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News Roundup: July 1, 2016

Hospitals, ACOs Need More Flexibility to Use Home Health: Panel

Published by Bloomberg BNA
By Michael D. Williamson
July 1, 2016

Policy makers recognize the need to allow regulatory flexibility and the value that home care services offers risk-bearing providers (such as those participating in APMs), Rodriguez said. The Alliance for Home Health Quality and Innovation sponsored the panel discussion.

Read the full article here:!/articles/O9LY9W3H0JK0?ni_name=NewsAlert&ni_source=AlertEmail

Berwick, Orszag To CMS: Launch Mandatory Pay Bundles Before Obama Exits

Published by Inside Health Policy
July 1, 2016

Several health and financial experts, including former administration officials Don Berwick and Perter Orszag, are asking CMS to initiate several more mandatory bundled pay demonstrations before the administration leaves office, and suggest that cardiac procedures are promising candidates for bundled pay.

CMS implemented its first mandatory bundled pay program, the Comprehensive Care for Joint Replacement model, earlier this year, and the experts including the University of Pennsylvania's Ezekiel Emanuel and the Center for American Progress' Neera Tanden and Topher Spiro say in a June 23 letter that moving to mandatory participation in these demonstrations was necessary “to ensure that participants in a demonstration are not only those providers that believe they will financially benefit from participation.” The letter also says that a mandatory demonstration makes sure all providers have the incentive to improve their processes.

“In the remaining months of this administration, we urge you to initiate several additional mandatory bundled payment demonstrations,” the experts say. “Additional mandatory demonstrations would send an important signal to stakeholders -- hospitals, physicians, device manufacturers, skilled nursing facilities, and home health care agencies -- that Medicare plans to aggressively expand bundled payments alongside other payment reforms.”

The experts warn HHS Secretary Sylvia Burwell that the market would respond to long periods of inaction or uncertainty, and implementing more mandatory bundles will keep CMS' momentum going.

Berwick, Orszag, Emanuel, and others say that targeting cardiac procedures like coronary artery bypass grafting, stent placement, cardiac catheterization, pacemaker placement and management of congestive heart failure for bundled payments could be promising. The experts say results from the Acute Care Episode Program suggest there are savings to be found for both Medicare and providers in this area.

There is also wide variation in spending around coronary artery bypass grafting, the experts say, which suggests there is a potential for savings there, as well.

“According to one study, the difference between hospitals in the highest-cost quintile and hospitals in the lowest-cost quintile was $23,833, or 70 percent. Much of this variation can be explained by differences in prices, suggesting that bundled payment can address price in addition to utilization,” the letter says.

Post-acute care also accounts for a large share of the variation in costs, so demonstrations should include post-acute care, the experts say, along with 90 day guarantees.

“Evidence indicates that providers only focus attention on care or processes that are included in the bundle,” the letter says.

The Alliance for Home Health Quality and Innovation recently touted a study from Dobson, DaVanzo and Associates that found for certain Diagnosis Related Groups for major joint replacements without complications, Medicare episode payments and readmission rates are lower on average for patients that go from a hospital to home health after discharge, rather than go to a facility-based setting. However, the group said the study didn't control for patient severity, aside from the DRG and presence of a fracture.

“In the post-acute care space, bundled payment initiatives, such as CJR, will be an essential part of achieving a health care system that rewards value-based approaches over the quantity of services provided,” said Teresa Lee, executive director of the Alliance. “The Alliance stands ready to work with CMS and lawmakers as they reform the health care delivery system to elicit better patient outcomes and lower spending rates by providing valuable data on the role of post-acute care in bundled payment models.”

The experts say that one benefit of a mandatory bundle -- aside from guaranteed savings that can be delivered over the short term for specific treatments -- is that the evidence necessary to expand a demonstration can be gathered quickly to justify a nationwide expansion. -- Michelle M. Stein (

CMS to Reduce Home Health Payments by $180 Million in 2017

Published by Home Health Care News
By Amy Baxter
July 1, 2016

The Centers for Medicare & Medicaid Services (CMS) has proposed reducing Medicare home health payments by 1% in CY2017, or $180 million. The proposed changes to the Medicare home health prospective payment system (HH PPS) follow the federal agency’s proposal to increase hospice payments by 2%, or $330 million for 2017.

