PNHP

Proposed SGR deal would advance GOP goal of privatizing Medicare

Proposed SGR deal would advance GOP goal of privatizing Medicare

By Harris Meyer
Modern Healthcare, March 18, 2015

The proposed bipartisan House deal to repeal and replace Medicare’s hated sustainable growth-rate physician-payment system offers Republicans a chance to make two significant benefit changes they’ve long sought. Now it remains to be seen if they can accept and lock in that victory. 

It also raises the question of what Democrats, if they help enact the SGR bill, would have left to offer when Republicans come back the next time—probably quite soon—with more and bigger demands to revamp and reduce Medicare spending.

The deal crafted by House Speaker John Boehner and House Minority Leader Nancy Pelosi would pay for a $70 billion portion of the SGR overhaul partly by increasing Part B premiums for higher-income beneficiaries and requiring those with Medigap supplemental coverage to spend at least $250 out of pocket before coverage kicks in, according to Modern Healthcare’s Paul Demko, who first reported the details last week. 

Even though President Barack Obama previously proposed similar Medigap changes in his 2016 budget, senior advocacy group AARP expressed “very serious concerns” about those changes and the increased means-testing of premiums. Some Senate Democrats also voiced reservations. 

The Center for American Progress (PDF) has cautioned that revising Medicare supplemental coverage rules to impose higher costs on seniors would hurt lower-income beneficiaries. It urged that any such changes be applied using means-testing, sparing beneficiaries at lower income levels. Beyond that, AARP and other groups that support Medicare fear that too much means-testing could erode political support for the program among middle- and upper-middle-class Americans.

But Boehner and the conservative Americans for Tax Reform see the measures as an important first step toward dramatically restructuring Medicare. Meanwhile,House Republicans separately unveiled their 2016 budget proposal that would transform Medicare into a defined-contribution voucher program (which they call premium support), convert Medicaid into a capped state block-grant program, and repeal the Affordable Care Act.

The increased beneficiary cost-sharing included in the SGR reform proposal could work hand-in-hand with the larger House GOP Medicare plan by prodding seniors to choose the lower-cost private Medicare plans envisioned under the budget blueprint. That would advance their long-held goal of turning Medicare into a privatized, means-tested welfare program and getting the government out of the health insurance business.

Some conservatives clearly were thrilled at the prospect of advancing their Medicare overhaul goals through the SGR bill, and urged other conservatives to accept the added 10-year costs to the federal budget and pass it. “I could care less about the 10 years,” Ryan Ellis, tax policy director of Americans for Tax Reform (which is headed by conservative stalwart Grover Norquist), told the National Journal. “You would never measure entitlement reform in a 10-year window.”

Follow Harris Meyer on Twitter: @MHHmeyer

http://www.modernhealthcare.com/article/20150318/BLOG/303189965

Harris Meyer oversees news and feature coverage for the magazine. Meyer has covered healthcare and law since 1983, most recently as a freelance writer for Health Affairs, Kaiser Health News, the Oregonian, Medscape and other publications. He previously served as law editor at the Daily Business Review in Miami; a staff writer at the New Times alternative weekly in Fort Lauderdale, Fla.; senior writer at Hospitals & Health Networks; national correspondent at American Medical News; and health unit researcher at WMAQ-TV News in Chicago. Meyer has a bachelor’s degree in communications from Northwestern University. In 2000 he was a winner of the Gerald Loeb Award for Distinguished Business and Financial Journalism. He joined Modern Healthcare in 2013.

Fed war on health care spending abuse needs to include Medicare Advantage

Commentary: Obama administration bragging about anti-fraud efforts, but Center report showed bigger dollars are being lost elsewhere

By Wendell Potter
Center for Public Integrity, March 23, 2015

The Obama administration went to great lengths last week to inform us that it recovered $3.3 billion in fraudulent payments to Medicare health care providers in fiscal year 2014. Officials even went so far as to give an advance copy of their report to The Wall Street Journal, which, like the Center for Public Integrity, has been investigating Medicare fraud and abuse.

In a story that appeared in the Journal before the official release of the report, WSJ reporter Stephanie Armour wrote that the recovery “was part of an effort by the Obama administration to improve enforcement and prevent abusive billing practices.” That effort is run jointly by the Department of Health and Human Services the Justice Department.

HHS secretary Sylvia Burwell was quoted in the story as saying that “we’ve cracked down on tens of thousands of health care providers suspected of Medicare fraud,” an effort she said is helping to extend the life of the Medicare Trust Fund.

That’s good news, of course. Taxpayers benefit when doctors and other health care providers get caught trying to rip off the government.

But when it comes taking on big and well-connected insurance companies that have been ripping off the Medicare program for years, the administration has been far less aggressive in catching, much less punishing, the abusers.

As the Center for Public Integrity reported last week, officials in the Obama administration were advised as long ago as 2009 that a formula the government uses to pay private insurers that participate in the Medicare Advantage program “triggered widespread billing errors and overcharges” that waste billions of tax dollars every year.

There was no press release issued by the administration about that 2009 report; in fact, the administration buried it. The report probably never would have surfaced at all had the Center for Public Integrity not filed a Freedom of Information request seeking records going back several years regarding payments to Medicare Advantage plans.

The Medicare Advantage program is a privately run alternative to standard Medicare. Close to a third of Medicare-eligible Americans are now enrolled in insurance company-operated Medicare Advantage plans. People enrolled in these plans typically pay less out of pocket for their care—which explains their appeal—but also typically have a smaller network of providers to choose from.

As Center reporter Fred Schulte explained in his March 13 story, the federal government pays these private health plans a set monthly fee for each patient based on a formula known as a risk score. Risk scores were put in place by the government to measure the state of Medicare Advantage enrollees’ health. “Sicker patients merit higher rates than those in good health,” Schulte wrote.

Schulte’s investigation into risk score payments last year uncovered evidence that the government has been overpaying private insurers for years. That’s because the risk scores can be manipulated by insurers to make it appear that enrollees are sicker than they actually are. Just last week, the Government Accountability Office estimated that “improper payments” to Medicare Advantage plans totaled more than $12 billion in 2014 alone.

