The State of Play in the ACA Marketplaces

Last week I was interviewed by Dmitri Sotus on WTOP's “To Your Health” about the state of competition in the ACA marketplaces.

 

Recent news reports have highlighted rising premiums and plan exit in the ACA marketplaces. United Healthcare has announced they will no longer offer marketplace plans in most of the 34 states where they had previously participated. Based on early insurer filings, three states may only have one insurance carrier offering marketplace plans during open enrollment this fall. Are these reports a sign that the marketplaces are unsustainable? Or are they a sign that the markets are working to make plans compete on price as intended?

 

Listen to find out and to get a preview of our June issue.

 

Tick

Tick: A small wingless bloodsucking insect that, along with the mite, belongs to the order Acarina. Ticks may be found in tall grass, where they may attach to a passing animal or person. Pulling a tick forcefully out from under the skin may leave the head behind. Ticks can transmit diseases such as Lyme disease, Rocky Mountain spotted fever, tularemia, equine encephalitis, ehrlichiosis, babesiosis, and (in animals only) anaplasmosis.

Picture of a tick

MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You

America's New Drug War

By STEVEN FINDLAY

Earlier this month an 86-year old man in Florida killed his 78-year old wife.  He called 911 and when the cops arrived he confessed.  When asked why he did it, the man told authorities that the couple could no longer afford her medications.  She'd been sick for 15 years, the man said, and was often in pain. 

News sources reported that the couple filed for bankruptcy in 2011.  At the time, they had $53,900 in liabilities, most in medical bills put on their credit card.   They lived primarily on social security.    

There's very likely more to this sad story, and it's unclear why Medicare didn't cover most of the couple's drug costs.  He told authorities he shot his wife (while she slept, by the way) because they had “run out of options.”   

Related, a few months back a Massachusetts Institute of Technology economist and a Harvard oncologist proposed that banks create a new kind of long-term loan-pegged somewhere between a car loan and a home mortgage-that would let people borrow money to pay for expensive medicines.   For example, a loan for a $100,000-a-year drug might require pay back in 9 years at an annual 9% interest rate, they suggested.     

With a nod towards value-based payment, they proposed that a borrower would not have to repay a loan if the therapy didn't work or if the patient died.  Andrew Lo, of MIT's Sloan School of Management, and Dr. David Weinstock, an oncologist at the Dana-Farber Cancer Institute, told news outlets they agreed that good insurance would be a much better option. “This is a private sector stopgap way to deal with [the drug price/cost problem] right now,” said Lo.

Clearly, the Florida mercy murder was an outlier event and the loan idea is probably going nowhere.  But both speak to mounting anxiety-even desperation-around the issue of rising prescription drug costs.  A 2015 Kaiser Family Foundation survey found that to be among the public's top health concerns.  And Modern Healthcare on May 23 reported that its' latest poll of hospital and healthcare CEOs found that 70% supported “aggressive measures” to slow drug costs.  

The issue's move to the front burner in the past year has been triggered primarily by the emergence of a new batch of expensive and effective medicines to treat hepatitis and cancer.  There was, of course, also the fact that a number of pharmaceutical companies were caught raising prices exorbitantly on older medicines for no other reason than to maximize profit.  You've heard/read the stories.   

Those stories had the White House, many members of Congress, and some presidential candidates-including Trump-fulminating about the industry.

In the context of that spotlight, it's worth checking in on the status of the latest high-profile initiative to address the problem.  The initiative powerfully illustrates how hard it's going to be politically to tackle Rx drug prices/costs.    

The Part B Drug Experiment

On March 8, 2016 the Center for Medicare and Medicaid Services (CMS) issued a proposed rule to test changes in how drugs administered under Medicare Part B are reimbursed.  In the capsule summary of the proposal, CMS said its aim is to test ways to “reduce Medicare expenditures while preserving or enhancing the quality of care provided to Medicare beneficiaries.”   

Sorry, but a bit of background is necessary since the way Medicare pays for drugs is complicated.     

Under Part A (hospital coverage), drugs administered in the hospital are reimbursed as part of the hospital bill. 

Under Part B (physician and outpatient clinical services), Medicare pays for infusion and injectable drugs and biologics administered in doctor's offices, clinics, and hospital outpatient departments.

Under Part D (stand-alone prescription drug insurance), Medicare pays pharmacies when seniors with Part D coverage fill their scripts. 

Under the Medicare Advantage program, almost all health plans cover prescription drugs, and that cost is built into the government's per beneficiary payment.

In Part B, since 2003, Medicare has paid for drugs according to a formula: “average sales price” (which has its own set of calculations and problems) plus 6%.  The 6% was established as a fee to doctors to cover their costs for procuring, stocking and administering the drugs, and billing Medicare.  Congressional action in 2013-to reduce the federal budget deficit (a process dubbed sequestration)-lowered the 6% fee to 4.3%.   

Here's the thing:  The fee was never intended to be a profit center for doctor's offices and clinics that administer drugs, with a built-in incentive to prescribe more expensive drugs.  But the 6% (now 4.3%) add-on to average sales price has effectively made it just that as the prices of many of the drugs administered in doctor's offices (such as cancer and biologic drugs) have soared.

Medicare spent $22 billion on Part B prescription drugs in 2015, double the amount in 2007. 

By way of simple illustration, a $100,000 drug gets a doctor's office a fee of $6,000.  A $15,000 alternative drug brings in just $900.  For oncologists and outpatient chemotherapy clinics, in particular, the fee is a substantial part of their revenue stream since most of what they do is infuse cancer drugs, to the tune of hundreds of thousands if not millions of dollars a month. 

Medicare beneficiaries are caught up in this as well.  Under Part B, they share expenses, with Medicare paying 80% and the beneficiary paying 20% of the bill, if the beneficiary does not have supplemental coverage.  And about 10% to 15% don't-almost all of whom have annual incomes under $20,000. 

Thus, with doctors incentivized to prescribe more expensive drugs, some patients suffer significantly-at least in the pocket book.

What CMS proposes is to test a reduction in the fee to 2.5% and to tack on a flat $16.80 per drug per patient.   The agency also wants to test value based purchasing arrangements for drugs in Part B.  In the test, doctor's offices (mostly oncologists and rheumatologists probably) nationwide would be divided into four groups, with a control group getting reimbursed according to the status quo.  I'll spare you further details, all of which are available in the Federal Register proposal.    

Predictably, most Democrats, health reform advocates, and liberal consumer groups such as AARP support the experiment.  Republicans, conservative and physician-interest groups, and a number of patient advocacy organizations don't, claiming that the experiment is ill-conceived and will hurt patient access to drugs and thus treatment and the quality of care.  The critics also assert that many physicians would end up paying more for some drugs than they get reimbursed-thus losing money.

Pharmaceutical companies, of course, are also vigorously opposed.  