In 2015, care for 3.4 million beneficiaries of home health services from approximately 11,400 home health agencies cost Medicare approximately $17.8 billion in 2015. Home health agencies (HHAs) are paid a national, standardized 60-day episode payment for all covered home health services, adjusted for case-mix and area wage differences, according to CMS.

The proposal reflects a combination of adjustments to home health payments, inducing a 2.3% home health payment update or $420 million increase and a $420 million decrease in the rebasing adjustment to the national, standardized 60-day episode payment rate, the national per-visit payment rates and the non-routine medicare supplies conversion factor. The proposal also includes a $160 million decrease reflecting the effects of a 0.97% decrease adjustment to the national, standardized 60-day episode payment rate for a case-mix growth impact of -0.9% and the effects of the $20 million decrease or 0.1% decrease in the proposed increase to the fixed-dollar loss ratio used in determining outlier payments.

CMS is also proposing to adopt four new payment determination measures for 2018 to meet the requirements of Improving Medicare Post-Acute Care Transformation Act (IMPACT) of 2014. These measures include preventable hospital readmission rates, total estimated Medicare spending per beneficiary, discharge to the community and medication reconciliation.

Home health agencies in the nine states where CMS is currently underway with its Home Health Value-Based Purchasing (HHVBP) Model will see their payments adjusted—either upward or downward—based on each HHA’s total performance score on a set of measures. The first payment adjustment of 3% will begin in 2018, followed by a maximum adjustment of 5% in 2019, 6% in 2020, 7% in 2021 and 8% in 2022. The nine-state pilot program is taking place in Maryland, Massachusetts, Florida, Washington, North Carolina, Arizona, Nebraska, Iowa and Tennessee.

The payment proposal is one of several rules for 2017 that reflect the agency’s strategy to create a better health system that values quality over quantity and focuses on specific reforms, including better health outcomes, preventing disease, helping patients return home, care management and greater efficiency and coordination.

CMS reduced home health payments for 2016 by 1.4%, or $260 million.

The federal agency has also put forth several changes and improvements related to the HHVBP model to help HHAs develop their public reporting. CMS proposes calculating benchmarks and achievement thresholds at the state level rather than the level of the size-cohort and change the definition of “benchmark” to refer to the meant of the top decile of Medicare-certified HHA performance on the specified quality measure during the calculated period for each state. The agency also proposed requiring a minimum of eight HHAs to qualify as a size-cohort, as well as remove four measures from the quality reporting and increasing the timeframce for submissting New Measure data from seven calendar days to 15 calendar days at the end of each reporting period to reflect weekends and holidays.

Specifically, CMS could remove four measures including Care Management: Types and Sources of Assistance, Prior Functioning ADL/IADL, Influenza Vaccine Data Collection Period and Reason Pneumococcal Vaccine Not Received. The proposal also includes an adjustment to the reporting period and submission date for the Influenza Vaccination Coverage for Home Health Personnel measure to an annual submission instead of a quarterly submission. Lastly, the agency would like to add an appeals process with the existing recalculation process and a new reconsideration process.

Medicare reforms that will improve care coordination for chronically ill patients

Published by Brookings
By Keith Fontenot, Kavita Patel and Margaret Darling
July 1, 2016

On June 15, the Leonard D. Schaeffer Initiative for Innovation in Health Policy held its inaugural event featuring Senator Ron Wyden and health policy experts from across the political spectrum on the topic of how to reform Medicare to improve care and coordination for Medicare’s chronically ill.

The event comes at a time when legislation on Medicare reform for chronic care may be imminent: over the last two years, a bipartisan working group on chronic care has formed and the Senate Finance Committee has held hearings and published policy options on how best to tackle the changing landscape of health care for America’s elderly.

