Site moved to, redirecting in 1 second...

33 posts categorized "Medicaid"

April 04, 2013

Medicaid Expansion Under the Affordable Care Act - A New Look at the "Before" Picture, with Tim Waidmann, Senior Fellow in the Health Policy Center at the Urban Institute

Financial Burden of Medical Spending by State and the Implications of the 2014 Mediciaid Expansions is the latest report from the Affordable Care Act implementation monitoring and tracking initiative funded by the Robert Wood Johnson Foundation. (Direct link to PDF of report.) I spoke with Tim Waidmann, Senior Fellow in the Health Policy Center at the Urban Institute, an author of the report. Please listen in:

The audio file of my interview with Tim Waidmann (about 20 minutes long) is available for download/podcast, or may be played here:

Tim Waidmann - Urban Institute - Medicaid Expansion

A full transcript is available as a PDF (Tim Waidmann interview) and is reproduced below.  

The Census Bureau has made these researchers' lives easier by collecting data that allows for the running of a natural experiment that answers the question: How will implementation of the ACA affect the percentage of household income spent on health care by low-income Americans? One of the interesting points highlighted by Waidmann is that the state in which the highest proportion of low-income household income is spent on health care (surprise: Nevada!) is not the state in which Medicaid coverage is least comprehensive, the state in which health care is most expensive, or the state with the greatest prevalence of poverty (though some of those states show up in the top ten).

All of the states with health care access and payment problems for low-income residents would be well-advised to consider the opportunities to expand coverage under the ACA Medicaid expansion provisions. Some -- including a couple at the top of Waidmann's list, as of this writing -- remain dead-set against the Medicaid expansion program (though most of the states that challenged the ACA are more than willing to accept the increased FFP for the Medicaid expansion to cover residents at up to 133% of the Federal poverty level, to the relief of the membership of their local hospital associations and other providers, which have been providing free care to folks who will be the beneficiaries of the Medicaid expansion). Some are exploring opportunities for creative alternatives to Medicaid expansion per se: Consider the Arkansas premium support plan, which will use Medicaid expansion dollars to buy private health insurance for those who would otherwise be eligible to enroll in an expanded Medicaid program.

If you're looking for a scorecard, you can follow state-by-state Medicaid expansion activity at 

David Harlow
The Harlow Group LLC
Health Care Law and Consulting   


HealthBlawg :: David Harlow’s Health Care Law Blog

Interview of Timothy Waidmann, Senior Fellow, Health Policy Center, Urban Institute 

April 3, 2013 

David Harlow:  This is David Harlow at HealthBlawg.  Today I’m speaking with Timothy Waidmann at the Urban Institute and with Kyle Caswell as well.  Tim is a senior fellow in the Health Policy Center at the Urban Institute, where Kyle is a Research Associate.  They are co-authors of a report on Medicaid released yesterday funded by the Robert Wood Johnson Foundation as part of the Affordable Care Act Implementation, Monitoring and Tracking Initiative.  The report is titled, Financial Burden of Medical Spending by State and the Implications of the 2014 Medicaid Expansions.  Welcome Tim and Kyle and thank you for speaking with us.

Tim Waidmann:  Thank you.  It’s a pleasure. 

Kyle Caswell:  Thanks. 

David Harlow:  So, the title of the report you’ve just released is a bit dense and I wonder if you could unpack it a bit for us before diving in. 

Tim Waidmann:  Let me look at the title again. 

David Harlow:  The Financial Burden of Medical Spending by State and the Implications of the 2014 Medicaid Expansions. 

Tim Waidmann:  Right.  So, the basic idea of this report is that we study how much income the non-elderly population devotes to medical spending and we look at that state-by-state.  And the idea is by looking at this variation and then focusing in on a low income population in particular, we hope to learn what state’s decisions about whether or not to expand their Medicaid programs as part of the Affordable Care Act.  What implications those decisions might have for their own populations.  So, this is, if a state has a particularly high level of burden of medical care spending, it’s likely that expanding Medicaid will have a larger beneficial impact than a state that has relatively low level of financial burden, so that’s kind of the – what we are trying to tease out of the data was a comparison along those lines. 

David Harlow:  Are there other takeaways from the report?

Tim Waidmann:  Well, the first cut of this was just to look, I mean, this is relatively new data source with which we can do this kind of study.  The Current Population Study is a nationwide large survey that has samples in every state and it allows us to look down at even small states and say, to get some idea of population characteristics and a couple of years ago they added to the survey a question or a couple of questions on how much people spend out of pocket on premiums and other expenditures for their healthcare, so whether co-pays or co-insurance, payments, deductibles, those kinds of things.  And so, the first cut at this was just to look overall, the whole population -- and we focused on non-elderly because Medicare is just sort of different word for medical spending.  But, excluding that population, we’re able to see of quite a bit of variation from state-to-state in how burdensome medical care is to the typical family and to the typical person.  So, for example, a typical person in New York say, in the State of New York spends about 2% of their total family income on medical care.  But in Idaho, the typical person spends more than twice as much as a share of their income and they spend about 5% of their annual income on healthcare.  So, that’s just, you know, the typical person in the middle of the distribution. 

David Harlow:  So, that’s in the general non-elderly population? 

Tim Waidmann:  Yeah.

David Harlow:  And is the spread the differential as pronounced for the Medicaid population? 

