What a Trump Presidency (and Republican Senate and House) Means for the Future of the Affordable Care Act

With the stunning victory of Donald Trump in Tuesday’s presidential election, everyone is wondering how the President-elect and the Republican Party will implement the campaign promise to “repeal and replace” the Affordable Care Act (ACA) on “Day One” of a Trump Administration. After President-elect Trump’s first meeting with President Barack Obama at the White House on Thursday, while Trump continued to list action on the ACA among his first priorities as President, he already had retreated from a position of blanket repeal to a more nuanced position of amending some parts of the law, and keeping other parts.

While Republicans maintained the majority of seats in the House of Representatives and re-gained the majority in the Senate in last week’s elections, there are still enough Democrats in the Senate for a filibuster of any blanket “repeal and replace” legislation. House Speaker Paul Ryan has pointed to a budget reconciliation bill to repeal funding for parts of the 2010 law as the legislative vehicle for “repealing the ACA”; the Senate and House enacted such legislation at the end of 2015, which was vetoed by President Obama in January 2016.

President-elect’s Trump Health Care Policy

Here is what President-Elect Trump’s just-launched transition website says about health care policy:

It is clear to any objective observer that the Affordable Care Act (ACA), which has resulted in rapidly rising premiums and deductibles, narrow networks, and health insurance, has not been a success.  A Trump Administration will work with Congress to repeal the ACA and replace it with a solution that includes Health Savings Accounts (HSAs), and returns the historic role in regulating health insurance to the States.  The Administration’s goal will be to create a patient-centered healthcare system that promotes choice, quality and affordability with health insurance and healthcare, and take any needed action to alleviate the burdens imposed on American families and businesses by the law.

To maximize choice and create a dynamic market for health insurance, the Administration will work with Congress to enable people to purchase insurance across state lines.  The Administration also will work with both Congress and the States to re-establish high-risk pools – a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage.

The Administration recognizes that the problems with the U.S. health care system did not begin with – and will not end with the repeal of – the ACA.  With the assistance of Congress and working with the States, as appropriate, the Administration will act to:

  • Protect individual conscience in healthcare
  • Protect innocent human life from conception to natural death, including the most defenseless and those Americans with disabilities
  • Advance research and development in healthcare
  • Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products
  • Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation – and beyond
  • Maximize flexibility for States in administering Medicaid, to enable States to experiment with innovative methods to deliver healthcare to our low-income citizens

Millions of Americans Rely on the Affordable Care Act for Health Insurance Coverage

Here are the facts that President-elect Trump and the 115th Congress will have to face as they consider action on repealing or amending the ACA:

Since 2013, 20 million Americans have been gained health insurance by enrolling in health plans through the federal health insurance marketplace and marketplaces in 11 states and the District of Columbia created by the ACA, by becoming eligible for expanded Medicaid, or by being able to keep their health insurance coverage because of ACA reforms. We are in the middle of the fourth open enrollment period, which began on November 1 and ends on January 31, 2017. Nearly 14 million Americans are expected to renew their current ACA health plans or enroll for health insurance for the first time through one of the federal or state marketplaces. 85% of those enrolled in ACA-created marketplace health plans receive federal tax credits to help subsidize their monthly premiums. The ACA also provides cost-sharing subsidies to help low-income Americans pay their health insurance co-payments and deductibles. Nearly 60% of those enrolled in ACA marketplace health plans use the cost-sharing subsidies.

So on “Day One” of a Trump Administration, January 20, 17, President Trump is not going to act to disrupt the health insurance of 20 million Americans, with less than two weeks to go in the fourth open enrollment period. There are literally billions of dollars at stake, as well as dozens of health insurance plans, thousands of hospitals, and hundreds of thousands of physicians and other health care providers who are relying on those enrollments to continue their business operations through coverage year 2017. As a businessperson, Trump simply won’t put such a significant portion of the U.S. economy into chaos and jeopardy.

“Repealing and Replacing” the ACA

However, as soon as the 115th Congress begins its session on January 3, 2017, there are likely to be bills immediately introduced and debated in both the House and the Senate to try to implement the campaign promise to “repeal and replace the ACA”.  Senate Majority Leader Mitch McConnell is much more conflicted about the ACA, given that his home state of Kentucky has successfully implemented the law (including Medicaid expansion), including the reluctant support of a Tea Party-suported Republican governor, Matt Blevin, who has clashed with McConnell (and unsuccessfully ran against McConnell for his U.S. Senate seat in 2014). Therefore, it is likely that Congressional action will be shaped more by Speaker Ryan. Given Ryan’s public positions on health care policy and his budget reconciliation strategy, the first actions of the 115th Congress will likely include the following:

  • de-funding the federal health insurance marketplace that serves residents of 39 states, beginning coverage year 2018
  • de-funding federal tax credit subsidies for health insurance premiums for low-income individuals and families beginning coverage year 2018, including those now available through the state health insurance marketplaces
  • de-funding federal subsidies for cost-sharing (co-payments and deductibles) for low-income individuals and families, including those now available through the state health insurance marketplaces; this already has been challenged by the House Republicans in litigation pending in the District of Columbia Court of Appeals, so a Trump Department of Justice would immediately reverse the current legal defense of those subsidies; it is not clear whether how quickly such de-funding would be implemented, but this is one part of the ACA that might get undone during the 2017 coverage year
  • repeal several sources of revenues intended to pay for the ACA, including the so-called “Cadillac” tax on high cost employer-provided health insurance plans (that had been delayed until 2020) and a 2.3% tax on medical devices (that had been temporarily suspended for 2016-2017).