At the Schaeffer Initiative event, Senator Wyden called for Medicare reforms to support coordination, home health, benefit flexibility, and technology use that could improve care for chronically ill beneficiaries.

Senator Wyden also intimated that the bipartisan working group may release legislation early next year, which could include increased financial support for coordinating care for the sickest patients, greater use of technologies and financial support for appropriate home health care, greater flexibility for supplementary benefits in Medicare Advantage, and ways to support continuing innovation in Medicare.

Chronic conditions among Medicare beneficiaries

"The debate about American healthcare is way, way, way out of whack [particularly for] the striking lack of attention to what now dominates American health care: chronic illness." – Senator Ron Wyden
In Medicare today, health care for individuals with chronic conditions accounts for a staggering share of overall Medicare spending—a significant change from 1965 when Medicare started. In 2012, the Centers for Medicare and Medicaid Services (CMS) published a report detailing the prevalence and impact of chronic conditions (PDF) in Medicare.

In fact, the expense of a few combinations of chronic diseases drives Medicare spending to an astonishing degree. The four costliest three-disease combinations include beneficiaries with stroke, chronic kidney disease, and either asthma, chronic obstructive pulmonary disease, depression, or heart failure.

Total per capita costs for beneficiaries with these combinations of disease exceed $60,000---seven times that of the average Medicare beneficiary.

Background on legislation

Senator Wyden proposed legislation in 2014 that would have established Better Care Plans (BPCs), a variation on Accountable Care Organizations, aimed at improving coordination of high cost, chronically ill Medicare beneficiaries. By requiring beneficiaries to actively enroll in such plans, they offered the potential to better engage patients, as multiple panelists at the event recommended.

Subsequently, in July 2014, the Senate Finance Committee held a hearing on how to address the unmet needs of patients with chronic illness, focusing on experiences of patients, caregivers, payers and health systems that have been involved in care for individuals with chronic disease. The following Finance Committee hearing on chronic care, in May 2015, focused on how to mobilize a plan, with prominent policy administrators and experts Patrick Conway and Mark Miller as witnesses.

Building on this, Senators Wyden and Hatch announced the launch of an on-going, bipartisan working group on improving chronic care for Medicare beneficiaries that released a policy options paper in December 2015 that outlined six key areas of reform.

Four areas of reform discussed at the event

Framed around “Updating the Medicare guarantee,” Senator Wyden focused on four key areas of chronic care reform at the Schaeffer Initiative event:

Coordination. The first of these four reform topics was coordination. While he credited the positive impact of free wellness visits, follow up coordination without added burdens on the patients is needed. Medicare recently added a fee code that newly reimburses physicians for the labor-intensive task of connecting all the dots associated with a chronically ill patient’s care.
Targeted home visits. Second, Senator Wyden cited appropriate care in the home as a source of untapped Medicare savings and improved quality of life for seniors. He highlighted the Independence At Home (IAH) demonstration, touting early results indicating a savings of $3,000 per Medicare beneficiary.

Additionally, policymakers have argued that Medicare’s Accountable Care Organizations—physician groups accountable for quality and total cost of care for Medicare beneficiaries—are hampered by reimbursement constraints. Notable among the services that could be used more effectively is telemedicine. Another reform noted in the bipartisan working group policy options paper would waive telehealth reimbursement requirements for Accountable Care Organizations that had agreed to take on risk for financial losses.
Flexibility in Medicare Advantage. The third area of reform focused on increasing flexibility within the Medicare Advantage program so as to enable more personalized insurance plans for individuals with special needs as a result of their chronic conditions.

As outlined in their December paper, one policy option to support flexibility in Medicare Advantage would be to allow Medicare Advantage plans to provide supplemental services that are related to the treatment or prevention of chronic disease. In their paper, they solicited comment on whether this flexibility should be granted to all Medicare Advantage plans, or a subset based on the plan’s record of quality performance or other criteria.
Keeping up with innovation. Finally, Senator Wyden focused explicitly on the current inability of Medicare to keep up with advancements in science, like telemedicine and new drugs. While these exist, many are beyond the reach of Medicare beneficiaries because of current benefit design and other policies.

Among the policies they were included in the policy options paper is the elimination of geographic limitations on use of telemedicine consults in cases of suspected stroke. Additionally, the paper suggested allowing Medicare Advantage plans to include some telehealth services in their bid amounts to Medicare.
Why the reforms matter

The main purpose for these reforms, as Senator Wyden strongly argued, is to improve the care for millions of elderly and disabled Americans with chronic conditions, and alleviate their suffering. Panelists were in agreement with that goal, but cautioned, however, not to expect huge savings from many of these reforms in the short run, as many improvements require investments in care managers and other infrastructure, but that a reasonable objective would be improvements in quality for similar or slightly lower costs.

The Schaeffer Initiative for Innovation in Health Policy, run jointly by Brookings and the USC Schaeffer Center, will also be releasing a series of policy analyses and recommendations later this year and in 2017, many of which can help inform this legislative process. Schaeffer Initiative work is being completed on Medicare Advantage and delivery system reform, prescription drug payment, and better coordinating post-acute care.

How Telemedicine Is Transforming Health Care

Published by The Wall Street Journal
July 1, 2016

After years of big promises, telemedicine is finally living up to its potential.

Driven by faster internet connections, ubiquitous smartphones and changing insurance standards, more health providers are turning to electronic communications to do their jobs—and it’s upending the delivery of health care.

Doctors are linking up with patients by phone, email and webcam. They’re also consulting with each other electronically—sometimes to make split-second decisions on heart attacks and strokes. Patients, meanwhile, are using new devices to relay their blood pressure, heart rate and other vital signs to their doctors so they can manage chronic conditions at home.

Telemedicine also allows for better care in places where medical expertise is hard to come by.

Five to 10 times a day, Doctors Without Borders relays questions about tough cases from its physicians in Niger, South Sudan and elsewhere to its network of 280 experts around the world, and back again via the internet.

In the woods outside St. Louis, shifts of doctors and nurses work around the clock in Mercy health system’s new Virtual Care Center—a “hospital without beds” that provides remote support for intensive-care units, emergency rooms and other programs in 38 smaller hospitals from North Carolina to Oklahoma. Many of them don’t have a physician on-site 24/7.

“It’s almost like being at the bedside—I can’t shock a patient [restart his heart with electrical paddles], but I can give an order to the nurses there,” says Vinaya Sermadevi, a critical-care specialist.

In the past year, ICUs monitored by Mercy specialists have seen a 35% decrease in patients’ average length of stay and 30% fewer deaths than anticipated. “That translates to 1,000 people who were expected to die who got to go home instead,” says Randy Moore, president of Mercy Virtual.

As a measure of how rapidly telemedicine is spreading, consider: More than 15 million Americans received some kind of medical care remotely last year, according to the American Telemedicine Association, a trade group, which expects those numbers to grow by 30% this year.

None of this is to say that telemedicine has found its way into all corners of medicine. A recent survey of 500 tech-savvy consumers by HealthMine found that 39% hadn’t heard of telemedicine, and of those who haven’t used it, 42% said they preferred in-person doctor visits. In a poll of 1,500 family physicians, only 15% had used it in their practices—but 90% said they would it if were appropriately reimbursed.

What’s more, for all the rapid growth, significant questions and challenges remain. Rules defining and regulating telemedicine differ widely from state to state and are constantly evolving. Physicians groups are issuing different guidelines about what care they consider appropriate to deliver in what forum.

Some critics also question whether the quality of care is keeping up with the rapid expansion of telemedicine. And there’s the question of what services physicians should be paid for: Insurance coverage varies from health plan to health plan, and a big federal plans covers only a narrow range of services.