Tim Waidmann:  So, in fact, it’s even greater for the low-income population, which we focus in on later, but when you look, you know, if staying with the general population, if you look at, if you say well, the typical person doesn’t really use a lot of medical care, what about the sort of higher-spending group and these differences that we see at the median persist and even grow, if you look at the top half of the spending – of the burden distribution.  And again, you just compare typical -- the 75th percentile -- think about the typical person in the top half of the burden distribution.  In Idaho that person spends 11% of income, while in New York they spend around 6, 6.5%.  So, these differences that appear in one part of the distribution seem to carry through the rest of the distribution as well, that indicates… 

David Harlow:  And by the higher percentile of the burden distribution you’re referring to someone who is making greater use of the healthcare system? 

Tim Waidmann:  Well, it’s sort of relative to income.

David Harlow:  Yes.

Tim Waidmann:  So that if you think of, what someone can expect to spend out of their take home pay or out of their total income, this suggests that someone in Idaho should expect to spend about twice as much of their income as someone in New York would spend. 

David Harlow:  So, would you characterize these data as surprising? When we think of New York, California, a couple of other locations, Massachusetts where I am, as being high cost centers for healthcare.  Are you saying that they may be high cost, but they’re not necessarily high cost relative to income? 

Tim Waidmann:  So that’s right, you pick up on a very important point that this measure of financial burden has both the spending component and an income component.  And a state could appear to be a very high burden state just because it’s a low income state.  And, if people have the same medical care needs, but lower income, their burden would appear to be higher.  And so, that – those same differences that would be apparent between individuals who show up across the states, so low income states are more likely to show high burden than high income states.  But then, the other factor that matters and varies from state-to-state as you mentioned is that health care costs more in some states than it does in others.  And so, two states that have similar levels of income, but different levels of medical care costs will also show up as having different levels of financial burden.  

David Harlow:  So, let’s look at perhaps some of the states that we think of as having particular problems in this area -- and whose Governors had at least initially said that they would not buy into the Medicaid expansion.  I’m thinking off the top of my head of places like Louisiana, Mississippi, where also traditional state level Medicaid coverage is rather slim. 

Tim Waidmann:  Right. 

David Harlow:  So that there is probably a higher burden now for lower income folk in those states. 

Tim Waidmann:  So, if you look specifically at the low income population, which is where we wanted to get to, the differences across states just seem to grow quite a bit.  But, in every state the average amount that a low income household spends on healthcare is going to be higher as a percentage of income than high income households.  But, the sort of range that we see between low income folks in some states and other states is quite dramatic.  And then, if you then further focus in on, you know, the population who doesn’t have Medicaid, the low income population that doesn’t have Medicaid -- that’s kind of where I think the policy implication is strongest and you mentioned Louisiana, Mississippi as two examples and they happen to be, you know, if you look at the top five states nationwide in terms of the share of their population who is low income and doesn’t have Medicaid and has high medical care burden, those two are among those top five. 

Nevada is actually the state with the highest fraction of its population, who is not covered by Medicaid, has high burden and low income.  But Nevada has decided that it’s going to go ahead with the Medicaid expansion.  So, what we would expect is that, you know, among these states that currently have – appear to have – a large portion of population who would be affected by the expansion, some of these states who go ahead with the expansion, we expect them to reduce their place on this ranking.  So, Nevada, we expect to fall -- once it expands its Medicaid program -- out of this top five, while Louisiana and Mississippi we expect will likely stay as high burden states for their low income population. 

David Harlow:  Right, unless they do accede to some pressures from the hospital industry and others, who would like to see some of their free care get reimbursed, which they would do if they had the Medicaid expansion in place. 

Tim Waidmann:  And so, I mean, it’s interesting among these top five states that we have found.  There were two, Nevada and Montana, who have agreed to expansion, two have said no to expansion so far, and one -- in Arkansas -- that has said yes to an expansion sort of, that would like to use a private, use the exchange system to expand coverage to this low income population.  And so, you could sort of think of this as an intermediate case, you know, it would be interesting to see what happens to a measure like this.  If the private version of the Medicaid expansion looks like Medicaid in that it has very low or zero cost-sharing requirements of its beneficiaries, I would expect that it will – what will happen in Arkansas will look very much like what happens in states that have full public expansion in Medicaid. 

David Harlow:  And so that would be private pay, in the Arkansas model? 

Tim Waidmann:  If what happens is that beneficiaries are fully subsidized to join private plans, you could imagine that they’ll see very little difference between that and in public sector Medicaid expansion.  But if they’re required to – if what happens is that they get some subsidies for enrolling in a private plan that doesn’t fully cover their expenses then it may well be that they don’t reduce this burden. 

David Harlow:  Right.  I had understood that there were not a whole lot of waivers available in order to reconfigure the way in which the Medicaid expansion would work, so that federal dollars would not necessarily be available for private premiums versus reimbursement of additional Medicaid expenses.

Tim Waidmann:  Yeah, I mean, I think that, I was a little surprised that how quickly they seemed to – the federal government quickly seemed to agree to a private version of covering this population in some form.  So, it will be interesting to see what happens there. 

David Harlow:  Sure … 50 laboratories, as they say. 

Tim Waidmann:  Yeah, that’s true. One of the key takeaways for us, I think was that, you know, we see where the world or where the states line up now before the ACA is fully implemented and this is kind of an ideal from a social science perspective experiment that we have 50 different approaches and we’ve got the state of the world before implementation and it’ll be a good sort of natural experiment to see what happens. 