The Congressional Budget Office estimated in March 2016 that the federal government would spend $43 billion for premium tax credits and $9 billion for cost-sharing subsidies in Fiscal Year 2017.  If these federal subsidies are repealed or overturned by the courts, these $52 billion in health care costs would be shifted to the millions of individual low-income Americans who now rely on them to afford their ACA marketplace health plans. Without these federal subsidies, hundreds of thousands, if not millions of Americans, would not no longer be able to afford health insurance, and may lose their coverage. The numbers of uninsured would increase, resulting in higher avoidable emergency and hospitalization costs when the uninsured are forced to delay seeking health care. There would be additional pressures on safety net providers including community health centers and public hospitals to provide care to these newly uninsured.

However, in the 11 states and District of Columbia that now operate state health insurance marketplaces, there is a likelihood that many of those state legislatures would act to continue their marketplaces, using state rather than federal dollars for some premium tax credits and cost-sharing subsidies. This would be similar to RomneyCare that was implemented in Massachusetts in 2006, and state health care reform that was almost enacted in California in 2008. For example, if federal subsidies for cost-sharing are undone by a court decision or by Congress, states might replace some or all of those subsidies with state-funded subsidies. States could enact an employer mandate (requiring employers to offer health insurance to their employees) and an individual mandate (requiring individuals to purchase health insurance, even if healthy, or be subject to fines) that would apply to their states. These state marketplaces and reforms would face not be simple or easy, especially to replace the level of federal ACA subsidies with state budget dollars.

Meanwhile, all this change and uncertainty will inevitably result in more health plans leaving the health insurance marketplaces, resulting in less competition, and higher premiums and even more cost-sharing requirements from the remaining health insurance plans. This, in turn, will make health insurance less affordable regardless of whatever federal and state solutions “replace” the ACA, resulting in more Americans returning to becoming uninsured.

In addition, the current Department of Justice opposition to the mega-mergers of national health insurance plans (Aetna with Humana, and Anthem with Cigna) is likely to get reversed, and there could be even more mergers, which also would result in less competition, and higher premiums and cost-sharing requirements for all health insurance products. It is not clear how mega-merged health plans would or would not participate in state health insurance marketplaces during a Trump Administration.

Speaker Ryan, and now President-elect Trump, have noted several parts of the ACA that they favor preserving, including the prohibition against denial of health insurance because of pre-existing conditions, and allowing young adults to remain covered by their parents’ health insurance plans until age 26. While these provisions are now popular, it is uncertain how they will continue to be financially viable without the other parts of the ACA, including the employer mandate, the individual mandate, “guaranteed issue and community rating” (requiring health plans to sell health insurance to all individuals within a reasonable range of prices, so that sicker individuals or those with pre-existing conditions can’t be charged unaffordable prices), and other consumer protections such as no annual or lifetime limits on the amount of covered health care services, limits on administrative costs and profits on health insurance plans (medical loss ratio), a minimum list of “essential health benefits” that must be covered by all health insurance plans, no cost-sharing for a list of preventive services and screenings, and standardized grievance and appeal rights if coverage or specific health care services are denied. The ACA’s expansion of  eligibility for Medicaid, as well as federal subsidies for premiums and cost-sharing to ensure that health insurance purchased through the ACA marketplaces is affordable for low-income individuals and families, are also important pieces to the ACA’s re-structuring of the health insurance markets to make them work for everyone.

If parts of the ACA are de-funded or repealed, Speaker Ryan and President-elect Trump do reference a return to high risk pools to cover those with pre-existing conditions or a history of high health care utilization and cost. Unfortunately, 35 states attempted to operate and subsidize such high risk pools before the ACA, and few succeeded in providing any affordable health insurance options for those that needed such coverage. Because the utilization and costs were so high, the extremely high premiums and cost-sharing charged in these high risk pools made them unaffordable, which meant that few purchased such coverage, which in turn, drove up the costs for those that did have the coverage (because even less premium and cost-sharing revenue was being collected from those insured in these insurance pools). These high risk pools cost billions of dollars and still left most individuals with pre-existing conditions uninsured.

Another element of both President-elect Trump and Speaker Ryan’s proposals would be to allow health insurance plans to be sold across state lines, or nationwide. While there is superficial attractiveness to having more health insurance plans compete with each other, the reality is that there is wide variation in the degree of regulation and health consumer protections among the states, which is the real reason why some health plans only operate in some states. If any health plan could be offered in any state, this would create a “race to the bottom” for health plans to find the states with the least restrictive regulations as their operational base, to avoid all the greater restrictions in every other state. This would essentially repeal all the strong consumer protections that have been enacted in more progressive states. For example, the state of California has strong regulation of both traditional health insurance plans and managed care plans, including requirements for a broad availability of providers, timeliness of care, and reporting on the quality of health care actually provided. California also has strong requirements for health plans to provide language assistance to consumers with limited English proficiency and who need health care interpreters and translations of health care documents. All these strong consumer protections now required for health plans operating in California could become meaningless if any health plan could re-organize in another state with less requirements, and then offer health plans in California without having to meet those California state requirements.

