A new report says transitioning the nation's $3.5 trillion healthcare system to a single-payer system 'could be complicated, challenging, and potentially disruptive.'
The Congressional Budget Office said Wednesday that government spending under a single-payer health system "would increase substantially."
However, the report didn't say how much a single-payer system would cost, nor did it say if total national healthcare spending under single-payer would be higher or lower than under the existing system.
"Government spending on healthcare would increase substantially under a single-payer system because the government (federal or state) would pay a large share of all national health care costs directly," the report said.
"Shifting such a large amount of expenditures from private to public sources would significantly increase government spending and require substantial additional government resources," CBO said, but the cost "would depend on the system's design and on the choice of whether or not to increase budget deficits."
"Total national healthcare spending under a single-payer system might be higher or lower than under the current system depending on the key features of the new system, such as the services covered, the provider payment rates, and patient cost-sharing requirements," CBO said.
The report deferred on the single-biggest question about single-payer: How much would it cost?
"This report does not address all of the issues that the complex task of designing, implementing, and transitioning to a single-payer system would entail, nor does it analyze the budgetary effects of any specific bill or proposal."
According to the CBO analysis, about 29 million people under the age of 65—that's 11% of the population—are uninsured in an average month. While a single-payer system would significantly reduce the numbers of uninsured, exactly by how much would depend upon the system's design.
"For example, some people (such as noncitizens who are not lawfully present in the United States) might not be eligible for coverage under a single-payer system and thus might be uninsured," CBO said.
Regardless, CBO said that because healthcare spending accounts for about 18% of the nation's gross domestic product, any changes to the delivery system "could significantly affect the overall U.S. economy."
"The transition toward a single-payer system could be complicated, challenging, and potentially disruptive," CBO said. "To smooth that transition, features of the single-payer system that would cause the largest changes from the current system could be phased in gradually to minimize their impact."
Federal prosecutors claim that, under Newsome's guidance, HMA pressured emergency department physicians to admit patients without regard to medical necessity.
Gary D. Newsome, the former CEO of now-defunct Health Management Associates LLC, will pay $3.46 million to settle kickback and false claims allegations made in a whistleblower lawsuit, the Department of Justice said.
Federal prosecutors claim that HMA, under Newsome's guidance, pressured emergency department physicians to admit Medicare patients without regard to medical necessity, and that the care provided to the beneficiaries should have been provided in a less costly outpatient or observation setting.
Prosecutors also alleged that Newsome's HMA paid EmCare, a company that provided physicians to staff HMA hospital EDs, to recommend admission when patients should have been treated on an outpatient basis.
"A physician's healthcare decisions should be driven by what is in the patient's best interest, not by what helps line a provider's pockets," said Barbara Bowens, acting U.S. Attorney for South Carolina. "The U.S. Attorney's Office will not tolerate false claims based on unnecessary hospital admissions, which drive up healthcare costs and can harm patients."
As part of the alleged scheme, Newsome saw that HMA made bonus payments to EmCare ED physicians and tied EmCare's retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED.
Newsome served as CEO of HMA from September 2008 through July 2013. HMA, which was based in Naples, Florida, was acquired by Community Health Systems Inc. in January 2014, after the alleged conduct at HMA occurred.
Newsome's attorney, Barry Sabin, said his client "is pleased that this matter is now behind him."
"In reaching a settlement, Mr. Newsome continues to emphatically deny the government's claims," said Sabin, a partner at Latham & Watkins. "He is pleased to now end the uncertainty and high expense of protracted litigation."
HMA and EmCare have already settled their liabilities.
In September 2018 HMA entered into a civil settlement under which it paid $61.8 million. Simultaneously, HMA entered into a Non-Prosecution Agreement with the Criminal Division's Fraud Section under which it paid a $35 million monetary penalty.
In addition, an HMA subsidiary that formerly owned one hospital pled guilty to a single count of conspiracy to commit healthcare fraud, and paid a $3.25 million fine. In December 2017, EmCare paid $29.6 million to resolve these allegations.
This settlement resolves a lawsuit originally filed in the U.S. District Court for the District of South Carolina by Jacqueline Meyer, a former employee of EmCare, and J. Michael Cowling, a former employee of HMA, under the whistleblower provisions of the False Claims Act.
Meyer and Cowling will receive approximately $725,000 from the settlement.
Proposed rule will increase transparency of changes of ownerships for AOs with Medicare deeming authority to safeguard patient safety.
The Centers for Medicare & Medicaid Services on Tuesday unveiled a proposed rule requiring greater transparency when ownership changes occur at accrediting organizations.
The proposed rule establishes a process AOs with Medicare-approved accreditation programs must follow if there is a sale, transfer, and/or purchase of assets related to the ownership of an AO. CMS said the new rule is needed to ensure the effectiveness of accreditation programs.
"Accrediting Organizations are an important partner in our oversight of healthcare facilities across the country," CMS Administrator Seema Verma said in a media release. "Today we are reinforcing our commitment to patient safety by proposing policy that would require accrediting organizations to notify CMS when the organization makes a change in ownership."
"This rule builds on earlier steps we've take to strengthen federal oversight of accrediting organizations and ensure patients are receiving high quality, safe care at our nation's healthcare facilities," Verma said.
CMS grants AOs "deeming authority" to affirm that a healthcare facility's safety standards meet or exceed those of Medicare. Only facilities and suppliers that have been deemed by state or AO surveyors to meet CMS' standards may receive payments from Medicare.
Current CMS regulations governing AOs do not require them to provide CMS advanced notice of pending changes of ownership. CMS is first notified of an AO ownership change when an AO, under new leadership, applies for renewal of its agreement to CMS or it voluntarily notifies the agency.
This proposal would require AOs to notify CMS when they are contemplating or negotiating a change of ownership, CMS said.
CMS would also require prospective new owners to submit documentation and information confirming their ability to effectively perform the required accreditation tasks after the change of ownership takes place.
CMS said the proposal does not impede the sale of an AO, but instead gives CMS the ability to approve or deny the accreditation programs that are to be transferred as part of the sale or transfer.
Tuesday's proposal is the latest in a series of actions CMS has taken to improve oversight of AOs. In 2018, CMS said it would AO performance data online and also began a more streamlined, efficient way to assess AOs' ability to ensure that facilities and suppliers comply with CMS requirements.
In December, CMS raised questions about potential conflicts of interest between Medicare accrediting organizations and the healthcare facilities they monitor.
"We are concerned that the practice of offering both accrediting and consulting services–and the financial relationships involved in this work–may undermine the integrity of accrediting organizations and erode the public’s trust," Verma said at the time.
The query was expected to include an examination of The Joint Commission, the nation's largest hospital accrediting organization. In a media statement in December, The Joint Commission said it is reviewing CMS's requests for comment, but said it is confident in the integrity of the "firewall" between its consulting and accrediting divisions.
"The Joint Commission recognizes the importance of assuring the integrity of the accreditation process, which we accomplish by prohibiting any sharing of information about consulting services for individual organizations with anyone involved in accreditation," the statement read.
The agency also issued a Request for Information seeking comment on the financial relationships between CMS-approved AOs and the healthcare facilities they review and monitor.
As part of this process, CMS will determine whether revisions should be made to the AO application and renewal process to identify actual, potential, or perceived conflicts of interest.
Phase 1 challenged innovators to submit a short proposal on approaches that could enable the design of new artificial kidney devices, improving quality of life.
The Department of Health and Human Services, partnering with the American Society of Nephrology, has picked 15 teams to take part in the first phase of Kidney Innovation Accelerator, or KidneyX.
Through cash awards and other incentives, KidneyX hopes to accelerate the development of innovative medical products and approaches to diagnose, prevent, and improve care for kidney diseases.
Phase 1 challenged innovators to submit a short proposal on approaches that could enable the design of new artificial kidney devices, extending life and improving quality of life.
"Building an artificial kidney is going to be a highly collaborative process, and Redesign Dialysis is one step in building the community of innovators," Sandeep Patel, MD, HHS KidneyX Director, said in a media release. "We are excited with the initial response, which tells us we're only scratching the surface so far."
Of the 165 submissions received, the submission topics ranged from innovations in vascular access and fluid filtration, to innovations in hemodialysis and biosensors. The submissions were scored by more than 40 technical reviewers comprised of patients and experts from government, industry and academia.
The top scoring submissions were then judged by a panel of nine experts in medicine, biomedical science and engineering, and commercialization. Fifteen winners were awarded monetary prizes of $75,000 each.
"The winning proposals address a broad range of potential improvements to dialysis and highlight the fact that there is more work to be done to change the status quo. Millions of patients are waiting," said John Sedor, MD, chair of the KidneyX Steering Committee.
Phase 2 of Redesign Dialysis will start accepting submissions this fall and is open to all, including Phase 1 winners.
In Phase 2, innovators will be asked to demonstrate functional prototypes that can replicate some or all kidney functions. Up to three winners will be awarded $500,000 each.
Prize Winners
A non-invasive, wearable telehealth device to detect thrombosis and monitor vascular access health of arteriovenous fistulas and grafts in hemodialysis patients
University of Alabama -- Birmingham.
Air Removal System for a Wearable Renal Therapy Device
Qidni Labs, Inc.
Atomically Precise Membranes (APM) for High-Flux and Selective Removal of Blood Toxins
Temple University.
Development of a Dialysate- and Cell-Free Renal Replacement Technology, Curion Research Corporation, University of California Los Angeles, and University of Arkansas.
Development of an Automated Multimodal Sensor to Improve Patient Outcomes in Hemodialysi Outset Medical, Inc.
Drug-Eluting Electrospun Hemodialysis Graft
Biosurfaces, Inc., Beth Israel Deaconess.
Fluo Medical - Non-Invasive Venous Waveform Analysis (NIVA) for Volume Directed Kidney Failure Management
Stanford University.
Improving intra-dialytic removal of protein-bound uremic toxin removal using binding competitors
Mount Sinai Renal Research Institute.
Intracorporeal Ultrafiltration System & Intracorporeal Hemodialysis System
The Kidney Project.
JEM™ - Sensor Enabled Hemodialysis
Access for Life, Inc.
New Kidney Grafts
Miromatrix Medical, Inc.
Nitric Oxide-Eluting, Disposable Hemodialysis Catheter Insert to Prevent Infection and Thrombosis
University of Michigan.
RenalTracker
Binnovate Digital Health BV.
The Ambulatory Kidney to Improve Vitality (AKTIV) & Rethinking Dialysis Vascular Access
University of Washington, Center for Dialysis Innovation.
Utilizing Optical Interrogation Methods for Early Diagnosis of Peritonitis in Peritoneal Dialysis Patients
Stanford University.
The Phase 1 prize winners were announced during the inaugural KidneyX Summit scheduled on Monday and Tuesday at the U.S. Institute of Peace in Washington, D.C.
Prize winners will present their solutions to an audience of industry leaders within government, mechanical and bioengineering, investment, and medical product development.
(Correction: The initial media release from HHS failed to include Curion Research Corporation among the prize recipients.)
The health insurer had pledged a vigorous defense in the suit, but isn't saying what prompted the confidential settlement.
Aetna has reached an out-of-court settlement in a high-profile lawsuit that was sparked when a physician for the health insurer said he'd never looked at a patient's health records before denying coverage.
Plaintiff Gillen Washington sued the health insurer in 2016 after he was denied coverage for a rare immune disorder, the infusion treatments for which can cost up to $20,000.
Former Aetna medical director Jay Ken IInuma, MD, stated in a deposition that he did not examine Washington's records before deciding whether to deny or approve care, relying instead on information provided by nurses who reviewed the records.
The California Department of Managed Health Care and the California Department of Insurance subsequently launched an investigation into Aetna's policies and procedures for approving or denying claims.
Aetna, which was acquired by CVS Health last November in a $70 million megamerger, did not immediately respond Monday morning to HealthLeaders' request for comment on the settlement, which was reached in late March, just ahead of a planned trial.
However, T.J. Crawford, vice president of external affairs for CVS Health, told CNN that the company doesn't "comment on legal settlements, which are commonplace and by no means an admission of wrongdoing."
Washington's attorney, Scott Glovsky, told CNN through a spokesman that "the matter has been resolved to the parties' mutual satisfaction."
When the allegations were made public, Aetna said it would fight the suit.
"Our policies always have our members’ best interests in mind. When those policies are called into question, we will defend them," the company said in a media release.
The insurer charged CNN with biased reporting, based on the allegations made by the plaintiffs, and said IInuma's words were taken out of context, and that his later explanation was ignored by much of the media.
It's not clear what prompted the health insurer to agree to a settlement.
The two companies allegedly used independent foundations to pay Medicare beneficiaries' copays for their own products, an illegal inducement under the Anti-Kickback Statute.
Pharmaceutical companies Astellas Pharma U.S. Inc. and Amgen Inc. will pay a combined $124.7 million to resolve allegations that they each used independent foundations as conduits for illegal kickbacks, the Department of Justice said.
The two companies allegedly used the foundations to pay Medicare beneficiaries' copays for their own products, an illegal inducement under the Anti-Kickback Statute. Astellas has agreed to pay $100 million, and Amgen will pay $24.75 million, DOJ said.
The settlements are the latest in a string of lawsuits involving drug makers. Earlier this month—Jazz Pharmaceuticals plc, Lundbeck LLC, and Alexion Pharmaceuticals Inc.—agreed to pay $57 million, $52.6 million, and $13 million, respectively, to resolve similar allegations.
"According to the allegations in today's settlements, Astellas and Amgen conspired with two copay foundations to create funds that functioned almost exclusively to benefit patients taking Astellas and Amgen drugs," said Andrew E. Lelling, U.S. Attorney for the District of Massachusetts.
"As a result, the companies' payments to the foundations were not 'donations,' but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies' drugs at the expense of American taxpayers," Lelling said.
Astellas
Astellas, the maker of Xtandi, an androgen receptor inhibitor, allegedly asked two foundations about the creation of copay assistance funds to cover the copays for Medicare patients taking ARIs, but not for other types of prostate cancer drugs. In July 2013, both foundations opened ARI-only copay funds; Astellas was the sole donor to both funds.
Prosecutors alleged that Astellas knew that Xtandi would likely account for the vast majority of utilization from each fund. In fact, Medicare patients taking Xtandi received nearly all of the copay assistance from the two ARI funds.
Astellas allegedly promoted the existence of the ARI funds as an advantage for Xtandi over competing drugs in an effort to persuade medical providers to prescribe Xtandi.
Astellas issued a statement that "denies any wrongdoing. These donations were conducted with the understanding that our actions were lawful and appropriate."
"We are pleased to resolve this matter and remain focused on pursuing our mission of turning innovative science into value for patients around the world," the company said.
Amgen
Amgen allegedly used a foundation to induce Medicare beneficiaries to use its secondary hyperparathyroidism drug Sensipar and the multiple myeloma drug Kyprolis.
Amgen acquired Kyprolis with its acquisition of Onyx Pharmaceuticals Inc. in 2013.
Prosecutors allege that from 2011 through 2014 Amgen worked with a foundation to create a "Secondary Hyperparathyroidism" fund that would support only Sensipar patients.
Amgen allegedly made payments to the fund even though the cost of these payments exceeded the cost to Amgen of providing free Sensipar to financially needy patients. However, by using the foundation to cover the copays, Amgen caused claims to be submitted to Medicare and generated revenue for itself.
Prosecutors also alleged that Onyx asked a foundation to create a fund that ostensibly would cover healthcare related travel expenses for patients taking any multiple myeloma drug, but which was actually used almost exclusively to cover travel expenses for patients taking Kyprolis, which must be infused at certain health care facilities.
The government alleged that Onyx was the sole donor to this travel fund and that Amgen, after integrating Onyx into its operations in 2015, continued to donate to the fund. The foundation also operated a second fund that covered copays for multiple myeloma drugs, including Kyprolis.
Onyx allegedly got data from the foundation on the fund's anticipated and actual expenses for coverage of Kyprolis copays, which it used to tailor its donations to the fund to just the amount needed to cover the copays of Kyprolis patients.
Amgen issued a statement saying it "does not agree with the government’s view of the relevant facts or that its conduct was inappropriate; accordingly, the settlement does not contain or constitute an admission of liability."
"This settlement reflects Amgen's desire to put this legal matter behind it and focus on the needs of patients. Donations to independent charitable organizations can provide significant assistance to patients with their copayments for prescriptions, and Amgen continues to believe these programs help patients lead healthier lives. As an element of Amgen’s efforts to help ensure patients have access to critical medicines, Amgen continues to donate to independent charity patient assistance programs," the company said.
In addition to the financial settlements, Amgen and Astellas each signed five-year corporate integrity agreements with federal regulators.
Deal volumes declined in Q1, but they remained above 200 for the 18th consecutive quarter.
Health services sector mergers and acquisitions decreased in the first quarter of 2019.
The values tripled, when compared with the last quarter of 2018, however, driven largely by the $17.4 Billion Centene-WellCare megamerger, according to an analysis By PWC.
Although deal volumes dropped in Q1, it remained above 200 for the 18th consecutive quarter. The two biggest private equity deals were in the long-term care sector, with each valued at more than $100 million, including Next Healthcare Capital and Genesis Healthcare's $204 million acquisition of 15 skilled nursing facilities from Welltower.
Despite the relatively slow start in 2019, PWC U.S. Health Services Deals Leader Nick Donkar said he anticipates continued interest in deals from health services companies and private equity firms.
"Buyers are exercising patience and discipline given the uncertainty in the global economy and regulatory environment," Donkar said. "We expect deal volume to increase in the remainder of the year given capital availability, reimbursement pressure, and companies’ continuing interest in expanding services beyond their current capabilities."
The Q1 2019 analysis found that:
The Centene-WellCare transaction is the largest managed care deal since CVS/Aetna in Q4 2017, and the third-largest deal overall since 2014 (behind Cigna/Express Scripts).
Q1 2019 deal volume declined over the prior year and prior quarter by 21.2% and 28.3%, respectively. This drop should not necessarily be seen as suggestive of future declines.
Although the deal count of 231 was 8.2% Below the 2014-2018 quarterly average of 252, it was still 15.5% above the 200 level that the sector has seen since Q4 2014.
The sector saw similar deal volume in Q2 2017, then witnessed a rebound. A similar rebound is possible in Q2 2019, especially given sustained high levels of private equity capital.
Q1 2019 deal value tripled over Q4 2018, partly driven by a $17.4 billion megadeal (defined as exceeding $5 billion), which accounted for 57.5% of the quarter's value. Q1 2019 deal value was also 16.1% higher than the 2014-2018 quarterly average of $26.1billion.
Excluding megadeals in Both Q1 2019 and the comparison periods, deal value increased 33.5% over Q4 2018 and 122.8% over Q1 2018.
All sub-sectors experienced a decline in deal volume over the prior year, except for Long-Term Care (19.5% growth) and Managed Care (flat).
In terms of deal value, over the prior year, four sub-sectors grew: Physician Medical Groups, Hospitals, Labs, MRI & Dialysis, and Long-Term Care.
There have Been no health services IPOs since 2016.
Stakeholders back federal rules that factor in social determinants of health to create a more-level playing field for hospitals that provide care for sicker, poorer patients.
New Medicare reimbursement rules that account for socioeconomic factors shift the burden of financial penalties toward hospitals serving wealthier patients, and that helps safety-net hospitals, a new study suggests.
The new rules under the Hospital Readmissions Reduction Program also reduce the penalties on hospitals in states that have more generous Medicaid programs, according to the study, published in JAMA Internal Medicine this month by researchers at Washington University, the Missouri Hospital Association and the Henry Ford Health System in Detroit.
"The new rules recognize the reality that it is harder to prevent readmissions when people don't have stable housing or social support," said study first author Karen Joynt Maddox, MD, a Washington University cardiologist and assistant professor of medicine.
"If you have patients who struggle to put food on the table, it's going to be tougher for them to manage their end-stage heart failure," Joynt Maddox said. "The old system took money away from hospitals that serve the most vulnerable patients. It created a significant disincentive to provide healthcare to poor people, and that’s the last thing we want."
HRRP can cut a hospital's Medicare reimbursements by up to 3%, and it's been criticized for unfairly penalizing safety-net hospitals that serve a generally, poorer, sicker patient mix, and who are more likely to be admitted for reasons beyond the hospital walls.
Rather than comparing all hospitals directly, the new rules divide hospitals into five groups according to the proportion of their dual eligible Medicare/Medicaid patients.
Hospitals are now compared only with peer institutions that treat similar proportions of disadvantaged patients. Across the five groups of hospitals, the average proportion of dual eligibles ranged from a low of 9.5% to a high of almost 45%.
Under the new rules, penalties for the hospitals serving the fewest poor patients are projected to increase more than $12 million in total, the researchers estimate.
Penalties for the hospitals serving the highest proportion of poor patients are projected to decrease by more than $22 million in total. On an individual hospital level, the changes are projected to range from an increase in penalties of $225,000, to a decrease of $436,000, the study said.
Large hospitals and teaching hospitals are the most likely to see reduced penalties. The researchers also found reduced penalties among hospitals serving patients from the most disadvantaged neighborhoods and those serving the most patients with disabilities.
Maryellen Guinan, senior policy analyst at America's Essential Hospitals, called the new methodology "a step in the right direction," and said the study's findings "add to the growing body of evidence for what essential hospitals and other providers have long known: Patients' sociodemographic and other social risk factors can significantly influence assessments of hospital quality."
“Under the old HRRP, essential hospitals and other providers that serve vulnerable patients were forced to absorb a greater proportion of readmissions penalties, leaving them with even fewer resources to treat disadvantaged people," Guinan said.
Hospitals in states with more generous Medicaid enrollment also fare better than those in states with fewer poor patients enrolled in the Medicaid program.
"States differ widely in the percentage of people living in poverty who are able to enroll in Medicaid," Joynt Maddox said. "Since the new rules, as written by Congress, only give credit to hospitals for treating patients on Medicaid and not poor patients in general, the states with more people enrolled in Medicaid are going to benefit more from the new system."
Maddox said she was surprised at the extent of the state and regional differences in the shift in penalties, with more penalties for hospitals in the South and Midwest and fewer penalties for hospitals in the West and Northeast.
California, which has generous Medicaid enrollment, had the most reduced penalties. South Dakota and Florida, two states with fewer poor patients enrolled in Medicaid, had the greatest increases. Overall, much of the shift in penalties between states could be explained by differences in state Medicaid enrollment.
"This was a positive change for the HRRP," Joynt Maddox said. "Making the program more fair doesn't take away from its goal, which is to use financial incentives to make hospitals think differently about care beyond their walls. Hospitals are increasingly working to provide a soft landing, including discharge planning and communication with outpatient-care providers."
Joynt Maddox said there's work to be done, even if the new rules more fairly consider the socioeconomic reality of hospitals' patient populations.
“There are still marked disparities in readmissions related to social determinants of health,” she said. “We need to find innovative solutions to improve outcomes for our most vulnerable patients after they leave the hospital.”
Guinan agreed.
"Specifically, the peer-grouping methodology uses dual-eligibility as a proxy for poverty, which is less than ideal," she said.“Not accounting for all the differences in patients’ circumstances that might affect readmission rates inevitably will skew readmission measures against hospitals providing essential care to low-income people, including the uninsured," Guinan said.
"CMS must go a step further and incorporate risk adjustment for sociodemographic status, language, post discharge support structure, and other factors that reflect the challenges involved in caring for disadvantaged populations,” she said.
States are encouraged to adopt integrated care models for serving dual eligibles, with options that include capitated payments, managed fee-for-service, and state-specific models.
States are being invited to partner with the federal government in integrated care models designed to improve outcomes for the nation's 12 million dual eligible enrollees in Medicare and Medicaid.
"Less than 10% of dually eligible individuals are enrolled in any form of care that integrates Medicare and Medicaid services, and instead have to navigate disconnected delivery and payment systems," Centers for Medicare & Medicaid Services Administrator Seema Verma said in a media release.
"This lack of coordination can lead to fragmented care for individuals, misaligned incentives for payers and providers, and administrative inefficiencies and programmatic burdens for all. We must do better, and CMS is taking action, Verma said.
In a letter this week to state Medicaid directors, Verma encouraged them to work with the federal government to address the complex needs of dual eligibles, who often have multiple chronic and mental health and socioeconomic risk factors that can lead to poor outcomes.
"Historically, dually eligible individuals have accounted for 20% of Medicare enrollees, yet 34% of Medicare spending. The same individuals have accounted for 15% of Medicaid enrollees and 33% of Medicaid spending. Across both programs, that equates to over $300 billion in state and federal spending each year," Verma said.
"Improving care for this population provides opportunities for state and federal governments to achieve greater value from our Medicare and Medicaid investment," she said. "This is especially critical as Medicaid spending is already among the two largest items in most state budgets and as more of the baby boom generation ages into Medicare eligibility each day."
Verma told the state Medicaid directors that CMS was considering several care options for dual eligibles, including:
The Capitated Financial Alignment Model. Through a joint contract with CMS, states and health plans, this model option creates a way to provide the full array of Medicare and Medicaid services for enrollees for a set capitated dollar amount.
Managed Fee-for-Service Model. This model is a partnership between CMS and the participating state and allows states to share in Medicare savings from innovations where services are covered on a fee-for-service basis.
State-Specific Models. CMS is open to partnering with states on testing new state-developed models to better serve dually eligible individuals and invite states to come to us with ideas, concept papers, and/or proposals.
This week's letter complements a State Medicaid Director Letter CMS released in December 2018 that highlighted 10 opportunities to improve care for dually eligible individuals, including using Medicare data to inform care coordination and program integrity initiatives, and reducing administrative burden for dually eligible individuals and the providers who serve them.
The Primary Cares Initiative got a warm initial reception from key providers groups, but many still have questions about the details of the proposal.
Provider associations are praising the Centers for Medicare & Medicaid Services' plans to launch five at-risk primary care models.
"Providing adequate financial support for high quality primary care must be an essential element of any strategy to improve the quality and affordability of our country's healthcare system," Gerald E. Harmon, MD, Immediate Past Chair of the American Medical Association Board of Trustees said in prepared remarks.
"Many primary care physicians have been struggling to deliver the care their patients need and to financially sustain their practices under current Medicare payments," Harmon said. "The new primary care payment models will provide practices with more resources and more flexibility to deliver the highest-quality care to their patients."
Health and Human Services Secretary Alex Azar unveiled the voluntary initiative on Monday, saying theCMS Primary Cares Initiative for Medicare and Medicaid beneficiaries would transform primary care to a value-based system that rewards physicians who keep patients healthy and out of the hospital.
The AMA also praised CMS for basing the new payment models on proposals developed by practicing physicians and incorporating recommendations from the Physician-Focused Payment Model Technical Advisory Committee.
"Secretary Azar has said that the best ideas for improving outcomes often come from individuals and organizations on the front lines of the health care delivery system, and we agree," said Harmon.
"PTAC has identified a dozen payment models developed by physicians that it believes merit testing or implementation by HHS, and we hope today’s announcement will be the first of many efforts to implement PTAC's recommendations," he said.
Ashley Thompson, the American Hospital Association's senior vice president of public policy analysis and development, said the hospital lobby "appreciates CMS's continued efforts to create additional voluntary payment models for providers."
"We look forward to learning more about these new models and how they can support our collective efforts to improve the health and well-being of our patients and communities," she said.
Don Crane, president and CEO of America's Physician Groups, called the initiative "a win for patients and the physician groups who care for them."
"For years, our members have demonstrated that patient-centered, integrated, and accountable care can address the low-quality, high-cost care that comes with a fragmented fee-for-service healthcare system," he said. "We’re very pleased to see that many of our recommendations for improving value-based care were adopted throughout these new models."
Crane predicted the initiative "will open the throttle on the movement from volume to value and improve the health of populations across America."
"We look forward to meeting with CMS to better understand how benchmarking will be implemented within these payment models," he said. "And we’ll be taking a closer look at the beneficiary component to see how that might impact both patients and their physician providers."
The Healthcare Leadership Council President Mary R. Grealy said the council is "encouraged by the administration's continued efforts to shape a Medicare program that focuses on improving care while, at the same time, containing costs."
"We applaud efforts to make the antiquated fee-for-service model a part of healthcare's past while ushering in a future that focuses on value, and putting the patient at the center, rather than volume of services," Grealy said.
Grealy said the initiative correctly focuses on seriously and chronically ill patients, who account for the greatest proportion of healthcare costs.
"We strongly support the continued movement toward coordinated care for this patient population and the new payment models’ incentives for providers to treat these high-need patients," she said.
Ann Greiner, president and CEO of the Patient Centered Primary Care Collaborative, commended HHS "for focusing on the centrality of primary care to achieve enhanced patient value."
"This is a major step in the right direction by the nation’s largest payer, one that promises to transform the role primary care plays in our national healthcare system," Greiner said.
Travis Broome, vice president for policy and ACO administration at the primary care provider Aledade, called the initiative "a smart step in the right direction, further moving healthcare away from fee-for-service and toward paying for better health outcomes."
Broome said the initiative shows that federal policymakers "recognize the leading role that primary care physicians play in a value-based health care system that better serves patients, providers, and payers alike."
The Primary Cares Initiative was largely the brainchild of policy wonks at CMS' Center for Innovation, which was created under the Affordable Care Act.
HLC's Grealy said the initiative "underscores the importance of having a Center for Medicare and Medicaid Innovation, to have a testing ground in which new patient-centered models can be evaluated, advanced, and bring substantive improvement to patient care."
It's not clear what would happen to the CMMI—or how it would affect the primary care initiative rollout—if a federal appeals court sides with a Texas-led coalition of 20 state attorneys general who are challenging the constitutionality of the ACA.