David Harlow:  Sure.  And, you have a good level of confidence in the data source that you are using in terms of the sort of self-reported statements that you described? 

Tim Waidmann:  Well, you know, Kyle actually is one of the people who did a study comparing this data source to other established sources and I think the Census Bureau folks, which is where Kyle was before he joined us, are fairly satisfied with the quality of this data.  And it was a boon to us in the health services research world that CPS added this question.  And I think we’re beginning to see the usefulness of it in some of these research projects we have undertaken. 

David Harlow:  Sure. I imagine you have a cache of some other questions that you’d love to see added to that questionnaire as well.

Tim Waidmann:  We have endless sets of questions that we would like to see added, but the Census Bureau is very careful with expanding that survey. I think they are worried about burdening their respondents too much and I think rightly so. This has been a great source of information even before this, even before these questions were added, especially on estimating coverage differences across states.  But, we’re just happy that they were able to add this most recently.

David Harlow:  Great.  So, how does this piece of work fit in with the other work that you have been doing about the roll-out of the Affordable Care Act?

Tim Waidmann:  Well, you know, I think that we’ve also, using other data sources, looked at differences in access to care across states and differences in coverage across states, and kind of also trying to get a sense of where the world is before the ACA gets into full swing.  And, you know, I think that we find similar amounts of variation in the use of – in access to basic healthcare and in the use of preventive services, I think that these findings here -- I think, from what I remember other members of our staff here have worked on that, but preventive care differences have been a little less dramatic, but certainly access to basic care does appear to have a bit of variation from state-to-state.  And we expect as coverage is expanded through both Medicaid and the exchanges and other methods, we expect some of those differences and access to care to shrink, but we’ll see what happens.

David Harlow:  Right. Well again, Tim and Kyle, thank you very much for joining me today.  It’s been a very interesting conversation for me and I hope for our listeners and readers.  And again, this is David Harlow at HealthBlawg.  Thank you very much.

Tim Waidmann:  Thank you, it’s been pleasure.


May 06, 2012

Nothing About Me Without Me - Participatory Medicine, Meaningful Use, and the American Hospital Association

Meaningful Use Stage 2 regulations were released in March by CMS and ONC.  Over the past month or so, I've been working with other members of the Society for Participatory Medicine (thank you, all) to prepare comments on these regulations from the patient perspective.  Last Friday, we filed two comment letters on the proposed regulations. One letter to the ONC on Meaningful Use Stage 2, and one letter to CMS on Meaningful Use Stage 2. Each letter opens like this:

The Society for Participatory Medicine applauds the work done to date in focusing on patient engagement in the proposed Stage 2 Meaningful Use regulations and the proposed Health IT Standards regulations.  It is our hope that the final requirements will be even stronger and more focused in this regard than the current drafts. As set forth in greater detail in the attached letter, we have a number of comments that we believe will improve the regulations and their use as a lever to improve patient experience, patient engagement, patient care and, ultimately, patient outcomes. We would like to highlight two in particular:

  • We favor improving the likelihood that patients will access their data by allowing for some automation of the process of accessing and downloading patient data, using existing technologies that protect patient privacy and security.
  • We also favor immediate patient access to information in the patient’s electronic health record – unless the patient has elected otherwise.

The overarching principle with respect to patient access to electronic health record data running through the entire meaningful use regulation and the health IT standards regulation should be:

    “Nothing about me without me.”

The Society for Participatory Medicine has individual and institutional members nationwide and has a governing board comprised of both clinicians and patients. It was founded to study and promote participatory medicine, which we define as being centered on networked patients shifting from being mere passengers to responsible drivers of their health, and providers who encourage and value them as full partners. For further background on the Society and its activities, we invite you to see the Society’s website (, its online journal, The Journal of Participatory Medicine ( and its blog,

Comments are being accepted through Monday May 7, 2012.

I invite you to read the Society for Participatory Medicine press release, Participatory Medicine Society Urges Quick Patient Access to Medical Information, outlining the Society's stance on the issue, and the recent posts on the Society's blog,, explicating the SPM Meaningful Use Stage 2 comment letters a little further, and putting them in context -- in particular, juxtaposing them against the American Hospital Association comments calling for a 30-day delay in patient access to information once it's in their EHRs.  (The proposed rule calls for up to 36-hour and 4-business-day delays, depending on context, and the SPM comments call for immediate access.)  Technologically literate commentators, including Fred Trotter, take issue with the AHA's view that 30 days are needed to respond to a request for an EHR.  (Fred's post says a lot more -- check it out.)  

Finally, take a few moments to consider Regina Holliday's comments on the proposed rules, filed in the form of a slideshow featuring her paintings:

Long Stories: The Story Of Meaningful Use and Why the patient voice matters..

August 15, 2011

Partners Health Care acquiring Neighborhood Health Plan: The 800-Pound Gorilla and the Fig Leaf?

Kingkong.jpg (480×320) Partners Health Care (the dominant provider network in Greater Boston) and Neighborhood Health Plan (a local mostly-Medicaid HMO) just announced that the former intends to acquire the latter, and maintain it as a separate operating entity.  No money will change hands between the parties, but an unspecified amount of money will be given by Partners as grants to community health centers where NHP members receive much of their health care services. Gary Gottlieb, CEO of Partners, graciously allowed that it would not seek to interfere with the current referral patterns of NHP members to the two local safety-net hospitals (which get disproportionate share hospital payments; Partners hospitals do not).