Both President-elect Trump and Speaker Ryan also have proposed providing greater federal support for health savings accounts (HSAs). Individuals and families that create such accounts can deduct their contributions to the accounts on their federal income tax returns and then use these accounts to pay for out-of-pocket co-payments and deductibles, and other health-related expenses that often are not covered by health insurance plans (such as over-the-counter medication and vision care). By definition, health insurance plans linked to HSAs have lower premiums but much higher deductibles and cost-sharing requirements. HSAs are beneficial to individuals and families with higher incomes (who can use the deductions), and are generally healthy (and therefore unlikely to reach the deductibles and cost-sharing limits, which can be paid from the HSA). In turn, health insurance plans favor these HSA-linked health plans because they attract more members because of the lower premiums, but also receive the higher deductible and cost-sharing payments from consumers who actually utilize the coverage. HSAs are not viable options for low-income individuals and families who often can’t benefit from the tax deduction, and are likely to have higher health care utilization so won’t end up “saving” much year to year in their HSAs because they have to pay for all their deductibles and cost-sharing.

Interestingly, Speaker Ryan’s plan also includes support for private health insurance marketplaces to replace the federal and state government marketplaces. Of course, the main difference is that there would be no federally-funded ACA subsidies in these private marketplaces to ensure that health insurance is affordable for low-income Americans. Ryan’s plan does mention “portable and refundable” tax credits to help pay for health insurance but there are few details how such tax credits would be implemented, and how they would be different than either the ACA subsidies (for low-income individuals and families) or HSAs (available to everyone).

Speaker Ryan’s plan also supports more “consumer-directed” health care, “defined contribution” options, and employer-controlled “health reimbursement accounts.” While all these options appear to be attractive because they sound consumer-friendly, they in fact shift financial responsibilities and risks from employers and health plans onto consumers. Again, these arrangements are more beneficial to higher income individuals and families and those that are healthy and less likely to utilize health care because they wouldn’t have significant health care costs and their higher incomes allow them to absorb any financial risks. However, these options are simply not financially viable for low-income Americans and those that do need to access health care services.

Medicaid 

Medicaid provides public health insurance coverage to over 70 million low-income and disabled Americans. Medicaid is a partially funded by the federal government and partially funded by each state, based on complicated formulas. The federal government is projected to spend over $376 billion on Medicaid in Fiscal Year 2017, with hundreds of billions more spent by the states.  31 states and the District of Columbia have implemented the ACA’s expansion of Medicaid eligibility, which has extended insurance to over 14 million Americans.

Both Speaker Ryan and President-elect Trump have supported the conversion of the Medicaid program into block grants or per-capita allotment formulas to the states. Rather than retaining federal regulation of Medicaid on such issues as the types of health care services available, states would receive their expected annual federal funding for Medicaid in a single payment, and then would have broad discretion how to spend those federal dollars to administer the Medicaid program in that state, including restricting health care services and limiting eligibility (for example, continuing to lower the income threshold for eligibility so that only the lowest income individuals and families would be eligible).  It is not clear whether states would have to continue to maintain their share of state dollar contributions to Medicaid in order to receive this federal funding. States also would be able to impose conditions and requirements for receiving Medicaid, including cost-sharing and work requirements. These types of fixed payments based on past enrollment also fail to adapt to inevitable economic downturns, when the number of Americans who are unemployed and/or uninsured go up, but a state only has a fixed sum of federal funding to respond to that increased need.  It is likely that Democrats in the Senate would attempt to filibuster against the conversion of Medicaid into block grants or per-capita formulas.

If Medicaid is converted into block grants or per-capita allotments, the 31 states and District of Columbia that have expanded Medicaid under the ACA are likely to do their best to use the federal funding to continue their state Medicaid programs as they are currently operated. Congress may also try to repeal the ACA’s expansion of eligibility for Medicaid, which would be opposed not only by Senate Democrats, but all the governors (including Republican governors) and some Republican Senators from those 31 states. Unfortunately, the states that have refused to expand Medicaid are the states that are most likely to restrict health care services and/or eligibility, narrowing even further the number of low-income individuals and families that would be covered by Medicaid in their states.