Telemedicine’s future will depend on how—and whether—regulators, providers, payers and patients can address these challenges. Here’s a closer look at some of these issues:

Do patients trade quality for convenience?
The fastest-growing services in telemedicine connect consumers with clinicians they’ve never met for one-time phone, video or email visits—on-demand, 24/7. Typically, these are for nonemergency issues such as colds, flu, earaches and skin rashes, and they cost around $45, compared with approximately $100 at a doctor’s office, $160 at an urgent-care clinic or $750 and up at an emergency room.

Many health plans and employers have rushed to offer the services and promote them as a convenient way for plan members to get medical care without leaving home or work. Nearly three-quarters of large employers will offer virtual doctor visits as a benefit to employees this year, up from 48% last year.

Web companies such as Teladoc, Doctor on Demand and American Well are expected to host some 1.2 million such virtual doctor visits this year, up 20% from last year, according to the American Telemedicine Association.

But critics worry that such services may be sacrificing quality for convenience. Consulting a random doctor patients will never meet, they say, further fragments the health-care system, and even minor issues such as upper respiratory infections can’t be thoroughly evaluated by a doctor who can’t listen to your heart, culture your throat or feel your swollen glands.

In a study in JAMA Dermatology last month, researchers posing as patients with skin problems sought help from 16 telemedicine sites—with unsettling results. In 62 encounters, fewer than one-third disclosed clinicians’ credential or let patients choose; only 32% discussed potential side effects of prescribed medications. Several sites misdiagnosed serious conditions, largely because they failed to ask basic follow-up questions, the researchers said.

“Telemedicine holds enormous promise, particularly in dermatology, but these sites are just not ready for prime time,” says Jack Resneck, a University of California, San Francisco, dermatologist and the study’s lead author.

The American Telemedicine Association and other organizations have started accreditation programs to identify top-quality telemedicine sites; the association also tells consumers to be wary of sites that sell products.

The American Medical Association this month approved new ethical guidelines for telemedicine, calling for participating doctors to recognize the limitations of such services and ensure that they have sufficient information to make clinical recommendations.

Yet there isn’t always agreement on what the limits of virtual medical exams are. Jason Gorevic, CEO of Teladoc, which went public last year, says its doctors use more than 100 guidelines developed specifically for delivering care remotely, including a five-point scale for determining whether a sore throat is likely due to streptococcus infection that warrants antibiotics. The Centers for Disease Control and Prevention, however, advises clinicians to prescribe antibiotics only for cases confirmed by a rapid test or throat culture.

Who pays for the services?
While employers and health plans have been eager to cover virtual urgent-care visits, insurers have been far less willing to pay for telemedicine when doctors use phone, email or video to consult with existing patients about continuing issues. “It’s very hard to get paid unless you physically see the patient,” says Peter Rasmussen, a neurosurgeon and medical director of distance health at the Cleveland Clinic.

Some 32 states have passed “parity” laws requiring private insurers to reimburse doctors for services delivered remotely if the same service would be covered in person, though not necessarily at the same rate or frequency. Medicare lags further behind. The federal health plan for the elderly covers a small number of telemedicine services—only for beneficiaries in rural areas and only when the services are received in a hospital, doctor’s office or clinic.

Bills to expand Medicare coverage of telemedicine have bipartisan support in Congress. Opponents worry that such expansion would be costly for taxpayers, but proponents say it would save money in the long run—as much as $2 billion over 10 years, according to an estimate by Avalere Health, a consulting firm.

Doctor-to-doctor consultations are also seldom covered by insurers. Health systems such as Mercy, the Mayo Clinic and the Cleveland Clinic that provide oversight and expertise on strokes, intensive-care units and other specialty care to networks of smaller hospitals typically charge those facilities a monthly fee, which generally cannot be charged to patients.

Such arrangements allow small hospitals to provide top-flight care to patients on-scene and to advertise that they partner with world-class health-care systems. And it’s less expensive than hiring their own specialists. “That’s a proverbial triple win,” says Dr. Rasmussen.

Experts say more hospitals are likely to invest in telemedicine systems as they move away from fee-for-service payments and into managed-care-type contracts that give them a set fee to provide care for patients and allow them to keep any savings they achieve.