When Schulte came across the unpublished 2009 report, he asked CMS why it was never made public.

The explanation he got was preposterous. According to a CMS spokesperson, the agency wanted to publish the report but was told it was too long, that to be considered for publication on a government-run research site, it would have to be “substantially shortened.” This despite the fact that some of the reports that have been published on that site are even longer than the one on risk score manipulation.

The story gets even more incredible. The CMS spokesperson said that “given competing workload demands we were not able to revise and resubmit the article.”

I don’t doubt that the folks at CMS were especially busy in 2009. That’s the year debate began on what would eventually become Obamacare.

To make Obamacare work, the administration needed to have the support of the insurance industry. Insurers had to agree to change many of their profitable but anti-consumer practices in exchange for billions of dollars in new revenue from the government.

Insurance industry lobbyists are among the most powerful and well connected in Washington. Could the administration have put the kibosh on the 2009 report because it didn’t want to jeopardize its relationship with insurers and put the reform law at risk?

We’ll probably never know. But if the administration is really as serious about reducing Medicare fraud as it said last week it is, let’s hear more from CMS about what it’s doing to end abuses in the Medicare Advantage program.

The Wall Street Journal reported that the owners of a home health care company that defrauded the government were recently sentenced to prison terms of up to 120 months each. How much do you want to bet that executives of Medicare Advantage plans that are overbilling taxpayers out of far more money will ever see the inside of a jail cell?

Wendell Potter is the author of “Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care” and “Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act.“

http://www.publicintegrity.org/2015/03/23/16942/fed-war-health-care-spending-abuse-needs-include-medicare-advantage

MIPS – Learn to live with it

Working Framework of SGR Package

House Committees on Energy & Commerce and Ways & Means, March 20, 2015

Repeal and Replace Medicare Physician Payment System. The legislation repeals the flawed SGR formula and replaces it with HR 1470, SGR Repeal and Medicare Provider Payment Modernization Act (replaces SGR with MIPS, the Merit-based Incentive Payment System)

Children’s Health Insurance Program (CHIP). This provision preserves and extends CHIP, fully funding the program through September 30, 2017.

Medicare, Medicaid, and Other Health Extenders. The legislation extends all of the extenders included in the Protecting Access to Medicare Act of 2014 (PAMA, the most recent SGR patch) in addition to funding for Community Health Centers through 2017.

Other Medicare Reforms.1) Medicare DMEPOS Competitive Bidding Improvement Act (HR 284). (2) The Protecting Integrity in Medicare Act (HR 1021).

Savings.

(1) Income-related Premium Adjustment. Starting in 2018, this policy would increase the percentage that beneficiaries pay toward their Part B and D premiums in two income brackets (roughly 2 percent of beneficiaries): for individuals with income between $133.5-160K ($267-$320K for a couple), the percent of premium paid increases from 50 percent to 65 percent. For those with income between $160-214K ($320- $428K for a couple), the percent increases from 65 percent to 75 percent.

(2) Medigap Reform. The proposal limits first dollar coverage on certain Medigap plans by prohibiting plans from covering the Part B deductible. Change applies only for future retirees starting in 2020.

(3) Increase Levy Authority on Payments to Medicare Providers with Delinquent Tax Debt.

(4) Hospital Update. Under current law, hospitals will receive a 3.2 percentage point adjustment in addition to their base payment rate in FY18. This policy would phase-in this update incrementally.

(5) Additional Medicaid DSH Savings.

(6) 1 Percent Market Basket Update for Post-Acute Providers

http://waysandmeans.house.gov/uploadedfiles/bipart_topline_summary-032015_final2.pdf

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What Measures Should Be Used to Evaluate Health Care?

By Melinda Beck

The Wall Street Journal, March 22, 2015

There’s little agreement among patients, providers and insurers

http://www.wsj.com/articles/what-quality-measures-should-be-used-to-evaluate-health-care-providers-1427079654

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Primum Non Nocere: Congress’s Inadequate Medicare Physician Payment Fix

By Jeff Goldsmith

Health Affairs Blog, January 24, 2014

With this legislation, Congress is preparing yet again to enshrine in statute another payment strategy that is both unproven and highly controversial.

The proposed legislation casts in concrete an almost laughably complex and expensive clinical record-keeping regime, while preserving the very volume-enhancing features of fee-for-service payment that caused the SGR problem in the first place. The cure is actually worse, and potentially more expensive, than the disease we have now.

If we’re not sure new advanced payment schemes actually work, if we haven’t actually gotten them right, then we have no business compelling or incenting 680 thousand practicing physicians to use them. We’re not going to get clinical practice where we want it to go with an elaborate, individualized operant conditioning schedule with four domains and sixty eight “core measures”, and billions more spent on the IT systems and clerical support to document them. We need to reward teamwork, not box-checking.

It isn’t just physicians that should be guided by Hippocrates’ maxim, “First Do No Harm,” but our policymakers as well.

http://healthaffairs.org/blog/2014/01/24/primum-non-nocere-congresss-inadequate-medicare-physician-payment-fix/

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Comment:

By Don McCanne, MD

We’re there. The SGR extension expires March 31, and Congress is leaving for a two week recess this Friday, March 27. Not only is there strong bipartisan Congressional support for HR 1470, the SGR repeal and replacement act, but there is also overwhelming support from the AMA and other physician societies and from other influential interest groups such as Families USA. The bill will pass this week.

The last two Quote of the Day messages have discussed some serious defects in this legislation, especially the problems with the Merit-based Incentive Payment System (MIPS). But that part of the bill is a given. What is new today is the one page summary of the intended amendments that will be added before enactment of the bill (see “Working Framework of SGR Package,” above).

Two items in these proposed amendments are of particular concern: 1) Means-testing of Medicare Part B and Part D premiums, and 2) Prohibiting Medigap plans from covering the Part D deductible.