Children’s Health Insurance Program (CHIP)

Another public health insurance program is the Children’s Health Insurance Program (CHIP), which needs to be re-authorized by the end of this Fiscal Year 2017. Because this is a program that Hillary Clinton is associated with creating, this may be a target for de-funding under a Trump presidency. On the other hand, Republicans like Senator Orrin Hatch, chair of the Senate Finance Committee, also are legislative champions of CHIP. Like Medicaid, CHIP is jointly funded by both the federal government and state governments, but the federal share of the funding is generally higher than for Medicaid (although the costs for children’s health care are generally lower than the cost of health care for the adults in Medicaid). Over 8 million children are covered by CHIP and the federal government is projected to spend $15 billion for CHIP in Fiscal Year 2017. If CHIP is not re-authorized, many of the children now covered would either have to seek coverage under Medicaid (which might be funded differently, as discussed above), or become uninsured. If Medicaid is converted to block grants or per-capita allotments, this surge in children who would need Medicaid would not be factored into the funding formulas, resulting in additional pressures for states to reduce benefits or restrict eligibility to Medicaid.

Medicare

Medicare is the public health insurance for all Americans age 65 and over or disabled, regardless of income. 58 million Americans are covered by Medicare and the federal government is projected to spend over $609 billion for Medicare in Fiscal Year 2017.

In 2015, Congress enacted the Medicare Access and CHIP Reauthorization Act (MACRA), making dramatic changes in how physicians and other health care providers would be paid in the Medicare (fee-for-service) program. MACRA was a bi-partisan compromise that took many years to enact. MACRA continues the shift away from fee-for-service payments (payment for the volume of visits to physician offices/clinics, or visits to emergency departments, or days of hospitalization, regardless of quality or health outcomes). MACRA creates both bonuses and penalties for value-based payments, based on achieving health care quality benchmarks and reducing the total costs of health care. The final regulation implementing MACRA was just released on October 22, with implementation beginning January 1, 2017.

MACRA’s successful implementation depends on many parts of the ACA, especially the work of the Center for Medicare and Medicaid Innovation (CMMI) at the Centers for Medicare and Medicaid Services (CMS). The ACA authorized CMMI to develop demonstration programs for alternate payment models to fee-for-service payments, with $10 billion to spend through FY 2019. CMMI has developed accountable care organizations, comprehensive primary care programs, bundled payments, and other models to test quality improvement and payment reform models. MACRA uses physician participation in several of these demonstration programs for eligibility for higher bonuses. Speaker Ryan and other Republicans have targeted CMMI for de-funding. If CMMI is de-funded, there will be enormous pressure on Congress by influential physician associations such as the American Medical Association to enact some other way to develop demonstration programs for MACRA so that physicians can continue to be eligible for MACRA’s payment bonuses.

In addition, it is likely that a Trump Administration and the incoming Congress will provide more support for Medicare Advantage, or Medicare managed care plans. Over time, these Medicare health plans had driven up Medicare costs, while adding revenues and profits to those health plans. Currently, about 30% of Medicare beneficiaries are enrolled in Medicare Advantage health plans. The ACA squeezed cost savings from Medicare Advantage health plans by gradually limiting payments to equivalent costs of fee-for-service or traditional Medicare, and linking payments to a 5-star quality rating system, rewarding high-performing plans and reducing payments to lower quality plans. It is unclear how the Trump Administration would reverse or weaken these requirements in order to encourage more Medicare beneficiaries to enroll in Medicare Advantage health plans.

Access to Reproductive Health Services, Including Contraceptives

One of the other highly contentious issues in the ACA is whether employers can claim that their religious beliefs exempt them from offering the ACA’s required “essential health care benefits”, including comprehensive reproductive health services, including contraceptives. These requirements apply to all health plans, including those provided by employers to their employees. In balancing the interests of both employers and employees, the Obama Administration requires an employer with a religious objection to file a statement to claim a religious exemption, which then requires the health plans used by that employer to arrange for access to the objected services such as contraceptives without using the employer’s share of the premium contributions to the health plans. Religious-based employers have challenged the requirement of filing a statement as unconstitutionally burdensome on their religious beliefs. In May, the U.S. Supreme Court vacated and remanded all the appellate decisions both upholding and invalidating the religious accommodation, instructing the parties to reach agreement on a compromise that would not require employers to file the religious exemption statement.

The 115th Congress, and Vice-President-elect Mike Pence, who has targeted Planned Parenthood and sought to restrict access to reproductive health services throughout his years in Congress and as Indiana’s governor, are likely to push for quick legislation strengthening such religious exemptions in the ACA, and/or repealing the requirement of reproductive health services from the ACA’s list of essential health care benefits, and/or repealing the requirement of any federally-defined essential health care benefits.

Protections Against Discrimination for Women and Transgender Americans

Another part of the ACA (section 1557) expanded federal protections against discrimination on the basis of race, color, national origin, sex, disability, and age.  This was the first time that discrimination based on sex in health insurance and health care has been prohibited. For example, prior to the ACA, there were blanket denials of health insurance to women of child-bearing age, or women who had prior pregnancies. Consistent with legal positions taken by the Departments of Justice and Education, the Equal Employment Opportunity Commission, and several federal courts, the Department of Health and Human Services has interpreted this section of the ACA to include protection against discrimination based on gender identity and sex stereotyping (which may include sexual orientation).  Five states and several religious organizations already have challenged this expansion of discrimination protections to transgender Americans in federal court. While President-elect Trump’s policy positions on lesbian, gay, bisexual, and transgender (LGBT) issues is unclear, Vice-President-elect Mike Pence and other key advisers have a long history of supporting anti-LGBT policies. While it is likely that a Trump-Pence Administration would reverse these administrative interpretations, federal courts would still be able to follow and enforce the original interpretation of the ACA including such protections. On the other hand, this section of the ACA prohibiting discrimination could be the target of Congressional repeal.

