HealthBlawg

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.

SGR Fix - Can This Really Be Happening?

The Sustainable Growth Rate mechanism creating a zero-sum game for Medicare Part B reimbursement rates (dropping rates as volume picks up) has long been unsustainable, and so Congress has been messing around with short-term SGR fix legislation for years now. Every six to twelve months we've been hearing about the impending 20% or 30% Medicare pay cut about to hit physicians' pocketbooks, and the likely exit of physicians from the rolls of participating providers. However, the stars are now aligned in such a way that real progress seems likely: multiple powerful Congressional committees have signed off on a deal to replace the SGR rule with something more workable: A unified approach to financial incentives to physicians and other medical professionals who are Medicare participating providers intended to promote quality and enrollment in alternative payment arrangements.

The full text of the bill will be available here: It's H.R. 4015. Check out the SGR fix section-by-section-summary and the websites of the House Energy & Commerce Committee and the Senate Finance Committee too. The substance of the proposal is discussed below.

How has this happened?

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  

PQRS: Alphabet soup with little meaning

I'm quoted in the current issue of Medical Economics, on the subject of the Medicare PQRS: Physician Quality Reporting System. I'm not a big fan of PQRS, since it rewards reporting of process measures, not outcomes, and the amounts at stake (up to a 2% bonus or, soon, penalty) have not been enough to move most docs to bother.

Here are my 5 PQRS tips, as reported in the article:

1. EHRs will help with data collection and processing. “You just have to keep your records properly. It’s a little bit of easy money for collecting information you should be collecting anyway,” Harlow says.  

2. The PQRS is a way to keep track of a set of measures that the Medicare program has deemed important. “Personally, I would prefer they would focus on six that would be the most predictive of outcomes,” he says, suggesting that the program could be a little bit more focused so that, after 5 or 10 years, it could be determined what measures are most predictive of good outcomes. “The danger is, physicians could focus on just the things that are being measured and the other things fall off the table.” 

3. A greater “bang for the buck” will occur as the private sector jumps on board, he says. Practices could make significantly more money on the private-payer side for reporting these measures. The more people get comfortable with reporting on and meeting these measures now, the easier it will be to incorporate doing so later.

4. “It’s not just about collecting the data, but to focus on [improvement] from one year to the next,” he says. “The focus on tracking [data trends] will enable you to take the next step.”

5. It’s better for providers to be ready for the shift to pay-for-performance sooner rather than later. Being able to show you aren’t just collecting data, but that you also are using those data to improve outcomes from year-to-year, will be increasingly important.

Bottom line: Look to the future, to reimbursement and care systems that leave behind FFS and all its add-ons like PQRS, like the ACO model (Accountable Care Organizations) and other innovations. 

The old system, with all of its adjustments and recalibrations, looks more and more like pre-Copernican astronomy, with the outrageous adjustments to a geocentric model that had to be made to explain behavior of a heliocentric solar system. I think we're all ready for a breath of fresh air.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting  

Can Patient-Centered Care Reduce Hospital Readmissions?

A new Press Ganey white paper highlights an association between HCAHPS performance -- patient experience scores -- and lower rates of readmission. (Performance Insights - The Relationship Between HCAHPS Performance and Readmission Penalties.)

With Medicare payment penalties for excess readmissions now in effect, reducing readmissions has become a top priority for hospitals and other stakeholders. The Centers for Medicare and Medicaid Services (CMS) publicly reports risk-adjusted readmission rates for heart attack, heart failure and pneumonia. The data show significant variation in performance across hospitals, indicating that some hospitals are more successful than others at addressing the causes of readmissions. A new study by Press Ganey suggests that performance on readmission metrics is associated with performance on patient experience of care measures.

This study is an interesting look at the relationship between two value-based purchasing programs used by CMS to calculate Medicare payments to hospitals -- the Hospital Value-Based Purchasing Program and the Readmissions Reduction Program.

The key learning from this study is this:  

Effective communications is fundamental to ensuring that patients become engaged in their care and, consequently, better equipped to follow discharge instructions and self-monitor after leaving the acute care setting.

Coupled with patient-centered practices supported by past studies which have shown that "the single most effective strategy for improving patient satisfaction is purposeful hourly rounding by nursing staff," a "sustainable discharge" strategy is highlighted as a key predictor of avoided readmissions.

A sustainable discharge strategy comprises identifying and addressing patient-specific factors that could lead to readmission, strategic patient education, developing a patient-focused after-care plan and ensuring a smooth transition to a post-acute setting. Tactics that drive success in achieving sustainable discharges include: dedicated patient transition coaches, proactive planning for non-medical barrier to treatment adherence, post-discharge phone calls, scheduled follow-up care, and use of cross-setting discharge planning tools and teams.

In other words, a patient-centered discharge planning process, built on clear communications with the patient, is likely to reduce readmissions.

With more than 20% of Medicare beneficiaries discharged from an acute care hospital being readmitted within 30 days, at a cost of over $15 billion a year, and with over 2000 hospitals looking at readmissions reduction program Medicare payment penalties in FFY 2013 totaling $280 million, this is a significant issue -- but one where a potential solution is clearly at hand.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting 

David Harlow is keynote speaker at Louisiana Hospital Association 2012 Health Law Symposium

This morning I am in Baton Rouge, at the Louisiana Hospital Association conference center, sharing my perspectives on ACOs and the broad range of innovation in health care delivery and financing being ushered in under the Affordable Care Act.

Accountable Care Organizations - The Camel's Nose Is In the Tent from David Harlow

I am also speaking about the use of health care social media in the face of concerns from legal, compliance and regulatory departments.

Health Care Social Media - Getting Started Without Getting In Trouble from David Harlow

David Harlow
The Harlow Group LLC
Health Care Law and Consulting