CBO Assessment Is In

. . . just a brief newsletter/blog this holiday week.

 

The Congressional Budget Office (CB)) assessment of the new American Health Care Act is in. Some highlights include:

 

  • Reduction of federal deficit by $119 billion
  • 23 million people would be added to the ranks of the uninsured by 2026
  • Savings from reductions in outlays in Medicaid and from replacing Affordable Care Act subsidies for nongroup health insurance with new tax credits
  • Average premiums may be lower in part because the insurance, on average, would pay for a smaller proportion of health care costs
  • Average premiums would depend in part on any waivers granted to states and on how those waivers were implemented
  • “Over time, it would become more difficult for less healthy people (including people with preexisting medical conditions) in those states [requesting waivers] to purchase insurance because their premiums would continue to increase rapidly. In particular, out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars in a given year for the nongroup enrollees who would use those services.” (quote from the CBO report)

(“CBO: 23 Million Would Lose Insurance Under ACA Repeal Bill,” AHLA Weekly, May 26, 2017)

 

iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.

 

Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Ms. Jennings discusses the importance of social determinants of health in a population health management strategy.

 

 

For a complete list of iProtean courses, click here. www.iprotean.com/index.php/iprotean/onlineCourses/Available_courses

 

 

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Some Providers Tackle Food Insecurity as Part of Population Health Management

Economists estimate that two-thirds of all the cost of health care relates to what are called social determinants of health—those factors outside the acute care setting that affect health and cost. These factors include everything from exercise and healthy diet, healthy weight, to avoiding substance abuse or other self-destructive behaviors, to ensuring that people have adequate nutrition and adequate housing. They help determine the health of the community and, as such, have been cited as key components of population health management. (Financial Risks and Strategic Implications of APMs,” iProtean, publication pending)

 

The Healthcare Financial Management Association profiled a few systems that are focusing on food insecurity as a component of their population health management strategy. Food insecurity, as defined by the U.S. Department of Agriculture, is a “household-level economic and social condition of limited or uncertain access to adequate food.” (“Providers Focus on Food Insecurity,” HFMA Leadership +, May 16, 2017)

 

Until recently, health system leaders shook their heads at the sad statistics but did not consider them directly relevant to their work. That is changing as leaders embrace the need for population health management, which means finding effective, efficient, and sustainable ways to improve the health of their patient population.

 

 

Some Statistics about Food Insecurity and the Relationship to Population Health Management

 

 

  • 42 million Americans lived in food-insecure households in 2015
  • 13 percent of all U.S. households experienced food insecurity at some point during the year
  • Among households with children, 17 percent—one out of six—experienced food insecurity in 2015
  • 30 percent of households with children headed by single women and 22 percent of those headed by single men were food-insecure
  • Healthcare costs were 49 percent higher for households with low food security—in the form of reduced quality, variety, or desirability of diet but little or no indication of reduced food intake—compared with those that had sufficient food quality. (2015 Canadian study)
  • Healthcare costs were 121 percent higher for those with very low food security, defined as multiple indications of disrupted eating patterns and reduced food intake. (2015 Canadian study)

 

 

Health System Initiative

 

About six years ago, a regional system started working on an anti-obesity initiative in response to its community health needs assessment. As its trainers went into the community to discuss obesity, they kept hearing reports of hunger. As a result, its executives began to see a direct line between food insecurity and spiraling healthcare costs. It began get a handle on food insecurity among its own patients.

 

In 2015, the system and the AARP Foundation co-founded a nonprofit membership coalition that addresses the root causes of health disparities by focusing on hunger and other social determinants of health. The coalition estimates that hunger contributes more than $130 billion a year to U.S. healthcare costs.

 

The coalition’s members—health systems, insurers, food banks and others—are working together on research, advocacy and education, including monthly webinars.

 

The system has screened over 57,000 people for food insecurity. A patient who screens positive for food insecurity receives a visit from a care team member to discuss community resources that may help, as well as a food “care package” at discharge.

 

Patients screened for food insecurity when they visit primary care physicians receive prescriptions that entitle food-insecure patients to visit a “food pharmacy” to receive several days’ worth of food for their entire household. The prescription is linked to a patient’s medical record, so staff members at the food pharmacy can help patients choose healthy foods that support their specific nutritional needs.

 

Other food-availability initiatives the system funds include:

 

  • A food reclamation program
  • A full-service grocery market in a food desert, (i.e., a neighborhood that lacks access to healthy, affordable food)
  • A mobile farmers market
  • Summer meals for kids

 

The system’s president & CEO noted “a moral imperative in responding to patients’ food insecurity. He said, “We spend $3.2 trillion on health care and prescribe drugs that our patients will never be able to afford—and we don’t ask people about their basic needs. To us, it seems like a lack of common sense.” (“Providers Focus on Food Insecurity,” HFMA Leadership +, May 16, 2017)

 

 

 

iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.