Under means-tested premiums, higher-income individuals will be required to pay larger premiums, undermining the support of this influential group for the traditional Medicare program. Since they will be paying higher premiums, many likely would prefer to select their own coverage from a market of private Medicare plans – a goal of those supporting privatization of Medicare through the premium-support model of reform. Thus this provision would be a significant incremental step towards privatization.

Prohibiting Medigap plans from covering Medicare Part B deductibles expands the implementation of consumer-directed approaches to financing health care. It advances the conservative agenda of requiring more personal responsibility on the part of patients, often expressed by the repulsive “skin in the game” rhetoric. Much has been written about the potential adverse consequences of deductibles, but the more ominous portent of this measure is that it establishes the principle that all health care must conform with the consumer-directed model. As we have seen, the use of ever higher deductibles is rapidly expanding in employer-sponsored plans, and this opens the door for the same rapid increase in cost sharing to occur with Medicare.

But back to the basic bill – using the MIPS to replace the SGR. In the last two Quote of the Day messages it was pointed out what an administrative nightmare MIPS would bring us. What should be particularly alarming is that these new required administrative procedures have not been shown to either significantly decrease the volume of medical services, or improve quality – supposedly the two goals of payment reform.

As Jeff Goldsmith states about last year’s version of the same policies, “The proposed legislation casts in concrete an almost laughably complex and expensive clinical record-keeping regime, while preserving the very volume-enhancing features of fee-for-service payment that caused the SGR problem in the first place. The cure is actually worse, and potentially more expensive, than the disease we have now.”

Tune in to C-Span this week for the latest chapter in their epic fiction series: Democracy in America.

Geyman takes on Obamacare, touts single-payer system in latest book

Journal of the San Juan Islands (Wash.), March 22, 2015

Is Obamacare the cure-all for what ails the U.S. healthcare system?

Not according to Dr. John Geyman.

In his newly published book, “How Obamacare is Unsustainable,” Geyman contends the three primary goals of the Affordable Care Act’s three primary goals—affordability, near-universal coverage and improved quality of care—are not being met and that a single-payer healthcare system is the best solution for all Americans, and for reform of U.S. health care.

Professor emeritus of the University of Washington School of Medicine and founding editor of “The Journal of Family Practice” (1973 to 1990), and a resident of Friday Harbor, Geyman offers up an “evidence-based” assessment of the good and bad about the ACA, the signature domestic legislation of the Obama presidency.

A former chairman of the Department of Family Medicine at UW, 1976-1990, Geyman was a practicing physician at Friday Harbor former Inter Island Medical Center from 1990 to 1997, and is a member of the San Juan County Board of Health.

Vanderbilt University Medical Center’s Dr. Larry Churchill has this to say about Geyman’s book: “John Geyman has provided us with the most lucid, best documented, and most compelling portrait of what’s wrong with the Affordable Care Act yet available. He also argues forcefully for the fix we need. This is an invaluable contribution to our understanding of U.S. healthcare, and the essential playbook for policy change.”

Published by Copernicus Healthcare, Geyman’s book, at 382 pages and $18.95, includes illustrative figures and tables, and is available for purchase in paperback at Amazon.com and in eBook at the Kindle Store.

Geyman is author of four earlier book focused on the U.S. healthcare system, including “Health Care Wars: How Market Ideology and Corporate Power Are Killing Americans,” and, “Hijacked: The Road to Single Payer In The Aftermath of Stolen Health Care Reform.”

http://www.sanjuanjournal.com/lifestyle/297191141.html

Scare tactics of health insurance industry

By F. Douglas Stephenson, LCSW, BCD
The Gainesville (Fla.) Sun, March 3, 2015

Using manufactured scare tactics, the U.S. health insurance industry successfully lobbied Congress to enact a requirement that most non-elderly Americans become compulsory customers of the insurance industry and approve taxpayer financing of massive subsidies for the private insurance industry.

With establishment of the Affordable Care Act, Americans have been forced to purchase the product of a particular private industry plus the tax-financed subsidies for the insurance industry in the amount of a half-trillion dollars per decade.

U.S. health insurance companies continue to protect their high profits using scare tactics. One very effective tactic is to deliberately confuse the public by conflating the “socialized medicine” label with single-payer, “socialized (public) health insurance”.

Whatever the pros/cons of socialized medicine, national, single-payer health insurance is not socialized medicine. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Health-care professionals in the U.S.Veterans Administration and the armed services are paid this way. The good health systems in Great Britain and in Spain are other examples.

Most European countries, Canada, Australia and Japan have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical, mental health practices or hospitals.

The term “socialized medicine” is often used by the private insurance industry and politicians to manufacture frightening images of government bureaucratic interference in medical care. In countries with socialized health insurance, health and mental health professionals and patients often have more clinical freedom. This is in sharp contrast to the U.S., where private health insurance bureaucrats attempt to direct/interfere with care .

Manufactured confusion by the health insurance industry and their political spokesmen impede the public’s ability to differentiate, and so far have allowed the private health industry to successfully maintain control of the U.S. health care system for its own purposes.

F. Douglas Stephenson lives in Inglis and is former president of the Florida Society for Clinical Social Work.

http://www.gainesville.com/article/2015150309931?tc=ar

URGENT: Explaining MIPS; Action required

Summary of “SGR Repeal and Medicare Provider Payment Modernization Act”

House Committees on Energy & Commerce and Ways & Means, March 19, 2015

Summary: http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/114/Analysis/20150319SGRSectionbySection.pdf
Yesterday’s Quote of the Day: https://www.pnhp.org/news/2015/march/emergency-the-mips-stake-is-plunging-into-the-heart-of-traditional-medicare

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Comment:

By Don McCanne, MD

Yesterday’s Quote of the Day message sounded the alarm on legislation that would replace the flawed Sustainable Growth Rate formula (SGR) for updating Medicare payments with a new Merit-based Incentive Payment System (MIPS) – legislation with strong bipartisan support that will be taken up in Congress this week and is expected to pass.

Yesterday I sent out a link to the actual legislation (minus crucial amendments, likely detrimental, that have not yet been advanced). Since few have the time to plow through the legislative language and make sense of it, I am now providing a link to the eight page summary (above).