The deal is contingent on several layers of regulatory review, including review by the Commonwealth's Attorney General's Office, which has reported on Partners using its market power to extract high rates of reimbursement from payors that do not correlate to a higher quality of care relative to others around town.

See the NHP presser and fact sheet, and the Boston Globe story on the deal announcement.

So, is the motivation for the affiliation (a) Partners offering a helping hand to a Medicaid HMO and a network of community health centers as part of its mission, (b) a rational reaction to market forces in the face of health reform by Partners, providing a fig leaf for Partners as it faces further scrutiny in the marketplace by regulators and others, (c) an ace in the hole that may be used to win a future hand (e.g., when state, Federal or commercial reimbursement rates get cut further, and Partners can claim it's a special case) or is it (d) simply part of the Partners unified field theory of the marketplace whereby it seeks to extend its influence over payors and non-Partners providers and position itself for future success as an ACO or other as-yet-undefined new type of provider network with a payor kicker?   Probably a bit of each.  The community health center move is just the latest in a years-long chess game of CHC affiliations.  The HMO acquisition is something new, though, and will bear watching.

For more on Partners, the Massachusetts experiment and Massachusetts Attorney General Martha Coakley, see this post on global payments and earlier Massachusetts Attorney General and special commission reports and other resources linked to from the post.

This news comes on the heels of news of some fancy footwork by John Kerry that tied all Massachusetts hospital Medicare payments to a wage index related to Nantucket Cottage Hospital (a high-wage hospital on an island) which is part of Partners.  (A few other states benefited from this ACA amendment as well.)  This being a zero-sum game, the $275 million a year extra income flowing to Bay State hospitals comes out of the hides of other states' hospitals. They are less than thrilled.

The continuing question as all of this shakes out is -- or perhaps should be -- whether the Partners-NHP deal advances Don Berwick's triple aim: improving the experience of care, improving the health of populations, and reducing per capita costs of health care.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

July 27, 2011

Rural health white paper released by UnitedHealth Group think tank

The UnitedHealth Center for Health Reform and Modernization released a white paper today on Modernizing Rural Health Care.  To quote from the UHG presser,

  • [The paper] projects an increase of around 5 million newly insured rural residents by 2019 – even as the number of physicians in rural America lags
  • Quality of care is rated lower in rural areas in 7 out of every 10 health care markets; both physicians and consumers in rural areas more likely to rate quality of care lower than those in urban and suburban markets
  • Innovations in care delivery – particularly telemedicine and telehealth – can absorb future strain on rural health care systems

The paper inventories the current state of health care for the 50 million Americans living in a rural setting -- and it's not pretty.  The question, of course, is why does rural health compare unfavorably to urban health metrics, and what can be done to improve matters?

The answers proffered are not particularly surprising.  Access to primary care providers and specialists is limited in the rural setting, it's likely to get worse, and the workarounds we've tried to put in place -- everything from clinicians "riding circuit" to telemedicine -- need to be implemented more broadly and need to be supplemented by additional resources. 

The resources needed include nurse practitioners, for example, whose hands are tied by restrictive scope of practice rules in heavily rural Southern states, and guidelines that could make them more effective primary care providers in an era of physician shortages; conversions of existing rural health care facilities to more current, relevant, uses. 

The resources needed also include dollars -- lots of cold, hard, cash -- to support this workforce, these guidelines, these facilities, needed collaborations with urban providers, and to bootstrap telemedicine beyond its current use, primarily for imaging, to expanded uses that can fulfill the promise seen in studies of pilot projects: quicker diagnoses, avoided costs, better outcomes.  Changes in telemedicine rules are also needed, e.g., relaxation of local licensing and credentialing requirements, so that rural access to telemedicine is not unreasonably limited.

In sum, I see the bottom line as, well, the bottom line.  An unspecified amount of money -- in the form of price supports and funding for other system supports -- will be needed in order to realize the promise of successful pilot programs in rural health. 

If we can learn from history (so that we may not be doomed to repeat it), we must remember that price supports can have unintended consequences.  For example, the federales can point to a great success in the form of the Department of Agriculture's extension centers -- the ONC's RECs are modeled on them -- but the danger to keep in mind when thinking about that model is that a couple of generations later the productivity of family farms, which was at first changed for the better, accelerated out of control thanks to continued meddling by the feds.  Consolidation of properties into factory farms was encouraged, resulting in a monoculture which has done irreparable harm to the environment.  I am not suggesting that enhanced Medicaid funding under the ACA for rural health improvement will lead to ruin, just that we need to always remain cognizant of the effect that pushing on one side of the balloon may have on the other.

Furthermore, one of the key lessons of the experience to date seems to be that programs arghmust be tailored to local conditions and cultural expectations in order to work well.  Thus, while a handful of inspiring program examples are offered -- drawn from rural Wisconsin to the Navajo Nation -- developing a comprehensive set of solutions addressing the issues presented in this paper will not be easy. 

All in all, we may have an understanding of what needs to be accomplished, but it is less clear just how to do it, and how to pay for it.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

June 24, 2011

The Massachusetts Experiment Analyzed: Are We Ready for Global Payments?

Massachusetts Attorney General Martha Coakley released her office's second annual report, An Examination of Health Care Cost Trends and Drivers (PDF; see also press release), which contains a wealth of critical data analysis -- and also highlights how little we know about certain things -- providing some important context for the discussion of the proposed Part III of Massachusetts health reform, a bill filed by Governor Patrick which would create all-payor ACOs and a system of global payments.