 

Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Ms. Jennings discusses the importance of social determinants of health in a population health management strategy.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Experts Expect Senate to Significantly Change AHCA

On May 4 the House of Representatives passed a new version of the American Health Care Act (AHC) that made deep cuts to both Medicaid funding and marketplace subsidies. It now moves to the Senate, where experts predict it will undergo substantial changes.

 

Hospital groups opposed the newer version of the bill primarily because of the reduction in the number expected to have insurance in 2026 (24 million according to an earlier Congressional Budget Office estimate). Most of those coverage cuts would result from an estimated $800 billion reduction in the growth of Medicaid over the next 10 years.

 

The American Hospital Association’s president and CEO issued a written statement expressing concern: “As the backbone of our nation’s health safety net, America’s hospitals and health systems—which include more than 270,000 affiliated physicians and 2 million nurses and other caregivers—believe it’s vital that Medicaid be protected.” (To read statement, click here.)

 

The issue with marketplace subsidies stems from provisions that would reduce the amount currently available for older enrollees—who generally use more hospital services—while increasing subsidies for younger enrollees. The change could help stabilize the Affordable Care Act (ACA) marketplaces but leave older, pre-Medicare-eligible enrollees with unaffordable healthcare costs. That situation could increase hospitals’ charity-care and bad-debt costs.

 

The Senate has appointed a 13-member working group to craft the Senate bill. The group includes members from both ends of the spectrum: complete repeal of the ACA to approval of its Medicaid expansion.

 

Pending a CBO score for the House bill (expected the week of May 22), the Healthcare Financial Management Association (HFMA) has noted some key points:

 

  • Hospitals will still be required to provide free care for medical emergencies to the newly uninsured.
  • Hospitals can expect a $165.8 billion decrease in revenue through 2026.
  • If ACA’s Medicare and Medicaid disproportionate share hospital payment reductions are retained, it would produce another $102.9 billion in hospital cuts.
  • The AHCA leaves in place an expected $289.5 billion in reductions to the Medicare inflation update over the coming decade.
  • The bill’s Medicaid cuts will likely force some states to either reduce Medicaid eligibility levels or cut provider payments to offset the growing burden on state budgets.
  • Hospitals would likely be the prime target of any state Medicaid-rate reduction because other types of providers would either opt out of the program or face unsustainable losses from any cuts.
  • Major Medicaid changes—including a reduction in the federal matching rate for the newly eligible population—are likely.
  • The House-passed AHCA would reduce the federal match in Medicaid for early expansion states to 80 percent starting this year, while the 19 non-expansion states could receive the enhanced match if they adopt the expansion by the end of this year.
  • The House bill would replace the ACA’s insurance subsidy structure with one that provides age-based subsidies ranging from $2,000 for ages 29 and below to $4,000 for ages 60 to 64. Those subsidies would not be adjusted to account for regional premium differences. The bill would eliminate cost-sharing subsidies for marketplace enrollees earning less than 250 percent of the federal poverty level.

 

Source: “Hospitals Watching Medicaid, Subsidies in Senate AHCA Bill,” HFMA Weekly, May 12, 2017

 

 

iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.

 

Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Some Experts Predict Extension of MACRA Flexibility through 2018

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) determines only Medicare Part B payment, but hospitals and health systems will be affected through their employed and affiliated physicians. So those organizations are working to help their physicians succeed under the payment system, which will mean moving as quickly as possible to advanced alternative payment models (APMs). (“Health Systems Brace for MACRA,” HFMA Weekly, May 5, 2017)

 

But how quickly? The Obama administration approved a “soft launch” for 2017 to allow physicians and hospitals time to get things in order to understand, implement and meet quality-reporting requirements. Now, some healthcare industry advisers expect the current administration to relax 2018 quality-reporting requirements under Medicare’s new physician payment system.

 

The expectation of further concessions on the implementation of MACRA in 2015 stems from projections that 90 percent of the more than 700,000 affected physicians will start out in the Merit-based Incentive Payment System (MIPS) track. If physicians don’t meet the intensive quality-data collection, reporting and performance requirements under MIPS, they face cuts that accelerate to potentially 9 percent of their total annual Part B payments. (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)

 

Initially, 90 percent of physicians are expected to not meet the criteria for qualifying APM participation and instead to default into MIPS.

