In hopes of improving the nation's physical fitness and reducing chronic disease, HHS Secretary Kathleen Sebelius announced $27 million worth of grants Tuesday.
The federal Administration on Aging will administer the grants that come from the American Recovery and Reinvestment Act of 2009. The grants will be spread over 45 states, Puerto Rico, and the District of Columbia. The program includes at least $1 million grants for a number of states, including California, New York, Massachusetts, Ohio, Pennsylvania, Texas, and Virginia.
"Prevention activities can strengthen the nation's healthcare infrastructure and reduce healthcare costs," said Sebelius, in a statement. "These new grants will provide an important opportunity for states, tribes, territories, and communities to advance public health across the lifespan and to help reduce or eliminate health disparities."
"The ARRA provides important support for programs to fight chronic disease, and we applaud the administration's continued commitment to prevention and wellness," said Tracey Moorhead, DMAA: The Care Continuum Alliance president and CEO. “DMAA members have successfully partnered with state Medicaid and other programs, as well as public health departments, to improve chronic condition management. We look forward to contributing to this initiative and others, including those under the new health care reform law."
Officials hope the programs can make a dent in Medicare's chronic disease care costs. According to CMS, two-thirds of Medicare spending is for beneficiaries with five or more chronic conditions.
"The number of older adults with chronic conditions will increase dramatically in the coming years as our aging population grows," said Assistant Secretary for Aging Kathy Greenlee, in a statement. "This opportunity will allow states to build the foundation for an infrastructure that embeds health prevention programs into the nation's health and long-term care system and expands a system of care that addresses the growing prevalence of chronic conditions."
Federal officials see the grant program as more than funding chronic disease programs. The initiative will also test which programs are successful.
HHS said state agencies on aging, public health departments, and Medicaid agencies will work together to "support the deployment of evidence-based chronic disease self-management programs." Organizations that received the grants will serve as least 50,000 older adults "and gather evidence regarding the impact of these programs on health behavior and health status outcomes of the participants."
The project will include collaboration between CMS and the Administration on Aging to conduct a pilot in one state to test quality. The project will track Medicare claims from the chronic disease self-management program participants and Medicare beneficiaries not participating in the program.
Nearly everyone agrees that prevention and healthy living can help slow the nation's healthcare cost spiral, but actually getting people interested in fitness has always been the problem.
Wellness advocates and population health management officials say Congress took a small step toward a healthier nation by approving health reform.
Here are four ways that health reform could increase and improve wellness programs:
32 million more insured
The legislation will provide health insurance for an estimated 32 million more Americans, which in theory should help improve the health of the currently uninsured. Insurance companies with wellness and disease management programs will enroll the previously uninsured into these programs, which are often run by population health management companies, such as Healthways, Health Dialog, and Alere.
Whether the newly insured can find a primary care physician who can spend time helping them improve their health is in question though.
There are also the issues of how the federal government will implement the broad legislation. Does it invest more in community health centers? Does it invest in demonstration projects and pilots that involve health plans and population health management companies? Or does it fund educational programs?
Though population health leaders are pleased that the legislation could lead to better health and more business, there are still a lot of issues that the feds will have to work out before regulations are implemented.
"This can't be bad, but how will it be shaped in the next round of the process?" says Bob Stone, vice president and co-founder of Healthways. "I would expect people in the [population health management] industry to be fairly active in determining how that gets shaped as it is turned into regulation."
Help for employer wellness programs
The legislation promotes wellness and health promotion activities, including requiring federally qualified health plans to create programs like health risk assessments and allows employers to use more incentives to spark greater employee participation in wellness programs.
Jaan Sidorov, MD, MSHA, FACP, an independent consultant for Sidorov Health Solutions, says reform allows employers to link a higher dollar amount to fitness program participation. Prevention advocates say using that monetary approach can lead to improved fitness participation.
Though he's pleased that many large employers will be able to create more wellness options, Sidorov says he's disappointed that Congress couldn't find ways to help small businesses improve their prevention programs.
Population health management leaders are especially excited about is the proposed CMS Innovation Center. The program will research and develop care delivery and payment models, which Tracey Moorhead, president and CEO of DMAA: The Care Continuum Alliance, says is an opportunity for the industry to take what has been learned in the commercial and Medicaid markets and replicate in the Medicare setting.
The fee-for-service payment model is often a barrier for wellness programs because their preventive services are not reimbursable. Moorhead says a "more closely aligned care delivery model" would allow wellness companies to have a more active member in the care team through such programs as health coaches and disease management.