Why this concern?

The SGR formula is considered to be flawed primarily because economic factors considered in the formula would result in inappropriate payment reductions in many of the yearly adjustments. Thus there is consensus that the formula should be repealed. However, it did provide an administratively simple process for trying to keep Medicare rates from increasing well beyond the growth in the economy. That is, there was no administrative burden placed on the providers; they merely had to accept adjustments in their payments.

The concern is over its replacement: MIPS. On reading the summary of the “SGR Repeal and Medicare Provider Payment Modernization Act,” you will see that MIPS places a tremendous administrative burden on health care professionals in a health care system that is already overwhelmingly overburdened with administrative excesses. The only way to escape this additional burden is to participate in Alternative Payment Models (APMs) which, in themselves, create further significant administrative burdens (ACOs, PCMHs, etc.). MIPS is an administrative nightmare.

Some might consider the administrative excesses of MIPS to be worth it if it were to result in fair adjustments to Medicare payment rates. But you need to read the “MIPS Payment Adjustment” section of the summary.

Under the MIPS payment system, eligible professionals with higher scores will receive positive payment adjustments (and may be eligible for an additional incentive payment). We have observed repeatedly how such systems are gamed in order to receive these extra payments. The problem is that those who do not game the system, and especially those with practice situations and patient populations that make it very difficult to score higher points, will almost automatically receive performance scores below the threshold since their performances will be compared with the gamers. This will result in negative payment adjustments – reducing payments by up to nine percent. If you think SGR is unfair, MIPS robs from these hard-working professionals who are just trying to make the system work for their patients, and gives the spoils to those who likely have consultants to show them how to game the system. (Consultants? See Sec. 6 that authorizes “qualified entities” to suck more money out of our health care system by selling analyses and claims data to assist providers in their quality improvement activities., i.e., professional gamesters.)

This is serious. And it is being steamrolled through Congress right now! I consider myself an information resource, but I am not an organizer. Those who care about the future of Medicare and who do have organizational skills must immediately inform themselves on what is happening here. Then act. You cannot wait to watch the Congressional vote tally on C-Span, perhaps as early as this week. By then it will be a done deal.

EMERGENCY! The MIPS stake is plunging into the heart of traditional Medicare

H.R. 1470: “SGR Repeal and Medicare Provider Payment Modernization Act of 2015”

114th Congress

A BILL

To amend title XVIII of the Social Security Act to repeal the Medicare sustainable growth rate and improve Medicare payments for physicians and other professionals, and for other purposes.

TABLE OF CONTENTS.—The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Repealing the sustainable growth rate (SGR) and improving Medicare payment for physicians’ services.

Sec. 3. Priorities and funding for measure development.

Sec. 4. Encouraging care management for individuals with chronic care needs. 

Sec. 5. Empowering beneficiary choices through continued access to information on physicians’ services.

Sec. 6. Expanding availability of Medicare data.

Sec. 7. Reducing administrative burden and other provisions.

Sec. 2 (c) MERIT-BASED INCENTIVE PAYMENT SYSTEM.

         (1) IN GENERAL.—Section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended by adding at the end the following new subsection:

   “(q) MERIT-BASED INCENTIVE PAYMENT SYSTEM.—

       “(1) ESTABLISHMENT.—

         “(A) IN GENERAL.—Subject to the succeeding provisions of this subsection, the Secretary shall establish an eligible professional Merit-based Incentive Payment System (in this subsection referred to as the ‘MIPS’) under which the Secretary shall—

             “(i) develop a methodology for assessing the total performance of each MIPS eligible professional according to performance standards under paragraph (3) for a performance period (as established under paragraph (4)) for a year;

             “(ii) using such methodology, provide for a composite performance score in accordance with paragraph (5) for each such professional for each performance period; and

             “(iii) use such composite performance score of the MIPS eligible professional for a performance period for a year to determine and apply a MIPS adjustment factor (and, as applicable, an additional MIPS adjustment factor) under paragraph (6) to the professional for the year.

       “(2) MEASURES AND ACTIVITIES UNDER PERFORMANCE CATEGORIES.—

          “(A) PERFORMANCE CATEGORIES.—Under the MIPS, the Secretary shall use the following performance categories (each of which is referred to in this subsection as a performance category) in determining the composite performance score under paragraph (5):

              “(i) Quality.

              “(ii) Resource use.

              “(iii) Clinical practice improvement activities.

              “(iv) Meaningful use of certified EHR technology

           “(B) MEASURES AND ACTIVITIES SPECIFIED FOR EACH CATEGORY.—For purposes of paragraph (3)(A) and subject to subparagraph (C), measures and activities specified for a performance period (as established under paragraph (4)) for a year are as follows:

              “(i) QUALITY.—For the performance category described in subparagraph (A)(i), the quality measures included in the final measures list published under subparagraph (D)(i) for such year and the list of quality measures described in subparagraph (D)(vi) used by qualified clinical data registries under subsection (m)(3)(E).

              “(ii) RESOURCE USE.—For the performance category described in subparagraph (A)(ii), the measurement of resource use for such period under subsection (p)(3), using the methodology under subsection (r) as appropriate, and, as feasible and applicable, accounting for the cost of drugs under part D.

              “(iii) CLINICAL PRACTICE IMPROVEMENT ACTIVITIES.—For the performance category described in subparagraph (A)(iii), clinical practice improvement activities (as defined in subparagraph (C)(v)(III)) under subcategories specified by the Secretary for such period, which shall include at least the following:

                 “(I) The subcategory of expanded practice access, such as same day appointments for urgent needs and after hours access to clinician advice.

                 “(II) The subcategory of population management, such as monitoring health conditions of individuals to provide timely health care interventions or participation in a qualified clinical data registry.

                  “(III) The subcategory of care coordination, such as timely communication of test results, timely exchange of clinical information to patients and other providers, and use of remote monitoring or telehealth.

