Medicare Releases Timeline for Penalty and Bonus Program

Medicare has announced that the quality care model for doctor reimbursement, formerly known as the value based purchasing plan, will go into effect over the next few years. The program will shift medicine away from its current payment system in which doctors are most often paid for each service regardless of their performance. Instead, Medicare will begin to gradually factor quality of care into reimbursement payments for hospitals, nursing homes, physicians, and most other medical providers.

Medicare has already decided that large physician groups, classified as those with 100 or more doctors, nurses, social workers or other health professionals, will gain or lose as much as 1 percent of their pay starting in 2015. Those incentives would double to 2 percent the following year under draft regulations Medicare released this month.

The proposal also would phase mid-sized physicians groups, those with between 10 and 99 health professionals, into the program in 2016 instead of in 2017 as previously proposed. While they would be eligible for bonuses up to 2 percent, they would be shielded from any penalties for that first year.

In 2017, the program would add the remaining doctors in practices of nine or fewer professionals, about 350,000 doctors, according to Medicare’s estimates.

The program would alter quality measures by specialty but many of the of the measures will check to see how often doctors follow basic medical approaches. At least at the start, physicians will be able to select which of Medicare’s measures they want to be judged by. In determining bonuses and penalties, the government also plans to take into account how much each doctor’s average patient costs Medicare, in order to encourage a more judicious use of testing and more aggressive efforts to avert hospitalizations.

Many hospital and medical groups have been advocating for Congress to repeal the provision over fears that the two percent penalty will harm doctors, while the two percent bonus will not provide enough incentive. Groups are also watching movement on the fight to repeal the Sustainable Grown Rate formula, which is supposed to calculate the annual payment rate before the penalties and bonuses. Congress passes a “patch” each year to avoid the SGR cuts.

The original article by Kaiser Health News in collaboration with The Washington Post can be found here. 

Committee Questions Data Security in Insurance Marketplaces

The House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements expressed concerns over security systems that will accompany the healthcare insurance marketplaces in October. The committee is referencing the marketplaces extensive data hubs, but according to the Obama administration, the hubs will not contain customers’ personal data.

Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner told lawmakers that the hub is a routing tool, not a database, and also noted that the application for insurance in the marketplaces does not ask for personal health information. The marketplace IT system will not access or store health information beyond what is routinely used when someone applies for Medicaid, for example. Further, the deputy chief information officer at CMS emphasized that data would only be stores in the hub for a matter of minutes.

The concerns of committee members also extended to how the administration is setting up and testing the hub before it goes live. While the Department of the Treasury is testing the hubs, Alan Duncan, assistant inspector general for security and information technology services, expressed some concerns that the final round of testing would not be done by the launch date of October 1, 2013.

Committee Chairman Darrell Issa (R-CA) also questioned a CMS contract with a British company, the Serco Group, to help handle applications for health coverage in the federally run exchanges. The group is being investigated by the British government in connection with its billing practices, and Issa said the Federal Bureau of Investigation found that the company’s computer system has been hacked, putting Social Security numbers at risk.

The full article is available via CQ here.

House Ways and Means Committee Asks for Input on Medicare Proposals

In their continued focus on Medicare, the House Ways and Means committee asked for public comment Friday on draft legislation prosing three modifications to Medicare’s benefits system that were made by the Obama administration. The committee, which has a Republican majority, didn’t necessarily endorse the proposals, but still published them for comments until August 16^th.

As reported by CQ, the Congressional Budget Office estimates that the three proposed changes would save more than $60 billion over 10 years. The changes would increase premiums that wealthier beneficiaries pay for services under Medicare Parts B and D, increase the deductible for Part B services, and create a copayment for home health services. Without and changes, the Medicare Trustee Report projects that the trust fund will become insolvent by 2026.

The bill would also increase the lowest income-related premium from 35 percent to 40 percent, and increase the premiums for other income brackets, with a cap of 90 percent at the highest tier. Income thresholds associated with those premiums until 25 percent of beneficiaries are subject to the higher premiums would also be maintained. The proposal would apply a $25 increase to the Part B deductible in 2017, 2019, and 2021 for new Medicare beneficiaries, and would add a new $100 copayment for home health episodes for new beneficiaries beginning in 2017.

Currently, beneficiaries are not required to make a copayment for home health services, which are paid based on a pre-determined daily rate for each 60-day episode of care. The copayment would be preempted if the home health episode was directly preceded by a hospital stay or inpatient post-acute care stay.

Committee Holds SGR Replacement Mark Up

After stating last month that his committee would take up legislation replacing Medicare’s Sustainable Growth Rate formula (SGR), House Energy and Commerce Committee Chairman Fred Upton (R-MI) has scheduled a meeting on the matter. The Energy and Commerce Health Subcommittee has set a markup for a new bill addressing the SGR for next Monday.

According to CQ, the subcommittee markup will be the first in several years on a plan to repeal the SGR and institute a new system for Medicare reimbursements to doctors. Upton confirmed the markup Monday in an interview.

The sustainable growth rate, or SGR, was enacted by the Balanced Budget Act of 1997. The formula is intended to ensure that the yearly increase in expense per Medicare beneficiary doesn’t exceed the volume increase of the country’s gross domestic product (GDP). Four factors are taken into account, including the estimated percent change in fees for physicians’ services, the estimated percent change in the average number of Medicare fee-for-service beneficiaries, the estimated 10-year average annual percentage change in real GDP per capita, and the estimated percentage change in expenditures due to changes in laws or regulations. According to ModernHealthcare, the formula also includes a “clawback” mechanism that reduces Medicare fees if overall spending targets were exceeded the previous year.

Each year, Congress passes a ‘patch’ or ‘doc fix’ to avoid the cuts required by the SGR. This bill framework would totally replace the current SGR with an enhanced fee-for-service system, while allowing providers to opt out and participate in alternative payment models. In the fee-for-service program, providers would get payment updates and incentives based on how they met specified quality measurements.

The House Ways and Means Committee may also take up possible fixes, as they have direct jurisdiction over a number of potential payment offsets. 

EHR Savings?

Nearly half of all physicians in America still rely on paper records for most patient care, according to Kaiser Health News, and time is running out to take advantage of the government incentive payments. Even with the payments and the administration touting the increased efficiency and portability of EHRs, a new study shows that the savings may take years.

The study, reported on by MedPage Today, found that using electronic health records (EHRs) saved a little more than 3% in ambulatory health costs 18 months after adoption, but didn't reduce overall inpatient costs.

Researchers examined monthly costs in commercial payers from 15 months before implementation to 18 months after implementation, with a total of 48,000 patients in the EHR group and 130,000 in the control group. Practices involved were mostly small and a mixture of primary care and specialty.

Providers with the EHRs saved an average of $5.14 per member per month over the 18 months after implementation, representing a 3.40% savings. Ambulatory cost savings accounted for $4.69 of that amount. Health costs rose with both the EHR and non-EHR groups, but they did not rise as fast with the EHR group. Critics argue that the study only looked at 18 months after implementation, and that the savings builds with increased time.

Even with incentive payments and cost savings, no matter how small, buying an EHR system is challenging. The market exploded when the federal government started offering doctors those incentive payments. There’s closer to a thousand products out there to sort through in order to find the right system, and time is running out. The government said that those who don’t go digital will face payment penalties in the future.

CMS Releases Guidance on Marketplace Navigators

As the Affordable Care Act progresses, health insurance marketplaces are set to open for citizens in all states in two and half months. Last week, the Centers for Medicaid and Medicare Services (CMS) released the final rule that outlines the training and duties of a marketplace “navigator.” You can read more about the navigators in the May NAHAM New article “Healthcare Assisters verses Navigators.”

In short, the navigators will be charged with providing expert advice on a wide range of issues to people signing up for insurance coverage under the health law. According to CQ, the rule requires navigators in the federally run marketplaces to go through 30 hours of training before they can start helping consumers. The rule also outlines standards for certified application counselors, who will also help people with their questions about how to get coverage. Navigators and certified application counselors will be providing help in the 33 states that will be served by the federal insurance exchange or that will be partnering with that exchange. The remaining 17 states are setting up their own such marketplaces and will provide help, at least initially, through what are known as “in-person assisters.”

Navigators, certified application counselors, and in-person assisters must be knowledgeable about qualified health plans, insurance affordability programs, tax implications of enrollment decisions, eligibility for premium tax credits and cost-sharing reductions, and other topics.

The states running their own exchanges can establish their own, more rigorous qualifications and requirements is they choose. 

New Smartphone Apps for Mental Health

There has been a wave of new medical smartphone apps released recently, designed for purposes from electronic health records management to patient self-diagnosis. Going forward, the Boston Globe is reporting that developers are testing the waters with apps that are designed for treatment, especially designed around mental health.

So far, most of the apps released have been games that are largely focused on the ability to be mindful, aware, and alert. One game called “Project Eco” allows players to explore new worlds with the goal of helping to sharpen cognitive functions, including being more mindful and engaged. The game simultaneously rewards players by having them collect stars, gems, and alien specimens as they play, enticing them to play again.

In another game, called “DepressionQuest,” players click through the deeply realistic narrative of a first-person character, making choices for the character about work, friends, and family. The game shows options for dealing with depression, such as seeking therapy, medication, or reaching out to friends. Still other games keep track of a player’s attention span, reaction times, and decisions to assist in diagnosis.

Developers hope that these apps might one day supplement therapy and support groups by putting mental health care into patients’ homes or pockets.

But not all psychologists are accepting the new diagnostic and support tools. Critics point out that most of the games haven’t gone through rigorous testing to see whether they work, or whether they might inadvertently harm patients. They also say that the makers aren’t yet allowed to make health claims for their products.

Drugs must be approved by the federal government and states license many therapists, but games are unregulated.  According to a spokeswoman, the US Food and Drug Administration plans to require approval for only a small subset of Web or mobile medical apps that may present potential harm to consumers.

Still, as NAHAM News reported last month (The Wave of Smartphone EHR Apps), the medical app trend doesn’t seem to be subsiding any time soon.