Winter 2008 - IHS leadership and affiliate CEO’s form health care agenda including “Top 10” list
Address geographic disparity in Medicare reimbursement for Iowa hospitals.
Address geographic disparity in Medicare reimbursement for Iowa doctors.
Promote value based purchasing models. Authorize new care models, specifically, accountable care
organizations. GME issues including “foundation model fix” and ability to count
time for didactic and scholarly activities Value primary care with bonus payments for primary care/general
surgery Limit physician specialty hospital provisions Authorize pilots for different payment models, such as bundling of
payments Prevention and wellness provisions Healthcare workforce provisions
Road to Health Reform
Road to Health Reform Winter 2009
Stimulus (includes funds for SCHIP, Medicaid, electronic health records, and “comparative effectiveness research”)
Budget (includes reserve fund for health reform, provides some financing for but not details on specific proposals)
Spring 2009 Hearings, reports, deal making, negotiation, missed deadlines
Summer 2009 Senate HELP and H.R. 3200 released, “markups” Floor votes delayed, recess chaos Revised budget
Fall/Winter 2009 House and Senate bills pass – both under $900 billion
Winter 2010 –Scott Brown elected to congress
House passes underlying Senate-passed reform bill Plus a fix-it bill (agreed upon changes) Plus a manager’s amendment (9 pages of technical changes
– includes geographic variation agreement)
President signs Senate reform bill – health reform is law
Senate considers and passes, fix-it bill and manager’s amendment via budget reconciliation process
Road to Health Reform
The Players and the Process
Senate Health, Education,
Labor & Pensions – HELP Chairman Harkin
Finance Chairman Baucus Ranking Grassley
House Ways & Means
Chairman Rangel (Stark taking over)
Subcommittee Chair Stark
Energy & Commerce Chairman Waxman (Braley)
Education & Labor Chairman Miller (Loebsack)
The Players and the Process
Senate breakdown – 57 Ds, 41 Rs, 2 Is Need 60 votes to overcome filibuster
House breakdown – 257 Dems, 178 Reps Blue Dogs – 52 moderate Dems
White House Nancy Ann Deparle – Health reform quarterback Rahm Emanuel – Chief of Staff
High Level Content Health Reform Bill
Co-ops and Exchange Insurance market reforms National vs. state
exchanges Subsidies for coverage Mandates and penalties –
individual/employers Medicaid expansions
Delivery system reforms Limitations on Physician-
owned hospitals Wellness/prevention Workforce / GME
Provisions Comparative effectiveness Tax provisions and industry
fees Enhanced fraud and abuse
/ transparency provisions
Increased Coverage for the UninsuredCoverage and Subsidies
Medicaid expansion up to 133% FPL Provides tax credits to support purchase of insurance
Sliding scale credit amounts depending on income Available to those between 133% and 400% FPL (Senate bill
did not provide for credits to those above 200% FPL) Creates Consumer Operated and Oriented Plan (CO-OP)
program Requires coverage of dependants under age 27 Reinsurance for early retirees age 54-65, subsidy for employer
to continue coverage Subsidies
Provides tax credits to certain individuals and small businesses for affordability
Increased Coverage for the Uninsured Mandates
Individual Mandate Minimum coverage required after 2013
and penalties imposed Employer Mandate
Penalties for employers with more than 50 employees who do not offer coverage
Increased Coverage for the Uninsured Exchanges / CO-OPs
Secretary awards planning and establishment grants to States within 1 year
States required to establish Exchanges by 2014 Exchanges would facilitate purchase of “qualified
health plans” and provide consumer protections Secretary will set criteria for certification of qualified
plans by the Exchanges Regional or interstate exchanges permitted Requires secretary to establish a Consumer
Operated and Oriented Plan (CO-OP) to create qualified non-profit health insurance issuers
Delivery ReformsOverview
Address geographic disparity for Iowa Readmissions – CMS will not pay for avoidable hospital readmissions Accountable Care Organizations (national program) and Medical Homes Bundling pilots – voluntary program to facilitate care coordination.