Conclusion

Last week’s elections have turned the page and started the next chapter in our national journey to make the U.S. health care delivery system more affordable, accessible, and effective for all Americans. While analysts and pundits will continue to dissect every statement from President-elect Trump, Vice President-elect Pence, Speaker Ryan, and Majority Leader McConnell for more insight into how they will “repeal and replace” the ACA, it is certain that health care insurance policies and options for health plans and consumers, as well as payment for state governments, hospitals, physicians, and other health care providers, will dramatically change under a Trump Administration and the 115th Congress.

Sources:

Jost T. Day One and beyond: What Trump’s election means for the ACA. Health Affairs Blog, November 9,2016

Andrews M. Concerned about losing your marketplace plan? ACA repeal may take a while. Kaiser Health News, November 10, 2016

Hitzik M. Despite Republican pledges, ‘repealing Obamacare’ will be almost impossible – but it could be vandalized. Los Angeles Times, November 10, 2016

Langley M, Baker G. Donald Trump, in exclusive interview, tellls WSJ he is willing to keep parts of Obama health care law. Wall Street Journal, November 11, 2016

Perlstein S. Donald Trump is about to face a rude awakening over Obamacare. Washington Post, November 12, 2016

Posted in Health Care Reform, Ignatius Bau: Policy Analysis, The iBau Blog | Leave a comment

Office of Management and Budget: Request for Comments on Federal Standards for Race and Ethnicity

The Office of Management and Budget (OMB) is seeking public comments on several long-awaited changes to the 1997 federal standards for collecting and reporting race and ethnicity:

1) to allow a combined Hispanic/Latino “ethnicity” question with the “race” question so that the distinction between ethnicity and race is less confusing

2) to create a subcategory of “Middle Eastern and Northern African” as part of the White category

3) to encourage further disaggregation of each race and ethnicity category, and re-emphasize that these are only minimum categories

4) to clarify terminology, such as not referring to a “principal minority race ” in reporting race and ethnicity data

 

Unfortunately, the public comment period only lasts 30 days, ending October 31; you can send your comments by email to Race-ethnicity@omb.eop.gov, or upload your comments at: https://www.regulations.gov/document?D=OMB-2016-0002-0001

Meanwhile, there already have been dozens of racist, nativist, and anti-Muslim comments sent to the OMB (you can review them on the comment website).

The Asian & Pacific Islander American Health Forum (APIAHF) is mobilizing grassroots, community member comments, specifically on the need for disaggregated data for our diverse Asian American, Native Hawaiian, and Pacific Islander communities: http://www.apiahf.org/omb

APIAHF published an op-ed on this issue earlier today.

 

Posted in Asian American, Native Hawaiian and Pacific Islander Health, Data, Demographic Data, Demographic Data: Race and Ethnicity | 1 Comment

Health Care Payment Learning Action Network: Financial Benchmarking

The Health Care Payment Learning Action Network (HCPLAN) has released a white paper on performance measurement within alternative payment models (APMs).  HCPLAN work products will be considered by the Centers for Medicare and Medicaid Services (CMS)  for implementation of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) and other health care payment reform initiatives.  This white paper was developed by the Population-Based Payment Work Group and documents principles and recommendations for financial benchmarking.

In shifting away from fee-for-service payments to alternative payment models, financial benchmarking becomes a key challenge to design and implement. Many accountable care organizations have complained that both national benchmarking and benchmarking based on one’s own performance have the unintended consequences of dis-incentivizing participation of “high performers”, who already have demonstrated the capacity to deliver higher quality and lower cost care, in current alternative payment models. CMS and other payers developing and implementing such models have to achieve a balance between raising the performance of all providers, reducing regional variations in expenditures, and continuing to support innovation and improvement among those high performers. Another debated issue is whether financial benchmarks should adjusted based on patient risk characteristics, especially for safety net providers who historically have served patients without regular care or continuity of care, and often have multiple and more complex health conditions.

The white paper uses the following principles for financial benchmarking:

  • Trust among payers, providers, purchasers, and consumers is essential for managing population-based payment models over time as benchmarks are updated, rebased, and risk adjusted;
  • Financial benchmarks in population-based payment models should incentivize high-quality, efficient care, enable accountability, and establish a target that fairly rewards provider organizations;
  • Payers should transparently communicate to providers the risk-sharing parameters involved in participating in a population-based payment model, such that providers can access the information they need to fully comprehend the risks associated with participation, understanding that there is an inherent tradeoff between simplicity and precision in payment design, and that it may not be possible to precisely quantify risk ahead of time;
  • Successful approaches to financial benchmarking must simultaneously encourage participation while meeting financial, quality, and access objectives; and
  • The effect of financial benchmarks is to enable 1) efficient provider organizations to succeed; 2) struggling organizations to improve; and 3) failing organizations to fail.