At this late date, few would argue against a move a way from fee-for-service reimbursement for health care, or adding quality metrics to the mix, and tying financial rewards to providers to their performance measured against these metrics.  (Consider the Massachusetts Blue Cross Blue Shield ACQ (alternative quality contract) experience.)  The AG's report, however, highlights the wide disparities in payments to providers based on negotiating strength, rather than quality or cost of care (as noted in last year's AG report; check out the 2009 special commission report, too).

From the presser:

This year’s six key findings are:

  1. There is wide variation in the payments made by health insurers to providers that is not adequately explained by differences in quality of care. 
  2. Globally paid providers do not have consistently lower total medical expenses.
  3. Total medical spending is on average higher for the care of health plan members with higher incomes.
  4. Tiered and limited network products have increased consumer engagement in value-based purchasing decisions.
  5. Preferred Provider Organization (PPO) health plans, unlike Health Maintenance Organization (HMO) health plans, create significant impediments for providers to coordinate patient care because PPO plans are not designed around primary care providers who have the information and authority necessary to coordinate the provision of health care effectively.
  6. Health care provider organizations designed around primary care can coordinate care effectively (1) through a variety of organizational models, (2) provided they have appropriate data and resources, and (3) while global payments may encourage care coordination, they pose significant challenges. 

The Attorney General makes six (6) recommendations to promote value-based purchasing and ensure consumer access to high quality, affordable health care:

  • Promote tiered and limited network products to increase value-based purchasing decisions.
  • Reduce health care price distortions through temporary statutory restrictions until tiered and limited network products and commercial market transparency can improve market function.
  • Encourage consumers to select a primary care provider who can assist consumers in coordinating care based on each consumer’s needs and best interests. 
  • Promote coordination of patient care through primary care providers by recognizing the need to improve funding of care coordination, including the infrastructure necessary to coordinate care, and by giving providers timely access to relevant patient data regardless of their size or payment methodology.
  • Consider steps to improve the use of the all payer claims database (APCD) by:  (i) developing reports for providers and the public to guide development of patient care coordination improvements and system accountability, and (ii) increasing the standardization of claim level submissions by reducing differences in how payers report payment level information.
  • Develop appropriate regulations, solvency standards, and oversight for providers who contract to manage the risk of insured and self-insured populations.

The full report is well worth the read.  Nuggets include the following through-the-looking-glass experience of looking at data produced in response to civil investigative demands from the AG's office and realizing that it is basically impossible to tell if negotiated rates and deals bear any relationship to quality and outcomes:

The complicated structure of risk contracts currently in place in the Massachusetts market makes it difficult to compare payments made under those contracts. Each risk contract has multiple components, such as infrastructure payments, quality payments, service carve-outs, unit price adjusters, mandated benefit adjusters, individual stop-loss provisions, and other factors that are each negotiated and vary significantly across provider contracts. These components confound efforts to understand and compare how health insurers pay providers. None of the three major health insurers could provide us with health status adjusted budget information comparing the providers in their networks that they pay under a global contract. In other words, none of the health insurers routinely and systematically evaluates how the global payment contracts that they have with various provider organizations compare to each other. This convoluted payment methodology makes it difficult for regulators, market participants, or others to make valid comparisons of provider rates or valid conclusions about the effects of global payment contracts, and further complicates the ability of providers to contract for value-based, market appropriate prices. Health insurers should pay providers using standardized payment methodologies that allow providers to value the risk that they hold and so stakeholders can make valid comparisons of provider global rates. (Emphasis supplied.)

Meanwhile, Governor Deval Patrick was in DC, testifying before the Senate Finance Committee (PDF of testimony).  He seems to have a more optimistic perspective on the system's ability to implement cost containment and quality improvement strategies in the commercial sector:

Rising costs in the health care system across the Nation are a serious national problem.  In fact, Medicaid spending has been growing more slowly than the dramatic health care cost increases in the rest of the economy.  For that reason, we have turned our attention there, to the broader question.  Everyone has a stake in that solution. And just as Massachusetts is the home of the nation’s most successful universal health care law, we are poised to crack the code on cost containment.  To get there, we are doing more to encourage integrated, whole person care: paying providers for the quality of health care they deliver, not just the quantity.  There are many good models being tried in the market today.  We are working on scaling them up and making sure the savings are passed along to businesses, families and government in the form of lower premiums.  (Footnotes omitted.)

(The unspoken subtext in the Governor's testimony, which focused on the Massachusetts Medicaid experience, is: Don't Tread On Me.  In other words, please let Massachusetts continue to go its own way instead of shifting gears to comply with the federales' vision of a health insurance exchange for years 1-3 of health reform implementation.  Cf. the Brown-Wyden bill, discussed in an earlier HealthBlawg post on Medicaid matters.)

The Governor's bill won't become law this year (or so I would think -- see the Governor's prediction, below), so we have a bit of a reprieve during which the actors on this stage can go off and learn their lines, so to speak -- i.e., get a better handle on a data-driven approach to pricing care.  The AG clearly doesn't think we can get there on our own: a big surprise in the AG's recommendations is the suggestion that we step into government price controls -- at least on a temporary basis (a return to rate setting for nongovernmental payors) -- in order to sweep out the market-based negotiated inequities that now pervade the system.

Update 6/28/2011: In response to questions from the HealthBlawger following his keynote address at the American Health Lawyers Association Annual Meeting yesterday, Governor Patrick averred that his views and the AG's are not as divergent as the popular press would have us believe (doth he protest too much?); and, notably, he predicted that the legislature will take up his bill in the fall, with action expected by the end of the calendar year.