Secretary to select 10 conditions Episode begins three days prior to admission and ends 30 days after
discharge. Value based purchasing – beings 2013 using measures from hospital reporting
program. Independent Payment Advisory Board
15 members appointed by President for six year terms Innovation Center – $10 billion of new authority and funding to CMS
Medical home and other chronic disease management To test innovative methods to increase quality and efficiency and reduce costs
Delivery Reforms Geographic Disparity
Includes language on geographic disparity for hospitals (championed by Congressman Braley)
Provides $400 million for FY 2011-2012 for hospitals located in counties in the bottom 25% of spending per Medicare enrollee
Requires IOM studies on: adjustment factors volume and quality of care
Requires a National Summit on Geographic Variation to be convened this year (additional verbal commitments by Sebelius)
Physician provisions on geographic disparity include GPCI adjustment and addresses misvalued codes (championed by Senator Grassley)
Delivery Reforms Readmissions
Readmissions – reduces payments to hospitals for avoidable readmissions (CAH’s exempt).
Focus on heart attack, heart failure and pneumonia All discharges reduced by adjustment factor that equals
the greater of a hospital-specific readmissions adjustment factor based on the number of readmitted patients in excess of the hospital’s calculated expected readmission rate or 0.99 in FY2013, 0.98 in FY2014, 0.97 in FY2015.
Secretary can expand list of conditions starting FY 2015 Community-based care transitions demo for those with
highest readmission rates
Delivery Reforms ACOs
Accountable Care Organizations Voluntary program (not a demo or pilot) Begins 2012 Accountability for care of FFS beneficiaries Minimum of 3 year participation Minimum of 5000 Medicare beneficiaries, assigned by
CMS Requires legal structure to distribute payments Must meet quality thresholds Secretary determines savings thresholds and breakdown Benchmarks determined on most recent 3 year period,
with growth against risk adjusted average expenditure growth for beneficiaries nationwide
Delivery Reforms
Bundling payment pilots – Secretary to select 10 conditions Episode begins three days prior to admission and
ends 30 days after discharge Value based purchasing – beings 2013 using measures
from hospital reporting program. Value based purchases required for long term care
hospitals, hospice and home health agencies Value based modifier for physician fee schedule and
penalties for failure to comply with PQRI standards Medical home demos Other demos
Delivery Reforms
Independent Payment Advisory Board – to submit proposals to Congress on the solvency of Medicare.
15 members appointed by President for six year terms If health care costs exceed CPI, Board submits
recommendations to reduce cost growth by .5 percent. If not acted on by Congress, automatically implemented.
Must reduce excess cost growth by increased amount each year.
Innovation Center Medical home and other chronic disease management To test innovative methods to increase quality and efficiency
and reduce costs
Cost Containment Measures Impact on Providers
Market basket reductions Productivity adjustments Limitations on physician owned hospitals – prohibits new
facilities; grandfathers facilities with Medicare provider agreement before December 31, 2010 but limits future growth
Home health cuts – rebasing and cuts amounting to over $40 billion
Extension of PQRI By 2012, individualized reports on resource use Value-based payment modifier under the physician fee
schedule – phase in beginning 2015 Independent Payment Advisory Board
Cost Containment Measures Cost Impact on Physicians
Extension of work geographic index floor and revisions to practice expensive geographic adjustment factor under fee schedule
Extends PQRI and provides additional bonus payments on certain quality measures
Establishes a physician feedback program comparing resource use
Establishes a “Physician Compare” website Value-based modifier for high quality care 10% Medicare bonus payment for primary care
physicians starting in 2011
Cost Containment Measures Impact on Hospitals
Scales back Medicaid DSH payment reductions from $18.1 billion to $14 billion, but implements the reduction one year earlier, in 2014.