And the white paper makes the following recommendations for financial benchmarking:

  • Approaches to financial benchmarking should encourage participation in the early years of the model’s progression, while driving convergence across providers at different starting points toward efficiency in the latter years;
  • The initial baseline should be based on provider-specific spending, taking into account the provider organization’s history and local market forces;
  • Updating and rebasing of the initial benchmark should not be based on provider-specific changes in spending;
  • Updating and rebasing of the initial baseline should drive convergence around local spending rates as quickly as local conditions allow, with an eventual movement to regional rates in the medium to long term;
  • There are multiple pathways to convergence but the end point is what matters;
  • Risk adjustment must strike a fine balance such that providers who serve higher-risk or disadvantaged populations are not unduly penalized and disadvantaged populations do not receive substandard care;
  • The state-of-the art of risk adjustment is likely to change over time, and it will be important to keep up with recent developments that improve the precision of risk-adjustment approaches;
  • Risk-adjustment models should minimize the connection between utilization and risk score;
  • Successful risk-adjustment models should accurately predict spending at the population and subpopulation levels, but it is not important for models to accurately predict spending at the individual level; and
  • Population-based payment models should not disrupt care for needy populations, and risk adjusting for socioeconomic status (SES) may be one way to accomplish this;  nevertheless, SES adjustments should not be a mechanism for forgiving lower care for needy populations.

Link to Original Source

Posted in Health Care Reform, Health Care Reform: Payment Reform | Leave a comment

Health Care Payment Learning Action Network: Patient Attribution

The Health Care Payment Learning Action Network (HCPLAN) has released a white paper on patient attribution within alternative payment models (APMs).  HCPLAN work products will be considered by the Centers for Medicare and Medicaid Services (CMS)  for implementation of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) and other health care payment reform initiatives.  This white paper was developed by the Population-Based Payment Work Group and documents principles and recommendations for patient attribution.

Patient attribution has been one of the most challenging elements in developing and implementing payment reform models such as accountable care organizations. Providers have been urging application of prospective attribution and more flexibility to “recruit” or incentivize participation by patients. CMS has been reluctant to yield the ability of Medicare fee-for-service beneficiaries to choose any Medicare provider, which favors retrospective or concurrent attribution.

Moreover, commercial insurance models usually are based on “open-access” that allow choice of providers (although many insurance plans increasingly offer options for “narrow networks” of providers in exchange for lower insurance premiums and co-payments). Shifting these commercial models to value-based payments present similar challenges.

The white paper makes the following recommendations:

  • Encourage patient choice of a primary care provider;
  • Use a claims/encounter-based approach when patient attestation is not available;
  • Define eligible (primary and specialty care) providers at the beginning of the performance period;
  • Provide transparent information to patients about their attribution;
  • Prioritize primary care providers in claims/encounter-based attribution;
  • Consider subspecialty providers if no primary care encounters are evident;
  • Use a single approach for attribution for performance measurement and financial accountability;
  • Use the patient attribution guideline nationally for commercial products;
  • Alignment among commercial, Medicare, and Medicaid populations may be possible with adjustments; and
  • Regardless of whether prospective or concurrent attribution is used, providers should receive clear, actionable information about patients attributed to them.

Link to Original Source

Posted in Health Care Reform, Health Care Reform: Payment Reform | Leave a comment

Health Care Payment Learning Action Network: Performance Measurement

The Health Care Payment Learning Action Network (HCPLAN) has released a white paper on performance measurement within alternative payment models (APMs).  HCPLAN work products will be considered by the Centers for Medicare and Medicaid Services (CMS)  for implementation of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) and other health care payment reform initiatives.  This white paper was developed by the Population-Based Payment Work Group and documents principles and recommendations for performance measurement.

Performance measurement currently faces multiple challenges, including a cacophony of measures with confusing results, the lack of available data to calculate important metrics, and burdens associated with capturing and reporting data. The Work Group conceives of measurement systems as being composed of three components, each of which is needed to reward providers who deliver high-value health care: 1) measure sets; 2) methods for evaluating performance on measures (e.g., performance scoring); and 3) methods for using performance assessments to adjust payment.  In other words, in order to explicitly reward providers who deliver high-value health care via the payment model, measurement systems must necessarily specify measures, employ some method for calculating overall performance scores, and adopt some approach for adjusting payments in light of those performance scores.

The white paper outlines the following principles for performance measurement:

  • Performance measurement is foundational to the success of population-based payment models to advance better outcomes for all patients and populations;
  • Because population-based payment models address the full continuum of care, measure sets have to span the full continuum across time, across providers, and across settings;
  • The measures required for the long-term success and sustainability of population-based payment models are fundamentally different from the measures used in traditional fee-for-service payment models; and
  • To promote better results for patients and populations, the use of performance measurement for payment in population-based payment models must create meaningful incentives for improvement.