Stay tuned for more news from the front lines of health reform here in Massachusetts.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

March 03, 2011

Medicaid: Busting the Budget-Buster With Real Innovation or Rearranging the Deck Chairs on the Titanic?

Medicaid has been front and center this week as President Obama addressed the National Governors Association, and several governors testified before the House Energy and Commerce Committee.  Obama told the governors that he supports the Wyden-Brown bill, which would accelerate the availability of waivers under the Affordable Care Act (from 2017 to 2014), so that states would not have to first create health insurance exchanges under the law, and then only later have the right to dismantle them and replace them with other mechanisms to achieve coverage goals of the law without additional cost to the federales.  (See Wyden-Brown fact sheet)  The law as it stands hurts the early adopters.  Without the change, the sponsors' home states, Oregon and Massachusetts would have to dismantle parts of their own health reform efforts in order to align with the federal mandates, only to potentially change things up agian three years down the road.  (Wyden has been a longer-term proponent of experimentation and innovation in health reform than Brown, and the opportunity to innovate three years down the road is in the ACA because of him.) 

To illuminate the issue with an illustration from a related domain: The mini-med waivers granted to states (in addition to those granted to corporations and unions) are just one example of interim steps needed to harmonize federal and state health reform.  When in 2014 mini-med plans will no longer be permitted at all under the federal health reform law, there will either need to be a significant dislocation of the underinsured -- the "Young Invincibles" in Massachusetts and underinsured employees in capped health plans elsewhere in the country -- or a change in the law.  Similar difficulties await state Medicaid programs, which will be faced with expanded eligibility, and other state agencies, which will need to set up exchanges per the ACA. 

The cost associated with eligibility expansion will be overwhelming ... or maybe it won't.  There are, of course, expert opinions across the board on the financial impact of health reform on state budgets.  As the saying goes, Where you stand depends on where you sit.  Some reports inflate state expenses by not accounting for the fact that the federal share of Medicaid expansion covers 92% of the total.

Obama probably thought he was proffering an olive branch to the governors by throwing his support behind the Wyden-Brown bill as a nod to states' rights and all that. (26 states, as we all know, are challenging the individual mandate portion of the federal health reform law, and the litigation continues on numerous fronts.  Today, Judge Vinson stayed the effect of his decision invalidating the law, so long as the Administration files its appeal within seven days.)  However, as Ezra Klein observes, in the current political environment, Obama's support for the measure may ensure its defeat in the GOP-controlled Congress.  While the acceleration of state-specific innovation makes sense from the state perspective, it will likely be more expensive from the federal perspective, since the three-year experience under the federal model was intended in part to establish a cost baseline, which would have to be replaced by generous estimates in the Wyden-Brown bill passes.  GOP governors (including, for example Haley Barbour of Mississippi) have asked for block grants to replace federal financial participation in state Mediciaid programs; that's been tried in the past, and did not work well, so it will not be tried again. 

Before having to deal with the 2014 issue, governors are facing a current concern with affordability of Medicaid expenses and are seeking greater flexibility from the federales in the near term.  (For example, getting federal permission to send certain notices via email instead of snail mail will save one state millions of dollars.)  Part of the reason we're hearing about this now is the impending drop-off in supplemental federal funding for Medicaid, due to end June 30.  Some states, like New York, are taking a proactive approach to the problem; New York convened a Medicaid Redesign Team that has taken a hard look at New York's Medicaid expenditures and what the state gets for those dollars.  When Governor Cuomo accepted the team report last week, his office noted: 

New York spends more than twice the national average on Medicaid on a per capita basis, and spending per enrollee is the second highest in the nation. At the same time, New York ranks 21st out of all states for overall health system quality and ranks last among all states for avoidable hospital use and costs. Unfortunately years of attempts to address the problem have been unsuccessful.

The structural changes recommended in New York -- both around health care financing and health care delivery (patient-centered medical home, anyone?) should be examined by other states as they work to develop reasonable approaches to the issues we all face.  (Massachusetts, by way of example, has long had a Medicaid waiver for a PCP program, and Governor Deval Patrick recently announced his proposal to bring the ACO model into the Massachusetts commercial market across the board, after some early success seen with Blue Cross Blue Shield's Alternative Quality Contract.)  The health reform law did not create these issues, but the various mechanisms for waivers ensconced in the law, plus those that would be accelerated by the Wyden-Brown bill, could be part of the solution to the state-level problem. 

In the end, having 50 states acting as laboratories for reform will help identify successes and failures that may be replicated (or avoded, as appropriate) on a broader scale.  Even, perhaps, a single payor system, as folks have been musing about since the Wyden-Brown bill was first put forward in November.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

 Updated 3/4/2011

November 08, 2010

OIG Issues "Roadmap for New Physicians" - A Guide to Avoiding Fraud and Abuse - and Some Thoughts on its Context

In October, the Office of Inspector General issued a report on Fraud and Abuse Training in Medical Education, finding that 44% of medical schools reported giving some instruction in the anti-kickback statute and related laws, even though they weren't legally required to do so. (As an aside, do we really live in such a nanny state? Over half of all medical schools don't teach their students anything about this issue -- because nobody's making them -- even though it is an issue that looms large in the practice of medicine.)  On a more positive note, about 2/3 of institutions with residency programs instruct participants on the law, and 90% of all medical schools and training programs expressed an interest in having dsome instructional materials on the subject of the anti-kickback statute, physician self-referrals (Stark) rules and the False Claims Act.