A fierce lobbying campaign to kill the proposal is now underway, and it could be successful.  On May 2, a dozen or so House Democrats broke ranks and called for the proposal to be completely scuttled.  Another 60 raised concerns in a letter, according to a story in The New York Times. Some Democrats also raised objections at a House hearing on May 17.  And every member of the Senate Finance Committee-14 Republicans and 12 Democrats-expressed reservations at a recent hearing.   A one paragraph House bill (HR 5122) would bar CMS from implementing the initiative. 

As a New York Times story by Robert Pear stated:  “Whatever the merits of the proposal, the administration has to date been outmaneuvered on Capitol Hill.” 

Public comments on the rule were due to CMS on May 9; it received 1,352. The comments were posted May 19; you can view them here.  I have not had time yet to read them. 

The House Republican opposition letter is here.   And here's a letter from consumer groups supporting the proposal.   

My take:  CMS and the White House should work with Congress to modify the proposal over the next few months.  It should not be scuttled.  Experiments like this-which are consistent with the move to value- based care and the removal of perverse incentives to deliver pricier care than needed-are essential to making progress on reducing the rate of increase in prescription drug spending.

Steven Findlay is an independent journalist and editor who covers medicine and healthcare policy and technology. 

Lymph node

Lymph node: One of many small, bean-shaped organs located throughout the lymphatic system. The lymph nodes are important in the function of the immune response and also store special cells that can trap cancer cells or bacteria that are traveling through the body through the lymph. Also known as lymph gland.

MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You

How Radiologists Think

By SARAUBH JHA, MD

Diagnostic tests such as CAT scans are not perfect. A test can make two errors. It can call a diseased person healthy – a false negative. This is like acquitting a person guilty of a crime. Or a test can falsely call a healthy person diseased – a false positive. This is like convicting an innocent person of a crime that she did not commit. There is a trade-off between false negatives and false positives. To achieve fewer false negatives we incur more false positives.

Physicians do not want to be wrong. Since error is possible we must choose which side to err towards. That is we must choose between two wrongness. We have chosen to reduce false negatives at the expense of false positives. Why this is so is illustrated by screening mammography for breast cancer.

A woman who has cancer which the mammogram picks up is thankful to her physician for picking up the cancer and, plausibly, saving her life.

A woman who does not have cancer and whose mammogram is normal is also thankful to her physician. The doctor does not deserve to be thanked as she played no hand in the absence of the patient's cancer. But instead of thanking genes or the cosmic lottery, the patient thanks the doctor.

How about the false negative – the cancer missed on the mammogram? A common reason doctors get sued is missing cancer on mammography.  The false negative is not a statistic but a real person. We promised her early detection of cancer but we failed. It is not surprising that she sues us for breaking our promise.

Now consider the false positive. She doesn't have cancer. The mammogram flags a possible cancer because of a suspicious finding. Abnormalities on mammograms are seldom binary. There are shades of gray. Because the shade of gray is a suspicious shade, she has an ultrasound and then a biopsy. She is waiting for the results of the biopsy. Her heart is pounding with anxiety. The physician breaks the news to her “no cancer, your biopsy is negative.”

Imagine her relief. Far from being angry with the doctor for taking her in to a rabbit hole she is grateful. That the possible abnormality in her mammogram was not ignored shows that her doctor cares. You can never care too much. You can never be too safe. Better safe than sorry.

This reminds me of the Stockholm syndrome – a curious phenomenon first described in a bank robbery. This is when hostages develop positive feelings for their captors, and have an exaggerated appreciation for acts of unexpected kindness. Is the gratitude of the false positive the medical variant of the Stockholm syndrome?

Doctors are thanked by the false positives but can be sued by the false negatives. Our choice is a no-brainer. Better thanked than sued.

Doctors haven't stopped being wrong. We just make more tolerable mistakes. But we are not alone. We live in a society obsessed with safety. Precaution is the new morality. False positive is precaution by another name.

Saurabh Jha is a radiologist based in Pennsylvania.

Fifth disease

Fifth disease: An oddly named disease caused by a virus called parvovirus B 19. (In the pre-vaccination era, fifth disease was frequently the "fifth disease" that a child contracted.) . Symptoms include low-grade
fever, fatigue, a "slapped cheeks rash," and a rash over the whole body.

While the illness is mild in most children, some children with immune deficiency (such as those with AIDS or leukemia) or with certain blood disorders (such as sickle cell anemia or hemolytic anemia) may become seriously ill with fifth disease. Parvovirus B19 can temporarily decrease or halt the body's production of red blood cells, causing anemia.

Moreover, fifth disease is of consequence in many adults. About 80% of adults with fifth disease have joint aches and pains
(arthritis) which may become long-term with stiffness in the morning, redness and swelling
of the same joints on both sides of the body (a "symmetrical" arthritis), most
commonly involving the knees, fingers, and wrists.

Pregnant women (who have not previously
had the illness) should avoid contact with patients who have fifth disease. The fifth
disease virus can infect the fetus prior to birth. And, while no birth defects have been
reported as a result of fifth disease, it can cause the death of the unborn fetus. The
risk of fetal death is 5-10% if the mother becomes infected.

Fifth disease is also known as erythema infectiosum. For more information, read the article on Fifth Disease.

MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You

Grading Hospital Report Cards (Again)

By MICHAEL MILLENSON

Medicare recently delayed a plan to issue a simple “star” rating of individual hospitals' care after 60 senators and 225 House members signed letters supported by major industry groups that questioned Medicare's methodology.

Rick Pollack, president and chief executive officer of the American Hospital Association (AHA), hailed the hiatus and pledged to make ratings more “useful and helpful for patients.” Perhaps. But while a summary grade for care quality has never fit hospitals-where the orthopedists could have a leg up on competitors, while the cardiac surgeons' results are disheartening-it's also true that hospitals have consistently fought attempts at transparency. Over an astonishing stretch of almost 100 years, they've done so crudely (burning the results of the first national quality survey in a hotel furnace to keep them from the press), through the courts (suing to prevent release of infection data), and using political clout.

Nonetheless, if the hospital groups that sought this delay-the AHA, the Association of American Medical Colleges, America's Essential Hospitals, and the Federation of American Hospitals-truly seek to sever the industry from its self-protective past, they don't have to wait for government. As the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) accelerates the move to value-based payment, there are significant actions hospitals could take to build a better report card right now.

Room For Improvement

The biggest opportunity lies in data reliability. Pollack rightly asserts that “consumers need reliable, factual information to make critical care decisions.” However, in a recent speech to health care journalists, Doris Peter, director of the Health Ratings Center for Consumer Reports, singled out underreporting of data by hospitals and other providers, missing data, and “no quality control around data” as a major challenge.

Hospital groups could help solve this problem by requiring their members' data submissions to meet the same rigorous criteria the industry demands of the government's star rating program.

