In November, the Republican Party took control of both houses in Congress. The shift in political power could have a profound impact on payers, according to a diverse panel of healthcare experts.
Healthcare is one of the most regulated industries in the country, with a host of federal and state agencies overseeing all the major stakeholders.
In last fall's mid-term election, Republicans gained control of the Congress, seizing the Senate with a 54-46 edge over the Democrats and their duo of independent party allies. In the House, the GOP extended its voting margin over the Democrats, picking up 14 seats to post a 247-188 advantage.
As Republican leaders prepare to wield power at the Capitol, HealthLeaders Media polled a half-dozen healthcare experts, including representatives from payers, academia, and the business community. The panelists were asked to identify the top Congressional initiatives for healthcare payers to watch in 2015.
Three initiatives rose to the top:
The quest to fix or replace Medicare's unpopular physician reimbursement mechanism, the Sustainable Growth Rate
Patient Protection and Affordable Care Act repeal legislation
Efforts to tinker with elements of the PPACA
The SGR mess
Congress has struggled to reform or repeal Medicare's SGR physician reimbursement formula for more than a decade.
Last February, frustration fueled a bipartisan coalition of lawmakers who cut an SGR repeal deal, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014. "The Sustainable Growth Rate formula—the mechanism that ties physician payment updates to the relationship between overall fee schedule spending and growth in gross domestic product (GDP)—is fundamentally broken," members of the Senate Finance Committee, the House Ways and Means Committee, and the House Energy and Commerce Committee said in a joint statement.
William Kramer, executive director of health policy for the Pacific Business Group on Health, a purchasing group based in San Francisco, says legislation designed to resurrect last winter's SGR repeal deal is of utmost importance to payers and other sectors of the healthcare industry.
William Kramer
Executive Director of Health Policy
Pacific Business Group on Health
Fixing or replacing the SGR when it expires in March would be a key step toward creating a value-based healthcare system, he says. "The stakes are high. If we don't change the way physicians are paid, we will perpetuate a system in which the primary incentive is to increase volume, not quality. Although the bill isn't perfect, this is a crucial opportunity to continue the momentum toward value-based payment. If we get it right, Medicare physician payment reform will be a game changer; it will ripple out into the broader health system and improve quality and affordability for everyone."
Paul Clark, a legal analyst at Wolters Kluwer Law and Business, is pessimistic about progress and says the forces of action and inaction are set for yet another SGR battle in Congress.
"Congress has been unable to enact significant changes in physician reimbursement, so each year they pass a Band-Aid piece of legislation that averts significant cuts for a short period of time," Clark says. "So expect at least another short-term fix early in the 114th Congress that will mollify physicians for a few months, and more rhetoric from members of Congress about a long-term fix."
Another SGR patch would likely prompt Congresspeople to attempt piecemeal reforms to physician reimbursement in 2015, according to Harold Miller, president and CEO of advocacy group Center for Healthcare Quality and Payment Reform.
Harold Miller
President and CEO
Center for Healthcare Quality
and Payment Reform
"If Congress decides to simply enact another temporary patch to the SGR this spring instead of a permanent repeal, separate legislation on physician payment reform will be needed," he says, noting that several factors have created momentum payment reform legislation in 2015, such as the bipartisan push to move away from fee-for-service physician reimbursement. "There will likely be two different kinds of legislation considered: first, legislation authorizing or requiring faster progress on alternative payment models for all types of physicians; and second, legislation requiring implementation of specific payment models for individual specialties."
PPACA repeal improbable
Despite the Republican Party's firm grip on the House and newly won Senate majority, the GOP appears far more likely to revise the PPACA than to repeal President Obama's prime domestic policy initiative.
Theda Skocpol, PhD, a Harvard University professor and director of the Scholars Strategy Network policy group, says PPACA foes face a harsh political reality. "Too many people have gained health insurance through this law," she says of Americans who have garnered health coverage through the new public exchanges or expansion of Medicaid. "Whatever changes are made, repeal remains nothing more than rhetoric."
Republicans are far short of the 67 votes that would be required to override a certain presidential veto of any PPACA repeal legislation, Skocpol says. "You can forget that."
Chipping away at the PPACA
Changes to the healthcare law are another matter. Republican lawmakers are likely to find enough Democrats to tinker with unpopular elements of the PPACA such as the tax on medical devices that helps fund the law, Skocpol says. "Some of these things will get through to Obama. You can chip away at this or that tax, then you're talking real money."
Michael Warfel, vice president of government affairs at Pittsburgh-based Highmark Inc., says the PPACA's health insurance tax is ripe for revision or repeal.
"The HIT is a tax on all fully insured health insurance policies offered by a carrier. The tax began as an $8 billion assessment on the industry in 2014. It is scheduled to grow exponentially, reaching $18 billion by 2024 and more in later years," he says. "Opposition to the tax is broad since those whose coverage it impacts—small businesses, seniors, and individuals without access to subsidized coverage—are the same groups already having a difficult time affording care. The push for repeal on Capitol Hill is being spearheaded by the small business community."
Washington wheels set to turn slowly
Cindy Morrison, executive vice president of marketing and public policy at Sioux Falls, SD-based Sanford Health, says the pace of 2015 healthcare-related legislation will be set by immutable forces in Congress: the calendar, politics, and taxpayer dollars. The deployment of these forces indicates the pace will be sluggish, she says: "There's going to be a wait-and-see approach."
The impending SGR showdown looms large on the legislative calendar. "It will have to be addressed," she says. "That's the first thing out of the chute in March."
On the political front, Congresspeople are likely to move cautiously on healthcare legislation until this summer's U.S. Supreme Court decision on whether to allow subsidies on federally operated insurance exchanges, Morrison says. "If you're a smart politician, you're not going to make a move until the Supreme Court decision in June,"
The financing of healthcare, particularly for programs linked to the PPACA, also points to a slow pace for healthcare-related legislation in 2015, according to Morrison. Attempts to repeal any of the taxes that finance the PPACA could meet the same end as last winter's SGR repeal deal, she says. "It's fine if you're going to repeal a tax, but you better have a pay-for."
In the next phase of the healthcare reform law's implementation, providers will be the primary focus of the reform revolution.
Ariel Linden, DPH
Healthcare payers have been bearing many of the heaviest burdens in the first phase of implementation of the Patient Protection and Affordable Care Act. Now, the heavy lifting is shifting to providers.