So in November, the OIG released a Roadmap for New Physicians - A Guide to Avoiding Fraud and Abuse, available on line and as a PDF.  It is a good 30-page primer on the subject.  While some of the examples given are specific to newly-minted physicians, anyone in the health care industry would benefit by reading it.  The document offers a window into the thinking of the OIG, its perspective on the wide range of issues summarized within, and is a good touchstone for any individual or organization seeking to structure a relationship that needs to stay within the bounds of these laws.

Of course, since so much may be changing under the Affordable Care Act, this document may be ripe for revision next year.  For example, the Accountable Care Organization regulations are due to be released in draft form before year-end, and they are expected to include new proposed exceptions and/or safe harbors under these rules.  (Though based on some recent news reports of internal disputes on implementation, one wonders whether the ACO rules will be issued in a timely fashion.)  As payment methodologies move further in the direction of value-based purchasing encompassing bundled and global payments with quality incentives, and provider organizations move further in the direction of the ACO and the patient-centered medical home, the fraud and abuse and self-referral rules, intended as a brake on bad behavior in the context of fee-for-service medicine, become less relevant -- and even become an impediment -- to new systems of care and new systems of financing of that care.

Well, following the recent midterm elections, we are now all entering a period of uncertainty, living up to the supposed Chinese curse: "May you live in interesting times."  (A related supposed Chinese curse: "May you come to the attention of those in authority."  Hmm.)

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


September 27, 2010

Massachusetts health care payment plan gets renewed attention: Global payments to replace fee for service?

Federal health reform and Massachusetts health reform may find a point of convergence in the development of ACOs (accountable care organizations) and the payment mechanisms that will make them tick (or hum, or do whatever it is that we want them to do).  The Federales will be holding a listening session next week on the issues raised by ACOs across the HHS and FTC landscapes.  Meanwhile, back in Boston, the inner circle of health care regulators and the regulated community are busy hashing out an approach to global payments that could be ready for prime time by January 1.

The need for payment reform in Massachusetts has been well-documented -- see the health care market report from the AG's office, as well as an earlier report on the imperative to keep insurance risk on insurers and place performance, or quality, risk on providers.  Now, this may be easier said than done, but we've got some of the best and brightest working away at the issue.

Unfortunately, the Massachusetts legislature blinked, and has not mandated the approach across the board -- at least not yet.  Initially, the global, or bundled, payment for episodes of health care approach is being tentatively applied to just a couple of types of episodes of care. (See Section 64 of Chapter 288 of the Acts of 2010 - the small group market reform legislation enacted this summer.)

This baby-steps approach, while better than nothing, is likely fueled at least in part by the inside baseball nature of the discussion: any change may produce losers -- or at least that's the way the zero-sum-game-players see it, and none of the folks at the table wants to be a loser.  On the bright side, it seems that MassHealth (Massachusetts Medicaid) may be heading in this direction sooner rather than later, which may end up dragging other payors along as well.

Implementing global payments for episodes of care will go a long way towards incentivizing providers to join together in ACOs -- not only for purposes of qualifying for an as-yet-to-be-defined CMS demo project, but also for purposes of improving outcomes, and improving financial performance for all providers involved.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

July 14, 2010

Meaningful Use: The Final Rule

Wordle: Meaningful Use Final Rule

Meaningful use was given its final definition yesterday, in the meaningful use final rule released by HHS.  Secretary Sebelius, CMS Adminsitrator Berwick, ONC chief Blumenthal and the two Reginas spoke -- U.S. Surgeon General Regina Benjamin, and Regina Holliday, whose late husband's last days were complicated by the failure of health care facilities to release and share health records.  Berwick, in his first full day on the job as CMS Adminstrator, waxed rhapsodic about the pleasures of practicing as a pediatrician at Harvard Community Health Plan using its pioneering electronic health record system.  (Years later, I am still a patient at Harvard Vanguard Medical Associates, which used to be part of HCHP, and I am still spoiled by the EHR system there.)  Blumenthal and Benjamin also spoke about how and why they came to use EHRs in their clinical practices, and why they wouldn't have it any other way.  (The rule will be published in the Federal Register July 28.)

Also released was the proposed permanent EHR certification rule.  (Last month, the federales released a temporary version of the EHR certification rule, so that there would be standards in place for providers seeking HITECH Act incentive payments for 2011 meaningful use of certified EHRs.)  Taken together with the draft regulations updating HIPAA privacy, security and enforcement rules under the HITECH Act announced last week, these rules outline the future of health care IT in this country.

Not surprisingly, after receiving over 2,000 comments on the draft definition of meaningful use released over six months ago, the feds revised the rule considerably, loosening the definitions of Stage 1 Objectives (i.e., the criteria by which 2011 compliance and eligibility for the full incentive payments will be judged), among other things.