                  “(IV) The subcategory of beneficiary engagement, such as the establishment of care plans for individuals with complex care needs, beneficiary self-management assessment and training, and using shared decision-making mechanisms.

                  “(V) The subcategory of patient safety and practice assessment, such as through use of clinical or surgical checklists and practice assessments related to maintaining certification.

                  “(VI) The subcategory of participation in an alternative payment model (as defined in section 1833(z)(3)(C)).

              In establishing activities under this clause, the Secretary shall give consideration to the circumstances of small practices (consisting of 15 or fewer professionals) and practices located in rural areas and in health professional shortage areas (as designated under section 332(a)(1)(A) of the Public Health Service Act).

              “(iv) MEANINGFUL EHR USE.—For the performance category described in sub-paragraph (A)(iv), the requirements established for such period under subsection (o)(2) for determining whether an eligible professional is a meaningful EHR user.

Sec. 2(e)(6) INTEGRATING MEDICARE ADVANTAGE ALTERNATIVE PAYMENT MODELS.—Not later than July 1, 2016, the Secretary of Health and Human Services shall submit to Congress a study that examines the feasibility of integrating alternative payment models in the Medicare Advantage payment system. The study shall include the feasibility of including a value-based modifier and whether such modifier should be budget neutral.

https://www.congress.gov/bill/114th-congress/house-bill/1470/text

GPO pdf of H.R. 1470: https://www.congress.gov/114/bills/hr1470/BILLS-114hr1470ih.pdf

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Comment:

By Don McCanne, MD

It is URGENT that everyone who cares about the future of Medicare understands what is happening here.

H.R. 1470, the “SGR Repeal and Medicare Provider Payment Modernization Act of 2015,” was formally introduced in the House of Representatives only yesterday (3/19/15), with strong bipartisan support. The 158 pages (GPO pdf) introduced so far provide a mechanism for replacing the Medicare Sustainable Growth Rate (SGR) for determining Medicare payments, with a new Merit-based Incentive Payment System (MIPS).

Next week it is anticipated that the House will act on amendments that allegedly will help offset the cost of canceling payment reductions that would have taken place under the SGR system. Today’s message is limited to the new MIPS, but everyone should be alarmed about the amendments that are to be considered next week. Just two of them – greater means testing of Part B premiums, and requiring Medigap enrollees to start paying deductibles – will be very damaging to the egalitarian nature of our Medicare program.

The excerpts from H.R. 1470,  above, reveal how the government intends to fulfill its goal of supposedly converting Medicare from a system that pays based on volume to a system that is based on value. Since the excerpts represent only a small sampling of this bill, it would be wise to download the full bill. You can gain a better understanding of the bill by skimming through the 158 pages, reading only the lines in full capital letters, while reading in full any section that piques your interest. It takes just a few minutes. That’s too much? Remember, this bill is about to become law and we will have to live with it perhaps for decades (the scorned SGR has been with us for 18 years).

One ominous clause in the bill is Sec. 2(e)(6) on page 101 of the GPO version. It calls for a study of “the feasibility of integrating alternative payment models in the Medicare Advantage payment system.” That is code language to clarify that these onerous requirements of MIPS apply only to the traditional Medicare program and not to the private Medicare Advantage plans. Why is that important?

The House budget introduced this week once again calls for the end of the traditional Medicare program and replacing it with a market of private plans. Although this has been a Republican goal, many Democrats now agree to this MIPS legislation that moves in that direction, and it has the strong support of the AMA and other physician organizations. While loudly proclaiming that we finally have a “doc fix” for the SGR, they are moving forward with changes that will lead us much closer to Medicare privatization, using the excuse that compromise is the way the legislative process works.

Physicians will be mortified by the new requirements and administrative burdens of MIPS. They will be looking for a way out. For those not able to retire, there may be a mass exodus of physicians from the traditional Medicare program into the Medicare Advantage plans. Included in H.R. 1470 is even a ruling change that simplifies the requirements for a physician totally opting out of Medicare indefinitely.

This process is being steamrolled. The bill will pass this month, unless Congress is deafened by a roaring protest.

Are you just going to sit there?

Gov. Brown’s attack on public employee health benefit programs

Unions, retirees blast Jerry Brown’s state worker medical plan

By Jon Ortiz
The Sacramento Bee, March 18, 2015

Unions lined up Wednesday to oppose Gov. Jerry Brown’s proposal to offer high-deductible medical coverage to state employees, suggesting it could hurt workers’ health instead of improving it.

“We think that high-deductible plans are a very bad thing,” SEIU Local 1000 President Yvonne Walker said during a Senate subcommittee hearing into Brown’s plan.

Meanwhile, state experts said it’s not clear whether a plan with high-monthly premiums and a tax-advantaged health savings account would save money in the long run. The most comprehensive studies take in only three years, not nearly long enough to establish a reliable trend.

Brown wants to add at least one health plan to the state’s menu that would give subscribers lower monthly premiums and a tax-advantaged health-savings account in exchange for higher co-pays for visits to doctor significantly larger deductibles for treatments, hospitalization and drugs.

High-deductible plans and health-savings accounts have become common in the private sector as a way for employers to shift more health care cost to their employees. This year the state will pay about $3 billion for employee medical benefits.

CalPERS, which is dominated by union members and politicians with labor ties, has stayed away from offering the kind of low-premium high-deductible health plan Brown has proposed, said Ann Boynton, who is responsible for the fund’s health plan contracting.

For reference, she noted that the lowest-premium plan CalPERS offers members now, PERS Select, has just 17,000 subscribers, fewest of any of its preferred-provider organization plans.

Member surveys show those subscribers are the most dissatisfied with their coverage, Boynton said, due to the steep co-pays and how hospitals in the preferred networks price services.

http://www.sacbee.com/news/politics-government/the-state-worker/article15302201.html

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Retirees Could Lose their ‘Guaranteed’ Health-Care Benefits

By Allison Schrager
Bloomberg Business, March 18, 2015

California’s struggling to pay for health care for retired state employees, with an estimated $72 billion in medical costs coming in the next 30 years. Governor Jerry Brown’s solution: Make workers start contributing money to pay for the health care they’ll need after retiring.