In addition, hospitals that are part of a local health system are currently lumped into a single Medicare provider file. That's like consumers getting one local health department report for four separate restaurants having one owner. Hospital trade groups should support data changes that enable the government to break out individual hospital data and, right now, urge their members (like the hospital system with a facility near my home!) to voluntarily do so.

Timeliness

There's also an urgent need to improve data timeliness. Information on Medicare's Hospital Compare site is typically a year or more old, as is information on other sites dependent upon government claims date. States can be much worse. New York provides detailed heart surgery mortality information on both hospitals and individual surgeons. Yet the latest public report on this serious procedure covers the three-year period 2010-2012! The time lag undermines usefulness while providing ammunition to critics who claim that the public doesn't care about report cards.

To support more meaningful transparency, industry leaders should call on all hospitals to routinely release detailed quality metrics as quickly as they're internally available. At the same time, the four groups who sought the Medicare star ratings delay could ask those 60 senators and 226 Congressmen to mandate and fund more rapid claims data processing. State hospital associations could launch similar initiatives.

Of course, it's important to emphasize that hospitals don't have to wait for government permission to release their own data or format it in a manner consumers can understand.

Unfortunately, many hospitals remain highly selective about releasing information. To cite one prominent example, the website of Harvard's Massachusetts General Hospital boldly displays its ranking for 2015-2016 from U.S. News & World Reportas “Number 1 in the Nation.” However, specifics shared on the Mass General website might as well come with cobwebs. To pick just a few categories: data on surgical events, care management events, and door-to-needle time are from 2013. And patient falls, “managing serious errors,” and hand hygiene data date back to 2014.

By the way, if you're curious how Mass General stacks up against household names like the Mayo Clinic hospitals, Johns Hopkins, or Stanford, so are they. Membership organizations like Vizient allow hospitals to share detailed quality reports confidentially among themselves.

Accessibility

One area where Mass General does exhibit admirable transparency is posting its latest survey results from the Joint Commission. Although the Joint Commission has deemed status from Medicare (which means its surveys are deemed an acceptable substitute for government inspections), it is very difficult to find individual facility information on the commission website. The AHA and other provider organizations that control the commission board could transform opacity to openness overnight. Hospital trade groups could also recommend a voluntary “best practice” to all their members that includes prompt and prominent posting of survey results.

Speaking of best practices, Kentucky's Norton Healthcare system reports in a simple visual format almost 600 nationally recognized quality indicators for the system and its individual facilities. The effort began in 2005 by disclosing about 200 indicators and includes core principles such as, “We do not decide what to make public based on how it makes us look.” The hospital industry could recommend that Kentucky's two senators, Majority Leader Mitch McConnell and former GOP presidential candidate Rand Paul, sponsor hearings on what the private sector and government can learn from Norton's experience.

The research literature amply documents the conflicting messages and confusionthat confound many current report cards. Most recently, the accuracy of a group of commonly used patient safety measures was the subject of academic criticism and a strongly worded response.

Providers understandably worry that the portrayal of the care they provide will be distorted by flawed analytical methods, and there is a need for more research on the best way to communicate comparative information. But as advocates for transparency have been forced to repeatedly emphasize over the years, it is also dangerous to make the impossibly perfect the enemy of the achievable good.

At about the same time that hospital groups were halting a potentially misleading report card from the government, a new policy analysis predicted that expanded consumer use of provider performance report cards lies just ahead. Individual hospitals and the industry remain quick to point out flaws in others' report cards to the press and policymakers while keeping mum about the wealth of comparative quality information they use internally. That is particularly true of clinical measures, the “gold standard” of accuracy in quality assessment.

Although star ratings may be more suitable for hotels than hospitals, the hospital industry should still be held accountable for helping build a “useful and helpful for patients” alternative. Hospital groups don't have to wait for government to lead their members to taking the specific steps needed to build a reliable, timely, and complete report card the public can trust.

Michael Millenson is a principal at Health Quality Advisors LLC. This post first appeared in the Health Affairs Blog. 

Health Affairs Briefing: Behavioral Health

With a raging opioid abuse epidemic under way and renewed concerns over rising suicide rates and underdiagnosed maternal depression, mental health and substance abuse are garnering increased attention in the health policy sphere and the public at large. Yet a vast gap remains between the role behavioral health plays in defining the well-being of the population and the resources dedicated to understanding and addressing behavioral health needs.

The June 2017 thematic issue of Health Affairs is devoted to the topic of behavioral health. You are invited to join us for a forum on Tuesday, June 7, 2016, at the National Press Club in Washington, D.C., at which we will discuss the issues in detail.

WHEN: 

Tuesday, June 7, 2016

9:00 a.m. – 12:40 p.m.

WHERE:

National Press Club

529 14th Street NW, Washington, DC (Metro Center)

Register Today!

Follow Live Tweets from the briefing @Health_Affairs, and

 join in the conversation with #behavioralhealth

Panels will cover:

• Insurance Coverage And Parity


• Meeting Behavioral Health Care Needs


• Interaction With The Criminal Justice System


• Equity


• Roundtable Discussion: Emerging Issues In Behavioral Health

The program will feature presentations from the following authors:

• Margarita Alegrìa, Chief of the Disparities Research Unit, Massachusetts General Hospital and Department of Medicine and Professor, Harvard Medical School, on Removing Obstacles to Eliminating Racial and Ethnic Disparities in Behavioral Health Care


• Yuhua Bao, Associate Professor of Healthcare Policy and Research, Weill Cornell Medical College, on Prescription Drug Monitoring Programs Associated with Sustained Reduction in Schedule II Opioid Prescribing in Ambulatory Settings


• Colleen Barry, Professor and Associate Chair for Research and Practice, Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, on Federal Parity In The Evolving Mental Health And Addiction Care Landscape


• Timothy Creedon, Research Associate Health Equity Research Lab, Cambridge Health Alliance, and PhD Candidate, Heller School, Brandeis University, on DATAWATCH: Access To Mental Health And Substance Use Treatment Up, But Disparities Remain


• Stephen Crystal, Associate Director for Health Services Research, Institute for Health, Health Care Policy and Aging Research, Rutgers University, on Antipsychotic Treatment Among Foster Care And Other U.S. Children: Turning the Tide?


• Janet Cummings, Associate Professor, Health Policy and Management, Rollins School of Public Health, Emory University, on Decline in Public Substance Use Treatment Centers Most Serious in Counties with High Shares of Black Residents


• Larry Davidson, Professor of Psychiatry and Director, Yale Program for Recovery and Community Health, Yale University, on The Recovery Movement And Its Implications For Transforming Mental Health Practice


• Robert Drake, Professor of Psychiatry, of Community & Family Medicine and of The Dartmouth Institute, Dartmouth College, on Individual Placement And Support Services Boost Employment For People With Serious Mental Illness, But Funding Is Lacking


• Michael Hogan, Principal, Hogan Health Solutions, on Suicide Prevention: An Emerging Priority For Health Care


• Alene Kennedy-Hendricks, Assistant Scientist, Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, on Improving Access To Care And Reducing Involvement In The Criminal Justice System For People With Mental Illness


• Tami Mark, Vice President and Research Director, Behavioral Health and Quality Research, Truven Health, on National Behavioral Health Spending Trends: 1986-2014 Insurance Financing Increased For Mental Health Care But Not For Treatment Of Substance Use Disorders


• Beth McGinty, Assistant Professor, Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health on Trends In News Media Coverage Of Mental Illness In The United States: 1995-2014


• Thomas McGuire, Professor of Health Economics, Department of Health Care Policy, Harvard Medical School, and Research Associate, National Bureau of Economic Research, on Simulation Of Marketplace Risk Adjustments Suggests Plans May Distort Coverage For Mental Health Or Substance Disorders


• Mark Olfson, Professor, Department of Psychiatry, New York State Psychiatric Institute, College of Physicians and Surgeons, Columbia University, on Building The Mental Health Workforce Capacity Needed To Treat Adults With Serious Mental Illnesses


• Harold Alan Pincus, Vice Chair, Department of Psychiatry, Columbia University's College of Physicians and Surgeons, and Director of Quality and Outcomes Research, New York Presbyterian Hospital, on Quality Measures For Mental Health And Substance Use: Gaps, Opportunities, Challenges


• Brendan Saloner, Assistant Professor, Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, on Substance Use Disorder Treatment Among Criminal Justice-Involved Adults: Trends From 2004 To 2014


• Jeffrey Swanson, Professor in Psychiatry and Behavioral Sciences, Duke University School of Medicine, on Preventing Violent Crime And Suicide Among People With Serious Mental Illnesses In Florida: Do Gun Restrictions And Background Checks Reduce Risk? 

Health Affairs thanks the California Health Care Foundation; Takeda Pharmaceutical Company, Ltd.; the Leona M. and Harry B. Helmsley Charitable Trust; and the Conrad N. Hilton Foundation for their support of this issue and the event. Benjamin Druss of Emory University served as theme adviser.

Stomach flu

Stomach flu: A gastrointestinal illness caused by a microorganism. Stomach flu is not related to the influenza (flu) virus.

MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You

Understanding How Payment And Benefit Designs Work Together In Health Care

There is a lot of commotion around payment reform, with a proliferation of ways to pay health care providers and many different definitions of similar terms. This has led to efforts by experts and stakeholders in health care to define or classify payment methods - e.g. Harold Miller's Payment Reform Glossary and the Learning and Action Network's Framework. However, none of these has both defined and critically analyzed the various payment methods, or examined how they may interact with each other as well as the insurance benefit designs to which providers' patients are subject.

Speaking of benefit designs, they are evolving at almost the same rate; however, they have not been the focus of health care reform discussions, other than recently in the context of the Affordable Care Act (ACA) marketplaces. This is perhaps because Medicare and Medicaid benefit design is set by law and effectively frozen, whereas private health care purchasers are able to innovate freely. Thus, unlike for payment methods, there has been little to no effort to define and categorize benefit designs, and similarly no attempt to analyze their nuances.

Creating Typologies

With the help of a Technical Expert Panel, the Urban Institute and Catalyst for Payment Reform (CPR) partnered to define and categorize the payment methods and benefit designs available in the market into two “typologies” based on their characteristics.

Our typology of payment methods classifies payments into two major categories: base or incremental. A base payment is a provider's underlying compensation. Base payments can be fixed (salary), activity-based (fee schedules or case rates), and population-based (capitation). Incremental payments are those that are layered on top of base payments. For example, pay-for-performance may be paid in addition to the fee schedule and standard hospital payment, or shared risk can be layered on top of capitation to a provider group.

We also classified benefit designs into two categories: cost sharing and contingent coverage. Benefit designs in the “cost sharing” category utilize basic forms of cost sharing (co-payments, co-insurance, deductibles) as well as more directive forms to encourage consumers to use particular providers or services. Benefit designs in the “contingent coverage” category require consumers to receive approval from a qualified entity (payer or provider) to utilize their insurance coverage.

Payment Methods and Benefit Designs: How They Work

Many of those experimenting with or interested in implementing reforms don't understand the nuances of the payment methods and or benefit designs involved: their strengths and weaknesses; how to combat potential weaknesses; what performance measures should be used to counter possible unintended consequences; and how these incentives may affect provider pricing. Having a greater understanding of the nuances inherent in provider and consumer incentives can help implementers determine where their reforms fall short and how they can address those challenges.

In particular, the nine payment methods either in common use or proposed as reform methods that warrant close examination include:

• fee schedules;


• primary care capitation:


• per diems;


• diagnosis-related groups;


• global budgets;


• bundled episodes;


• global capitation;


• shared savings; and,


• pay for performance.

On the benefit design side, those approaches that utilize cost differentials to encourage consumers to use particular providers or services require in-depth exploration, particularly because they are newer methods that employers and other purchasers are looking to implement. These include:

• narrow networks;


• tiered networks;


• reference pricing;


• high deductible health plans;


• centers of excellence;


• value-based insurance design; and,


• incentives to use alternative sites of care.

Analyzing these payment methods and benefit designs will help implementers understand how they might complement each other and support more informed consumerism among patients.

How Payment Methods and Benefit Designs Support Health Care Delivery

Understanding how payment methods and benefit designs work can serve another purpose. With the flurry of activity, many stakeholders have not yet made time to examine how these methods can act together to align the incentives of providers and consumers in the design of health care delivery models.

For example, for accountable care organizations (ACOs) that take on financial risk in the form of shared risk and/or capitation, a narrow network might best drive consumers to seek care from the ACO's providers only. This makes it easier for the ACO to manage and coordinate attributed patients' care. ACOs may be less willing to take on risk if their patients have the ability to seek care from providers who are not in the ACO; therefore, a broad network would not lend support to a risk-based payment method for an ACO.

For patient-centered medical homes (PCMHs), value-based insurance design (V-BID) could reduce financial barriers to high-value care, thereby aligning the interests of the patient and practice. Additionally, because V-BID lowers consumer cost sharing for services with well-established positive impacts on the quality of care, this sets the provider up for practice patterns that may serve as the basis for potential bonuses. In addition, capitated payments to providers in the PCMH would support its ability to make care more accessible to patients through, for example, telehealth visits, which can be less expensive to provide and less costly for patients.

Focused factories are a uniform approach to delivering a limited set of high-quality services efficiently, such as a center of excellence for joint replacement. When providers are paid essentially a package price for bundled episodes, consumers can calculate their portion of that price up front and select a provider accordingly. Reference pricing, which establishes a standard price and requires the plan member to pay any allowable charges above that price, could also steer consumers to these expert providers.

