HealthBlawg

Better, Smarter, Healthier: Medicare and Value Based Purchasing

The big announcement this week from Medicare -- setting forth specific targets for a historic shift away from fee-for-service reimbursement in order to reduce costs and improve quality -- is less than it seems.

Medicare has been talking about value based purchasing for decades now, and thus far has taken baby steps towards implementation. Even the strides taken in recent years, and the targets laid out this week for the future, don't really leave FFS medicine in the dust. ACOs and other MSSP innovations don't entirely move away from FFS reimbursement; they just add cost and quality kickers as part of a retrospective reconciliation.

CMS identified four categories of payment and targets related to each of these categories.

• category 1—fee-for-service with no link of payment to quality
• category 2—fee-for-service with a link of payment to quality
• category 3—alternative payment models built on fee-for-service architecture
• category 4—population-based payment

Farzad Mostashari on the Proposed ACO Regulation: The future of the Medicare Shared Savings Program examined in an interview with David Harlow

The Accountable Care Organization regulations were first promulgated under authority of the ACA's Medicare Shared Savings Program in 2011. Three years later, the regs are in the shop for a tune-up. Farzad Mostashari MD was one of the authors of the Brookings Institution ACO issue brief released in the spring, suggesting some changes to the program that would keep current ACOs engaged past the end of their three-year contract term, and improving the program overall. Dr. Mostashari, former National Coordinator for Health IT, is now the founder and CEO of Aledade, a startup focused on helping physician organizations develop ACOs. With a level of excitement shared only by a small coterie of health wonks -- and usually reserved for video recordings of unboxing the latest hi-tech toy -- Farzad livetweeted his reading of the 429-page typewritten version of the proposed ACO rule when it was released late last Monday. (See the CMS Fact Sheet on Proposed Changes to the MSSP and the Aledade post on the proposed reg.

The rule was published officially on December 8, with a 60-day comment period. I had the opportunity to interview Dr. Mostashari about the new rule. As he noted in our conversation, CMS is calling for input on a variety of issues, so don't be shy, especially if you have some data to back up your suggestions on the choices that remain to be made in this rulemaking process.

(Read or listen to the full interview after the jump.)

Solving Sovaldi: David Harlow Talks Value-Based Payment with Cyndy Nayer

We have been deluged with stories about the $100-a-pill medication for Hepatitis C. Is it really worth $87,000? (Well, it's cheaper than a $600,000 liver transplant.) I had the opportunity to speak with Cyndy Nayer, of the Center of Health Engagement, about the issues surrounding this drug and its use, value-based approaches to payment, and the question of whether we are able to solve this problem in our current environment at all.

The Affordable Care Act: How Provider Organizations Can Succeed Under Health Reform

The Camel's Nose is in the Tent: Health Care Reform & the Joslin Affiliate from David Harlow

The Affordable Care Act has triggered many changes in the health care delivery system. Learn about the health reform-inspired approaches to redesigning care that work (or don't work) for management of chronic conditions, including diabetes -- from ACOs to bundled payments to patient centered medical homes.

I recently had the opportunity to present to the domestic affiliates of Joslin Diabetes Center on this topic.

Health IT Wisdom at the End of 2013 and Start of 2014

I am quoted in a couple of year-end / new year pieces on health IT, appearing this week in iHealthBeat and FierceHealthIT.

With new developments over the past year in the realms of telehealth, mobile health and health data privacy and security, and opportunities for accountable care organizations, integration of connected health and implementation of HIPAA compliance plans, there is plenty of material for prognosticators.

Kate Ackerman, Editor-in-Chief at iHealthBeat asked 13 experts three questions.

Here are the questions and my answers; follow the link above to read 12 other perspectives.

Mobile Health Apps: Pass the Secret Sauce

The IMS Institute for Healthcare Informatics released a report on the ecosystem bloody mess of 40,000+ mobile health apps that are available today. Hat tip to Jane Sarasohn-Kahn for writing about it today at Health Populi.

From the executive summary:

Over time, the app maturity model will see apps progress from being recommended on an ad hoc basis by individual physicians, to systematic use in healthcare, and ultimately to an end goal of being a fully integrated component of healthcare management. There are four key steps to move through on this process: recognition by payers and providers of the role that apps can play in healthcare; security and privacy guidelines and assurances being put in place between providers, patients and app developers; systematic curation and evaluation of apps that can provide both physicians and patients with useful summarized content about apps that can aid decision-making regarding their appropriate use; and integration of apps with other aspects of patient care. Underpinning all of this will be the generation of credible evidence of value derived from the use of apps that will demonstrate the nature and magnitude of behavioral changes or improved health outcomes.

(Emphasis supplied.)

We are nowhere near this endpoint -- integration of the use of health apps into health care management -- right now, due to a number of factors.

HIPAA Clarity: Do You Have to Sue HHS to Get It?

Sue Me

"Serve a paper and sue me ...."  Is this really the only way to get HHS to agree to promulgate long-promised guidance for medication adherence contractors and others that face "restrictions on remunerated refill reminders and other communications." under the HIPAA Omnibus Rule?  

Apparently it is.