Moorhead points to successes, such as the medical home Medicaid programs that have focused on care coordination in areas such as maternity, chronic disease management, and obesity management. These programs feature collaboration between health plans, physicians, and population health management companies to develop alterative reimbursement models and provide support staff, such as health coaches. They have led to better health outcomes, patient satisfaction, and quality, she says.
The Innovation Center will test integrated care in the Medicare population and the legislation also provides grants for state Medicaid programs that create new payment models. She says those provisions are positive steps.
Medicare and the pre-Medicare populations are areas in which population health management programs can help improve health, says Stone.
Keeping middle-aged and seniors healthy will save the country long-term health-related costs and will lead to a healthier Medicare population. This will be especially important as baby boomers move into Medicare.
"It doesn't take a lot of risk reduction to equal real dollars," he says.
Changes to CBO scoring
Another positive for population health is a provision that asks the Congressional Budget Office (CBO) to work with Congress to develop "better methodology to score wellness programs," says Moorhead.
Industry cynics question whether wellness and disease management programs actually save money. CMS highlighted these concerns last year when it alleged a Medicare project that tested disease management programs didn't meet necessary savings requirements. Though population health management leaders point to CMS' project design and patient selection as flaws that doomed the project, the aftershocks from that project remain in the minds of some industry insiders.
The CBO provision could prove important for population health management companies because savings associated with their programs may take years.
Currently, CBO can't look beyond a five- or 10-year window when estimating the cost of legislation, she says. This change within health reform could allow CBO the flexibility to gauge cost savings for longer range programs, such as obesity initiatives.
Though wellness advocates are pleased overall with health reform, Sidorov says there were also missed opportunities. One example is refunding $250 to Medicare Part D beneficiaries. Instead of refunding the money, Sidorov says Congress could have given $300 vouchers to exercise programs with an option of $200 cash for those who didn't want to take part. Those kinds of options are flexible enough to allow people to take advantage of community-level wellness programs.
"That is an example of flexibility that DC and the mainframe thinking is unable to accomplish," says Sidorov.
Cleve Killingsworth, who has led Blue Cross Blue Shield of Massachusetts since 2004, is leaving the insurer effective immediately.
The insurer's board accepted Killingsworth's resignation, but the president and CEO "will remain available to the company as needed to ensure a smooth transition," according to BCBSMA.
Killingsworth joined BCBSMA as president and COO in 2004 after leading Health Alliance Plan in Detroit. He was named CEO at BCBSMA in 2005.
In a prepared statement, Killingsworth said, "It's been an honor and privilege to work with such a talented group of people who are deeply committed to improving the quality and affordability of health care," Killingsworth said. "I look forward now to moving the discussion of quality and affordability to a national level, where I believe my experience can be of value."
Under Killingsworth, BCBSMA has been a leader in Alternative Quality Contracts (AQC). HealthLeaders magazine recognized him in HealthLeaders 20, which is the magazine's annual list of 20 people who make healthcare better, in the December 2009 issue. (To hear Killingsworth talk about AQC, listen to this audio feature.)
In an interview with HealthLeaders at that time, Killingsworth talked about creating a payment model so insurers pay for high-quality effective care. He said the idea is to build a new set of incentives based on eliminating clinical waste, but also retargeting goals.
"The whole idea of switching process measures out for outcomes measures was a new idea for targets under the incentive program," he said.
BCBS of MA's AQC combines two forms of payment. The first is a global, or fixed, payment per patient adjusted for health status and performance incentives tied to the latest nationally accepted measures of quality, effectiveness, and patient experience. That's combined with performance incentives based on quality and safety metrics.
"What we're doing here is starting at levels doctors and hospitals have already achieved and extended that level in the AQC environment. We're not taking money out of their pockets to get this done," Killingsworth said at the time.
Killingsworth said BCBS of MA is working with doctors to make sure they succeed in the program and AQC is about more than gaining a larger market share.
"This is not about making more money or getting bigger for Blue Cross, it's about doing the right thing. Making sure our members get the most effective and safest care possible. There is some distance from where we are and the care that our members and other people in the community should expect," he said.
Now, three months later, Killingsworth is leaving Massachusetts' largest insurer. Paul Guzzi, who was named chairman of the Board of Directors earlier this month, said the board thanks Killingsworth for his service.
"We appreciate the energy, vision and commitment he has demonstrated in developing meaningful and sustainable solutions to the complex healthcare challenges our state and nation face today," he said.
William Van Faasen, who was the insurer's CEO from 1992 to 2005, will serve as interim CEO while the board searches for a permanent successor. Van Faasen will serve in this position without compensation, according to BCBSMA.
In its latest round of health IT funding, HHS announced $162 million in American Recovery and Reinvestment Act funding on Monday to help states "facilitate health information exchange and advance health information technology."
The funding is part of a $2 billion initiative to "achieve widespread meaningful use of health IT and provide use of an electronic health record by every citizen by the year 2014," according to HHS.
"These critical investments will help unleash the power of health information technology to cut costs, eliminate paperwork, and help doctors deliver high-quality, coordinated care to patients," said HHS Secretary Kathleen Sebelius. "States are important partners in improving and expanding our electronic health records system. By improving the secure exchange of electronic health records between providers and hospitals within and across states, these awards mark a significant step in bringing our health system into the 21st century."
"What these awards will do is strengthen our healthcare system and speed our economic recovery," said Sebelius at a news conference Monday. "They have to unleash the power of health information technology to reduce costs, eliminate paperwork, and best of all help doctors deliver a higher level of quality, coordinated care."
The latest awards will go to 16 states and qualified state designated entities, which federal leaders say will enable care coordination and improve quality and efficiency of care. The awards include nearly $29 million for the Texas Health and Human Services Commission, nearly $21 million for the Florida Agency of Health Care Administration, and more than $11 million for the New Jersey Health Care Facilities Financing Authority.
"Today's announcement of awards to 16 states and SDEs marks a significant milestone with all states now empowered to start their journey toward identifying innovative ways to break down theses barriers that prevent the seamless exchange of information, so that we can give patients the access to care they deserve and expect," said Dr. David Blumenthal, national coordinator for health information technology. "States play a critical leadership role in advancing the development of the exchange capacity of healthcare providers and hospitals within their states and across the nation."
The states are "proceeding rapidly" and "at their own pace," he said at the news conference.
"We're trying to get physicians on the escalator toward meaningful use and we want to set the first step at the right level. We're anxious to hear comments," said Blumenthal.
Sebelius said the funding with help physicians and hospitals gain electronic health records. She cited statistics that only 20% of doctors and 10% of hospitals have "basic electronic records."
"Even though many doctors around the country can see the potential benefits, there also are still lots of obstacles. One of the problems in that the electronic health record systems are not always compatible with each other. That's where these grants that we are announcing today will help. They'll facilitate nonproprietary health information exchange that adheres to national standards, which means they'll help ensure the security and privacy of health information as it's exchanged within and across doctors and hospitals," she said.
San Antonio-based Baptist Health System has purchased a 56-acre parcel of land in New Braunfels, TX, where it hopes to build a new hospital.
The hospital, which would be built near Interstate 35 and Loop 306, would provide comprehensive acute care medical and emergency care, as well as cardiovascular services and neonatology, according to Baptist.
Baptist is building the hospital because the population has exploded in the area. Plus, the system said, Comal County alone is expected to nearly triple by 2040.
"The tremendous growth in Comal, Guadalupe and Hays counties has meant an increase in demand for medical services," said Graham Reeve, president and chief executive officer for Baptist Health System. "With its location near two major roadways, the new hospital will provide greater access for area residents to a full range of medical services, specialist physicians and top-flight programs like the Baptist Brain & Stroke Network."
Mark Hickman, MD and general surgeon, said, "As a physician, resident, and board member of the New Braunfels Economic Development Foundation, I know that it's important for our growing community to have choice and access to care where we need it most. The site of the new hospital, along with the full range of services offered there, will be a boon to the health of residents in our area."
Baptist said the new hospital would enhance the local economy and complement the current healthcare services.
"Proximity to high-quality hospital services is often a top site-selection factor for expanding and relocating businesses," said Michael Meek, president of the Greater New Braunfels Chamber of Commerce. "Our community has identified additional medical services as a major goal and this decision will bring additional economic impact to the area and services nearer to our residents."
The health system is working on design and planning to determine the facility's bed size and exact scope of services. The hospital is expected to open in 2012, said Baptist.
Chicago-based Rush University Medical Center has agreed to pay $1.5 million plus interest to resolve allegations that it violated the False Claims Act, according to the Justice Department.
The Justice Department alleged that Rush entered into leasing arrangements for office space with two physicians and three physician practice groups, which violated the Stark Law. The Stark Law forbids hospitals from "profiting from patient referrals made by a physician with whom the hospital has an improper financial arrangement," said the Justice Department.
Federal officials said a leasing arrangement without a written lease, signed by both parties, and without specifics about the premises covered by the lease is against the Stark Law.
"The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program," said Tony West, assistant attorney general for the Justice Department's Civil Division. "The department will continue to protect patients by pursuing hospitals that have improper financial relationships with physicians."
The Justice Department said Rush is one of several defendants in a 2004 false claims whistleblower suit. The suite alleges that Rush "entered into prohibited financial relationships with certain physicians," said the Justice Department.
As part of the civil agreement, the two whistleblowers, Dr. Robert Goldberg and June Beecham, will receive $270,760.
The Justice Department said the settlement is part of a greater emphasis on combating healthcare fraud. The feds have recovered more than $3 billion since January 2009 in cases involving the False Claims Act.
Saying the health insurer was jeopardizing "the health and safety" of Medicare Part D enrollees, CMS terminated its contract with Fox Insurance Company on Tuesday.
The decision comes less than two weeks after CMS told Fox it could not enroll new members or market its Part D offering because CMS alleged the insurer was not following "Medicare's rules for providing prescription drug coverage to its enrollees." On Tuesday, CMS said a further investigation found persistent problems that placed obstacles in front of enrollees "in getting needed and, in many cases, life-sustaining medications," according to CMS.
In fact, CMS said Fox required enrollees to "have unnecessary and invasive medical procedures before they were able to obtain drugs."
"Fox committed a series of violations, including improperly denying its enrollees coverage of critical HIV, cancer, and seizure medications," said CMS.
CMS reportedly found that Fox:
Failed to "provide access to Medicare prescription drugs benefits by imposing unapproved prior authorization and step therapy criteria that made it more difficult for beneficiaries to get drugs that are protected by law."
Did not meet "the plan's appeals deadlines."
Didn't comply "with Medicare regulations requiring enrollees to be transitioned to new drugs at the beginning of the new plan year."
Failed "to notify enrollees about prior authorization and step therapy determinations as required by Medicare."
"The immediate termination of Fox as a Medicare prescription drug plan demonstrates our commitment to protecting the health of some of their most vulnerable enrollees from getting necessary drugs, in some cases life-sustaining medicines. CMS' immediate action was essential to protect members' health and safety—an integral part of our contract with all Medicare beneficiaries," said Jonathan Blum, acting director of CMS' Center for Drug and Health Plan Choices.
The more than 123,000 Medicare Part D beneficiaries with Fox Insurance, who are spread across 21 states, will be covered under LI-NET, which is run by Medicare and administered by Humana, until May 1. Fox enrollees will have until that time to choose a new prescription drug plan or Medicare will enroll them into a new plan.
Absolute Total Care, Centene Corporation's South Carolina subsidiary, has signed a definitive agreement to purchase Carolina Cresent Health Plan (CCHP), which is the state's largest nonprofit Medicaid managed care organization, from University Health Services, Inc., according to Centene.
With the purchase, Absolute will pick up CCHP's more than 40,000 Medicaid members in 46 South Carolina counties. In announcing the purchase, Centene said the company will cover about 13% of the state's eligible Medicaid population, which is in keeping with Centene's ultimate goal of covering between 10% and 15% (or about 90,000) of the eligible Medicaid population after the sale.
Absolute said the move will "enable the company to leverage its care management capabilities across nearly twice as many members, with the potential to significantly improve health outcomes and reduce costs for the state's Medicaid members."
"The expansion of our South Carolina operations is consistent with our strategy to effectively and prudently deploy capital to grow our business," said Centene Chairman and Chief Executive Officer Michael F. Neidorff. "Like all accretive acquisitions, this transaction will allow us to leverage our business platform and systems across a broader member base, enabling us to provide better service at lower cost to our customers."
Centene, which didn't announce financial terms of the deal, expects the purchase will add revenues of between $55 billion and $65 billion this year and $115 million to $130 million on an annual bases.
The Centers for Medicare and Medicaid Services announced it is realigning, consolidating, and integrating functions to "allow the agency to better focus on three key areas: beneficiary services, program integrity, and strategic planning," CMS acting Administrator and Chief Operating Officer Charlene M. Frizzera announced to staff Wednesday.
In announcing the re-alignment, Frizzera said she will also continue in her interim role as acting administrator and COO.
As part of the changes, Frizzera named Marilyn Tavenner to a new principal deputy administrator position and Peter Budetti as deputy administrator for program integrity. Tavenner, a former nurse, once led Virginia’s Health and Human Resources and was an executive at the Hospital Corporation of America. Budetti, a pediatrician, was the founder and director of the Center for Health Policy Research at George Washington University and was chairman of the Department of Health Administration and Policy in the College of Public Health of the University of Oklahoma Health Sciences Center, according to The Hill.
"CMS is firmly committed to its mission of ensuring effective, up-to-date healthcare coverage and promoting high value, quality care for our beneficiaries. We are very fortunate to have dedicated employees who are passionate about CMS’ mission and who work tirelessly to achieve it. Medicare, Medicaid, and the CHIP program now provide health insurance coverage to over 90 million Americans—a number that is expected to grow in the coming years. As part of our commitment to providing quality care and quality customer service to all people who rely on our programs, we continuously seek more effective ways of operating in order to meet the healthcare needs of our beneficiaries," she wrote in an e-mail to agency staff.
In addition to creating the principal deputy administrator role, the changes will create: The Office of External Affairs and Beneficiary Services; and four centers led by deputy administrators (Center for Medicare; Center for Medicaid, CHIP and Survey & Certification; Center for Program Integrity; and Center for Strategic Planning).
The Center for Medicare will combine Medicare fee-for-service, managed care, and Medicare Advantage.
The Center for Medicaid, CHIP and Survey & Certification is the former Center for Medicaid and State Operations.
The Center for Program Integrity is a combination of the Office of Financial Management’s Program Integrity Group and the Medicaid Integrity Group of the Center for Medicaid and State Operations.
The Center for Strategic Planning brings together the Office of Research, Development, and Information, and the Office of Policy.
The Office of External Affairs & Beneficiary Services realigns the Office of Beneficiary Information Services with the Office of External Affairs. CMS said this move will allow them to "integrate and better leverage its communication, call center and Web resources; ombudsman services; and extensive network of partners to enhance service to beneficiaries."
The realignment has not been approved by Health and Human Services Secretary Kathleen Sebelius, but CMS expects the realignment to happen within 60 days.
"This realignment will help CMS do our job better and help to improve service and quality for the millions of people who depend on our services," Frizzera wrote.
As yet another indication that 2009 was a horrible year for nearly all aspects of the economy, Moody's Investors Service reported today that the year featured "high downgrade activity" in the not-for-profit healthcare sector.
In fact, Moody's reported 54 downgrades compared to 21 upgrades in 2009, which contrasts to 53 downgrades and 27 upgrades the previous year. In other words, the downgrade-to-upgrade ratio increased from a 2 to 1 ratio in 2008 to a 2.6 to 1 ratio in 2009, said Moody's.
The past two years are part of a four-year trend in which downgrades have exceeded upgrades. Though the past four years have been difficult, they are a far cry from the 4.6 to 1 downgrade-upgrade ratio in 2000. Last year was the highest ratio since 2000, said Moody's.
A positive is that the downgrade activity began to wane in the second half of 2009. The downgrade trend went from 6.8 to 1 in the fourth quarter of 2008 and 4 to 1 in the first half of 2009 to 1.7 to 1 in the second half of 2009.
"Despite operating challenges facing most not-for-profit hospitals and healthcare systems and weakening of credit measures across all major ratios and rating categories, rating affirmations still accounted for nearly 79% of all rating actions, continuing a long-standing historical trend in which affirmations dwarf both downgrades and upgrades," said Moody's Associate Analyst Deepa Patel, author of the report "Moody's Not-For-Profit Healthcare 2009 Year-End Rating Activity."
According to Moody's, the "280 ratings affirmations in 2009 were on $114.5 billion in debt, representing nearly 79% of total rating actions and were on par with 2008 rating affirmations. Eighty, or 29%, of the affirmations were accompanied by outlook changes, 47 in a negative direction, and 33 in a positive direction."
"For the first time in six years, the absolute amount of downgraded debt, $14.8 billion, was greater than the absolute amount of upgraded debt [$8.2 billion] by a ratio of 1.8 to 1," said Patel. "The total downgraded debt measured the highest since 2000, while total upgraded debt measured the lowest in the six years since 2003."
Heading into 2009, six ratings in the not-for-profit healthcare sector were on Moody's Watchlist for possible downgrade and one for possible upgrade, according to Moody's.