As many forces push the health care system to experiment with and expand newer health care delivery models, such as PCMHs, ACOs, and focused factories, it is critical to think about how we can best align provider and consumer incentives. It will take more work than thinking about each reform in isolation, but the time has come.

A Reality Check on Workplace Wellness

By JIM PURCELL

In 1971, President Nixon declared a war on drugs, and decades later our country's efforts to battle drug addiction remains largely a failure. Even here on idyllic Cape Cod, we see deaths by overdose and suicide in numbers that are horrifying, particularly with our youngsters.  This epidemic shows little sign of abating as communities grapple with the scourge of runaway drug addiction and its gut-wrenching consequences.

So, it's fair to ask: given our societal failure to stop drug abuse, should we throw in the towel because it's, as we say here in Massachusetts, wicked hard? Is it acceptable to let drug users spiral downward with predictable ruinous consequences, because to intervene and provide programs that might help could be called invasive or ineffective?  Of course not.  Because we cannot and will not abandon people with serious health conditions who, on their own, cannot recover.

The workplace and its wellness are not so very different.  Today's American workforce is anything but healthy.  Poor health is overwhelmingly the result of unhealthy lifestyles, and it inflicts incredible damage on employers and on employees and their families. It's a national tragedy, and frankly, it's a disgrace that we have not had the collective will to do more about it.    

Yet, there are those who suggest that we not only give up on trying to improve unhealthy lifestyles, but also that we give up on workplace wellness altogether. I categorically disagree.

 Just as with our drug policy's successes and failures, the wellness industry too must learn from its successes and failures, and press forward WITHOUT ABANDONING THE ENTIRE PREMISE THAT GAVE RISE TO WORKPLACE WELLNESS IN THE FIRST PLACE.  

In this, the first of a series of articles, I will outline some fundamental Premises that compel the conclusion that we must double down on workplace wellness.  Subsequent articles will expand on those Premises, explore weaknesses and flaws of some programs, and suggest strategies that can achieve the full benefits of workplace wellness, including lowering coverage costs.

PREMISE 1:  Corporate America has a responsibility to help employees improve their health and wellbeing.  This is not about rampant paternalism. We've made access to quality healthcare a fundamental right of every man, woman and child legally in America.  We have compelled businesses to buy healthcare coverage for their employees.  At least 97% of today's healthcare actually is sick-care, treating already-acquired conditions rather than preventing them.  

Is that where our obligation ends?  If so, employees will keep getting unhealthier, and even the best healthcare system can do little to stem the tide of bad health much less reduce costs.

Unfortunately, the wellness industry is under attack like never before, and an emerging sense of angst over the seeming lack of progress in workplace wellness is palpable. A recent observable trend of commentators and the workplace wellness industry in general is to give up on changing the unhealthy lifestyles of employees and reducing the cost of healthcare coverage (ROI).  “ROI” means per-employee claims expense savings that exceed the cost of a wellness program.  “VOI” (Value of Investment) means any “non-financial” improvements that result from workplace wellness activities, such as boosting productivity, morale, reducing absenteeism, etc.

Two recent articles are symptomatic of how workplace wellness is increasingly viewed as a failed concept and may represent an emerging consensus to give up on efforts to achieve ROI by improving unhealthy employee lifestyles altogether.  

“Should Employers Give Up On Wellness ROI?” consists of an interview of Dee Edington, a practitioner in wellness for over 40 years.  Mr. Edington states that, “Yes, [ROI] is dying…”  He conditioned that remark with several “ifs,” but concluded that “[t]he most obvious misconception is that a wellness program will generate a positive ROI, anywhere from 1.0 to 6.0.”  He concludes by saying that corporate wellness has a bright future IF it embraces the shift of focus away from ROI to VOIs.  He was more direct in a 2009 conversation:  “Wellness programs have been focusing on behavior change, and I've come to the conclusion that that's been a waste of time.”  

With respect (and with the realization that Dee has been doing this much longer than I), I emphatically disagree.  Cost of coverage MUST remain the focus.  To reduce cost, we must reduce chronic illness.  According to the US Centers for Disease Control and Prevention (CDC), chronic illness is mostly caused by unhealthy lifestyles and accounts for 75% of US healthcare expenditures.  And chronic disease is the most preventable of diseases.  The CDC states that the key to reducing chronic illness is to address unhealthy lifestyles.  To follow Mr. Edington's  suggestion means an abandonment of attempts to reduce chronic illness, the most preventable of illnesses, and to reign in costs.

The second article is representative of an even more radical approach, namely, doing away with workplace wellness.

“Playing Doctor” is written by Al Lewis, the CEO of Quizzify.com and the author of “Surviving Workplace Wellness,” a title that pretty much sums up his view of workplace wellness. Mr. Lewis' viewpoint, characterized by militant and high visibility opposition to workplace wellness, reflects the far end of the spectrum of anti-workplace wellness sentiment.  He is oft-cited, and it seems he has not seen a wellness program or a positive ROI computation that he has liked.

“Playing Doctor” focuses on the EEOC's final rules  regarding wellness program incentives and penalties, which Al uses as a springboard to repeat his mantra that the wellness industry hides data, misrepresents results such as ROI, and not only fails to improve employee health, but actually exposes employees to significant potential harm in order to maximize revenues. His suggestion is to steer employees to safer hospitals and educate employees how to purchase healthcare wisely, something that his company, Quizzify, purports to do.  

Educating people on how to better access our dysfunctional healthcare system should be part of any comprehensive workplace wellness program.  But if that is all we do, it perpetuates smarter purchasing of sick-care by sick people rather than well-care, prevention, and healthier lifestyles.  That, in turn, will only perpetuate an increasingly unhealthy and unproductive workforce, driving costs of coverage higher and higher.

Mr. Lewis and I have commented on each others' articles in the past, and I commented on this one, asking “[a]re you saying we throw in the towel on changing unhealthy lifestyles…”?  His response was, “…yes, I throw in the towel until, to mix cliches, someone invents a better mousetrap.”  

I believe that commentaries such as these are leading corporate America down the wrong path.  

If followed, this will divert us from the single most important thing that must be accomplished to obtain ROI or VOIs:  healthier employee lifestyles.  We cannot be diverted from this inconvenient fact.  Without improving unhealthy lifestyles, none of these goals is accomplished.

PREMISE 2:  The workplace is not only an appropriate venue, but the best venue to facilitate wellness and wellbeing.

On the issue of appropriateness, the cost of healthcare coverage is one of corporate America's top concerns, as is an unengaged and unproductive workforce.  It is hard to identify a more appropriate workplace activity than directly addressing those issues.  

Employee engagement is greatly affected by health and wellbeing. A 2012 Gallup State of the American Workplace study confirms how a healthier, more engaged employee population can bring huge returns. Another study by Willis, Towers, Perrin supports this finding that more employers enjoy major financial returns and competitive advantages through higher employee engagement, productivity, and workplace morale. Yet, we cannot significantly improve employee health and wellbeing without long-term improvement of unhealthy lifestyles.  It's that simple.