For payers, the PPACA has upended business models through regulatory edict, created an individual insurance market from a scratch exchange recipe, developed new payment models such as accountable care contracts, and introduced a bevy of new competitors including insurance cooperatives and technologically savvy startups.
For providers, the PPACA journey has just begun, with thousands of health systems, hospitals, and physicians struggling to keep pace with the first wave of reform. Providers have clamored for repeal, revision or delay of several key federal reform initiatives such as the two-midnight rule for determining patient admission status at hospitals, Meaningful Userequirements for information technology and price transparency for healthcare services.
In their regulatory struggle with providers, federal officials have not only the law, but also the logic of accounting on their side.
Providers are the big spenders in the healthcare industry, according to data collected for the National Health Expenditure Accounts, the country's official healthcare spending statistics tallied at the Centers for Medicare & Medicaid Services.
In 2013, NHEA data pegged healthcare spending at $2.9 trillion. Spending for hospital, physician and clinical services accounted for more than half of the total, at $1.5 trillion. When accounting for other provider services such as dentistry, home health, and long-term care facilities, the provider share of the healthcare spending pie rises to $2.1 trillion in 2013.
Big Spenders
Providers had a hand in an additional $314 billion in 2013 healthcare spending through prescription drugs and costs for prescribed durable medical devices such as eyeglasses and hearing aids.
Ariel Linden, DPH, lead author of a study published in October that cast doubt on the effectiveness of hospital readmission reduction efforts, says providers face a daunting healthcare reform odyssey. "In some areas, they're pretty far along, but in others, they're not even on first base," he told me recently, citing Meaningful Use as the poster boy for provider reform quagmires.
"Even though it's written into law, there are many organizations that are falling behind. Are they sharing the data with their partners? Most of them are not."
The reformist push for value over volume is just beginning to overturn the fee-for-service business model that providers have embraced for generations, Linden says.
"What do they need to make the right clinical decisions that generate the most value? They're in the process of just thinking about it. This industry is only in its diaper. Providers are not getting the data they need… We don't have clear evidence, as a system, where we know clearly what works and doesn't work. Providers need a clear pathway to what they need to do."
Peter Angood, MD, president and CEO of the Tampa, FL-based American Association for Physician Leadership, says the absence of rigorously established standards for clinical care is a massive hurdle for providers to clear in the value-based healthcare revolution.
Recently, he told me that providers desperately need "appropriately focused and realistically representative metrics and measures for clinical care that are accurately coordinated with public reporting."
The establishment of evidence-based clinical standards is vitally important to the effort of transforming patients into powerful economic agents, Angood says.
David Burton, MD
"These metrics and measures need to accurately provide information on outcomes of patient care that reflect provider performance with reality-based methodology. The public reporting should more accurately reflect the difference in outcomes between providers as health systems and providers as individuals. Health systems' performances can strongly influence reporting—positively and negatively—of individual providers. Patients are still unable to make these differentiations when making consumer decisions."
Price transparency poses a similar challenge for providers in their role as one of the midwives in the birth of healthcare consumerism, Angood says. "Cost and pricing transparency remains one of the biggest obstacles for better understanding the value equation. Value equals quality divided by cost. We do not yet know how to optimally define quality as a numerator; and the denominator of cost is not easily understood because of the lack of transparency."
2 Accelerators
David Burton, MD, developed managed care health plans at Salt Lake City-based Intermountain Healthcare and has served in several top leadership roles at Health Catalyst, a data analytics firm in the Utah capital. He says there are two kinds of "accelerators" providers need to push as they weather the next wave of healthcare reform: mastery of data integration and clinical content.
Burton says providers and their vendor partners must develop data integration technology that is capable of combining information from several disparate electronic sources such as claims records, clinical records and financial records. Combining this data provides the level of granularity in patient records that is required to achieve success in major provider reform initiatives such as care coordination, cost control and quality improvement, he told me recently.
"If you have to recreate the wheel at every provider, this process isn't going to go anywhere. EHRs have sought to make clinical data 'machine readable.' The next [information technology] accelerator has to do with data integration and the creation of data warehouses. Can you get the data flowing? Can you integrate the data?"
"Clinical content accelerators" are needed to help providers establish best clinical practices and conduct a population-management-based approach to the delivery of healthcare services, Burton says. "It begins with a new mapping schema. You get a much more accurate picture of acute care than just looking at inpatient care." Effective data analytics in the clinical realm must draw data from settings beyond inpatient facilities including outpatient settings such as retail clinics, he adds.
The most potent clinical content accelerators are based on precise patient registries and are capable of tracking outcomes such as cost of care and mortality rates, Burton says. "It's not a bottomless pit, but it is a fairly ambitious undertaking."
The effort requires using data to define best practices in about a dozen primary clinical areas for hundreds of "care processes." As an example of bringing this data analytics muscle to bear on clinical content, he cites cardiology as a primary clinical area and coronary artery bypass graft surgery as a care process worthy of close scrutiny. "With the use of good analytic techniques, you can concentrate on the big processes, so it doesn't seem that you're pushing against the ocean."
Chef Rebecca Katz's life changed when her father began a battle with laryngeal cancer in 1999. That event spurred her belief that food is a key element in cancer care and her quest to change the American diet. Having cooked for various cancer patients and published a book on the topic, she promotes "sustainable nourishment as a way to improve American health."
In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. They are making a difference in healthcare. This is the story of Rebecca Katz.
This profile was published in the December, 2014 issue of HealthLeaders magazine.
"The food that we eat is critical. It has to be not just nutrition. It has to be translated to the plate."
Master chef Rebecca Katz's quest to change the American diet started with a life-altering event: Soon after the Californian finished culinary school in 1999, her father began a battle with laryngeal cancer.
"I went back east to cook for him, and I didn't know how to cook for someone with cancer," she says. "There was nothing to guide me. I realized how helpless I felt. My father became my guinea pig."
The process of culinary experimentation during her dad's treatment and recovery led to the publication of Katz's first book, One Bite at a Time, in 2004—and convinced her that food is a key element in cancer care.
The secret sauce of cooking for cancer patients is "understanding their transient taste changes as they go through treatment," Katz says. "The nerve endings are affected by chemotherapy and radiation. Look at your palate like a switchboard, and you're always having brownouts."
Over the past decade, a host of scientific studies have verified the nutritional benefits of several whole foods, herbs, and spices, such as anti-inflammatory effects. Katz found, for example, that carrot and ginger soup is a great dish for many cancer patients undergoing head and neck radiation therapy. "Their taste buds are on fire. Almost anything they eat is just too acute."
