Posts Tagged ‘Kathleen Sebelius’

HHS Sets November 16 Deadline for Healthcare Marketplace Details

Wednesday, July 11th, 2012

States must give detailed information to the federal government by November 16 – just 10 days after the 2012 presidential election – on how they intend to run their online insurance marketplaces, according to Kaiser Health News.  States that miss the deadline — or can’t operate their own marketplaces – will have it done for them by the federal government, starting in January 2014.

The marketplaces, which are mandated by the Patient Protection and Affordable Care Act (ACA), are designed to increase competition among insurers and make coverage more affordable.  States can opt to run the exchanges, perform limited services, or yield control to the federal government.  The Department of Health & Human Services (HHS) “will seek to harmonize…policies with existing state programs and laws wherever possible.”  Although the guidance does not state whether there will be a governing board overseeing the federal exchanges, it does say the federally-overseen marketplaces will accept any insurer that meets the basic requirements.  Consumer groups, such as the American Cancer Society Cancer Action Network, wanted the federal government to be more selective, in hopes that it would make insurers compete more on pricing and quality measures.

Steve Larsen, the federal official overseeing the federal exchange creation, said the initial approach will be an open marketplace, although in the future, other options may be explored.  States that operate their own exchanges are free to choose whichever model they prefer.  While many states are moving forward – 34 have received federal grants to fund planning efforts – others are moving slowly or not at all.  Six states — Illinois, Nevada, Oregon, South Dakota, Tennessee and Washington – recently received additional grants totaling more than $181 million.

Officials in some state say they are holding back pending the Supreme Court’s decision on the constitutionality of the ACA.  The court could uphold the entire law, strike it down entirely or eliminate some parts of it.  Other state lawmakers have said they want to hold off on creating marketplaces until after the November election.  Larsen reiterated the government’s stance that the court will uphold the law and that President Obama will be re-elected, noting that “states should turn their attention to moving forward.”

The ACA requires states to establish exchanges that offer federally subsidized health coverage to an estimated 16 million people who currently lack healthcare insurance.  The exchanges let consumers purchase their insurance from an easily readable menu of competing plans, at premiums set on a sliding scale according to the buyer’s income.

“What this shows is that states are making real progress in delivering quality, affordable health coverage to their residents and they want to be up and running by January 2014,” said Kathleen Sebelius, HHS Secretary.  She said that 34 states — including some that want the ACA overturned — and the District of Columbia have accepted federal grant money to help establish the insurance exchanges.  Approximately 15 states have moved to establish exchanges, either through legislation or executive order.

HHS also released guidelines for helping states that might not be able to offer full exchange services by 2014 and for establishing federal exchanges in states that refuse to participate.  According to officials, the administration will partner with state governments in two realms: certifying health insurance providers for the exchanges and helping consumers apply for coverage and enroll in the chosen plan.

Karen Ignani, President of America’s Health Insurance Plans, is taking a wait-and-see attitude According to Ignani, “Exchanges work best when they are true marketplaces that maximize choice and competition so that individuals, families, and small businesses can purchase plans that are right for them.  States are in the best position to establish exchanges because they have the experience and local-market knowledge to meet the consumers’ needs.  If a state chooses not to establish its own exchange, any exchange that is implemented should seek to preserve consumer choice and avoid regulatory duplication that will add complexity and increase costs for consumers.  We appreciate that the Department has prioritized minimizing administrative burdens, encouraging choice, and preserving the states’ traditional role of regulating health insurance as these exchanges are developed.  Allowing all health plans that meet new quality and performance standards to offer coverage in an exchange will help ensure competition and preserve consumer choice.  Moreover, we agree that exchanges should be developed with input from all stakeholders to ensure they are able to provide individuals, families, and small businesses with the most accurate and up-to-date information about all of their coverage options.”

National Alzheimer’s Plan Launched

Monday, May 21st, 2012

President Barack Obama has thrown down the gauntlet in announcing the first National Alzheimer’s Plan, which sets a deadline of 2025 to find ways to effectively treat — or at least delay — the mind-destroying disease.  The Obama administration is laying out numerous steps the government and private partners can take over the coming years to fight what is poised to become a defining disease of the rapidly aging population.  Families and caregivers with a family member suffering from Alzheimer’s can visit a new website for information about dementia and where to get help in their own communities.

The National Institutes of Health (NIH) is funding new studies of possible therapies, including a form of insulin that is shot into the nose.  “These actions are the cornerstones of an historic effort to fight Alzheimer’s disease,” Health and Human Services Secretary Kathleen Sebelius said.

The National Alzheimer’s Plan comes as leading scientists and researchers are meeting at the NIH to debate what research needs to be prioritize to meet that 2025 deadline.  According to the researchers, the time is right to begin testing potential therapies before people have full-blown Alzheimer’s symptoms, when it may be too late to help.  “There’s a sense of optimism” as a result of some new discoveries, Dr. Francis Collins, director of the National Institutes of Health, said.  But, “we need to figure out exactly where is the best window of opportunity” to battle Alzheimer’s.  Collins noted that cardiologists don’t test cholesterol-reducing drugs on people who have advanced heart failure.

The research is being funded by grants of $16 million and $7.9 million respectively. Experts predict that unless more effective drugs are developed, the number of Americans with Alzheimer’s will double by 2050 and related healthcare costs could soar to more than $1 trillion.  Alzheimer’s affects approximately 5.1 million Americans today; current treatments address symptoms, but do not prevent the disease or halt its progression.

The 2025 goal was the subject of a long debate in the advisory council tasked with helping to write the national plan.  “We had people saying it was overly ambitious and we had people who said it wasn’t ambitious enough,” said Don Moulds, principal deputy assistant secretary for planning and evaluation at HHS.  According to Moulds, some were concerned that an earlier goal might skew research funding into treatments that might be easy hits, but not game-changing treatments.  The 2025 target was deemed to be the earliest date when an effective treatment could be found.  “It’s a huge initiative and a very ambitious step in the right direction,” Moulds said.