Scales back Medicare DSH payment reductions from $25.1 billion to $22.1 billion, but implements the reduction one year earlier, in 2014. (a portion of the cut is returned to hospitals for uncompensated care, subject to a trigger tied to coverage)
The hospital market basket reductions increased: In FY 2014: market basket (MB) minus 0.3 + productivity
adjustment In FYs 2015-2016: MB minus 0.2 + productivity adjustment In FYs 2017-2019: MB minus 0.75 + productivity
adjustment Applies to all Prospective Payment System (PPS)
hospitals
Cost Containment Measures Impact on Hospitals
Provides extra assistance for the federal share for all state Medicaid programs
Includes Federal Medicaid Assistance Program (FMAP) increase for states that have already expanded their coverage for childless adults
Cost Containment Measures Impact on Hospice
Reduces payment by $7.1 billion Reduces market basket update by 0.5% in 2013-
2019 (contingent on reductions in uninsured) Productivity adjustment beginning in FY 2013
Requires HHS to collect additional data to revise payment for hospice Quality reporting programs
Medicare Hospice Concurrent Care Demonstration program
Cost Containment Measures
Impact on Inpatient Rehabilitation Services
Senate Reform Bill Reduces payment by $5.4 billion
Reduces market basket update by 0.25% for FY 2010 and 2011, 0.3% for FY 2014; 0.2 percent for FY 2015 thru 2016 and 0.75% for FY’s 2017-2019
Productivity adjustment effective FY 2012. Quality report program effective FY 2014 (2.0%
penalty)
Cost Containment Measures Impact on Home Health
Senate Reform Bill Reduces payment by $39.4 billion
Cap on outlier payments Reduce market basket by 1% in 2011, 2012,
and 2013 Rebase payment system in 2014
Workforce
National Health Workforce Commission Grants to states and localities Loan repayment programs Geriatric training, family medicine, general medicine, general
pediatrics, physician assistantship Training in dentistry Mental and behavioral health training and education grants Advanced nursing education grants Nurse faculty loan program Primary care extension program focused on evidence-based
therapies, health promotion, disease management, preventive medicine.
Workforce GME
Flexibility for jointly operated residency training program
- Allows IME and direct graduate medical education (GME) funding for residents who train in non-provider settings (including foundation model)
Redistribution of unused residency positions Hospitals can request up to 75 slots Priority given to hospitals in states with resident-to-population ratios
in the lowest quartile; and 30% of positions to hospitals in rural areas and hospitals located in top 10 states of population living in
HPSA Counting time for didactic and scholarly activities Teaching health centers development grants to develop/expand
primary care residency.
Fraud and Abuse Transparency
Substantial new investment in fighting fraud and abuse, including: Requires provider screening and disclosures Creates a Integrated Data Repository at CMS to
integrate data and expand data sharing Enhances penalties and creates new sanctions CMS-IRS data match to identify fraudulent
providers $250 million increase for Health Care Fraud and
Abuse Control Fund
Requires hospitals to publicize costs of common procedures a list of standard charges for items and services provided by the hospitals including DRG’s
Requires non-profit hospitals to conduct a community needs assessment and imposes penalties for failure to do so.
Limits the amount that can be charged for emergent or medically necessary services to individuals eligible for financial assistance.
Direct Secretary of Treasury to review community benefit activities of hospitals at least once every three years.
Fraud and Abuse Transparency
Revenue Generators Excise Tax on High Cost Health Plans – Cadillac Tax
Under reconciliation, implementation delayed to 2018
Increase in Medicare (HI) Payroll Tax Increase to 2.35% on all income earners over $200,000
Various Industry Fees and Taxes Device Health plans
Cuts in Medicare reimbursement to healthcare providers (market basket value based purchasing)
“Independent Payment Advisory Board” Will make proposals to Congress on ways to reduce Medicare spending
over time; not allowed to proposed payment cuts to providers until 2018
Scales back Medicare Advantage Program
Considerations for Providers
Downward pressure on reimbursement A larger insured population (but will put stress on
providers and will add complexity) Insurance exchange – potentially more
competition Delivery and payment reforms can provide
opportunities such as pilots, demos and various grant opportunities
Increased involvement in regulatory process will be necessary over the next 5 years
“Top 10” List - Accomplishments
Address geographic disparity in Medicare reimbursement for Iowa hospitals.
Address geographic disparity in Medicare reimbursement for Iowa doctors.
Promote value based purchasing models. Authorize new care models, specifically, accountable care
organizations. GME issues including “foundation model fix” and ability to
count time for didactic and scholarly activities Value primary care with bonus payments for primary
care/general surgery Limit physician specialty hospital provisions Authorize pilots for different payment models, such as
bundling of payments Prevention and wellness provisions Healthcare workforce provisions