She says preparing palatable meals for cancer patients is crucial to their treatment and recovery, particularly when temperamental taste buds turn favorite foods foul. "If something doesn't taste good, or the expectation isn't met, you'll push food away."
In 2000, Katz cooked for her first group of cancer patients for a week. "It was the most rewarding experience I have had in a kitchen—to see how the act of food could bring joy into people's eyes." Now, she teaches cooking techniques to oncologists. "It's quite an enlightening experience for doctors," she says. "They can look at their patients with a different eye to see why their patients don't eat."
Now that she's seen how food can positively influence cancer care, Katz is promoting "sustainable nourishment" as a way to fundamentally improve American health. "It's looking at food and cooking food in a way that's delicious and nutritious—food you like and cooking you like. It's not just a diet, it's a way you live your life."
She says sustainable nourishment needs to rise to the forefront of efforts aimed at containing a growing tsunami of chronic illnesses in the United States, including heart disease, cancer, and diabetes. Many people suffering with chronic illnesses are hopelessly noncompliant with doctors' dietary recommendations because they aren't aware of the savory alternatives to their forbidden favorite foods.
When she teaches cooking to people with chronic illnesses or their caregivers, Katz says she never speaks about food in terms of the "can have" and "can't have" lists that doctors give their patients. "This is what I say: 'Here are the restrictions, here is what's going on, here's what we can do so you don't feel deprived.' You have to navigate different foods in different ways."
Katz says there's no excuse for the vast majority of Americans not to eat healthy, delicious food that fends off disease and helps heal the sick. "You'll have people who say they can't afford to eat healthy. Dollar for dollar, I can take you through the grocery store and prove that's not true."
A major component of sustainable nourishment involves encouraging Americans to return to eating whole foods, fruits and vegetables, rather than industrially processed food with high sugar and fat content, she says. "We used to be a community of producers—growing our own food. Now we're a community of consumers. … We have to go back in time to when food was considered important. The food that we eat is critical. It has to be not just nutrition. It has to be translated to the plate."
A New York-based startup health plan is on a quest to achieve one of the most elusive goals in healthcare insurance: processing information among payers, providers, and patients in real time.
A small company based in New York is tackling one of the biggest dimensions of health insurance: time.
"The traditional communication channels between providers and payers have been antiquated," Mario Schlosser, co-founder and co-CEO of New York-based Oscar Health Insurance, told me last week.
Mario Schlosser,
Co-Founder and Co-CEO,
Oscar Health Insurance
Oscar, launched in fall 2013 and marketed to individuals and their families through a website designed for ease of use, is striving to make a technological leap to real-time sharing of healthcare data. While the claims adjudication process remains a daunting time barrier, Oscar is automating as many other processes as possible to establish real-time communications between payers, providers, and patients.
Schlosser says the key to taming time is marrying long-term payer data such as medication history with provider-generated clinical data. "Lack of information flow in the healthcare system impedes service and slows the process down. It could be so much easier. It generally amazes me, the 10- to 20-year-old technology you find in healthcare."
Oscar's website helps health plan members gain easy access to physicians through an up-to-date and searchable provider registry. "We want to know which doctors have open panels," Schlosser says.
On the health plan's back end, technology makes it easier for Oscar to process claims and perform other administrative functions through automated workflows.
Frank Ingari
CEO of NaviNet
For the provider network, technology is helping to fuel a heightened level of cooperation, he says. "We constantly think about how we can get closer to providers."
Oscar has established an active and information-rich "feedback loop" with providers through a partnership with Boston-based NaviNet Inc. "We share eligibility in real-time, including deductible status and co-pay costs. That enables the doctor, very quickly, to get the pulse on the member's coverage status," Schlosser explains. "Providers spend a lot of time and effort to collect bills. Collection costs have increased. A doctor needs eligibility information in real-time. Then the doctor can simplify his workflows around care."
Sharing information with providers broadly and quickly creates a "virtuous cycle," Schlosser told me. "Doctors spend more time with patients. If we make life easier for the doctor… the doctor can spend more time with the patient than with us. If Oscar patients are happier with the care facilitated by us, then we can keep the cycle going."
Frank Ingari, NaviNet's CEO, says the Boston technology company has forged a powerful bond with Oscar by focusing its healthcare IT collaboration on providers. "The network is the organizing model," he says.
Earlier this month, Oscar chose NaviNet Open to serve as a payer-provider communications platform with real-time capabilities. Ingari says a prime objective of the platform, which includes a set of network services as well as reimbursement-related and clinical applications, is to establish a "robust way" for providers and payers to exchange information. "Healthcare has been very, very much lagging in providing secure communication."
Oscar is using NaviNet's platform to create a pair of communication channels with providers. An "interactive channel" includes the triggering of information exchanges whenever an Oscar health plan member experiences a healthcare event such as an emergency room visit. "The event will trigger medical document exchange in real-time," he says, noting that access to payer information and clinical histories gives physicians "guidance in the moment."
Ingari calls the platform's other communication channel a "clinical campaign" that features scheduled and targeted releases of information to providers. This set of information does not have to be triggered in real-time, but timeliness is essential to help physicians hit quality benchmarks and "push out the patients who are highly in need of an exam."
"In both cases, the product works bi-dimensionally. Payers and providers can be pushing and pulling information."
Oscar has an accurate directory of "everyone who is an active sender or receiver of information;" clinical documents are exchanged automatically, often with network alerts about clinical or financial developments in a patient's records; and the sharing of information in real-time includes "management of the preferences of a care team," Ingari says.
Everything that happens in the network happens in real-time, with one exception.
"To enable real-time payment, you have to have real-time adjudication. Today, it's a rare capability in healthcare, but it can be done. … Oscar is moving in that direction."
Mindset is also a problem, Ingari says, noting that a historical barrier must be cleared before processing a patient's healthcare transactions becomes as instantaneous as buying groceries with a debit card.
"We got exactly what we designed," he says of the historically adversarial relationship between payers and providers, "payers who have been ignorant about quality of care, and providers who haven't cared about cost. You need communication of information across that payer-provider barrier. We need evidence-based guidance. We know that can deliver tremendous value, but we have a mountain to climb."
"We're coming to a time when it's all about execution," he says. "You're being rewarded now for cooperating with providers, not exploiting your providers. That's a big change."