Until recently, the courts had regularly said that health-care benefits must be honored. In January, that changed: The Supreme Court unanimously decided that retiree health benefits are not necessarily guaranteed.

Since 1992, private companies have had to list health-care obligations as a liability on their balance sheets. Being forced to disclose health-care costs led many employers to ditch retiree health care. A Kaiser Foundation report speculates that the remaining plans may soon be eliminated, too.

The Supreme Court’s ruling may finally signal the end of private-sector retirement health benefits. What it means for public-sector retirees is still an open question, although some lawyers say the same ruling will apply. If that’s the case, the consequences may be more far-reaching. Employer health coverage among public-sector retirees is still common. From 2006 to 2010, health plans covered two-thirds of Medicare eligible and three-quarters of early retirees.

http://www.bloomberg.com/news/articles/2015-03-18/retirees-could-lose-their-guaranteed-health-care-benefits

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Comment:

By Don McCanne, MD

Private employers have taken the initiative in slowing the cost increases in their health benefit programs. They have been reducing or terminating their retiree health plans. They have also greatly expanded the use of high-deductible health plans which shift costs of care to their employees. Public employees have been relatively insulated from these reductions, largely due to more favorable plans negotiated by their unions. California’s Governor Jerry Brown is now attempting address the state’s budget issues by reducing the state’s contribution to these plans.

These were not free benefits that the unions negotiated. They were paid for by forgoing wage increases. To reduce these benefits without compensatory wage increases amounts to significant pay cuts for the government employees. That is not right.

Also, high-deductible health plans clearly reduce access to appropriate health care primarily because health care becomes less affordable when the patient is faced with greater out-of-pocket costs. CalPERS has confirmed what was already well known about the high-deductible plans: subscribers to these plans are the most dissatisfied. Today’s payers, whether the government or the private sector, are taking it out on their employees through these undesirable reductions in benefits that create potential financial hardships for their employees.

It would be far better to remove the employer, public or private, from the role of being keeper of the health benefits, and to restore, in full, the wage and salary increases that have been forgone to pay for these programs.

With a publicly-financed and publicly-administered single payer program – an improved Medicare for all – there would be no need for employer-sponsored plans for either active or retired employees. Also, the public program would be designed for the benefit of patients needing care, rather than being used inappropriately as a tool to balance public or private budgets.

Think About It: Democracy or Sausage

By Bertha Cooper
Sequim (Wash.) Gazette, March 18, 2015

Most of us have heard the saying that watching legislation being made is like watching sausage being made. The image brings to my mind watching pigs being sacrificed and seeing some parts going to fine cuts of pork for those that can afford it and less desirable, unappetizing parts being ground into sausage for just about everyone’s breakfast.

The implication is that the process of making laws is a lot like making sausage and so revolting that we would lose our faith in the quality of the final product, that is, if we haven’t already.

I resent this analogy typically used by politicians involved in the process and all-knowing pundits. It comes across too much as an insider reflection that separates us ordinary folk from elite law makers and observers and, I think, might cover up things they don’t want us to know.

After all, we call our legislative process democracy, which should be a transparent process that can be audited at any point by the voting public.

Groups or individuals who wish to influence public policy are at a significant disadvantage when they do not have access to the process. As much as they keep their eye on the process around their bill and attempt to use the system to make their case, they cannot know the deals that are made behind the scenes.

Making sausage

Case in point is an example that dashed the hopes of a singularly dedicated group, Healthcare for All/WA (HCFA-WA), that has been working for over a decade to improve access to health care while reducing health care costs not only for the government, but for the individual and family.

Following the implementation of the Affordable Care Act (Obamacare), they started working with the state Legislature to activate a provision that would allow a waiver to the State of Washington to enact a version of the single payer system that would provide for health care for all Washington residents.

2015 was no different and another bill (HB 1025), sponsored by 23 legislators, one of whom was Steve Tharinger from our district, was submitted to the House. A public hearing for the bill was scheduled for Feb. 20 before the House Health and Wellness Committee on which Tharinger and Kevin Van De Wege, our other representative, sit.

Both Tharinger and Van De Wege have said that there wasn’t a snowball’s chance on Hurricane Ridge in 2015 that it would pass during this legislature session. Still, the group persisted as many do (think women’s right to vote) because they did want to keep the issue before the Legislature for passage in 2016 or 2017.

In order to understand what’s going on in this story, it is important to remember that payment of our nation’s health care system is through commercial insurance predominantly provided as an employee benefit, government payers such as Medicare, Medicaid and Tricare and commercial insurance purchased by individuals through Obamacare.

HCFA-WA’s idea is to eliminate commercial health care insurance for the most part and move to a less complicated single payer system. To make their point, the group pulled together businesses owners and representatives to testify at the hearing to the economic value of a single payer plan to businesses.

Secret sauce

A related bill (HB 1967) was put forth by Health and Wellness Committee asking for a different waiver provided for in Obamacare around Feb. 1. “HCFA-WA only learned about the Bill one week before their scheduled testimony on HB 1025,” according to Patrick Noonan, a member of HCFA-WA who would provide testimony.

The new bill introduced by the committee (HB 1967) would “permit employers to integrate employer health care arrangements with individual market policies and to authorize alternative structures for those participating in medical assistance.” In other words, the bill supported the existing American method of insurance policies for health care and effectively silences any effort toward single payer in the near future years.

The public hearing for the new bill with three sponsors was held on Feb. 11 and executive action was taken on Feb. 17, three days before the scheduled hearing at which HCFA-WA would appear. The Health and Wellness Committee passed the new legislation with a majority, which included Tharinger and Van De Wege, and was sent to appropriations on a relative fast track.

I could have burst into tears hearing this all too familiar story of the long-suffering boyfriend or girlfriend that waited for years only to be left standing at the altar except this bride or groom of democracy was ruthlessly sent into obscurity without so much as an explanation. Sure there was a public hearing for the new bill, but who knew?