As the largest aggregator of adult work-aged Americans today, the workplace is also the best venue to affect and improve employee lifestyle changes. Millions of Americans show up for work each day focused on their work and its environment.  Employers already have their attention. Messages are sent and received.  If employers can link wellness to employees' personal and work goals, they can create the opportunity for behavior change on a scale that dwarfs any other platform.  

We cannot abandon that opportunity.  Dr. Toby Cosgrove, CEO of Cleveland Clinic said it best:  “only private business…can solve America's epidemic of obesity, chronic disease, and runaway healthcare costs by investing in the health…of their employees.”

PREMISE 3:  Workplace wellness need not be offensive or inappropriately invasive.  We have interventions in many areas when lifestyle threatens life or good health.  Do we throw up our hands and do nothing about the opioid epidemic that we are experiencing because of some suggestion that recovery is not something you “do” to someone?  Make no mistake about it.  Most of us understand from our own experiences that to facilitate long-term lifestyle change, some method of gentle or firmer intervention is needed to change the status quo.  

Are there poorly designed programs that do more harm than good?  Unfortunately, yes.  Are there incentives that are ill-disguised stratagems to increase employee shares of health coverage costs?  Yes.  Are there examples of invasive use of employee data?   Yes.  Can there be over-testing that some describe as “bad medicine?”  Let's assume there can be.  And have most wellness programs failed to produce a positive claims ROI ?  That is correct (Rand Study, EBRI Study, and Pepsico), and  claims of Harvard researchers of ROIs of $3.27 from traditional wellness programs have been proven suspect.

But does this imply that we get out of workplace wellness altogether? I suggest that it is quite possible to design and implement programs without being insensitive or downright stupid, nor should we be scared off by strident accusations to the contrary. Accordingly, this is not about whether we do this; it's about how we engage employees and their families in a supportive, positive way consistent with their life goals.

PREMISE 5: While VOIs are achievable and valuable, the cost of coverage is still the single most critical issue facing corporate America today.  Wellness ROI can be achieved.

While VOIs are indeed valuable “returns” on workplace wellness programs, we are at risk of abandoning ROI. This must drive CEOs and CFOs crazy.  They are in essence being told to abandon precisely what they need most to continue to provide comprehensive employee coverage.  Ignore unhealthy lifestyles??  Other than our dysfunctional healthcare delivery system, unhealthy lifestyles are the biggest cause of our of control costs and an unsustainable trajectory.

Accordingly, it is not time to withdraw.  It is time to  double down on ROI.

America has a tradition of meeting crises head-on. There have been seemingly intractable issues that we've overcome by thoughtfulness, persistence, funding, and a will not to give up.  Our environmental legacy has shown that to be true.  Have we reached the finish line on the environment?  No.  We can and will always strive to do better.

I too want “a better mousetrap” for corporate America. Because while we've spent a bucket load of money on wellness, we haven't put in the effort, thought, and leadership that this fundamental issue requires. It's time to change that, and in my following articles, I will outline how we can do just that.

Knowledge Is Power: Improving Health Care Information For The Most Vulnerable

In health care, being an informed consumer is essential to promoting positive outcomes. Whether the issue is finding affordable care where prices vary widely, minimizing harm from medical errors, or just finding a provider, knowledge is power. Navigating the health care system is hard enough, even for health care professionals. Our most vulnerable-the uninsured, those in poverty, family caregivers, and non-English speakers-are at high risk of receiving lower-quality care, in part, because they lack the information to make choices that work for them.

To address this problem, the Robert Wood Johnson Foundation has launched Right Place, Right Time, a special research initiative to better understand the challenges that vulnerable patients face in accessing health care information and to create recommendations for improving access to such information.

To investigate the health care information needs of vulnerable patients, this project includes three coordinated studies over the spring and summer of 2016. To understand vulnerable patients' experiences, Altarum Institute conducted semistructured interviews and focus groups with sixty-five vulnerable health care consumers (including the low-income people, caregivers, and Spanish speakers mentioned below), in addition to interviews with middle-income patients and Medicare retirees for comparison. A national survey will soon follow to quantitatively measure the prevalence of the challenges as well as reception to the possible solutions that emerged from the interviews. To hear the marketplace perspective, the consulting firm Oliver Wyman is interviewing leaders at more than 100 health care organizations, including providers, health plans, employers, and others, to learn about their experiences and challenges in serving the vulnerable.

This blog post will review five recurring themes that have emerged from patient interviews and focus groups. Subsequent blog posts will explore each theme in greater detail.

Accessing health care information

Many lower-income patients described their friends and family as being their most important source of health care information, but they often went online to search for such information. Participants often did not know of specific health care information resources and used relatively generic search terms rather than specific search terms, and doing so often limited the success of their searches. Simply put, many vulnerable patients do not know about the health care resources available and do not know to look for them.

However, when vulnerable patients would discover a resource, such as patient reviews or medication price comparisons, they found these resources invaluable. However, they often did not know of these resources before their search.

In comparison, while many middle-income people also did not know of specific health care tools, their searches were precise enough to find helpful resources quickly. This suggests a possible solution: in response to nonspecific health care searches, search engines or other sites could recommend links to high-value resources that users may not know to look for, such as tools for finding the right doctor, comparing prices, or comparing quality of care.

Additionally, while many lower-income people do not have regular access to a computer at home or work, they very often have access to the Internet through mobile phones. Making health care information that is online mobile-friendly is essential to empowering lower-income patients.

Trust and respect between patients and providers

A persistent theme from our interviews and focus groups is the pervasive role of trust and respect between providers and patients. For many lower-income patients, respect was their primary concern regarding their health care. Lower-income patients often went to patient reviews to look for indicators of poor treatment of patients like them. Many patients sought out provider photos in an attempt to determine which providers would treat them with the most respect. Participants described looking for a “friendly face” but may have been using additional visual cues to anticipate their prospects in the patient–provider relationship.

Patients cited concerns about receiving lower-quality care because of their income status, race, and insurance status. Several participants refused to visit particular facilities because of past negative experiences. In particular, lower-income patients reported experiencing rude staff, condescending providers, and a feeling that their health concerns and physical pain were disregarded.

Because we did not study patient–provider interactions directly, we can only report patient perceptions of these negative encounters. However, these perceptions are discouraging many patients from seeking the care they need. While middle-income patients expressed a desire to be treated well, few reported such negative experiences, and they rarely influenced their care decisions.

