAC Got It Wrong (pt 1)

By GEORGE HALVORSON

This is the first part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. The rest will be published on THCB later this week. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

MedPac just did their annual report on Medicare Advantage (MA) and they were extremely wrong on several key points.

The MedPac staff has a long tradition of being critical of MA, and they also, unfortunately, have a long tradition of being inaccurate, misleading, and consistently negative on some key points for no explicable or easily understood reason.

They achieved a new low this year by spending more than 20 pages of the report warning us all in detail about the upcoming cash flow distortions and coding abuses that they say are coming from a risk adjustment model and system that actually no longer exists in 2022 as a functioning system for our Medicare program — and they are also continued their distortion about Medicare overpayment of the plans by running an artificial cost number that functions only to deceive and not to inform and by using what is essentially a fake news number several times in the report.

Coding and Risk Adjustment

CMS has now officially canceled and retired the CMS Hierarchical Conditions Categories Risk Adjustment Model that has been used for almost two decades to calculate risk for plans. It is dead and completely gone for 2022 — and MedPac explained bitterly for more than 20 pages why it was a damaging approach and they somehow did not mention that it was now gone.

CMS has some very good thinking people who brilliantly took that whole set of coding linked issues off the table by making the system that was being potentially abused simply disappear.

MedPac wrote more than 20 pages in this year’s official report about MA complaining about that exact process and system and they didn’t mention that it was gone or explain why it was important to not have that data flow create the risk level information that we will now be using to get diagnostic information into the system.

The new approach for determining patient risk levels is fraud proof. There is no way to put wrong data into the information flow that they are now going to use to see and determine which patients are diabetic and which have heart disease or who has drug abuse issues for the risk discernment processes.

The impact on low income Medicare patients & union members

MedPac also had a major content deficit in their report and managed to leave the most important aspects of the work being done now by the plans to help offset some of the damage done to too many Americans who have been damaged by social determinants of health issues for far too long in their lives. MedPac also completely failed to report and discuss the important reality of the fact that we have now reached the point where two-thirds of our lowest income Medicare beneficiaries are all voluntarily in the MA plans.

They also left out of their report the fact that a significant number of union trust funds and a significant number of employer retirement programs that had made significant promises of retirement health care benefits to their retirees over the past decades are actually having those commitments kept, met, and even enhanced with the relatively new employer-sponsored MA plans that work directly with employer settings.

Five million people who might have had their retirement health care programs bankrupt, underfunded, or at serious risk have found a very strong safety net in the MA program — and MedPac does not think that development was important to understand and probably celebrate.

Anyone looking at the future politics and funding of the MA program will find both that overwhelming support for MA from our lowest income people and from our most well-connected employer retirement funds to be good and important to understand.

MedPac missed every bit of that agenda and set of accomplishments in this year’s report.

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How are hospitals supposed to reduce readmissions? Part III

By KIP SULLIVAN, JD

The Medicare Payment Advisory Commission (MedPAC) and other proponents of the Hospital Readmissions Reduction Program (HRRP) justified their support for the HRRP with the claim that research had already demonstrated how hospitals could reduce readmissions for all Medicare fee-for-service patients, not just for groups of carefully selected patients. In this three-part series, I am reviewing the evidence for that claim.

We saw in Part I and Part II that the research MedPAC cited in its 2007 report to Congress (the report Congress relied on in authorizing the HRRP) contained no studies supporting that claim. We saw that the few studies MedPAC relied on that claimed to examine a successful intervention studied interventions administered to carefully selected patient populations. These populations were severely limited by two methods: The patients had to be discharged with one of a handful of diagnoses (heart failure, for example); and the patients had to have characteristics that raised the probability the intervention would work (for example, patients had to agree to a home visit, not be admitted from a nursing home, and be able to consent to the intervention).

In this final installment, I review the research cited by the Yale New Haven Health Services Corporation (hereafter the “Yale group”) in their 2011 report to CMS in which they recommended that CMS apply readmission penalties to all Medicare patients regardless of diagnosis and regardless of the patient’s interest in or ability to respond to the intervention. MedPAC at least limited its recommendation (a) to patients discharged with one of seven conditions/procedures and (b) to patients readmitted with diagnoses “related to” the index admission. The Yale group threw even those modest restrictions out the window.

The Yale group recommended what they called a “hospital-wide (all-condition) readmission measure.” Under this measure, penalties would apply to all patients regardless of the condition for which they were admitted and regardless of whether the readmission was related to the index admission (with the exception of planned admissions). “Any readmission is eligible to be counted as an outcome except those that are considered planned,” they stated. (p. 10) [1] The National Quality Forum (NQF) adopted the Yale group’s recommendation almost verbatim shortly after the Yale group presented their recommendation to CMS.

In their 2007 report, MedPAC offered these examples of related and unrelated readmissions: “Admission for angina following discharge for PTCA [angioplasty]” would be an example of a related readmission, whereas “[a]dmission for appendectomy following discharge for pneumonia” would not. (p. 109) Congress also endorsed the “related” requirement (see Section 3025 of the Affordable Care Act, the section that authorized CMS to establish the HRRP). But the Yale group dispensed with the “related” requirement with an astonishing excuse: They said they just couldn’t find a way to measure “relatedness.” “[T]here is no reliable way to determine whether a readmission is related to the previous hospitalization …,” they declared. (p. 17) Rather than conclude their “hospital-wide” readmission measure was a bad idea, they plowed ahead on the basis of this rationalization: “Our guiding principle for defining the eligible population was that the measure should capture as many unplanned readmissions as possible across a maximum number of acute care hospitals.” (p. 17) Thus, to take one of MedPAC’s examples of an unrelated admission, the Yale group decided hospitals should be punished for an admission for an appendectomy within 30 days after discharge for pneumonia. [2]

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