 

One large health system executive said that the organization is looking at how to move its clinicians out of MIPS into APMs and identifying the competencies needed to support them. Other health systems are initiating multiyear efforts to push many of their employed and affiliated physicians into advanced APMs. (“Health Systems Brace for MACRA,” HFMA Weekly, May 5, 2017)

 

At the World Health Care Congress last week, a former healthcare advisor for the White House urged physicians to evaluate their quality performance, “then think of ways to optimize their activity within the fee structure to gain revenue while building in the needed quality infrastructure.” Such infrastructure can carry a high price tag—an average startup cost of between $5 million and $25 million for an accountable care organization (ACO) with 15,000 to 25,000 enrollees. (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)

 

The administration has asked for industry input on reducing MACRA reporting requirements while maintaining the core approach to continue the momentum in the shift to value-based payment.

 

A large health system has decided to proceed under the assumption that there will not be an extension of the 2017 “soft launch” of MACRA. It will use the time to “get better” rather than “stall what we really need to do.” (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)

 

Its preparation includes:

  • Weekly meetings with various stakeholders
  • Ongoing physician and administration education
  • MACRA oversight committees that include senior leadership

 

The Healthcare Financial Management Association noted, “ . . . the talk of slowing MACRA implementation comes amid widespread industry agreement that it is likely to spawn greater healthcare consolidation, including acquisitions of many—if not all—small practices.” (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)

 

It could be the swan song of the private-practice physician because of needed, and expensive, infrastructure to answer and report all the things these physicians need to report to get paid. Some expect the percentage of employed physicians will increase from less that half to more than 80 percent over the next 10 years as a result.

 

 

 

iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.

 

Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Bundled Payments: Mandatory, Voluntary or Gone Altogether?

Policy experts recently weighed in on the future of the bundled payment program. Uncertainty has been the byword since the current administration delayed the start of the latest mandatory bundled payment program. Some have speculated that such models are “on their way out.” There is no consensus among experts.

 

A review of the background: the current mandatory Comprehensive Care for Joint Replacement (CJR) model (started in 2016) was targeted for expansion at the same time new bundled payment models for heart attack, cardiac bypass surgery services, and a new cardiac rehabilitation incentive program (collectively known as episode payment models) were to go into effect on July 1. Both programs have been pushed back to Oct. 1.

 

CMS wants additional notice and feedback so it can tweak the program as needed. Among the issues on which the agency seeks comment is the possibility of delaying the new models to Jan. 1, 2018.

 

Some viewed the initial delay as particularly significant because of criticism of mandatory models by the Secretary of Health and Human Services.

 

Reactions/comments from industry experts include:

 

  • Health Care Transformation Task Force: “mandatory models are probably off the table—the true indication of the administration’s view of mandatory models will be whether it curtails the CJR model.”
  • Gail Wilensky (formerly head of the precursor to CMS): HHS Secretary’s objections may not be as straightforward as they appear; his objections last year (as a member of Congress) appeared “to stem from concern over imposing on congressional authority.”

 

One expert noted that bundles might be needed to move most providers toward full risk given that “there is some real concern about people who seem to be remaining for extended periods of time in the Medicare Shared Savings Program Track 1,” which carries no downside risk.

 

Regardless of what happens to mandatory bundled payment models, industry watchers expect a big increase in the use of bundled payments from the expected extension in 2018 of some version of the voluntary Bundled Payments for Care Improvement program.

 

(The information above excerpted from “Policy Pros Divided on Whether Mandatory Bundles Ending,” HFMA Weekly, April 28, 2017)

 

 

The American Hospital Association, which previously opposed mandatory participation, recently submitted a comment letter to CMS indicating that it backs a January 1, 2018 start date.

 

The Healthcare Financial Management Association (HFMA) stated in a recent letter that its members “strongly support” delaying the start of the cardiac and hip fracture episodes described in the Episode Payment Models interim final rule, and noting that at this time, the bundles do not reflect the principles HFMA has articulated for “fair and rational” payment models. Highlighting technical design flaws in the models, it identified the following issues: (“HFMA Comments on CMS’s EPM IFR,” HFMA Weekly, April 28, 2017)

 

  • Lack of risk adjustment
  • Insufficient episode exclusions
  • Insufficient access to Medicare claims data in a timely fashion
  • Insufficient (or inapplicable) quality measures
  • Inadequate waivers from antiquated fraud-and-abuse regulations that were designed to address the volume incentives inherent in fee-for-service-payments

 

However, HFMA encouraged CMS not to delay the expansion of CJR beyond October 1, 2017. “These adjustments create a pathway for the CJR program to be considered an Advanced Alternative Payment Model (AAPM) under the Medicare Access and CHIP Reauthorization Act (MACRA).” (“HFMA Comments on CMS’s EPM IFR,” HFMA Weekly, April 28, 2017)

 

 

iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.

 

Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.