Who on the Health and Wellness Committee could not take the time to say we are going in another direction? And why not? No one seemed to have the interest or courtesy to tell this group or, as it turns out, to listen to any more they had to say.

Grind to a humiliating halt

HCFA-WA’s time at the Feb. 20 hearing was reduced to 10 minutes. One HCFA-WA participant reported that they were first on the agenda and although Tharinger and Van De Wege were present, very few legislators were. Other legislators arrived at a leisurely pace during the presentations. Once seated, many of the few made no pretense to listen and turned their attention instead to their electronic device or each other.

There was nothing subtle about the message; they were not interested. Noonan had driven from the Olympic Peninsula and stayed the night so he could participate in the legislative process. He lamented, “The path was already decided,” and added, “I was embarrassed for us and I was embarrassed for them. Mostly, I was embarrassed for democracy.”

So why do it; why waste their time and the time of interested citizens? My guess is that the Health and Wellness committee of the House needed to document that they gave 10 minutes to HCFA-WA in compliance of some sort of rule.

The point is not whether one supports the bill or not; it’s more that the process should allow for transparency and inclusion of differing views. Things that have to be hidden in the sausage can’t be good. In the end, the group and presenters were not allowed at the table making the sausage.

I can’t help but think that someone more influential than this low-budget, nonprofit group was at the table and will get the fine cut of pork.

Bertha D. Cooper is retired from a 40-plus year career as a health care administrator focusing on the delivery system as a whole. She still does occasional consulting. She is a featured columnist at the Sequim Gazette. Reach her at columnists@sequimgazette.com.

http://www.sequimgazette.com/opinion/296782981.html#

How American health care turned patients into consumers

By Philip Caper, M.D.
Bangor (Maine) Daily News, March 19, 2015

A clash of cultures is rapidly developing among those of us who see the mission of the health care system to be primarily the diagnosis and healing of illness and those who see it primarily as an opportunity to create personal wealth.

The concept of health care primarily as a business is uniquely American, and it has gained ascendancy during the last few decades. While there have always been a few greedy doctors, businessmen-wealth-seekers — not doctors — now dominate the medical-industrial complex. They include for-profit insurance, medical device and pharmaceutical companies as well as for-profit and nonprofit corporate providers of health care services, such as the three large hospital systems in Maine.

Partly because of the Affordable Care Act, they also include a rapidly growing army of lawyers, consultants and policy wonks who are creating lucrative businesses helping hapless “consumers” — formerly “patients” — “navigate” their way through the grotesquely byzantine maze our health care system has become.

This shift in emphasis from patient care to money profoundly has affected the practice of medicine and resulted in the clash of cultures within health care. As increasing numbers of “providers” — formerly “doctors” — become employees of large health care corporations — formerly community hospitals — we have come under increasing pressure to diagnose profitable diseases and order profitable tests and procedures without enough regard to the benefits or harm accruing to patients. Hospital “CEOs” — formerly “administrators” — trained in the ethics and practices of business rather than health care are incentivized to configure their “product lines” — formerly “services” — to produce the largest “profits” — formerly “margins.”

Those of us in the health care “business” — formerly “profession” — have been slow to react to this hijacking of our health care calling. Patients, despite sensing something is deeply wrong, feel helpless to push back. That now seems to be changing.

For the past three years The Lown Institute, founded by Dr. Bernard Lown, renowned cardiologist and advocate for universal health care, has held conferences designed to point out the growing problem of overtreatment in medicine. Recently they also have turned their attention to the equally disturbing problem of impaired access to health care and undertreatment. They now advocate for RightCare — not too much treatment and not too little.

Arguably some of the most important effects of Obamacare have been the destabilization of our deeply dysfunctional health care system and an order-of-magnitude increase in the amount of attention given to its dysfunction by the media and the public. Elisabeth Rosenthal’s excellent New York Times series “Paying Till It Hurts” and Steven Brill’s Time magazine cover story and book titled “America’s Bitter Pill” are two of the most recent examples. These two factors have created an opportunity for real structural and cultural change.

There are many advocacy groups — Physicians for a National Health Program, HealthCare-NOW, Maine AllCare — trying to highlight these issues and to propose ways to turn this runaway train around.

While they are necessary, attempts at education and persuasion are not sufficient. Unlike past human rights movements, such as women’s suffrage and marriage equality, the fight for the right to health care for all Americans will require redirecting huge sums of money away from deeply entrenched, profit-oriented private corporations to not-for-profit programs that directly promote the public’s health and well-being.

The Institute of Medicine estimates that the convoluted American health care system wastes $750 billion per year in inefficiency and fraud, unnecessary administrative complexity and medical services, unjustifiably high prices and missed prevention opportunities. That waste creates a lot of jobs but does not pay for one Band-Aid or aspirin.

I attended the latest Lown conference, held last week in San Diego, to talk about the “Heal-In” held at Boston City Hospital in 1967 as an example of direct action taken by doctors, nurses and other healers to achieve a political goal without compromising patient care. The capstone of the conference was to announce the expansion of Lown’s mission, previously focused on education and discussion, to include creation of a national grassroots movement that will include direct action. Their first foray will be called RightCare Action week and is scheduled for the fall. Stay tuned.

Changing our health care system is as much about persuasion through power as it is about the power of persuasion. We as patients have power through the ballot box, and we as health care workers have power through our key roles in the “business” of health care to return and redirect its mission toward healing and away from its increasingly singular obsession with profitability.

All we have to do is summon the will and the courage to exercise that power.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.

http://bangordailynews.com/2015/03/19/health/blogs-and-columns/how-american-health-care-turned-patients-into-consumers/?ref=search

Blue Shield of California loses its state tax-exempt status

With billions in the bank, Blue Shield of California loses its state tax-exempt status

By Chad Terhune
Los Angeles Times, March 18, 2015

Authorities have revoked the tax-exempt status of nonprofit Blue Shield of California, potentially putting it on the hook for tens of millions of dollars in state taxes each year.

The move by the California Franchise Tax Board comes as the state’s third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves.