The white paper makes the following recommendations:

  • To support the long-term success and sustainability of population-based payment models, future-state measures must be based as much as possible on results that matter to patients (e.g., functional status) or the best available intermediate outcomes known to produce these results;
  • Because fragmentation across population-based payment models can undercut success, reliance on core measure sets is valuable; continued innovation and refinement are needed to ensure measure sets are comprehensive, parsimonious, and outcome oriented;
  • A governance process is needed to oversee and accelerate the development, testing, and use of new, high priority measures for population-based payment models;
  • In service of a future state that employs measures that are outcomes-oriented, the infrastructure nationally must be sufficient to systematically collect, use, and report clinically rich and patient-reported data;
  • Providers in population-based payment models should have meaningful incentives to deliver high-quality care, achieve favorable health outcomes, improve patient care experiences, and manage the total cost of care;
  • Measurement systems should define performance targets in a way that motivates ongoing improvement across the performance continuum, promotes best practice sharing, avoids a forced curve that mandates winners and losers, and enables long-term planning and commitment to improvement;
  • Whenever possible, measure targets should be set in absolute (not relative) terms, established prior to the measurement period and fixed for a minimum of one year, although ideally for the full contract term;
  • Measure targets should include a range of scores on each measure to enable the incentive system to reward both performance and improvement; and
  • Adherence to good measurement science and implementation (e.g., sample size requirements, demonstrated reliability and validity, national acceptability, clinical importance, and the opportunity for a provider to improve before being held accountable under the new model) is critical to achieving the desired results from performance measurements in population-based payment models.

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Health Care Payment Learning Action Network: Data Sharing

The Health Care Payment Learning Action Network (HCPLAN) has released a white paper on data sharing within alternative payment models (APMs).  HCPLAN work products will be considered by the Centers for Medicare and Medicaid Services (CMS)  for implementation of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) and other health care payment reform initiatives.  This white paper was developed by the Population-Based Payment Work Group and documents principles and recommendations that should guide approaches to data sharing in population-based payment models. The goal should be to share important patient data to inform clinical decision making, allow payers to assess provider performance, and support increased alignment across public and private payers.

Data sharing currently faces multiple challenges, including proprietary approaches to data collection and reporting, inconsistent and underdeveloped data architecture, a lack of funding and standards, and technical limitations to the collection of rich clinical and patient-reported data. The white paper recommends the following principles for data sharing:

  • Data sharing is foundational for the successful operation of population-based payment models and makes it possible for stakeholders to carry out their respective roles;
  • Data sharing in population-based payment models will need to be fundamentally different from data sharing in traditional fee-for-service models;
  • Data sharing for population-based payment models requires multi-stakeholder relationships built on trust, cooperation, and transparency;
  • Identifiable, patient-level data should follow the patient;
  • De-identified, population-level data should be treated as a public good; and
  • Providers who participate in population-based [payment models with multiple payers will need to receive, use, and share data with each of them, giving rise to complexities that may benefit from collaboration with third-party data intermediaries.

The white paper makes the following recommendations:

  • Payers and providers should identify in advance aligned approaches and policies for data sharing to support population-based payment models;
  • For data to follow the patient, payers and providers should collaborate on approaches to patient identifiers that enable mapping across systems and data types (e.g., clinical, administrative, and patient-reported data); this effort should be scalable;
  • Payers, providers, purchasers, and patients should convene a multi-stakeholder group to recommend solutions that assure patients that their personal data are appropriately used;
  • Requirements for data sharing should be made explicit in agreements between purchasers and payers that participate in population-based payment  models;
  • Payers should give patients and purchasers easy access to information on what it costs to see different providers for the same, common procedure, alongside relevant quality indicators; and
  • Payers, providers, and purchasers should actively participate in pilot programs to evaluate approaches to the sharing of data across multiple payers and providers.

The white paper also discusses a number of use cases and includes several case studies that provide examples how the principles and recommendations could be implemented.

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Health Research & Education Trust: Creating Effective Hospital-Community Partnerships to Build a Culture of Health

The Health Research & Education Trust of the American Hospital Association has published this guide for creating effective partnerships between hospitals and health systems and their local communities.  The guide was funded by the Robert Wood Johnson Foundation, which is promoting the concept of a “culture of health”, creating a society that gives all individuals an equal opportunity to live the healthiest life they can, whatever their ethnic, geographic, racial, socioeconomic or physical circumstances may be. The guide is based on 50 interviews with hospital, health system, and community leaders from 25 diverse communities to determine common themes and successful approaches for developing effective collaboration. The guide shares lessons learned in:

  • identifying community health needs and reaching consensus on priorities;
  • identifying potential partners;
  • creating sustainable partnership structures
  • overcoming obstacles; and
  • assessing interventions and partnerships.