The HHS fact sheet (available on the relatively new CMS EHR Incentive Programs web page) describes some of the key components of the rule as follows:  

  • For Stage 1, CMS’s proposed rule called on physicians and other eligible professionals ("EPs") to meet 25 objectives (23 for hospitals) in reporting their meaningful use of EHRs. The final rule divides the objectives into a “core” group of required objectives and a “menu set” of procedures from which providers can choose.  This “two track” approach ensures that the most basic elements of meaningful EHR use will be met by all providers qualifying for incentive payments, while at the same time allowing latitude in other areas to reflect providers’ varying needs and their individual paths to full EHR use.
  • In line with recommendations of the Health Information Technology Policy Committee, the final rule includes the objective of providing patient-specific educational resources for both EPs and eligible hospitals and the objective of recording advance directives for eligible hospitals.
  • With respect to defining hospital-based physicians, the final rule conforms to the Continuing Extension Act of 2010. That law addressed provider concerns about hospital-based providers in ambulatory settings being unable to qualify for incentive payments by defining a hospital-based EP as performing substantially all of his or her services in an inpatient hospital setting or emergency room only.
  • The rule makes final a proposed rule definition that would make individual payments to eligible hospitals identified by their individual CMS Certification Number.  The final rule retains the proposed definition of an eligible hospital because that is most consistent with policy precedents in how Medicare has historically applied the statutory definition of a ”subsection (d)” hospital under other hospital payment regulations.
  • Under Medicaid, the final rule includes critical access hospitals (CAHs) in the definition of acute care hospital for the purpose of incentive program eligibility.
  • The final rule’s economic analysis estimates that incentive payments under Medicare and Medicaid EHR programs for 2011 through 2019 will range from $9.7 billion to $27.4 billion.

Not only did the government go the "Chinese menu" route in allowing providers to customize the standard set that will be applicable to them; it also made the standards much less stringent (e.g. threshhold of 40% e-prescribing vs. 75% in the draft rule; though one must wonder whether this is mere window dressing, as an EP with an e-Rx system in place would not be likely to use it for anything less than 100% of patients)That's not to say that qualifying for the incentives will be a breeze, though some naysayers are criticizing the feds for that reason.  On the other hand, there are plenty of voices out there decrying the difficulty providers will face in trying to qualify for the full incentive payments in the time remaining.  Finally, there are those who still question the value of this whole exercise, seeing it as a Recovery Act handout for the EHR vendors more than anything else, wondering when and where the clinical benefits will materialize.

The EHR vendors that are guaranteeing compliance with meaningful use are now in overdrive, working on the interim certification for their products, and looking to sign up providers now that the meaningful use rules have been finalized.  Hospitals and EPs that are not already in the midst of implementation may be hard-pressed to achieve meaningful use of a certified EHR before the first deadline in 2011.  Most will be able to pull it off by 2015, when the incentives for EHR adoption switch over to penalties for failure to get wired.  (The cynics among us may see a future legislative deferral of the penalty provisions, just as we have been getting used to regular last-minute deferrals of SGR formula-driven physician reimbursement cuts.)  Some vendors are offering advances against incentive payments, in addition to compliance guarantees (see, e.g., GE's healthymagination program).

The FDA did not insert itself into the final rulemaking process, as some had hoped or expected.  The FDA has asserted jurisdiction over EHRs as "devices" and the regulated community would sure as heck like to know sooner, rather than later, just what the FDA has in mind for regulating EHRs (no pre-market approval, methinks). 

Finally, the criteria established and to be met are not ends in themselves, but a means to a further end: the improvement of quality while reducing cost -- two legs of the proverbial three-legged stool.  (The third leg, access, may be improved through other aspects of the Obama administration's health reform initiatives.)   As the meaningful use rule and the revised HIPAA rules come together in seeking to promote a migration of health data to a near-universal online, interoperable state, some e-patients and patient advocates will measure the success of the implementation by its satisfaction of the Declaration of Health Data Rights.  Let's hope that the deferral of PHR-EHR connection requirements don't sidetrack the patient empowerment side of this rule.

There are many, many other issues dealt with and implicated in the more than 800 pages of the final rule, and many other commentators writing about them.  I invite you to peruse the rule and some of the other materials linked to in this post, and to offer your thoughts on the rule and its implications below.

For further reading:

The Stage 1 Meaningful Use objectives and associated measures, broken out by "core" and "menu" set are found in Table 2, beginning on page 221 of the final rule PDF released yesterday.

A helpful side-by-side comparison of final vs. proposed rule Stage 1 objectives and measures may be found at Keith Boone's blog (together with an analysis of the certification rule).

Another helpful meaningful use summary (courtesy of the federales) is available via the New England Journal of Medicine.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

April 04, 2010

Health Reform enacted; HealthBlawger punked by POTUS

As regular readers of HealthBlawg are well aware, I had my doubts that el Presidente could pull it off once the Dems lost Kennedy's Senate seat, but he did manage to rally the troops and get the sausage version of health insurance reform enacted.  Nothing to sneeze at, but it's only a first step -- health insurance reform, not a full health reform package as promised during the campaign. 

Nevertheless, the steps to be taken towards implementation of health reform remain the same -- even though we do have legislation in place, and a nominee (finally) -- Don Berwick -- to head CMS.  (See more on the pros and cons of Berwick's nomination, and a podcast interview with Berwick here on HealthBlawg from about 18 months ago.) 

In brief, with or without the legislation -- and many, many other sources have posted summaries of the legislation, so I will not be doing that here -- the federales and other players need to continue to do three things:

  • Federales: Design and run meaningful pilots and demonstration projects, and mainstream successful ones as soon as possible;
  • States: Continue to act as laboratories for experimentation in health care reform; and
  • Private and Public Sector Employers: Continue to experiment with and implement new approaches to health care financing and delivery -- e.g., patient-centered medical home and value-based design -- that can and do lower costs and improve quality.

Now the fun begins.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting