Payment reform

Medicare pilot to test paying for ambulances to non-ER sites

Medicare wants to change how it pays for emergency ambulance services to give seniors more options besides going to a hospital emergency department, officials said Thursday (Source: “Medicare ambulance rides may no longer end up at ER,” Associated Press, Feb. 14, 2019).

Other options could include going to an urgent care center, a doctor’s office, or even treatment at home under supervision of a doctor via telehealth links.

The pilot program, if adopted nationwide, could save Medicare more than $500 million a year and allow local fire departments and ambulance services to focus the time and energy of first responders on the most serious emergencies.

Later this year, Medicare will announce up to 40 grants available to local governments or agencies that operate 911 dispatch centers. The pilot program would start early next year and run for two years. If successful, it could be adopted nationwide. Medicare says it also wants to get state Medicaid programs and private insurance companies interested in the approach.

The idea came out of the Center for Medicare and Medicaid Innovation, created under the Obama health care law to improve quality and reduce wasteful spending in the two giant health care programs.

HPIO releases revamped health transparency resource page

The Health Policy Institute of Ohio’s newly updated healthcare cost and quality data transparency resource page includes federal, state and local-level healthcare cost and quality datasets, tools and reporting, as well as information on organizations setting healthcare quality standards.

In 2012, HPIO released its first Health Data Transparency Basics publication which provides an overview of the availability of transparent, accessible health data and discusses how access to information on price and quality impacts consumer choice, quality of care, healthcare spending and health outcomes. Due to growing interest in the topic, HPIO released a second iteration of the publication in 2016, Healthcare Data Transparency Basics, which explores the rationale for healthcare price transparency, the challenges it presents and potential policy approaches at the state level to increase transparency.

Ohio to participate in state, federal primary care payment initiatives

Separate state and federal initiatives announced this week aim to reform healthcare payments to encourage better primary care (Source: “Largest Ohio insurers to pay family doctors more under plan,” Columbus Business First, Aug. 4, 2016).

The Governor’s Office of Health Transformation announced that it will launch a statewide initiative next year in which Ohio's four largest commercial insurers and the private plans that manage most Medicaid patients will pay more to primary care doctors practicing preventative care under a state plan developed with an Affordable Care Act grant. 

The commercial insurers – Anthem Blue Cross and Blue Shield in Ohio, Aetna Inc., Medical Mutual of Ohio and UnitedHealthcare of Ohio – are voluntarily adopting the new payment models. They helped design the plan alongside state Medicaid officials and the state’s Medicaid managed care plans: CareSource, Molina Healthcare Inc., Buckeye Community Health Plan and Paramount Advantage. UnitedHealth has both commercial and Medicaid plans in Ohio.

Starting Jan. 1, qualified practices will get monthly per-patient payments for reducing medical claims by keeping patients well; they'll be measured on such factors as performing preventative care, following up after a hospital stay, and offering same-day visits and extended hours.

Also this week, the Centers for Medicare and Medicaid Services announced that Ohio is one of just 14 regions selected to participate in a separate federal program called Comprehensive Primary Care Plus, or CPC+, Medicare's far-reaching program promoting the use of patient-centered medical homes at primary care practices (Source: “CMS Identifies 14 CPC+ Regions, Starts Enlisting Primary Care Practices,” HealthLeaders Media, Aug. 3, 2016).

CPC+ is slated to run over a five-year period beginning in January 2017.

GAO report: Medicare quality payments haven’t improved care

A new federal report has found that in the first three years of Medicare’s program of providing bonuses and penalties to providers based on performance, there have no demonstrated quality improvements (Source: “Hospital Care Unaffected By Quality Payments, GAO Finds,” Kaiser Health News, Oct. 2, 2015).

The Government Accountability Office analysis examined the Hospital Value-Based Purchasing Program, one of the ACA’s initiatives to tie payment to quality of care. Earlier this year, Medicare gave bonuses to 1,700 hospitals and reduced payments to 1,360 hospitals based on their mortality rates, patient reviews, degree of improvement and other measurements.

Safety-net hospitals, which serve more poor patients, tended to do worse than hospitals overall, but that difference has decreased over the life of the program, the report said. Hospitals with the strongest balance sheets tended to do better than other hospitals, the report found:  Those with a net income margin of more than 5 percent received average bonuses of 0.23 percent, while hospitals basically breaking even financially on average did not earn any extra payments.

The report said that even before the program began in October 2012, hospitals had been improving in how consistently they followed basic clinical guidelines, such as performing blood cultures before giving patients antibiotics. That improvement continued but did not increase with the advent of the financial incentives. The same was true for patient ratings, on such items as the quality of communication from doctors and nurses, and for mortality rates for heart attack patients. Heart failure and pneumonia death rates stayed roughly the same.

Medicare proposes payment changes to hospitals for hip, knee replacement

Federal health officials are proposing a major change in the way Medicare pays for hip and knee replacements, requiring hospitals to partly repay the government if patients get avoidable infections and other complications but rewarding them with extra payments if patients do well (Source: “Medicare proposes payment changes to hospitals for hip, knee replacement,” Washington Post, July 9, 2015).

The proposal announced Thursday by the Centers for Medicare and Medicaid Services is part of the Obama administration’s efforts to overhaul the health care system, in part by using the payment system to reward quality of care rather than volume of services. Under the current system, doctors and hospitals typically get paid set fees for every procedure they perform, regardless of how patients fare.

The new payment method would be used in 75 areas across the country, including several in Ohio, affecting 800 hospitals and an estimated 100,000 patients a year. Officials hope to save $150 million over the five-year demonstration period (Source: “CMS proposes major initiative for hip and knee replacements,” U.S. Department of Health and Human Services, July 9, 2015). 

HPIO releases policy brief on population health

The Health Policy Institute of Ohio has released its latest policy brief: “What is ‘population health’?” (pdf, 12 pages). 

With support from the National Network of Public Health Institutes, through a Robert Wood Johnson Foundation-funded project, HPIO convened a group of healthcare and public health stakeholders throughout 2014 to develop a consensus definition of population health for Ohio.

The brief describes the consensus understanding of population health that resulted from discussions among members of the HPIO Population Health Definition Workgroup.

Report: Medicare patients pay more at rural hospitals

Many Medicare beneficiaries treated at primarily rural 'critical access' hospitals end up paying between two and six times more for outpatient services than do patients at other hospitals, according to a report released last week by the inspector general at the Department of Health and Human Services (“Many Medicare Outpatients Pay More At Rural Hospitals, Federal Report Says,” Kaiser Health News, Oct. 8, 2014).

According to a report from the Inspector Genral of the Department of Health and Human Services, there are more than 1,200 critical access hospitals, which are generally the sole hospital in rural areas and can have no more than 25 beds. Medicare pays them more generously so they won’t go out of business.  Medicare requires patients to pay 20 percent of the amount a hospital charges, which means the cost is higher at critical access hospitals because their overall charge is higher.

Many supplemental insurance policies for the elderly pick up the tab, but one in seven Medicare recipients lacks such a policy. In addition, these higher medical costs are ultimately factored into the premiums insurers set.

There are 34 critical access hospitals in Ohio, accounting for 20 percent of all hospitals in the state.

Study shows coordinated care savings have potential to spread

A new study of an accountable care program for privately insured patients in Massachusetts found that the cost-sharing program led to lower costs for Medicare patients who were seen by the same providers (Source: “ACOs’ Coordinated Care Savings May Be Contagious,” Kaiser Health News, Aug. 28, 2013).

An accountable care organization, or ACO, is a network of doctors and hospitals that shares responsibility for providing care to a specific group of patients. The concept centers on paying providers for the quality of the services they provide, rather than the volume. The ACO is offered a bonus for giving patients high quality care at a reduced cost. But if they fail to hit certain quality targets or do not manage to reduce the cost of care, they will be paid less.

According to the study by researchers at the Harvard Medical School, within two years, providers in the private ACO-like Blue Cross Blue Shield Alternative Quality Contract, achieved  significant savings for the Medicare patients they saw, relative to a control group of Medicare patients seen by providers at other Massachusetts hospitals. The average savings in outpatient care was $73 per patient, and “included significant differential changes in spending on office visits, emergency department visits, minor procedures, imaging, and laboratory tests.”

“The spillover savings in Medicare that we found suggest that at least some of the interventions providers adopted in response to the AQC [the private BCBS Alternative Quality Contract] changed the way care was delivered for all patients,” assistant professor J. Michael McWilliams, said in a press release.

Fed. panel pushes for Medicare payment changes to hospitals

A federal advisory panel urged Congress last week to move immediately to cut payments to hospitals for many services that can be provided at much lower cost in doctors’ offices (Source: “Medicare Panel Urges Cuts to Hospital Payments for Services Doctors Offer for Less,” New York Times, June 15, 2013).

In its annual report to Congress, The independent Medicare Payment Advisory Commission said current payment disparities had created incentives for hospitals to buy physician practices, driving up costs for the Medicare program and for beneficiaries. Hospital buyouts of doctors, turning independent practitioners into hospital employees, have also led to higher spending by private insurers and higher co-payments for their policyholders, the commission said.

“In many cases, a physician’s practice that is purchased by a hospital stays in the same location and treats the same patients,” but “Medicare and beneficiaries pay more for the same services,” the 17-member commission said in its report.

Survey: Commercial insurers consider payment reform ‘major priority’

A national survey of commercial health plans found that 82 percent consider payment reform a “major priority” and nearly 60 percent predict that more than half of their business will be supported by value-based payment models in the next five years (Source: “Value-based payment models expected to reach tipping point by 2018, study finds,” Healthcare IT News, May 13, 2013).

The study, titled Health Plan Readiness to Operationalize New Payment Models, was conducted by health information network Availity and examines the migration of commercial plans from a fee-for-service model to value-based models.