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Health Research & Education Trust: Hospital-Based Strategies for Creating a Culture of Health

The Health Research & Education Trust of the American Hospital Association has published this guide on how hospitals can support community health improvement. The guide was funded by the Robert Wood Johnson Foundation, which is promoting the concept of a “culture of health”, creating a society that gives all individuals an equal opportunity to live the healthiest life they can, whatever their ethnic, geographic, racial, socioeconomic or physical circumstances may be. The guide is based on a review of 300 community health needs assessments, and provides strategic considerations for hospital engagement in community health improvement. Hospitals can be promoters, conveners, anchors, and specialists in community health improvement. The guide also suggests measures that can be used to evaluate such efforts:

  • Social cohesion and shared value of health: measure perceived norms and social capital; evaluate community engagement or measuring actions that signify participation in promoting health in the community, such as providing volunteer care or participating in a charity sporting event
  • Multisectoral collaboration to build health partnerships: measure strength, nature and quality of collaborations along with number of innovative partnerships
  • Improved and equitable opportunity for healthy choices and environments: measure social and environmental factors and availability of resources; consider equity across the population
  • Improved quality, efficiency and equity of health and health care systems: measure health outcomes, health care system quality and equity across demographics

Finally, the guide has ten case studies about hospitals that have successfully implemented some of the strategies described in the guide.

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Centers for Medicare and Medicaid Services: Comprehensive Primary Care Plus Regions Announced

The Centers for Medicare and Medicaid Services (CMS) has announced the 14 regions (in 16 states) that will be participating in the Comprehensive Primary Care Plus (CPC+) program for Medicare fee-for-service (FFS) beneficiaries:

  • Arkansas: Statewide
  • Colorado: Statewide
  • Hawaii: Statewide
  • Kansas and Missouri: Greater Kansas City Region
  • Michigan: Statewide
  • Montana: Statewide
  • New Jersey: Statewide
  • New York: North Hudson-Capital Region
  • Ohio: Statewide and Northern Kentucky: Ohio and Northern Kentucky Region
  • Oklahoma: Statewide
  • Oregon: Statewide
  • Pennsylvania: Greater Philadelphia Region
  • Rhode Island: Statewide
  • Tennessee: Statewide

The program is an multi-payer initiative so each region has identified public and private payers that have tentatively agreed to participate:

Link to Original Source

To support the delivery of comprehensive primary care, CPC+ includes three payment elements, with two payment “tracks”:

  1. Care Management Fee (CMF): The program will provide participating primary care practices a non-visit based CMF that will be paid per Medicare beneficiary per month. The amount is risk-adjusted for each practice to account for the intensity of care management services required for the practice’s specific population. These Medicare CMFs will be paid to the practice on a quarterly basis. Practices participating in Track 2 will be eligible for higher CMFs.
  2. Performance-based incentive payment: CPC+ will prospectively pay and retrospectively reconcile a performance-based incentive based on how well the practice performs on patient experience measures, clinical quality measures, and utilization measures that drive total cost of care. Practices participating in Track 2 will be eligible for higher incentive payments.
  3. Payment under the Medicare Physician Fee Schedule: Primary care practices participating in Track 1 will continue to bill and receive payment from Medicare FFS as usual. Primary care practices participating in Track 2 practices also will continue to bill as usual, but the FFS payment will be reduced to account for CMS shifting a portion of Medicare FFS payments into Comprehensive Primary Care Payments (CPCP), which will be paid in a lump sum on a quarterly basis. However, given the expectations that Track 2 practices will increase the comprehensiveness of care delivered, the CPCP amounts will be larger than the FFS payment amounts they are intended to replace.

The program and new payments will begin January 2017.  In addition, practices that participate in CPC+ may qualify for additional incentive payments available for the Advanced Alternative Payment Models in the proposed Medicare Access and CHIP Reauthorization Act (MACRA) Quality Payment Program (performance year proposed to also begin January 2017).

CPC+ has 13 requirements for Track 1 practices and 24 requirements for Track 2 practices:

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Here is a Frequently Asked Questions and answers for primary care practices:

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CMS also has released a video explaining the program:

Primary care practices in the participating regions have until September 15, 2016 to apply to participate in CPC+. Practices applying to participate in Track 2 must secure support from their health IT vendor to support and participate in the program. CMS will be hosting numerous webinars before September 15 to provide additional information about the program.

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National Academies of Sciences, Engineering, and Medicine: Integrating Health Literacy, Cultural Competence, and Language Access Services

The Health and Medicine Division of the National Academies of Sciences, Engineering, and Medicine (formerly the Institute of Medicine) has published a summary of a workshop on integrating health literacy, cultural competence, and language access services. Health care organizations are searching for approaches that will enable them to provide information and services to all persons from diverse backgrounds in terms of age, race, culture, and language skills, in a manner that facilitates understanding and use of information to make appropriate health decisions and utilize health care services effectively.

The workshop included presentations and discussions about the opportunities that the implementation of the Affordable Care Act and other health care delivery system changes are creating to support the integration of health literacy, cultural competence, and language access services. There also were presentations and discussions about the issues and challenges in such integration, and some real-world approaches that health care systems are taking to address those issues and challenges. Breakout groups focused on the implications of integration of health literacy, cultural competence, and language access services for research, for policy, and for services and care. In accordance with the policies of the National Academies of Sciences, Engineering, and Medicine, the workshop did not  establish any conclusions or recommendations about needs and future directions, and the workshop summary only reports on issues identified by the speakers and workshop participants.

The October 2015 workshop was sponsored by the Roundtable on Health Literacy, which is planning followup activities.

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