Health care from nonphysicians

We also observed how frequently vulnerable patients met their care needs through nonphysicians, such as friends with some medical training and pharmacists. This was often because patients could not afford a visit to a doctor, could not get time away from work, or did not have childcare available to see a doctor during regular business hours. Participants often told us of relying on home remedies and self-care recommended to them for most of their care. For many participants, their pharmacist acted similarly to a primary care provider. Pharmacist consultations, which are free and available without an appointment, overcome two of the largest barriers to lower-income people accessing medical care-cost and time. Many lower-income patients actually reported more loyalty to their pharmacist than to their doctors. We did not hear of similar experiences from middle-income patients.

Family caregivers' concerns

In speaking with sixteen family caregivers, we observed that caregivers were often pushing the frontiers of health care information by adopting new tools, such as patient portals to view medical records; using health apps; and gathering as much health care information as possible-more than most middle-income patients were doing. Many caregivers expressed frustration about the resources available to support them. For many, other caregivers were the most valued resource for both informational and emotional support. One particular problem we observed is that foster parents are not allowed to access their foster children's medical records, despite being responsible for the health care of their foster children. This presents enormous challenges to foster parents in advocating for their foster children's health needs when the child's medical history is kept secret.

Spanish-speakers' concerns

We also spoke with fifteen Spanish-speakers to understand their experiences and concerns. For many, the language barrier was a concern, but surprisingly, many participants reported that their limited English had not been a barrier to receiving good health care information or good quality of care. Overall, Spanish-speakers looked for less information online and reported that their most common sources of health information were friends and family, Spanish-language television, and flyers in Spanish-speaking areas. We did observe that, as supported by prior research, many Latino immigrants perceived the role of medical care as primarily for acute injuries and illnesses, rather than for preventive care or chronic disease management. Many with chronic disease, such as diabetes or high blood pressure, were not seeking or receiving regular care and did not perceive this as problematic.

This post has briefly reviewed some of the recurring themes from our interviews and focus groups with sixty-five vulnerable patients. We will explore each of the issues above in greater detail and bring in survey results where available in future blog posts hosted at Altarum's Health Policy Forum. Updates will be posted below as they are published.

By JOHN HALAMKA

In 2011 and 2012 I wrote about the increasing problem of Business Spam – unsolicited, unconsented advertising that has grown in volume to the point that it constitutes more than half of my email .   In 2016, I've done an experiment – I've not opted in to any newsletter, any website offering notifications or any vendor offering information.   I've monitored my mailbox for violators of good email practices.

This month, we put a stop to it – cold turkey.   Anyone sending business spam is now blocked from the 22,000 users of Beth Israel Deaconess and its affiliates.

Here's how we did it – using a commercially available appliance we have black listed organizations which send bulk email and companies which violate unsolicited email policies.

I realize there are many categories of activity going on here

1. Those who have my contact information for a legitimate business reason but sell that information without my consent.  Maybe there is something buried in a conference registration that suggests my information will be sold, but I've never found such a disclosure.

2.  Those who create mailing lists by guessing at email addresses.   John.halamka,  halamkaj, john_halamka, halamka.john are all guesses since I've never used such addresses on any materials.

3.  Those who facilitate bulk mailing.   I've had conversations with the management of companies that provide bulk mailing services such as newsletters/product updates/special deals.   Many of these bulk mailing companies have sound anti-spam policies.   However, they have to trust that organizations which use their services adhere to the policies, accepting attestation that consent/subscription has been obtained from recipients on mailing lists.   Many customers of bulk mailing outfits submit false attestations.    Remember, I've not opted into a single thing in 2016 and I'm receiving hundreds of bulk emails every day.

May of 2016 marks “email liberation” month at BIDMC, since  we put a stop to the electronic equivalent of garbage passing through our email gateways.   This Zero tolerance for bulk email approach may very well transform email into a once again useful medium for communication.   Sure, we'll implement secure texting and groupware over the next year as alternatives to email, but there is a chance email could be salvaged.

My email box has gone from 1500 emails a day to 150. If everyone does this, maybe the business spammers will stop their flood of unwanted communications.

Viva the email liberation!

John Halamka is the CIO at Beth Israel Deaconess Medical Center.

<

The Domino Effect of House v. Burwell

By PAUL KECKLEY

Last week, U.S. District Court of Appeals Judge Rosemary Collyer issued a ruling in House v. Burwell that could cripple the law. In her opinion, the President overstepped his Constitutional authority in granting cost sharing subsidies for those lacking insurance coverage since budgetary approval is required from Congress.

The specific constitutional question is this: Did the administration or specifically the Secretaries of Health and Human Services and Treasury violate Article I, §9, cl 7 of the U.S. Constitution when they “spent public monies that were not appropriated by the Congress.” (United States House of Representatives v. Burwell, 130 F. Supp. 3d 53, 81 D.D.C. 2015). The constitution is explicit:

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time. (U.S. Const. art. I, § 9, cl. 7.) The courts will have to decide if the portion of the cost sharing subsidies (ACA Sections 1401, 1402) disbursed by the federal government without Congressional authorization violates the law.

In the aftermath of the Collyer ruling, the Justice Department served notice it will appeal. Nonetheless, this decision and its pending judicial challenges is likely to have a domino effect regardless of its ultimate outcome in the courts.

Background: Along with Medicaid expansion, cost sharing subsidies are foundational to the ACA's incentives to increase access to affordable health insurance and reduce the ranks of the uninsured. The premise is this: the majority of individuals who lack coverage simply can't afford the premiums. So the law allows for these subsidies to be paid directly to private insurers on behalf of eligible marketplace enrollees whose incomes fall between 100% and 400% of the federal poverty level. In the first year of the marketplaces, 5.6 million enrollees had 77% of their premium, or an average of $290, paid to their plan of choice via the cost sharing element of the ACA.

Will Judge Collyer's ruling be upheld by an Appeals court or find its way to the Supreme Court? No one knows for sure. It could take up to two years if House v. Burwell ends up being decided by SCOTUS. If it does, it's significance in setting the future of the Affordable Care Act will rival NFIB v. Sebelius which affirmed the constitutionality of the law and King v. Burwell that upheld the availability of cost sharing subsidies for enrollees thru Healthcare.gov rather than state exchanges. And uncertainty about House v. Burwell will have immediate and significant impact regardless of the judicial process. It creates a domino effect that industry stakeholders will feel immediately:

1-Health insurers will raise premiums or exit the marketplaces altogether.

The individual insurance market for insurers is risky compared to their employer, Medicaid and Medicare Advantage lines of business. The individual market via the marketplaces is even riskier: enrollees are older, sicker and needier than ACA proponents calculated, and stringent requirements for the plans they offer make marketplace participation a tough call for insurers.  Private insurers counted on the availability of the cost sharing subsidies along with the risk-sharing pool to mitigate their financial risks. In the end, participation in the marketplace became a game-day call: for larger investor-owned and Blue Cross plans, it's a financial call thus the recent announcements by United, Humana and others they'll cutback their marketplace participation. For CO-OPs and plans sponsored by provider organizations, it's more complicated. The them, the marketplaces were vehicles for expanding access to vulnerable or un-served populations. It's safe to say that all insurers have been disappointed in the marketplaces and forced to make adjustments. Uncertainty about the fate of House v. Burwell will prompt insurers to raise premiums in their marketplace offerings while waiting on the appellate process to play out.

