Berwick Indicates CMS Still Plans To Mix Private Payers, Medicare In ACO Demo

By John Wilkerson
Inside Health Reform
February 3, 2011

CMS Administrator Donald Berwick indicated on Feb. 1 that CMS still plans to use a demonstration to let accountable care organizations include Medicare beneficiaries and patients with private insurance. Specifically, he said the CMS innovation center will make room for the “vanguards” of accountable care organizations so CMS can test ACO models that go beyond what is called for under the ACO program.

Sources say CMS had been planning to announce a demonstration program late last year to assign Medicare and possibly Medicaid beneficiaries to existing clinically integrated entities in the private insurance market. That announcement was delayed, they said, leaving them to wonder whether CMS had backed off the plan – but Berwick seemed to say at a Brookings Institution conference that the plan is still in the works.

CMS is talking to private payers about public-private partnerships and about how clinically integrated organizations can align what they are doing for patients with private insurance with the goals of ACOs, Berwick told reporters after his presentation. (The Federal Trade Commission has warned that broad-based ACOs involving private payers could raise antitrust concerns, but the FTC has been working out those matters with CMS.)

Berwick said the proposed rule on the ACO program should be published soon, but when asked by Inside Health Policy whether a demonstration would be announced before the proposed rule, Berwick said only that the innovation center would move “quickly” on ACO demonstrations. The health reform law created an ACO program, which is permanent and separate from the temporary demonstrations that the innovation center approves. However, CMS could approve ACO demonstrations that would later be wrapped into the ACO program, sources say.

http://www.ahiphiwire.org/FocusMed/News/Default.aspx?doc_id=749955

Brookings Institution Conference: ACHIEVING BETTER CARE AT LOWER COSTS
THROUGH ACCOUNTABLE CARE ORGANIZATIONS (transcript – 110 pages):
http://www.brookings.edu/~/media/Files/events/2011/0201_accountable_care/20110201_accountable_care.pdf

This Brookings Institute conference on accountable care organizations (ACOs) provides important insights as to what we might be facing. These experts, including Donald Berwick, Elliott Fisher and Mark McClellan, provide abstractions as to policies that might achieve the quality and cost-containment goals of the ACOs that are mandated by the Patient Protection and Affordable Care Act (PPACA).

The Medicare Shared Savings Program will begin on January 1, 2012, less than one year from now. At that time, “groups of providers of services and suppliers meeting criteria specified by the Secretary may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization” (PPACA). Details as to the requirements can be found in Sec. 3022 and Sec. 10307 of PPACA.

If you read the transcript of the Brookings presentations of the experts and the panel discussions following, you should be concerned – very concerned. Within months, these somewhat nebulous abstractions are to be transformed into real life organizations of health professionals and facilities that supposedly will deliver higher quality care at a lower cost, while splitting the savings with the government.

Obviously, these ACOs will not spring up de novo; there isn’t enough time. We already know that the early demonstration projects are using existing entities that can best be categorized as managed care organizations. According to the report from Inside Health Reform, “CMS is talking to private payers about public-private partnerships and about how clinically integrated organizations can align what they are doing for patients with private insurance with the goals of ACOs, Berwick told reporters after his presentation.”

As recorded in the transcript of the Brookings conference, CMS Administrator Donald Berwick stated, “Now, I’m in a little bit of an awkward moment, aren’t I? The Notice of Proposed Rulemaking isn’t out yet. It will be out very soon, but I can’t tell you what’s in it yet because I guess I’m not supposed to, but you’ll see it soon. And then there’ll be a comment period, which I hope you’ll all take seriously.”

Be ready. When the Notice of Proposed Rulemaking is released for public comment, peruse it to determine if Medicare is going to be turned over to private insurer/managed care organizations in the name of higher quality and lower costs through accountable care organizations. We need to find out if this is merely new rhetoric that will mask the further privatization of Medicare, intended or not. If so, we cannot let it stand.

Senate Judiciary Committee
February 2, 2011

Testimony of Charles Fried, Beneficial Professor of Law, Harvard Law School, and Former U.S. Solicitor General, Reagan Administration, 1985-1989

As I recall, the great debate in the Senate was between this device (the individual mandate) and something called the government option. And the government option was described as being something akin to socialism, and I think there’s a bit of a point to that. But what is striking, Senator, is that I don’t think anybody in the world could argue that the government option, or indeed a single payer federal alternative, would have been unconstitutional. It would have been deplorable. It would have been regrettable. It would have been Western if not Eastern European, but it would not have been unconstitutional. And it’s odd that this (the individual mandate), which is an attempt to keep it in the private market, is now being attacked.

(96 minutes into the video)
http://judiciary.senate.gov/hearings/hearing.cfm?id=4964

Comment: 

By Don McCanne, MD

Harvard Professor Charles Fried may not like single payer, but he emphatically agrees that single payer is constitutional. This is something we can do if the people of this nation demonstrate their desire to have it.

Hearing on the Constitutionality of the Affordable Care Act

Senate Judiciary Committee
February 2, 2011

Testimony of Charles Fried, Beneficial Professor of Law, Harvard Law School, and Former U.S. Solicitor General, Reagan Administration, 1985-1989

As I recall, the great debate in the Senate was between this device (the individual mandate) and something called the government option. And the government option was described as being something akin to socialism, and I think there’s a bit of a point to that. But what is striking, Senator, is that I don’t think anybody in the world could argue that the government option, or indeed a single payer federal alternative, would have been unconstitutional. It would have been deplorable. It would have been regrettable. It would have been Western if not Eastern European, but it would not have been unconstitutional. And it’s odd that this (the individual mandate), which is an attempt to keep it in the private market, is now being attacked.

(96 minutes into the video)
http://judiciary.senate.gov/hearings/hearing.cfm?id=4964

Harvard Professor Charles Fried may not like single payer, but he emphatically agrees that single payer is constitutional. This is something we can do if the people of this nation demonstrate their desire to have it.

Need an MRI? Anthem might have a deal for you

By Shari Rudavsky
IndyStar.com
January 30, 2011

… an Anthem Blue Cross and Blue Shield pilot program made its debut in December. Under the program, an Anthem employee calls policyholders who have been approved for scans and lets them know whether a cheaper, high-quality option exists close to them. If the policyholder agrees, Anthem sets up the appointment.

Anthem officials say they designed the program to steer their patients toward higher-quality facilities that charge less. But some say more emphasis is being placed on costs and not on quality of care and consequences for the patient.

The program is currently limited to Central Indiana policyholders scheduled for imaging such as MRI and CT scans. Still, it could usher in a major change in health care in which insurers work directly with policyholders to keep costs low for a variety of medical services.

“This puts a lot more control in the hands of the individual consumer and allows the consumer to make a decision that is a good one,” said Susan Pisano, a spokeswoman for the Association of Health Insurance Plans. “I think you’re going to see this kind of program more and more in the short term.”

If the program proves successful, the company might explore the idea of similar programs for lab tests or colonoscopies.

http://www.indystar.com/article/20110131/BUSINESS/101310327

WellPoint’s Anthem Blue Cross and Blue Shield subsidiaries have led the health insurance industry in innovation, but these innovations have been designed to improve their business model and profits, not to improve health care. Even though regulatory oversight of the insurers should increase as a result of enactment of the Patient Protection and Affordable Care Act, this new innovation of intercepting and redirecting patient referrals reveals that the private, for-profit insurance industry has every intention expanding the range of self-serving innovations that increase profits as long as the innovations fall below the threshold that would induce a patient backlash.

There are a great many reasons why a physician may select one imaging center over another for the patient’s procedure. The decision may be based on the quality of the equipment or the skills of the radiologist’s team. It may be based on prior positive or negative experiences with the centers. It may be based on integrated eHealth systems. It may be based on specific procedures not utilized in all centers. Regardless, these are clinical decisions that should be made by physicians who have their patients’ health care needs first and foremost in their minds.

(Physicians also may selectively refer to their own imaging centers – a conflict of interest that is another problem, though not covered in today’s message.)

When the insurer intercepts and redirects a referral, it is done to reduce the insurer’s costs. The insurer may claim that the intervention is to direct the patient to higher quality services, but the referring physician should be in a much better position to make that judgement. No, the decision is made on the basis of, “It’s the prices, stupid.”

The problem that the insurers are addressing is very real. Prices do vary tremendously, especially between facilities that are contracted with the insurer and those that are not. This raises the extremely important point that a health care financing system based on multiple private insurers acting independently cannot possibly bring us appropriate, reasonable pricing throughout the entire health care delivery system.

Of course, this is one of the more important advantages of a single payer system. Prices are not based on secret contracts and dysfunctional markets; instead they are based on negotiation with a public administrator, taking into consideration legitimate costs and fair profits. The interests of patients are served by preventing excessively high prices that waste taxpayer funds while providing adequate payment to ensure that the health care professions will remain attractive to well qualified individuals. The private insurance industry will never get this right.

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA PENSACOLA DIVISION

STATE OF FLORIDA, by and through Attorney General Pam Bondi, et al.;
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al.,
Defendants.

ORDER GRANTING SUMMARY JUDGMENT

I. Medicaid Expansion (Count Four)

Accordingly, summary judgment must be granted in favor of the defendants on Count IV.

II. Individual Mandate (Count One)

The individual mandate is outside Congress’ Commerce Clause power, and it cannot be otherwise authorized by an assertion of power under the Necessary and Proper Clause. It is not Constitutional. Accordingly, summary judgment must be granted in favor of the plaintiffs on Count I.

I must conclude that the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit. The individual mandate cannot be severed.

Injunction

Thus, the award of declaratory relief is adequate and separate injunctive relief is not necessary.

Conclusion

For the reasons stated, I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here.

Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.

For all the reasons stated above and pursuant to Rule 56 of the Federal Rules of Civil Procedure, the plaintiffs’ motion for summary judgment (doc. 80) is hereby GRANTED as to its request for declaratory relief on Count I of the Second Amended Complaint, and DENIED as to its request for injunctive relief; and the defendants’ motion for summary judgment (doc. 82) is hereby GRANTED on Count IV of the Second Amended Complaint.

In accordance with Rule 57 of the Federal Rules of Civil Procedure and Title 28, United States Code, Section 2201(a), a Declaratory Judgment shall be entered separately, declaring “The Patient Protection and Affordable Care Act” unconstitutional.

DONE and ORDERED this 31st day of January, 2011.

ROGER VINSON
Senior United States District Judge

Judge Roger Vinson has ruled that the individual mandate in the Patent Protection and Affordable Care Act is unconstitutional, as Judge Henry Hudson had ruled earlier. Judge Vinson went further and ruled that the individual mandate cannot be severed from the rest of the Act, and, therefore, the entire Patent Protection and Affordable Care Act is unconstitutional.

He also ruled that “officials of the Executive Branch will adhere to the law as declared by the court. As a result, the declaratory judgment is the functional equivalent of an injunction.”

There are two fundamental decisions in this summary judgement:

1) The individual mandate to purchase private health insurance is unconstitutional. Since he has ruled that the mandate cannot be separated from the rest of the Act, the entire Act is unconstitutional.

2) Medicaid is constitutional. Summary judgement in support of Medicaid expansion was granted on behalf of the United States Department of Health and Human Services.

Forget the Supreme Court. Let’s walk away from the unconstitutional Patient Protection and Affordable Care Act and instead enact the constitutional Expanded and Improved Medicare for All Act. It’s less expensive, works better, and includes all of us.

As Judge Vinson stated, “That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system.”