Otis Brawley, MD, chief medical officer of the American Cancer Society, has no fear of acting as a lightning rod in the ongoing storm of healthcare reform. As a leader in the field of health disparities research and co-author of a scathing book on the topic, Brawley sees the growing costs of US healthcare as a recipe for economic calamity that needs to be changed.
In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. They are making a difference in healthcare. This is the story of Otis Brawley, MD .
This profile was published in the December, 2014 issue of HealthLeaders magazine.
"We have this mind-set that the more medicine we consume, the better off we are. There is harm in that."
Regardless of personal cost, some Americans find it impossible to remain silent when they believe the country is careening toward disaster.
Otis Brawley, MD, chief medical officer of the American Cancer Society and author of a scathing book on what ails U.S. medicine, has no fear of acting as a lightning rod in the ongoing storm of healthcare reform. The 55-year-old has the ability to speak damning truths to powerful healthcare stakeholders, for which he credits his parents, a parochial school education, and the violence-plagued streets of his childhood in Detroit.
"I was one of the few black males in my neighborhood to make it to the age of 35," Brawley says. "I think I just have a strong moral compass. … I see the path this country is going down, and it's bad. We're going to bring the economy of the country down with healthcare, of all things."
One of the central premises of the oncologist's 2012 book, How We Do Harm: A Doctor Breaks Ranks About Being Sick in America, is that the growing cost of U.S. healthcare is a recipe for an economic calamity. If the 20-year trend of increased spending continues, medical services will swallow 35% of the U.S. economy, Brawley says. "That is not sustainable. We cannot exist in the United States if we're spending one-third of our dollars on healthcare."
Brawley is a leader in the field of health disparities research. His views on uneven access to healthcare services in America are both idealistic and pragmatic. "There is basic healthcare that every human being has a fundamental right to," he says, insisting that a combination of technology and cost-effective delivery of primary care and preventive medical services is possible even for people living in poor, remote areas of the country.
"Not only do we have disparities in healthcare, we have disparities in preventive care," he adds, noting the level of health education in the general public is woefully short of where it needs to be for people to appreciate the value of their health. "There are a whole lot of people who don't understand health."
Prevention is sharply undervalued, Brawley says. "Nixon declared war on cancer in 1971. Our investments in cancer research have been better applied in Europe. We're irrational. We have this mind-set that the more medicine we consume, the better off we are. There is harm in that. Overconsumption can be incredibly harmful. Our healthcare system is designed to treat people. There's very little in our system that's designed to prevent disease."
He notes that European physicians' emphasis on prevention is paying huge dividends in lower obesity rates, better exercise habits, and other lifestyle-linked health factors. "We give them a diagnosis, then we treat them for that illness," he says of the American doctor-patient relationship. "In Europe, doctors get paid to consciously help people from getting sick. … We don't pay and reimburse for prevention. We pay for treatment. Preventive services need to be appreciated more."
Brawley has several stern prescriptions to improve the status of American health. First is to promote cost-effective screening techniques, particularly among underserved populations. "At $30, stool blood testing is just as effective as colonoscopy, which costs $3,000 per procedure. Let's get some poor folks some stool test kits," he says. But at the same time, disease screening must be deployed judiciously to avoid false positives and unnecessary treatments, including potentially dangerous surgical procedures: "People just don't understand how screening might not be good for them."
In addition, "high caloric intake, lack of exercise, and obesity" are fundamental challenges to American health. Brawley says obesity has been identified as a cause of a dozen cancers and is a particularly vexing problem: "It complicates treatment of all other illnesses."
Lastly, he calls for increasing daily servings of fruits and vegetables, walking at least four hours per week, and quitting smoking.
"A truly informed consumer would be very, very helpful," Brawley says. "The problem is the people who think they are informed about healthcare who are not."
Two decades after a consumer backlash drove many health maintenance organizations out of business, narrow provider networks are back in a big way.
Market conditions in the healthcare industry are driving the growth of narrow networks, according to a pair of leaders from large employer organizations.
William Kramer
"This time, narrow networks are here to stay," William Kramer, executive director of health policy for the San Francisco-based Pacific Business Group on Health, said this week. "With the early HMOs, some managed care plans were put together clumsily and generated a backlash from some providers and many consumers."
Steve Wojcik, vice president of public policy at the Washington, DC-based National Business Group on Health, says several key healthcare industry stakeholders are embracing narrow networks.
"Employers and health plans in particular have increasingly realized there is a wide variation in healthcare price and quality," and narrow networks have emerged as a market-based approach to maximizing value in care delivery, he said this week.
"We are able to select winners and losers. It's easier for us to do it [than the government programs]. We're looking for the best we can get in terms of price and quality."
Providers and patients also are embracing narrow networks, he says. "The last time with managed care, narrow networks were formed without the support of physicians and consumers," and the recent widespread growth of narrow networks has many healthcare providers clamoring to be included for competitive reasons.
"Price-sensitive consumers are choosing narrow networks on the new exchanges. It's not like someone is forcing them into it… As long as the public sees value in the narrow networks, there won't be a repeat of the managed care backlash."
'Selected for Quality and Efficiency'
Health plans are committed to developing narrow networks, and regulators appear to accept their inevitability in the evolving healthcare industry.
Amy Oldenburg, head of performance networks for Hartford, CT-based Aetna Inc., says narrow networks are generating multiple benefits for health plans, consumers, and the entire healthcare industry. "Narrow networks have become a valuable way to offer consumers a moreaffordable healthcare product, better control medical service costs, and improve negotiating leverage as providers consolidate into sprawling health systems."
Oldenburg says a key difference between the early HMO provider networks and the current crop of narrow networks is an emphasis on value rather than cost, which is why many insurance carriers and employers prefer the term "high-performance network."
"Aetna's performance networks include a special group of providers who have been evaluated and selected for quality and efficiency," she says.
Tyler Brannen, a health policy analyst at the New Hampshire Insurance Department, says the steady increase in healthcare costs over the past 20 years has primed the market for narrow network proliferation.
"In general, narrow networks are an effective tool in negotiating prices with providers," Brannen said this week. Health insurance premiums reached a tipping point for employers and consumers in the years leading up to the passage of the Patient Protection and Affordable Care Act in 2010. "The costs were never as high as they are today," he says.
New Regulations Under Consideration
Regulators are definitely open to the concept of narrow networks, but new network adequacy rules under consideration in states across the county are a major concern for employers, Kramer says. "The biggest threat to narrow networks is an overly protective regulatory environment."