2-Bad debt for hospitals will increase.

In the calculations leading to the passage of the ACA in 2010, federal funding for hospitals was cut $155 Billion (2010-2019) by lawmakers on the assumption that 25 million previously uninsured would be covered through the marketplaces and Medicaid expansion would proceed in every state. And the big stick in the equation was the individual mandate requiring everyone to buy insurance or pay a penalty (in 2016, it's the higher of 2.5% of adjusted gross income or $695 per person). None of these has worked out as planned. The Supreme Court (June 2012) made Medicaid expansion optional for states. And glitches in the Healthcare.gov rollout in the fall of 2013, higher than expected premiums for the silver plans (to which cost sharing subsidies are applied) and confusion about the exchanges depressed marketplace enrollment. Now add uncertainty about House v Burwell and the continued volatility of insurer participation and premiums. These combine to negatively impact hospitals: the ranks of the uninsured will likely swell and hospital bad debt with follow suit. Unlike insurers, hospitals can't elect not to participate: they're required to treat patients without considering their ability to pay their bills. And it's not likely Congress will offer to give back hospital cuts they authorized though their calculus was faulty.

3-The politics of the ACA, and Supreme Court appointments of the next President, will become big topics in Campaign 2016. The next President will likely name one or two justices to the Supreme Court where big decisions impacting the future of the ACA will be settled. The enforcement of contraception coverage, ongoing challenges by states about the scope of the federal oversight, potentially House v. Burwell and others are foundational to the law's implementation and compliance by all parties. To date, debate about the ACA in Campaign 2016 has been long on bravado and short on specifics: the GOP mantra has been Repeal and Replace, while the Dem retort has been Repair and Expand. An appeals court decision is unlikely before November which keeps House v. Burwell alive as a campaign issue, and Supreme Court appointments by the 45^th U.S. President a major focus for both campaigns.

That's the domino effect of House v. Burwell. As its judicial journey begins, it's important to monitor the outcome of its deliberation, its impact across the industry and the anxiety among those most directly impacted-individuals who count on their subsidies for coverage.

 

Congressional Risk Corridor Payout Limits Spawning Legal Difficulties

Update On Qualified Health Plans. On May 23, 2016, CMS released at its REGTAP.info website a question and answer addressing the issue of whether qualified health plans (QHPs) may contract with excluded providers and list them in their provider directories. The HHS Office of Inspector General (OIG) maintains a list (LEIE) of individuals and entities excluded from participation in Medicare, Medicaid, and other federal programs. No payment may be made by a federal program for any items or services furnished, ordered, or prescribed by the excluded person or by anyone who contracts with an excluded person.

QHPs are not considered to be federal health care programs. While CMS encourages QHPs to not contract with excluded individuals or entities, it does not prohibit them from doing so. The Q&A reminds QHPs to update their provider directories if they terminate contracts with providers on the LEIE or enter into contracts with providers who are removed from the LEIE.

Implementing Health Reform. Two recently filed lawsuits illustrate continuing difficulties the administration faces in implementing the Affordable Care Act, particularly under the constraints imposed upon it recently by Congress. Specifically, the suits illustrate the legal difficulties for the administration created by Congress' limiting of “risk corridor” payments-made to insurers with high claims costs-to amounts contributed to the risk corridor program by insurers with low costs. Last year, CMS announced that it would have only $362 million in contributions to pay out $2.87 billion in requested payments, and so would only pay out 12.6 cents on the dollar for payment claims.

The first lawsuit was filed by Iowa Insurance Commissioner Nick Gerhart on May 3. Gerhart is responsible for managing the insolvency of Co-Opportunity, Iowa's failed health insurance CO-OP, and thus for ensuring that its enrollees claims are paid. The federal government is a creditor of Co-Opportunity, having loaned it about $15 million in start-up loans and $130 million in solvency loans. These loans are explicitly subordinate to payments owed for enrollee claims.

The lawsuit alleges that the federal government currently owes Co-Opportunity over $22 million in reinsurance, risk adjustment, and risk corridor payments, as to which it currently admits liability. Beyond these admitted debts, the federal government owes Co-Opportunity $113.6 million in risk corridor payments which it is unable to pay because they exceed the amount that can be collected from insurers that owed money to the program. If all of these risk corridor funds were available, the complaint alleges, Co-Opportunity could cover the claims of its participants and repay much of the debt it owes the federal government.

The administration has, however, placed an administrative hold on the money it owes Co-Opportunity and is considering using these funds to set-off debts owed by Co-Opportunity. Commissioner Gerhart's lawsuit claims that the administrative hold and proposed netting of payments the federal government owes Co-Opportunity against the debts it owes the federal government violate Iowa insolvency and federal law, including the express subordination agreements. It asks the court to ensure that the funds owed by the federal government to Co-Opporunity are released and promptly paid.

The second lawsuit, brought by Highmark Health Insurance Company and several related health plans, challenges the failure of the United States to pay $195 million of the $223 million owed to the companies under the risk corridor program for 2014. As with Co-Opportunity, the government was only able to pay out 12.6 percent of the money due Highmark under the statutory risk corridor formula because of Congress' limitation on payments under the program. The Highmark lawsuit claims that the administration has violated the risk corridor statute and regulations, as well is its contracts with Highmark, by failing to pay the full risk corridor amount. The Highmark lawsuit raises the same issues p a failed CO-OP, earlier this year.

Seven Principles For Better Information Technology

By JAMES S. GESSNER, M.D.

Physicians well know the rapid advance of information technology in medicine over the last decade.  Pushed by federal and state regulations and requirements, the adoption of electronic medical records has been swift. Today, some 90 percent of physicians in Massachusetts use some form of electronic medical records.

While health information technology (HIT) arrived with great promise and adoption has been quick, widespread acceptance has lagged, and EHRs remain a major concern among physicians of all specialties. Among the most contentious issues: interoperability, clinical workflow efficiency, and the myriad demands of reporting patient data as required by Meaningful Use and the Physician Quality Reporting System, among others.

Some physicians have embraced HIT; they see it as a way to reduce medical errors, streamline workloads, and offer a path to improved outcomes.  Others view it as an impediment to the physician-patient relationship, a huge expense, a tool that consumes too much time, and a source of immense frustration.  Some have even stopped practicing medicine because they found the rules and regulations and operations too onerous.

Health information technology has been a major focus of the Massachusetts Medical Society since the establishment of the MMS Committee on Information Technology (CIT) some 20 years ago. The Committee's Guide to Health Information Technology has provided useful information and direction for physicians as we struggle through the obstacle courses of HIT and EHRs.