Is the state-by-state regulatory system outdated?
Historically, regulation of medicine has been left to individual states. But some industry members contend that having 50 different sets of rules, licensing fees and even definitions of “medical practice” makes less sense in the era of telemedicine and is hampering its growth.

Currently, doctors must have a valid license in the state where the patient is located to provide medical care, which means virtual-visit companies can match users only with locally licensed clinicians. It also causes administrative hassles for world-class medical centers that attract patients from across the country.

At the Mayo Clinic, doctors who treat out-of-state patients can follow up with them via phone, email or web chats when they return home, but they can only discuss the conditions they treated in person. “If the patient wants to talk about a new problem, the doctor has to be licensed in that state to discuss it. If not, the patient should talk to his primary-care physician about it,” says Steve Ommen, a cardiologist who runs Mayo’s Connected Care program.

To date, 17 states have joined a compact that will allow a doctor licensed in one member state to quickly obtain a license in another. While welcoming the move, some telemedicine proponents would prefer states to automatically honor one another’s licenses, as they do with drivers’ licenses. “You don’t have to stop a get a new license every time to drive through a new state,” says Jonathan Linkous, the American Telemedicine Association’s CEO.

But states aren’t likely to surrender control of medical practice, and most are considering new regulations. This year, more than 200 telemedicine-related bills have been introduced in 42 states, many regarding what services Medicaid will cover and whether payers should reimburse for remote patient monitoring as well as store-and-forward technologies (where patients and doctors send records, images and notes at different times) in addition to real-time phone or video interactions. “A lot of states are still trying to define telemedicine,” says Lisa Robbin, chief advocacy officer for the Federation of State Medical Boards.

What counts as practicing medicine?
The exploding volume of health information on the internet is raising new questions about what constitutes the practice of medicine. Some web-based businesses enable consumers to consult doctors overseas, who don’t have U.S. medical licenses, but post fine-print disclaimers that they are providing information and not medical advice.

FirstDerm invites users to upload photos and a description of their skin issues and says a “board-certified dermatologist” will reply within 24 hours with a possible identification of the condition and treatment options, for $25. Most of the dermatologists are in Europe.

CEO Alexander Börve says “there is no doctor-patient relationship” because both the physicians and patients remain anonymous.

Another site, First Opinion, connects users with doctors in India for web chats, but a disclaimer states that these are merely “social interactions.” If a prescription or lab test is warranted, a locally licensed doctor joins the conversation for a $39 fee. The company didn't respond to requests for comment.

Are such services “practicing medicine” without a license? The exact definition varies from state to state, and state medical boards generally don’t investigate unless a patient files a formal complaint. Even then, boards have jurisdiction only over individual doctors licensed in their state, not companies, or physicians overseas, says Ms. Robbin of the Federation of State Medical Boards.

How will this change competition?
Telemedicine is also shaking up traditional relationships between providers and payers and fueling the rise of medical “megabrands” whose experts are increasingly competing for patients in each other’s backyards.

Insurers such as Anthem and UnitedHealth Group are offering their own direct-to-consumer virtual doctor-visit services, rather than simply paying for plan members to use those from web-based vendors. Major health systems are making their physicians available for virtual follow-ups and chronic-disease management, as well as urgent-care visits, to new and existing patients.

Johns Hopkins Medicine, Stanford Medical Center, Harvard-affiliated Partners HealthCare and other academic centers are all offering remote consultation services. American Well, which supplies software for many hospitals’ telemedicine programs, hopes to become what CEO Roy Schoenberg calls “the Amazon of health care,” offering a marketplace of branded telemedicine programs from top hospitals

The Cleveland Clinic is working to create a “Cleveland Clinic in the Cloud” that would allow patients across the country to access its physicians without going to Ohio. Dr. Rasmussen also foresees joining with local pharmacy clinics, labs and imaging centers to provide in-person exams as needed. “This will open up a world of relationships across a spectrum of health-care providers that we haven’t seen to date,” he says.