The final rule was promulgated eight months in advance of the compliance date coming up on September 23, yet Adheris (great name, eh?) found it necessary to seek an injunction earlier this month barring HHS/OCR from enforcing the Omnibus Rule insofar as it would infringe on the company's constitutionally-protected right of free (commercial) speech.

Leverage: Preventable readmissions and a recent OIG advisory opinion

Medicare's excess readmission penalty policy (up to a 1% ding in IPPS Medicare payments to hospitals that have excess readmissions for acute myocardial infarction, heart failure and pneumonia in FFY 2013, going up to 2% in 2014 -- and adding in measures for hip and knee replacements and acute episodes of COPD patients -- and 3% thereafter) has resulted in some hospitals experiencing multimillion-dollar pay cuts. Over the next couple of years, the potential exposure will triple, upping the ante from the relatively low stakes hospitals have faced thus far.

The excess readmission penalty program (if the penalties are high enough) will force hospitals to become enmeshed in post-discharge care to a degree not hitherto seen in the FFS world. This is of a piece with leverage exerted by other health reform innovations. For example, the cost and quality improvements called for in the ACO program will lead health systems to apply changes to management of all patients' care, not just Medicare patients' care (because running multiple parallel systems is impractical). In essence, by design or otherwise, various aspects of health reform and financial incentives attached to them require greater integration of effort across previously more-disjointed elements of the health care "system," as well as departures from the traditional FFS mode of thinking and acting.

Alternative Quality Contract with Blue Cross Blue Shield of Massachusetts: A model for ACOs?

Managed Care Magazine recently ran a story on the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC), which serves as a model for the ACO program under the Affordable Care Act. Check it out: Bay State Blues Combine Global Payment With Quality Metrics. The author of the piece, Joe Burns, contacted me as well as others in Massachusetts for comment.

My take, drawn from the story:

David Harlow, a health care lawyer in Newton who writes the HealthBlawg, agrees [that the early findings are encouraging], calling the AQC a significant development for two reasons. First, it is an alternative to fee for service.

“That’s appropriate because there is a need to change the incentives of health care providers in the system,” he adds. Second, the AQC is important because it has served as a model for the federal Centers for Medicare & Medicaid Services’ accountable care organizations.

“The problem with past attempts to control health care spending is that adequate quality standards were not in place,” Harlow says. “It was all about keeping costs down. While this model represents an improvement over other models, the amounts at risk are relatively trivial and, standing alone, will not bend the cost curve.

“Nevertheless, the AQC is different because no provider group can earn a quality bonus unless the physicians and hospitals achieve or exceed the quality standards.”

As I've written before, I think the focus should be on long-term planning for a wholesale shift away from fee-for-service medicine rather than trying to expose and rationalize payment levels. Global payments (a euphemism for that dirty word, capitation), a bonus structure tied to performance against quality benchmarks pegged at a level sufficient to change provider behavior, and dedicated funding within the global payment system for nurse case managers and other elements of the medical home model, are the key elements of the solution we are looking for.

The AQC is a good start. 

David Harlow
The Harlow Group LLC
Health Care Law and Consulting 

Hospital Chargemasters and Open Data from CMS -- The conversation continues

When CMS recently released hospital chargemaster and payment data for the 100 hospital codes most frequently billed to Medicare, there was much written and said about the significance of the data release.

Some found this to be significant; others (including your humble HealthBlawger), not so much.

Leonard Kish summed up and addressed the critiques of the value of the CMS open data, and others whose judgment I also respect found that the release was overall a good thing. Gilles Frydman, for one, in a listserv exchange, opined that the release was a net positive because it thrust the irrationality of hospital pricing into the public eye, and that "[i]f enough people get angry, a public push for more transparency will follow."

I can accept the proposition that data will be valued differently by different parties. However, I want to throw something else into the mix: We are collectively trying to move away from fee-for-service medicine. As the saying goes: the future is already here; it just isn't evenly distributed. Some are further down the path than others. I think that our time and effort is better spent on ensuring that value-based purchasing systems are up and running, rather than on improving the pricing transparency of FFS medicine.

Eighty-two percent of health plans responding to a recent survey consider payment reform a ‘major priority.’ Nearly 60 percent forecast that more than half of their business will be supported by value-based payment models in the next five years. And, of those, 60 percent are at least mid-way through implementation, according to a study published May 9 by Availity, a health information network.

The Health Plan Readiness to Operationalize New Payment Models study delves into the progress of the country’s commercial health plans, as they migrate from fee-for-service to value-based models of compensating physicians, according to a news release by Availity. The study highlights the consensus among plans that information sharing with physicians must be automated – primarily in real-time – for these models to achieve success.

HealthcareIT News.

On the Medicare front, ACO development and other initiatives of the Center for Medicare and Medicaid Innovation are moving the system away from FFS medicine as well.

There's a system-wide bet that's been placed on value-based payment. Historical amounts charged and paid shouldn't really enter into the construction of this framework, and that's part of what underlies my negative reaction to the release of the chargemaster and payment data. We should be more focused on things like: revaluing primary and preventive care, global budgeting for episodes of care, adoption and refining of meaningful quality measures and quality-based payment systems (even though not all VBP schemes are working) -- all to the same end as the end sought by those who have been cheering the release of the charge and payment data: transparency and a clear connection between payment and delivery of value.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting