An analysis of Virginia insurance claims indicates there are practical opportunities to slash billions of dollars in wasteful healthcare spending nationwide, researchers say.
The best way to make deep cuts in healthcare spending is to start with reductions in low-cost, high-volume services, according to research published today in Health Affairs.
"An analysis of data for 2014 about forty-four low-value health services in the Virginia All Payer Claims Database revealed more than $586 million in unnecessary costs," wrote the authors of the research paper, "Low-Cost, High-Volume Health Services Contribute the Most to Unnecessary Health Spending."
The researchers examined fee-for-service claims from 5.5 million Medicare, Medicare Advantage, Medicaid, and private commercial insurance beneficiaries. The benchmark for a low-cost, low-value service was set at $538.
Several methodologies were used to assess service value, including the ABIM Foundation's Choosing Wisely campaign, the U.S. Preventive Services Task Force, and Medicare's Healthcare Effectiveness Data and Information Set. The researchers pegged the percentage of low-value healthcare services at 2.1% of total healthcare spending in Virginia.
"A substantial proportion of healthcare costs in the United States is allocated to low-value care, defined as patient care that provides no net health benefit in specific clinical scenarios—such as early diagnostic imaging for uncomplicated low-back pain. Despite decades of attention to this issue, U.S. expenditures on low-value care persist," the researchers wrote.
A key finding of the research was drawn from contrasting low-value services based on cost—showing that the total cost of spending on low-cost, low-value services was nearly double the spending on high-cost, low value services. "The total cost for the low- and very-low-cost low-value services (65 percent of costs, or $381 million) was nearly twice as much as the total cost of high- and very high-cost low-value services (35 percent of costs, or $205 million)," the researchers wrote.
This finding contradicts conventional wisdom.
"Although higher-cost low-value services are frequently showcased in policy deliberations and the media, lower-cost low-value services (those in the bottom two quartiles of our study) accounted for almost twice as much unnecessary cost as did services in the top two quartiles."
The researchers say their study has a pair practical implications in the nation's quest to cut healthcare spending:
Given that the researchers identified $586 million in wasteful spending in one state, "even a modest decrease in the use of low- and very-low cost low-value services could lead to savings and serve as a feasible strategy for catalyzing a broader movement to tackle low-value care."
Focusing on low-cost services "would not present a financial threat to any particular clinical specialty or advocacy group."
Low-cost, low-value services could be the best starting point in meaningful efforts to cut healthcare spending, the researchers wrote: "Instead of pursuing a politically charged strategy to reduce the use of high-profile and higher-cost low-value services, an alternative approach that initially targets the reduction of high-volume and less costly items might be a more strategic way to catalyze the movement to tackle the problem of low-value care."
With Medicare and other payers shifting to value-based-care business models, rural doctors face a fundamentally changing marketplace, a pair of rural healthcare leaders says.
Physician engagement is crucial to shifting to value-based healthcare in rural communities, says Kevin Halter, CEO of Ashland, KY-based Bon Secours Kentucky Health System, which features 215-bed Our Lady of Bellefonte Hospital.
"My biggest challenge is getting my physicians educated on the front end because they all see the wave coming. And that's true for any of the new initiatives—bundled payment and financial changes like& MACRA are in the journals, but it's not right in front of them as it is in places like Richmond, Virginia."
Bon Secours Kentucky Health System is part of the Marriottsville, MD-based Bon Secours Health System, which operates 19 acute-care hospitals in six states and has more than 25,000 employees.
Halfway across The Bluegrass State in Elizabethtown, Hardin Memorial Health features a 300-bed acute-care hospital. Hardin Memorial is affiliated with Louisville, KY-based Baptist Health, operator of eight acute-care hospitals with a total of 2,700 licensed beds.
Primary-care physicians are crucial players in the shift to value-based care, says Hardin Memorial President and CEO Dennis Johnson.
"You don't have to employ every physician on the planet, but you do need to drive the primary care referrals... And if you have good primary care, you are going to be able to manage a population's health."
Halter and Johnson say there are several approaches that rural physicians and their practices can take to adopt value-based care models:
Engaging with Local Hospitals and Health Systems
The relationship between hospitals and physicians is critical to success in value-based care, Halter says.
"Hospitals have been in value-based purchasing for five-plus years, now it's going to go to physicians, and my physicians are just now starting to see it. The reason they are seeing it is I am putting it in front of them. We had a board retreat with about 40 physicians to start educating them."
Building Integrated Clinical Networks
Hospitals and health systems can build the infrastructure needed to support value-based care models, and they need to convey this advantage to potential physician partners, Halter says.
"This is coming, you need to get prepared, we are going to help you get prepared by putting in a clinically integrated network.' Now, we are helping them work through the change so they don't find relief in the channels outside the hospital."
Hospital-employed Physicians
Our Lady of Bellefonte has about 250 physicians on staff, with 30% of the staff hospital-employed. Employment status has had a significant impact on adoption of value-based care models among physicians at the hospital, Halter says.
"Employed docs get force-fed. They are in these programs. Bundled payments for instance, and MSSP ACO. We sign them up."
The Primacy of Primary Care
In 2011, Hardin Memorial and Baptist Health engaged the Healthcare Strategy Group, a provider of physician integration services, to help craft their strategic plan, Johnson says.
Identifying new primary-care partners was an essential element of the planning process. "HSG assisted both Baptist and Hardin on a primary-care strategy… to help identify those markets where we had an opportunity."
Primary-care practices can function successfully in both fee-for-service and value-based business models, he says. "Primary care is really a low-risk, high-return investment."
This week's anticipated Senate vote on a repeal-and-replace plan for the Affordable Care Act is likely the GOP's last chance to enact healthcare reform this year.
This week marks a major milestone in congressional efforts to repeal the Patient Protection and Affordable Care Act (PPACA), a pair of beltway watchers says.
Majority Leader Mitch McConnell, (R-KY), is maneuvering for a vote on repeal-and-replace legislation sponsored by Sen. Bill Cassidy, (R-LA), and Sen. Lindsey Graham, (R-SC). The Senate Finance Committee is scheduled to hear testimony at 2PM Monday.
Earl Pomeroy, ex-president of the National Association of Insurance Commissioners is a Democrat and a former US representative from North Dakota. He says the Cassidy-Graham legislation is the Republican Party's "last gasp" to repeal and replace the PPACA before the 2018 elections.
"There are many Republican senators who have committed to voting for the bill who have not had time to fully consider it. The bill is being driven by calendar, not content."
"At the end of the month," says Pomeroy, "the ability to pass health reform with 51 votes using the budget reconciliation vehicle of 2017 expires, because we move into the 2018 fiscal year."
The time pressure linked to the Senate calendar gives the Cassidy-Graham proposal a political push, he says. "It's now-or-never."
Cost Forecasting
The Cassidy-Graham Plan has not been scored by the nonpartisan Congressional Budget Office. It aims to release a preliminary assessment this week. Others, such as Avalere, CMS, and the Kaiser Family Foundation have been weighing in.
This 11th-hour attempt to repeal and replace Obamacare is expected to result in health insurance and Medicaid coverage cutbacks equal to GOP legislation proposed earlier this year that would have cut more than 20 million people from healthcare coverage.
Republican candidates for Congress would pay a political price from a rollback of healthcare coverage, Pomeroy says.
"If the Republican Party votes to destroy the Affordable Care Act, that will be a political problem for Republicans for years to come. Millions [of Americans] will lose their coverage, and they will be extremely unhappy for many elections."
Passage would also create a political opportunity for the Democratic Party, he says. "The Democrats will be flat-out on the attack, and the Republican position on healthcare will be extremely defensive."
The course of healthcare reform through the 2018 election will turn on this week's Senate vote, Nicholas Manetto, prinicipal at Washington-DC-based law firm Faegre Baker Daniels.
"If Cassidy-Graham fails, it would embolden those in the Republican caucus who want to move away from healthcare and toward taxes or other issues, and it could potentially revive the bipartisan efforts that were terminated [last] week," Manetto says.
Predicting the Senate Vote
A razor-close vote is likely in the Senate this week, he says.
"The four most prominent names are [Republican] Senators Paul, Collins, Murkowski and McCain. Paul is opposed because in his view Cassidy-Graham does not do enough to scrap the ACA, while the other three were the pivotal 'no' votes during the summer. Sen. Collins certainly appears to be a likely 'no' given the concerns she has expressed on Medicaid."
McCain is a perennial "wild card," Manetto says. "Sen. McCain may be gettable—he is close with Sen. Graham."
"Murkowski remains a big question. Others to keep an eye on are senators like Rob Portman and Shelly Moore Capito, both of whom had significant concerns earlier in the year, particularly on the Medicaid side."
In a bid to solicit Murkowski's vote, special accommodations would have to be made in the bill for Alaska, Sen. Graham reportedly told conservative activists.
After seven years and more than 40 attempts to repeal and replace Obamacare, many Republican lawmakers in Congress are eager to drop healthcare as a priority issue, Manetto says.
"Much of the GOP caucus wants to move far away from healthcare toward taxes and other issues they see as being more favorable to them. You also have the reality of an election year that, before too long, will focus much attention on the polls."
Dozens of hospital patients who were evacuated from the U.S. Virgin Islands have received care in Puerto Rico that is reimbursable under a federal program.
In response to evacuations linked to Hurricane Irma, federal officials are drawing on the National Disaster Medical System (NDMS) to help pay for patients' bills.
This is the first time the NDMS Definitive Care Reimbursement Program has been activated since the 2010 international response to an earthquake disaster in Haiti. The program reimburses hospitals and other medical facilities for care provided to patients who are evacuated from their communities after a disaster and cannot access care at their local facilities.
The program is overseen by the Department of Health and Human Services (DHHS) Assistant Secretary for Preparedness and Response (ASPR). The federal departments of Defense and Veterans Affairs also participate in the program.
At least 85 patients have received care in Puerto Rico through the reimbursement program, DHHS reported Sunday in a prepared statement. The patients were evacuated from the U.S. Virgin Islands after Hurricane Irma dealt a devastating blow to many Caribbean islands and the Florida Keys last week.
"Hurricane Irma significantly affected access to medical care in the areas hardest hit by the storm, and patients who need care in these impacted areas must rely on facilities in areas spared by the storm," said ASPR Robert Kadlec, MD.
Under the NDMS reimbursement program, patients such as those impacted by Hurricane Irma are transported to NDMS-approved medical facilities. The U.S. Virgin Island patients were taken to Puerto Rico with "resources" drawn from the Department of Defense and the Federal Emergency Management Agency's national ambulance contract, the DHHS prepared statement says.
Services covered through the reimbursement program include:
hospital care, which can extend beyond a 30-day stay
home care
rehabilitation and physical therapy
primary care
The reimbursement rate for services provided through the NDMS program are as high as 110% of the Medicare rate, or a similar rate if there is no comparable Medicare benchmark. To participate in the program, medical facilities must have at least 25 licensed beds available for evacuation patients. This year, more than 1,900 hospitals are eligible to participate in the reimbursement program.
In 2010, HHS launched a pair of Federal Coordinating Centers in Atlanta and Tampa under NDMS in response to the Haitian earthquake. With medical facilities devastated in Haiti, 79 Haitians and 10 U.S. citizens were evacuated from Haiti to NDMS-approved facilities for treatment of life-threatening conditions, the Obama administration reported.
In 2012, NDMS played an active role in the response to Hurricane Sandy's impact on New Jersey and New York, according to an ASPR report on the disaster:
Oct. 29: Sandy makes landfall and DHHS deploys more 160 staff, including ASPR regional emergency coordinators in three Regional Response Coordination Centers
Oct. 31: DHHS Secretary Kathleen Sebelius declares a state of emergency throughout New York and total number of DHHS staff tops 500
Nov. 1: Sebelius declares state of emergency in New Jersey, with total number of DHHS staff topping 650
Nov. 6: Response under NDMS reaches build-out point, with 1,000 DHHS staff deployed. NDMS resources deployed feature 15 Disaster Medial Assistance Teams in New York and New Jersey, each equipped with medical supplies and staffed by U.S. Public Health Service officers.
NDMS also participates in preparedness and medical support for national events such as presidential inaugurations.
The Cleveland-based health system has set ambitious multi-year goals for making changes across its clinical, physical, and operational initiatives.
For many health systems, adapting to change is a near-term inevitability. They proceed dutifully, and with caution. You can almost hear the groans.
But for The MetroHealth System, the safety net provider for Cuyahoga County, OH, change is a welcome opportunity to adopt new strategies and abilities.
"Innovations and new environments all demand new strategies and abilities," says CFO Craig Richmond. Richmond made his remarks in August at the HealthLeaders CFO Exchange in La Jolla, California.
For the fiscal year ending Dec. 31, 2016, MetroHealth reported total revenue at $1.04 billion. In 2015, the health system posted total revenue at $941 million.
The health system's patient-population has grown from 180,000 patients in 2012 to a projected 300,000 next year. "We've had remarkable success and growth over the years," Richmond says.
Expanding its services has been a top priority. From 2012 and projected through 2018, MetroHealth will have grown in these ways:
Inpatient facilities – from one to three
Emergency departments – from one to four
Outpatient facilities – from 20 to 30
System-owned pharmacies – from three to nine
The system is investing heavily at the brick-and-mortar level, Richmond says. "We just executed on one billion dollars in financing to rebuild a majority of our main campus.
From a strategic perspective, MetroHealth is trying to harness the transformational potential of change, he says. It has adopted a three-pronged operational unit called DoIT: the Department of Integration and Transformation.
The DoIT trident features business-intelligence data, robust project-management capabilities, and a decision-acceleration model that "allows us to accomplish more at an accelerated pace," Richmond says.
1. The Department of Operations Research and Analytics (DORA):
Analyzes specific business processes or questions;
Manages business rules for inter-departmental data use;
Generates forecasts, simulations, and linkages of clinical, financial, and operational data
2. Results Management Office (RMO):
Focuses on desired outcomes;
Uses data-driven methodologies for optimizing innovation and cutting waste;
Leverages employee knowledge to boost quality of decision-making;
Features several project management capabilities, such as prioritizing initiatives, optimizing resource allocation, reducing risk, and increasing return on investment.
3. Center for Disruptive and Radical Experimentation (DARE):
Fosters employee participation in decision-making, with emphasis on enabling staff to challenge the status quo.
DARE efforts include Meeting-Free Fridays, which encourage spontaneous interactions among staff members, an Idea Lab, which serves as a dedicated space for DoIT activities, and about 40 interdepartmental "game-changers" – employees who serve as proponents of change across the organization.
"Each one of these individual divisions can have a significant impact within the organization," says Richmond. "But similar to a multifunctional tool, when all three are working together you can create better results."
For the period spanning 2012 to 2018, MetroHealth set goals for transformational change in three areas—clinical, operational, and physical:
Clinical features– expansion of its primary-care network, IT-enabled integration of care settings, care management, and assumption of financial risk
Physical features– distribution of anchor facilities evenly across the local market and the construction of a new main campus
Operational features– building analytics capabilities and restructuring based on the service-line model
Creating a culture of continuous process improvement generates significant gains, Richmond says, quoting legendary basketball coach John Wooden, "If you don't have time to do it right, when will you have time to do it over?"
"We are hearing from many of the hospitals with which we work that the first two-to-three quarters have been challenging, and most opportunities for episode savings are in post-acute costs: rehab and skilled nursing facility (SNF) utilization," Christopher Stanley, MD, MBA, a director at Chicago-based Navigant Consulting said this week.
"It's a bit too early to generate a broad view of how hospitals are performing in 2017 when downside penalties kick in, though we expect many hospitals will incur a penalty under the program in 2017."
On April 1, 2016, the Centers for Medicare & Medicaid Services imposed mandatory participation in bundled payments for hip and knee replacement procedures for about 800 hospitals under Medicare's Comprehensive Care for Joint Replacement reimbursement model.
In two hospital surveys last year, the majority of hospitals polled reported they were not ready for CJR. A FORCE-TJR survey found 56% of hospital orthopedics programs reported being unprepared for CJR.
Avalere Health, a consulting firm, released survey results indicating that 60% of the hospitals required to participate in CJR could lose money in the bundled-payment model when downside risk began in January.
Last year, Fred Bentley, vice president of Avalere's Center for Payment & Delivery Innovation, said he was not surprised over widespread lack of preparedness for CJR.
"[Providers] have really been focused on the care of patients in the four walls of the hospital and not really on the post-discharge side. They have been focused on growing their orthopedics volume and their referrals, and now they're going to be focused on the entire episode. And that's a big shift."
Under the CJR bundled-payment model, each participating hospital has been given a target price for hip and knee replacement procedure episodes, which include the cost of post-acute care. Last year, the cost of hip and knee replacement procedure episodes for Medicare patients varied widely across the country, from $16,500 to $33,000, according to CMS.
Hospital preparedness to participate effectively in CJR has improved, but more work is needed, Stanley says.
"Midway through 2017, I would characterize many of these hospitals as underprepared instead of unprepared. Facilities now know where episode costs occur: initial hospitalization, post-acute, readmissions, etcetera. However, too many hospitals don't know how to affect change in these categories."
Establishing an effective post-acute care strategy is critical to success in CJR, he says.
"We suggest focusing first on post-acute use: narrowing down the number of SNFs that a hospital uses based upon quality, SNF length of stay, and ability to collaborate. Unfortunately, many hospitals are unable or unwilling to change SNF use patterns, which takes away one of the most important tools to succeed in the CJR program."
The Trump administration's approach to bundled-payments programs is maturing but uncertainty remains in the regulatory environment, Stanley says.
"The message from CMS is that CJR and similar mandatory programs will continue for now, though they likely will not expand in number under the current administration."
The health system's approach to delivering value to patients realizing cost-efficiency gains from consolidation, cost-cutting, and the deployment of a new performance-measurement methodology.
The leadership team at Yale-New Haven Health System, which operates four hospital campuses in Connecticut, is striving to make value a core cultural element of the organization.
At the first annual National Symposium on Value Innovation at Yale, last year, YNHHS President and CEO Marna Borgstrom, MPH, said the health system's leadership is committed to generating value for patients as opposed to emphasizing cost-cutting alone.
"It's not about what we can do, or what we need. It's about generating value for our patients," she said. She described the effort as a "quest for unparalleled value."
On the quality and patient safety side of the value equation, YNHHS has adopted several initiatives over the past five years such as the development of clinical rapid response teams and the deployment of predictive analytics in clinical settings that have contributed to significant gains in patient outcomes.
In September 2012, YNHHS acquired the former Hospital of Saint Raphael, a struggling safety-net hospital in New Haven located about a quarter mile from the Yale-New Haven Hospital campus. The deal created a 1,541-bed, dual-campus hospital in the heart of the city.
2. Cost-Efficiency Gains from Consolidation
Largely through consolidation of clinical services and achieving economies of scale linked to the Saint Raphael acquisition, YNHHS was able to reduce annual costs by about $200 million, according to Richard D'Aquila, executive vice president of YNHHS and president of Yale-New Haven Hospital.
Regulatory commitments helped drive the consolidation strategy, he said at the symposium. "There was one hospital, one provider number, one model for clinical services."
3. Cutting Operational Costs
On the cost side of the value equation, YNHHS was able to reduce spending by about $150 million from 2012 to 2015, and the figure was a focal point at the symposium.
The organization had set a target for $125 million in cost savings over the four-year period, primarily in four categories:
Clinical redesign
Labor
Non-labor
Human resources
"We beat our target, and it is sustainable," Abe Lopman, senior vice president of operations at YNHHS, said at the symposium.
Patient care accounts for about 83% of the health system's annual spending, so cost savings from clinical redesign were the biggest budget category targeted for spending reductions, at $60.8 million. Actual costs savings from clinical redesign were $33.4 million, but the shortfall was not surprising, Lopman said.
"This is something that has to be part of your culture. It takes time to do it. Over time, we expect it to be better."
The health system was able to exceed its cost-savings projections in three areas: human resources, labor and non-labor. The total cost savings targeted in those areas was $64.2 million, with $116 million in actual cost savings achieved.
4. New Performance Metrics
The adoption of Quality Variation Indicators (QVI) performance metrics have helped YNHHS improve the delivery of value in medical services, Stephen Allegretto, vice president of strategic analytics and financial planning at the health system, told HealthLeaders during the symposium.
At YNHHS, QVIs feature more than two dozen categories of negative clinical outcomes such as implant complication, transfusion reaction, air embolism, drug poisoning, shock, infection, and obstetric trauma.
The performance methodology allows the health system to harness data for clinical quality and cost of care, which supports the organization's "cost-value initiative."
Understanding variations in risk for different categories of patients is critical to setting successful strategic approaches to managing exposure in risk-based contracts.
The shift to value-based care model in healthcare requires development of a key skill set—managing exposure to risk in risk-based contracts.
Managing risk exposure was a focal point during a recent HealthLeaders Media Roundtable event in Denver, with the panel featuring three physician leaders and a healthcare-finance expert from New York City-based Bank of America Merrill Lynch.
Risk exposure varies across a plethora of patient categories, said Alan Lazaroff, MD, co-founder and coding medical director of Physician Health Partners, a Denver-based physician organization.
"There are a lot of different risks that people face. For example, in geriatrics, one of the worst risks is the risk of having to go to a nursing home. The risk factors for that are completely different than the risk factors for going in the hospital. If you have Alzheimer's disease, that is the risk factor for going into the nursing home. Alzheimer's probably affects the hospitalization risk, but not as much as heart failure or coronary artery disease."
Setting patient-outcome objectives is critical to success in managing risk-based contracts, said Louis Levitt, MD, vice president and a practicing physician at The Centers for Advanced Orthopaedics, a physician group based in Bethesda, Maryland.
"You have to define the goals you are trying to achieve. If you can't define goals—and dementia is a tough one to define—it is hard to be successful. If you are successful, what will you see changed? Keeping patients at home? Keeping them out of the hospital?
Payer mix has a significant impact on managing risk exposure, said Rick Lopez, MD, senior vice president of population health at Atrius Health, a Newton, Massachusetts-based physician organization.
"In the commercial population, people who are at high risk of hospitalization tend to be the sicker commercial patients who almost look geriatric in terms of their conditions. We developed a separate algorithm to predict the risk of spending more than $100,000 in the next year, and when you apply that algorithm to the commercial population, the big costs are not the hospital costs. The big costs are the pharma costs and the physician procedures."
Data management is an essential element for success in risk-based contracting, said Seattle-based Kerri Schroeder, senior vice president and credit products executive at Bank of America Merrill Lynch.
"Most providers are struggling with data—having congruent access to data with the payers, so you have all that claims data in a way that you can consume it. You need data analysts who can merge claims data with EHR data and any other data sources related to socio-economic issues that can help predict risk in patient populations. You need clarity about the composition of the population, how you are going to measure success, and the spending benchmarks.
"Another problem is that every provider is dealing with multiple payer contracts, and the rules are different for each one. So, how do you create one process and one set of business rules that work for all of the different payment arrangements that you are under? That is a huge challenge."
For the upcoming federal fiscal year, Medicare payment rules and methodologies for hospital inpatient care feature a payment-rate hike and $800 million increase in uncompensated-care reimbursement.
Medicare reimbursement to about 3,330 acute-care hospitals nationwide is expected rise $2.4 billion in the federal fiscal year beginning Oct. 1.
In the FY2018 Inpatient Prospective Payment System (IPPS) final rule released yesterday, federal officials estimate Medicare reimbursement to acute-care hospitals will rise about 1.3%. This figure represents the adjusted base payment rate and the hospital-to-hospital financial impact of incentive payment programs such as the Hospital Readmissions Reduction Program (HRRP).
A factsheet produced at the Centers for Medicare and Medicaid Services (CMS) details features of the IPPS final rule, which is slated for publication in the National Register on Aug. 14.
The adjusted base payment rate, which is pegged at 1.2% has five elements:
Market basket update +2.7
Productivity update -0.6
Removal of a one-time adjustment made in FY2017 to compensate hospitals for implementation of the Two-Midnight Rule for hospital-admission status -0.6
The American Hospital Association (AHA) posted an advisory report on the Chicago-based organization's website that offered a tepid take on the new IPPS final rule, including describing the Two-Midnight Rule payment adjustment as designed "to restore unlawfully instituted two-midnight policy cuts."
In the advisory report, AHA Executive Vice President Tom Nickels criticizes two provisions of the new final rule: a data-collection worksheet for uninsured patients and the refusal of CMS to offset a hospital-reimbursement cut in FY2017.
"We continue to have concerns over the accuracy and consistency of the 'Worksheet S-10' data that CMS will use to determine the cost of treating uninsured patients. … We are also disappointed that CMS has decided not to restore last year's excess cut to reimbursement rates for hospital services. While a reduction to the hospital update factor was mandated by law in 2012, CMS ignored Congress' intent by imposing a cut that was nearly two times what Congress specified."
There are several other elements of the new IPPS final rule that will impact acute-care hospitals:
CMS is easing provisions of the Medicare and Medicaid electronic health record (EHR) incentive programs. The alleviation provisions include a change to "EHR reporting periods for new and returning participants attesting to CMS or their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the calendar year," the CMS factsheet says.
Readmission penalties assessed to hospitals under HRRP are being changed to reflect a hospital's performance relative to other hospitals with similar numbers of Medicare and Medicaid dual-eligible patients.
Medicare payments to hospitals for uncompensated care under the Disproportionate Share Hospital program are slated to increase about $800 million over the FY2017 funding level.
The politics of repealing the Patient Protection and Affordable Care Act have soured, leaving President Trump and repeal-minded Republicans in Congress with few paths forward on healthcare reform.
With last week's collapse of Obamacare repeal-and-or-replace efforts in Congress, the Republican Party's options have dwindled to repair or wreck, a trio of DC healthcare-policy watchers says.
"Republicans have not been able to pass several versions of replace. They have tried a big version. They have tried a skinny version. They have tried repeal-only. Instead of repeal-and-replace, it's time to move to repair," Earl Pomeroy, a former Democratic U.S. representative from North Dakota, told HealthLeaders today.
At this point, any repeal effort appears doomed, the ex-president of the National Association of Insurance Commissioners says.
"In healthcare, good policy is good politics. The lesson we learned on repeal-and-replace is the policy was not very good. It threw a lot of people out of coverage. The public didn't like it; therefore, the politics behind repeal-and-replace were lousy."
Patient Protection and Affordable Care Act (PPACA) is politically primed for repair—even for Republican Party lawmakers and voters who have opposed the PPACA for the past seven years, Pomeroy says.
"The politics are clearly on the side of repair. We have moved past repeal-and-replace. Now, the options are wreck it or repair it. The politics are very poor on the wreck-it scenario. With the governing power held exclusively by the Republican Party in the presidency, House, and Senate. They will be held responsible for actions that wreck the insurance exchanges."
Finding Healthcare Reform Common Ground
There does not appear to be a legislative path forward for Republican lawmakers to repeal the PPACA, Nicholas Manetto, principal at Faegre Baker Daniels Consulting in Washington and former press secretary for a GOP congressman, told HealthLeaders today.
"I tend to agree with the take of several senators in leadership that unless something shifts to move a no vote to yes, there is not much value in pursuing a subsequent vote."
The legislative logjam presents an opportunity for Democratic and Republican lawmakers to stand on common ground and cut a deal on healthcare reforms, according to Pomeroy and Merrill Matthews, PhD, resident scholar at the Institute for Policy Innovation in Irving, TX.
Members of Congress on both sides of the aisle held several shared policy positions on healthcare before passage of the PPACA in 2010, Matthews told HealthLeaders today.
"There has always been support for addressing the problem of the uninsured. There was widespread support among Republicans and Democrats on providing some kind of subsidy to lower-income people to make sure they could afford health insurance. There was pretty wide report for repairing the safety net—you had 35 high-risk pools in the states."
Pomeroy says the commercial insurance market and Medicaid are two crucial areas where the rival parties in Washington have common interests among their home-state constituents.
"On insurance, the debate so far has shown there is enduring support for insurance coverage of pre-existing conditions. Most people think that if you have a health condition you should still be able to buy coverage. So you have to look at how you can make insurance markets function when you can't control the risks you have coming on the books. …
"The Medicaid component of the Affordable Care Act extended the ability of people with very modest incomes to finally get coverage, and the public is determined that that coverage should continue. That was fought over literally for months. … In the end, the Republicans could not get the votes to phase it out. That means that states that have not extended Medicaid may want to take another look at it."
While the Republican Party's healthcare proposals languish on Capitol Hill, Matthews says the Trump administration has a golden opportunity to broker a historic healthcare deal with Democratic lawmakers, as long as Donald Trump sits on the sidelines. "If Trump assigns cutting a deal to Mike Pence, he may be able to get it done. Trump seems too volatile."
He says the president should borrow a page out of his predecessor's playbook from early 2010, when Barack Obama invited Republican and Democratic lawmakers to the White House for discussions on healthcare reform.
"I think it was all for show, but Obama was always presidential. Trump can be presidential at times; but, at other times he can't. You never know which Trump is going to come out."
Ironically, an Obamacare-wreck strategy that ends federal subsidies on the insurance exchanges could be a route to repairing the PPACA, Matthews says.
"If Trump does not continue to make those payments, more insurers will pull out of the exchanges, and faster. It may take the catalyst of more insurers pulling out before they finally come to a willingness to agree on something."