Patients should not be required to "drive too far for needed care," but onerous limits on narrow networks would impede the push for value in the healthcare industry, he says. "The appropriate amount of regulation is helpful, but over regulation could stifle development of these health insurance products, which are delivering value for consumers."
Last month, an independent consumer panel linked to the Washington, DC-based National Association of Insurance Commissioners released a report that includes the results of a national survey about narrow networks and proposed changes in the organization's guidelines for network adequacy rules.
"Although some reasonable trade-offs are necessary to ensure health coverage is affordable, the increasing use of 'narrow networks' and tiered networks has focused additional attention on the regulation of health plan provider networks and the potential financial implications for consumers who receive out-of-network services," the NAIC Consumer Representative says.
Insurance officials from 38 states completed the NAIC survey, which found the main tool regulators use to monitor network adequacy is complaint data.
The survey also showed most states are lagging in their efforts to police narrow networks: "Enforcement actions are rarely taken based on violations related to network adequacy. Only four states reported they usually take enforcement actions against more than one health plan a year due to network adequacy violations."
The NAIC report makes 17 recommended changes to the organization's network adequacy guidelines, including:
Expand the scope of existing network adequacy regulations to include all types of network plans, including health maintenance organizations, preferred provider organizations, exclusive provider organizations and point of service plans.
Establish quantitative standards for meaningful access to care, such as minimum provider-to-enrollee ratios, reasonable wait times for appointments based on urgency of the condition, and distance standards that require access to network providers within a reasonable distance from an enrollee's home.
Require health plan provider directories to be updated regularly and available for both enrolled members and individuals shopping for coverage.
In New Hampshire, insurance officials are conducting an extensive review of the state's network adequacy rules that began last February.
During a meeting of the NHID Network Adequacy Working Group this week, Brannen presented the framework for a new set of rules. The Granite State is seeking to move away from rules that set explicit time and distance access standards for patients to travel to specific classes of providers.
Under the proposed model, the network adequacy rules would specify access to types of services rather than the type of provider who offers those services, he said.
"We're not going to include 10,000 procedure codes within the rules," Brannen says. "The goal is to establish networks that have standards but allow carriers the flexibility to create the most value in their networks." After the working group session, NHID plans to have new network adequacy rules set by early 2016.
In March, federal officials set "reasonable access" as their prime consideration for network adequacy in the PPACA-spawned insurance exchanges. But the Centers for Medicare & Medicaid Services advised health plans that time and distance or other standards are likely in future rulemaking.
Reform Advocate Wary
Harold Miller, president and CEO of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, says narrow networks could undermine efforts to boost coordination of care.
"The dictionary defines a network as a 'group or system of interconnected people or things.' But a health plan's network is typically nothing more than a list of providers," Miller said this week.
"There may be no connections whatsoever among the providers on the list, and a short list of providers chosen based on price may be even less likely to have connections than a longer list… At a time when there is a strong national focus on improving coordination of care, forcing patients to use providers who don't have any connections to each other might result in lower prices for individual services but higher overall spending, since the providers in this kind of 'network' will be more likely to order duplicate tests, perform unnecessary services, and fail to prevent problems that require expensive treatment."
Narrow networks have the potential to rattle care coordination, he says. "If the narrow network is the only choice the patients have, it's even more problematic because, almost by definition, it means that many patients will have to change doctors, which will disrupt continuity of care."
Pine scent and mold spores that grow on Christmas trees are among a host of potential reaction triggers during the indoor allergy season, allergists say.
Christmas trees can make you sick.
Awareness of the outdoor allergy seasons is widespread among healthcare providers and the public: tree pollen in the spring, grass pollen in the summer and weed pollen in the fall. But knowledge about the indoor allergy season during the late fall and winter, including a phenomenon some allergists call Christmas Tree Syndrome, is relatively scant.
"Once the weather gets colder and the heat comes on, it's one of my more traumatic times of the year," says Dean Mitchell, MD, president of New York-based Allergy Advances Medical.
Pine scent and mold spores that grow on Christmas trees are among a host of potential reaction triggers during the indoor allergy season, he says. Other indoor allergens include dust and mold from heating systems, pet dander, and dust mites, which are present in many indoor environments from bedding to airline seats.
When people make holiday visits to the homes of friends and family members, "they encounter an environment that could be problematic," Mitchell says, noting that pet dander and dust are prime allergy suspects under this scenario.
Symptoms linked to mold on Christmas trees may include head congestion, itchy eyes, headaches, skin rashes and bronchitis.
A studypresented in 2007 at the annual scientific meeting of the American College of Allergy, Asthma, and Immunology demonstrates the potential for live Christmas trees to increase indoor mold counts several fold. The research was conducted by Rebecca Gruchalla, MD, PhD, of University of Texas Southwestern Medical Center in Dallas and John Santilli Jr., MD, of St. Vincent Medical Center in Bridgeport, CT.
Dean Mitchell, MD
President of Allergy Advances Medical
After placing a live pine tree in a room heated at about 66.5 degrees, Gruchalla and Santilli collected mold count data for two weeks. The mold count rose from 800 spores per cubic meter of air to 5,000 spores per cubic meter.
Mold and fungus grow naturally on pine trees, particularly in the fall, says Robert Arnold, MD, a family medicine physician in Colorado who works at Birmingham, AL-based AFC/Doctors Express Urgent Care. Once a Christmas tree is brought into a home's warm environment, "spores proliferate exponentially," he says.
Gauging the Threat
When asked about the prevalence of allergic reactions to Christmas trees among their patients, allergists interviewed reported a widely variable level of cases.
"In my 20 years of practice, I've seen two cases of this issue," Mitchell says.
Arnold and Clifford Bassett, MD, a New York-based allergist who serves as spokesman for ACAAI, say they have treated many more patients for Christmas tree-related allergic reactions.
Bassett, who says that about 15% of allergy patients are sensitive to mold allergens, embraces the term Christmas Tree Syndrome. Tips to mitigate allergy problems linked to Christmas trees are on his "list of the Top Ten ways to avoid holiday allergic reactions."
Mike Tringale, MS, senior VP of external affairs for the Washington, DC-based Asthma and Allergy Foundation of America, says there is a spike in allergy service utilization in December, but the increased patient traffic is not driven primarily by Christmas trees or other holiday-season allergen sources such as scented candles.
"Flu is the Number One trigger for asthma from November to January," he says.
During the cold months of the year, patients who experience suspected allergic reactions and their physicians should cast a wide net to find the allergen triggers, Tringale advises. "The truth is, allergy is a very complex disease," he says. "Sometimes, you don't see all the triggers that are around your house."
Avoidance Strategies
Arnold, who is 62, says he broke a lifelong habit after learning about the mold threat from Christmas trees. "I used to cut a tree every year and tried to keep the tree as pristine as possible," he says. Now he has a new routine. "The easiest thing to do is just to wash it off with water and set it outside in a bucket to dry off."
It may be stressful for cost-conscious people during a cold snap, but Mitchell says opening the windows of a home for 15 minutes can have a significant impact on reducing airborne allergens.
He also advises spraying live trees with a weak bleach solution to combat mold and cautions that artificial trees can gather dust during storage that trigger allergic reactions. "You need to make sure that's cleaned up very well," Mitchell says.
While people with a history of allergic reactions to trees and plants may benefit from purchasing an artificial tree, "a synthetic tree is not necessarily the best option," Tringale says. That's because chemicals on fake pine trees can trigger asthma. "Buyer beware: some synthetic trees are better than others."
When asked whether allergists have declared war on Christmas trees since the release of the 2007 mold study, Tringale had a concise answer. "No. Definitely not. Remember, not everybody is allergic to everything."
Payers are a crucial cast member in the healthcare industry's reform drama. This year, health plans have played a center-stage role.
As the curtain falls on 2014, it is a good time to turn the spotlight on the top health plan developments of the year.
1. Exchange express gets rolling
Katherine Hempstead
Team Leader and
Senior Program Manager, RWJF
The launch of the Patient Protection and Affordable Care Act-spawned public health insurance exchanges and growth of private exchanges were the marquee health plan developments of the year.
Despite a slew of glitches in the rollout of the public exchanges, including the nearly disastrous debut of the federal government's exchange website, HealthCare.gov, about 8 million individuals signed up for health insurance through the new exchanges.
When combined with Medicaid expansion efforts in half the states, the public exchanges have helped to significantly reduce the nation's uninsured rates, according to the Robert Wood Johnson Foundation. "The number of uninsured nonelderly adults fell by an estimated 10.6 million between September 2013 and September 2014 as the uninsurance rate fell from 17.7 percent to 12.4 percent—a drop of 30.1 percent," RWJF reported earlier this month.
Employer-sponsored insurance still dominates the market, with about 165 million covered lives, but public and private exchanges are having an impact that reaches beyond increasing access to healthcare services. Katherine Hempstead, team leader and senior program manager at RWJF, told me this week that exchanges are prompting revolutionary payer change: "As exchanges increase in popularity, it becomes evident that health insurance in its current form was not ideally designed to be sold directly to consumers. A lot of progress is being made to develop tools that better support consumer choice, but we might also anticipate a movement toward simpler plan design."
One of the surest signs that exchanges are moving into the health insurance express lane is HIX investment among carriers. While many insurers sat out the first year of the public exchanges, the number of carriers participating in 2015 has increased 25%, the Department of Health and Human Services reported in September.
Health plan and large employer investment in private exchanges is also on the rise.
In June, Accenture revised the consultancy's estimate of 2014 private exchange enrollment from 1 million lives to 3 million. And established health insurance organizations such as Blue Shield Blue Cross carriers are jumping on the private exchange bandwagon. In September, Philadelphia-based Independence Blue Cross launched a private exchange targeted at mid- and large-sized employers. In July, Blue Cross Blue Shield of Massachusetts introduced the Bay State's first online private exchange, My Blue Choices.
Depending on the outcome of a case before the Supreme Court, King v. Burwell, the public exchanges also could be a health plan hotspot next year, according to Paul Clark, a legal analyst at Wolters Kluwer Law & Business.
"In 2014, the issue of whether the PPACA allows subsidies to individuals if they purchase health insurance on a federal exchange percolated through several federal courts. The U.S. Supreme Court agreed to hear this case in November, with oral arguments likely in March and a decision issued at the end of the court's term in June or July. What's at stake is health insurance coverage for about 4 million people in the 36 states that don't operate their own insurance exchange," Clark told me this week.
2. Market forces unleashed
Insurance exchanges, price transparency laws, and the rising influence of consumers brought an unprecedented level of market pressure to bear on the health plan sector this year.
Suzanne Delbanco
Executive Director,
Catalyst for Payment Reform
Suzanne Delbanco, executive director of the nonprofit advocacy group Catalyst for Payment Reform, says market forces are beginning to transform the entire healthcare industry. "We have more insight than ever before into the bum deal we often get in healthcare. Quality, safety, and prices vary tremendously and have little correlation to each other. The more we can reveal this, the more we'll understand about how to bring things in line, where competition is on value, not just a reflection of market power," she told me this week. "We are getting closer every day."
Efforts to introduce price transparency in healthcare took a leap forward this fall in Massachusetts, where providers and payers are now required to provide real-time healthcare service pricing information.
Hempstead told me that increased cost sharing is combining with price transparency regulation to boost consumers' influence in the healthcare industry: "Consumer interest in price transparency will be sure to increase as high deductibles and co-insurance figure more largely in plan design."
3. Innovation leaves few stones unturned
This year, upgrading information technology capabilities became an existential endeavor for insurance carriers nationwide, with necessity serving as the mother of invention.
Whether your organization is selling health insurance policies on exchanges, seeking to improve customer experience, or boosting cooperation with providers, healthcare IT looms large.
The exchanges have been an incubator for technological innovation, with healthcare IT capabilities serving as a key factor for competitiveness and customer experience. Health plans with antiquated administrative processes—particularly those dependent on paper-driven documentation—have been at a competitive disadvantage on the exchanges. From the customer experience perspective, healthcare IT capabilities are critically important for health plans to engage their new HIX beneficiaries.
Payment reform also drove innovation this year, Delbanco told me: "CPR's 2014 National Scorecard on Payment Reform showed that about 40% of commercial health plan payments are now value-oriented. This is dramatic progress—our 2013 Scorecard showed just 11%. Clearly, the era of payment reform is here and there is a flurry of experimentation. But next, we need to determine which of these new methods of paying for care actually improves quality and make care more affordable."
4. Narrow networks take hold
In a back-to-the-future development for health plans, narrow provider networks similar to those deployed by health maintenance organizations a generation ago emerged as a crucially important benefit design tool this year.
In contrast to the HMO backlash of the 1990s, the current narrow networks sequel appears to be receiving a warmer welcome from regulators and consumers.
From the regulatory perspective, health plans have relatively few implements left in their tool box to control costs. The PPACA banned one of the most effective cost-containment tools available to insurance carriers: denying eligibility for coverage due to pre-existing conditions. The fallout from eliminating pre-existing condition eligibility denials became evident this year, with health plans and large employers from coast to coast developing narrow networks.
From the consumer perspective, increased cost sharing in health insurance has made narrow networks more palatable. With consumers facing deductibles that can pull thousands of dollars out of their wallets annually, the cost savings associated with narrow networks is a powerful draw for potential enrollees. This market dynamic has been conspicuous in the public exchanges, where low- to moderate-income beneficiaries have shown a high degree of price sensitivity and health plans have responded by establishing narrow networks in most states.
5. Accountable care deals cut
Medicare has led the accountable care charge with the Medicare Shared Savings Program and the more ambitious Pioneer ACO initiative, but health plans have also invested heavily in accountable care pacts with providers this year.
Hartford, CT-based Aetna Inc. has been one of the most active health plans in the accountable care space, cutting ACO deals with dozens of provider organizations in several states. As of October, Aetna had established 51 accountable care collaborations nationwide.
A potent combination of established players such as CVS Health, Walgreens, and Walmart and a crop of new entrants have retail healthcare clinics cementing their hold on a slice of the continuum of care.
The market for retail healthcare clinics, once a destination for shoppers with sore throats and sniffles, is reaching maturity.
Nancy Gagliano, MD
When Woonsocket, RI-based CVS Health opened its first walk-in medical clinic 14 years ago, the focus was on a handful of conditions including sore throat diagnosis and treatment. Now the pharmacy giant is a major player. It opened 170 MinuteClinics this year and has set a goal to have 1,500 retail clinics operating by 2017, according to Nancy Gagliano, MD, a senior VP at CVS Health and chief medical officer of MinuteClinic.
Many established retail clinic players such as hospital urgent care centers and CVS Health have at least a decade of experience, and new entrants are planting stakes.
"Now, the maturation is [in] becoming part of the healthcare community… rather than being an isolated care provider," Gagliano says.
In addition to expanding rapidly, MinuteClinic is establishing affiliation agreements with hospitals and health systems nationwide. CVS Health has cut nearly four dozen of the deals so far.
Pharmacists, Gagliano notes, are well-positioned to help boost chronic disease patients' medication compliance. "Our concept is if we can provide high-quality access in the community, then we can help create high-quality access with primary care providers… We can be part of the team."
Deerfield, IL-based Walgreens Co., one of CVS Health's top competitors, is following a similar retail clinic trajectory.
"Walgreens will have opened more than 40 Healthcare Clinics in 2014, the most it has ever opened in one year, bringing the company total to more than 420," spokesman James Cohn says. "We continue to focus on clinic growth levels by offering increased access to care and an increasing scope of services. We also continue to explore innovative ways to leverage our clinics through partnerships and collaborations with health systems and providers."
Like CVS Health, Walgreens views its Healthcare Clinics as complementary to other healthcare industry stakeholders.
"Our approach is based on enhancing access and quality of care by collaborating with physicians, health systems, and payers to leverage some of Walgreens strongest healthcare assets; including Healthcare Clinics, and in some cases core pharmacy services like immunizations and medication management services," Cohn says.
Walmart Tries Again
The largest US retailer, Walmart, is on its third iteration in retail clinics.
Walmart's first foray into retail clinics a decade ago failed because the providers who leased storefront space could not turn a profit, says Alan Ayers, a spokesman for the Urgent Care Association of America. A second attempt five years ago failed because retail partnerships with hospitals struggled to attain a "critical mass" of clinics.
Now the Bentonville, AR-based company appears to have rolled out a stronger model, he says. The new Walmart Care Clinics are not only store-owned but also seek to capitalize on an internal business dynamic.
The siting of Walmart's first wholly owned retail clinic in Carrollton, TX, is telling. "It's flanked by about 20 other stores and has a significant base of Walmart employees to serve," Ayers says. The clinics appear to be designed to help Walmart drive down the company's internal healthcare costs and "any other patients they can draw off the street would be gravy."
David Schultz, founder and president of Albany, NY-based Media Logic, says a fundamental shift in health insurance has bolstered retail clinics.
"The outsized increase in the number of people with deductibles is the biggest disruptor for the healthcare industry. It has unleashed the brutally efficient 'American shopper' on all of the providers who—until this time—had been selling services to consumers who never really knew what things cost.
"Now, patients are asking questions about whether services are needed, how much they cost and why. This spells opportunity for alternative providers, especially retail healthcare clinics," says Schultz.
'Urgent Care Entrepreneurs'
Another sure sign of market maturation is entrepreneurs stepping in to spot those opportunities—and fill gaps that established players have left unattended. "Urgent care entrepreneurs have seen there's a need for access," Ayers says.
In New Hampshire, Portsmouth-based ConvenientMD Urgent Care is filling an access gap.
"Thirty years ago, patients had a close relationship with primary care providers," says Max Puyanic, co-CEO of the new entrant into the retail clinic market. "They did everything for those patients." But as economic incentives drove medical school students away from general practice and toward specialty medicine, the country developed a primary care service shortage and a healthcare access challenge.
"[PCPs] can't provide the same scope of care that they used to," he says. "They spend a lot more of their time helping people manage chronic conditions and providing care management… Now, when patients need a half-dozen stitches, they go to the emergency room."
ConvenientMD, which opened its first clinic in Windham, NH two years ago and plans to have 10 clinics in The Granite State by the end of next year, is positioned to provide a range of care not readily available in PCP.
The clinics are equipped to treat any condition short of "life-threatening" events. The staffing model has doctors, nurses, and radiation technicians working seven days a week from 9 a.m. to 9 p.m. "We are getting people in an appropriate setting with a more pleasant experience than the ER," says Puyanic.
And the cost for consumers is significantly lower than at hospitals, "This is a thin-margin business," he says. Most ConvenientMD services for insured patients have the same out-of-pocket costs as primary care office visit co-pays. "What we're trying to do is provide a broad scope of care on a primary care financing model."
Retail Clinics Here to Stay
Retail clinics are well established, making inroads, and apparently have a bright future.
Anne Lesperance, director of emergency services at Concord Hospital in the New Hampshire capital, says her organization's urgent care facility at the city's Horseshoe Pond business park has reached a milestone.
"We are very proud that our Walk-In Urgent Care Center at Horseshoe Pond is celebrating 10 years this month. As such, it is an integral part of the Concord Hospital continuum of care. WIUCC staff participates on hospital committees and work groups, and policies and procedures are shared between all hospital locations."
Collaboration between the urgent care center and the hospital is a market differentiator, she points out. "This is perhaps the biggest benefit we offer: Connection to primary care offices and the hospital through electronic health record sharing, shared medication lists, and effective provider communication."
Changes designed to boost Medicare's largest accountable care program would result in greater federal savings, but the country's largest hospital association says CMS's risk-sharing deals need to be sweeter.
Three years after launching the Medicare Shared Savings Program, federal officials are trying to fine-tune their most popular accountable care model.
MSSP has grown from 27 inaugural participants in April 2012 to more than 330 participants this year. According to MSSP Year 1 performance data released last month, Medicare reaped about $383 million in shared savings.
In proposed rule changes set to be enacted in 2016, the Centers for Medicare & Medicaid estimates higher levels of MSSP shared savings if the revisions are implemented: "The proposed changes detailed in this rule would result in median estimated federal savings of $280 million greater than the $730 million median net savings estimated at baseline for calendar years 2016 through 2018."
Via email this week, CMS spokesman Alper Ozinal said MSSP has reached a significant milestone.
"The Shared Savings Program is designed to promote accountability for a specific Medicare fee-for-service (FFS) population, coordinate items and services under Medicare Parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery. While we are pleased with the first year results and the implementation of the program, we have identified certain policy modification proposals."
Ozinal says the proposed rule changes, which are open to public comment until Feb. 6, include the following goals:
Growing ACO participation, especially from small and solo practices, as well as providers in underserved areas.
Encouraging greater participation in "two-sided" risk tracks similar to Medicare's Pioneer ACO program, which features both gain and cost sharing.
Simplifying operations for stakeholders, reducing market and beneficiary confusion, and promoting better information sharing.
Continuing to provide national leadership for accountable care.
Risk Tracks Key to Running MSSP Railroad
The proposed MSSP rule changes would adjust the existing pair of risk tracks and create a third track.
Currently, Track 1 features upside-only risk with a 50% maximum gainsharing rate, and Track 2 features two-sided risk with a 60% maximum gainsharing rate. According to CMS, only five MSSP participants have chosen Track 2.
"Track 1 was designed to get organizations interested in ACOs, but Track 2 was supposed to be the serious program that would implement real changes to healthcare delivery," says Sarah Baumann, JD, a legal analyst at New York-based Wolters Kluwer Law & Business.
Now CMS is tweaking the MSSP risk tracks.
"Under the current regulations, Track 1 ACOs are expected to transition to Track 2 at the end of the three-year agreement period. CMS recognizes that many of those ACOs will need more time and experience before they are comfortable transitioning to Track 2 and may drop out of the program to avoid potential shared losses in Track 2. To prevent that, the agency is suggesting the elimination of the requirement for Track 1 ACOs to transition to Track 2 when their first agreement period ends," Baumann says.
The addition of Track 3 gives MSSP participants a potentially profitable but more perilous two-sided risk option.
"Track 3 is the new Track 2," Baumann says. "As proposed, Track 3 is now the riskier model for experienced organizations willing to expose themselves to higher risk for the chance to reap shared savings up to 75%… The shared loss rate would range from 40% to 75%; losses in excess of 15% would not be shared."
Track 3 also seeks to ease ACO concerns over the lack of beneficiary assignment under MSSP rules. The proposed rule changes include enhanced prospective assignment of patients to MSSP ACOs. "As in other models, beneficiaries would be assigned prospectively; however, unlike those in other models, Track 3 ACOs would not be forced to undergo retrospective reconciliation," Baumann says.
"This means that Track 3 ACOs would not need to account for beneficiaries who were not assigned to them at the beginning of the year but who received ACO services later in the year." The proposed rule changes are "an acknowledgment that the MSSP is a program in transition."
"MSSP was designed to be a landmark program that would change the healthcare landscape overnight. Organizations would take the plunge to form ACOs, improve the delivery and quality of care, and that would be the future of healthcare. CMS has realized that the MSSP was, instead, a chance for organizations long engaged in fee-for-service culture to get their toes wet in performance-based risk models."
"Only five ACOs took the plunge and entered Track 2 initially. The proposed rule is attempting coax hesitant organizations into accepting a pay-for-performance culture and to convince some of the braver ones to commit fully to coordinated care."
'They Really Didn't Go Far Enough'
The American Hospital Association says CMS needs to up the coaxing ante.
"They really didn't go far enough in this regulation," Ashley Thompson, VP and deputy director of policy at AHA, said this week.
The proposed changes are insufficient to encourage widespread adoption of the program, she says. "We're very pleased with the three-year renewal. We're not pleased they are proposing a lower sharing rate from 50% to 40%," Thompson said. "If anything, they may be moving in the wrong direction."
While calling the Track 3 option "very helpful" and welcoming enhanced prospective assignment, she says the proposed rule changes represent "a missed opportunity" for CMS. Thompson cited several areas where healthcare providers are looking for more robust reforms, such as stronger improvement in data sharing, more attainable financial thresholds, and allowing Medicare beneficiaries to "opt-in" as ACO-linked patients. "We have a long list of things that they could have done that they didn't do," she says.
Comment Sought on Financial Benchmarks
CMS is also mulling a shift in financial benchmark evaluation away from year-to-year performance improvement. Equally weighting the three years in the next round of the program could "reduce the disincentive to generate savings in any one year," Ozinal says.
Says Ozinal: "We seek comment on using regional FFS expenditures instead of national FFS expenditures in establishing and updating the benchmark, holding an ACO's historical costs constant relative to its region, and transitioning to using regional FFS cost data to make ACO benchmarks gradually more independent of the ACO's past performance and gradually more dependent on the ACO's success in being more cost efficient relative to its local market."
Replacing year-to-year improvement as an accountable care evaluation model would be a welcome change, but healthcare providers need more concrete coaxing from CMS before they will sign up to participate in MSSP, Thompson says. "They put forth options for changes in the benchmarks but didn't adopt changes," she says. "We are reviewing those options with our members."