The highly unusual action comes after a lengthy state audit that looked at the justification for Blue Shield’s taxpayer subsidy.

Now, a company insider has sided with critics. Michael Johnson, who resigned as public policy director last week after 12 years at the company, said the insurer has been “shortchanging the public” for years by shirking its responsibility to Californians and operating too much like its for-profit competitors.

On Wednesday, Johnson plans to launch a public campaign calling on executives to convert the insurer into a for-profit company and return billions of dollars to the public that could be used to bolster the state’s healthcare safety net. He estimates the company could be worth as much as $10 billion.

In 1996, a similar conversion of Blue Cross of California — now part of Anthem — generated $3 billion to establish the California Endowment and the California HealthCare Foundation.

The company defends its work on behalf of Californians. It cites its long-standing support of health reform and numerous efforts to make coverage more affordable.

“Blue Shield as a company and management team firmly believes it is fulfilling its not-for-profit mission and commitment to the community,” said company spokesman Steve Shivinsky.

In 2011, amid a backlash over rate increases, the insurer capped its profits at 2% of annual revenue and gave back about $560 million to customers and community groups from 2010 to 2012. Blue Shield has also contributed more than $325 million over the last decade to its own charitable foundation.

But some consumer advocates and health-policy experts say those gestures are lacking in light of the company’s stockpile of cash.

Blue Shield’s surplus of $4.2 billion at the end of 2014 is four times as much as the Blue Cross and Blue Shield Assn. requires its member insurers to hold to cover future claims.

Critics also note the company hasn’t served the state’s poorest residents on Medi-Cal and it has frequently run afoul of state regulators. The 2011 disclosure of a nearly $5-million salary for its former chief executive drew protests.

Some consumer groups have also questioned whether certain Blue Shield spending is out of line with its nonprofit mission.

For instance, the company contributed about $10 million to defeat a ballot measure last year seeking rate regulation. It spent $2.5 million for a luxury box at the new professional football stadium in Santa Clara, Calif.

Critics have also long complained about Blue Shield’s lack of disclosure.

Blue Shield was founded by the California Medical Assn. as part of a national movement by hospitals and doctors to form prepaid health plans.

The company is a “mutual benefit” nonprofit — “dedicated to charitable, religious or public purposes,” according to California corporation law.

http://www.latimes.com/business/la-fi-blue-shield-california-20150318-story.html

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Comment:

By Don McCanne, MD

Many of us in California were very upset when Blue Cross of California converted to a for-profit (WellPoint, then Anthem) and immediately changed its behavior to fulfill its responsibilities to its shareholders as a profit-making business. We immediately saw “insurance innovations” that redirected its business goals from taking care of patients to taking care of shareholders.

It was particularly disappointing to see non-profit Blue Shield of California adopt similar insurance innovations in order to remain competitive in the California insurance market. From the perspective of health care “consumers,” Blue Shield and Blue Cross remained virtually indistinguishable.

Blue Shield of California has annihilated the dream of those who believed that the United States could adopt a universal system of private, non-profit insurance companies like they have in Switzerland. There are many serious problems with the Swiss model, but some believed that a market of well-regulated, non-profit insurers would make optimal patient care a priority. Blue Shield of California has now demonstrated to us that this pipe dream would only become another nightmare in the saga of private insurance markets in the U.S.

We need to banish them and establish our own public program – an improved Medicare for all.

“Paying for value” could mean the end of small family practices

A Boehner-Pelosi prescription for Medicare doc fixes

By Jennifer Haberkorn and David Rogers
Politico, March 15, 2015

In a rare display of bipartisanship, House leaders are actively pursuing a deal to permanently change the way Medicare pays doctors and to extend a children’s health program for two years.

While details are still being ironed out, the basic contours are clear: The plan would permanently eliminate the Sustainable Growth Rate, the outdated formula that calls for frequent and deep cuts to Medicare providers, and replace it with a new payment system. This is a priority for both parties to end the need for frequent “doc fixes.”

The replacement policy agreed to by the House Energy and Commerce and Ways and Means committees and the Senate Finance Committee would move away from volume-based payments, in which physicians are paid based on the number of tests or procedures ordered, into a value-based system. That would reward them with higher payments when they meet performance thresholds on improved care and quality.

This new system would set up a series of quality measures that physicians will have to meet and would incentivize care coordination, particularly for patients with chronic care needs in which multiple doctors are involved.

The replacement policy is widely supported by medical organizations. But some critics argue the bill is too vague and that its reporting requirements could be ruinous to small practices.

“Aspirationally, it is correct, but we don’t know enough about how to measure value,” said Robert Berenson, the former vice chairman of the Medicare Payment Advisory Commission. “This could mean the end of small general practices for all practical purposes.”

http://www.politico.com/story/2015/03/medicare-doctors-john-boehner-nancy-pelosi-116097.html

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Comment:

By Don McCanne, MD

The rhetoric sounds great. We are moving away from paying for the volume of health care provided, and we are going to pay for value instead.

In reality, volume will always be an important factor in determining health care costs. Maybe there are marginal expenses that can be reduced, but most services are clinically appropriate and do have relatively fixed costs involved. Reducing volume has really been code language for using various schemes such as accountable care organizations and bundling of payments to reduce prices. These schemes have an almost negligible impact on reducing volume.

What is this increased value that the industry envisions? Usually they are referring to quality measures. Yet those measurements are very primitive. As Robert Berenson says, “we don’t know enough about how to measure value.” Yet reducing payments for volume and giving rewards for Mickey Mouse quality scores increases administrative complexity – increasing busy work without increasing value.

Do we really want to do this? Again, quoting Robert Berenson, “This could mean the end of small general practices for all practical purposes.” My personal primary care physician is a solo practitioner. I should have to give him up simply because some policy people believe that we should continue down this path when there is very little support that these measures will either reduce costs or increase quality?

What the policy people do know is that an improved Medicare that covered everyone for the same amount that we are spending today is the most effective way to improve value. We should go where the action is. Once there, we can tweak the system for quality and volume.