Researchers leading the largest clinical study ever done on Alzheimer’s disease have run into an unexpected hurdle.  With nearly 500 patients undergoing MRI scans, PET scans and even spinal taps, researchers hope to invent the first ever test to find Alzheimer’s before a patient loses any memory — or even knows there’s a problem.  “We may be able to screen and begin treatment even before any symptoms begin,” said Dr. Raymond Turner of Georgetown University Hospital, which is one of 57 centers participating in the study.

“The problem is finding volunteers to join the studies,” Turner said.  “Patients.”  The study of 750 patients is 250 patients short.  Nationally, the deficit is in the thousands, with virtually every clinical trial related to Alzheimer’s short of volunteers.  Alzheimer’s itself is part of the problem.  Patients who don’t know that they have the disease don’t know to volunteer, and patients with mild memory loss are often reluctant to participate.  The lead researcher of the imaging trial, Dr. Michael Weiner, says one answer is to recruit physicians who treat Alzheimer’s patients.  “We definitely could do a better job trying to get physicians to refer patients to our project,” Weiner said.  “The slower our trial goes, the slower the rate of progress.”

Eric J. Hall, president and CEO of the Alzheimer’s Foundation of America (AFA), “This day has been a long time coming. The release of the ‘National Plan To Address Alzheimer’s Disease’ reflects the growing impetus among the public and policymakers to act on a disease that has been in the shadows for far too long.  We commend President Obama, HHS Secretary Kathleen Sebelius and Congress for uniquely recognizing and responding to the implications of the Alzheimer’s Disease epidemic.  Recognition is essential for action, and their courage has forged enormous opportunity.

Aging Population Stresses Medicare

Tuesday, May 1st, 2012

The aging population as millions of baby boomers turn 65 and a slowly recovering economy are stretching the long-term finances of Social Security and Medicare.

Soaring healthcare costs have put Medicare in a worse position than Social Security.  But both programs are likely to become insolvent in the coming decades, unless Congress takes action.  In 2011, the trustees projected the Medicare hospital insurance fund would run out of money in 2024.  Social Security’s retirement fund was projected to dry up in 2038, while the SSDI (Social Security Disability Insurance) fund was projected to be empty by 2018. Revised projections provided a more ominous assessment of the disability program, which has seen growth in applications as more disabled workers lose jobs and apply for benefits.  The non-partisan Congressional Budget Office said the disability fund will run out of money in 2016.  Social Security’s trustees have asked Congress to strengthen the disability system by reallocating money from the retirement program.  There is precedent for this since lawmakers did the same thing in 1994.

If the Social Security and Medicare funds ever run out of money, both programs would collect only enough money in payroll taxes to pay partial benefits.  “I don’t know how to make it clear to the public, but in my mind the sirens are going off,” said Mary Johnson, policy analyst for the Senior Citizens League. “I wouldn’t say we’re under attack, but we are in a very, very serious position.”

Tax revenues have started to rebound but they are still below pre-recession levels.  Also, this year’s cost-of-living adjustment (COLA) was much higher than the trustees projected it would be.  Last spring, the trustee’s projected that Social Security recipients would get a benefit increase of 0.7 percent for this year, but higher-than-expected inflation pushed it to 3.6 percent.  That was good news for seniors but it drained more resources from the system.

The trustees overseeing the programs include Treasury Secretary Timothy Geithner, Labor Secretary Hilda Solis, Health and Human Services Secretary Kathleen Sebelius and Social Security Commissioner Michael Astrue.  More than 56 million retirees, disabled Americans, spouses and children collect Social Security.  The typical retirement benefit is $1,232 a month; the average benefit for disabled workers is $1,111.

According to Geithner, the trustees’ reports demonstrate a real need for Congress to make substantial changes to entitlement programs, although he continues to oppose Republican proposals to partially privatize Medicare.  “We will not support proposals that sow the seeds of their destruction in the name of reform, or that shift the cost of healthcare to seniors in order to sustain tax cuts for the most fortunate Americans,” Geithner said.  Last year, the trustees said that the Patient Protection and Affordable Care Act (ACA) would extend the life of the Medicare trust fund — a point that Geithner emphasized.  According to Kaiser Health News, “One of the most important things we can do right now to preserve Medicare is to implement the Affordable Care Act fully and effectively.” Geithner said.  “Still, more needs to be done.”

The positive news for Medicare is that the pace of cost increases has eased a bit. “The trends in Medicare are more modest than the cost increases we have seen in the private commercial sector,” said economist David Blitzer, who administers Standard & Poor’s index of healthcare costs.  “But both Medicare and the commercial sector face rising cost pressures no matter what, and they seem to come from virtually all directions.”

Medicare sets prices on take-it-or-leave-it terms for hospitals and doctors, who complain it doesn’t pay them adequately.  That causes them to charge privately insured patients at higher rates.  Some experts say the longer Congress waits to act on the two programs, the more difficult it could become to make effective changes.  If Congress acts quickly, it can phase in changes over time, perhaps sparing current retirees while giving those closing in on retirement time to prepare.  Unfortunately, Washington has had difficulty making tough political choices that involve raising taxes, cutting benefits or some combination of both.  Advocates for seniors oppose benefit cuts, noting that Social Security’s finances are secure for decades.

“No one is saying you don’t have to maintain it,” said Eric Kingson, co-chair of the Strengthen Social Security Campaign and professor of social work at Syracuse University.  “What I worry about is reducing the benefit structure or radically changing the system.”  Kingson believes that Social Security can be shored up by simply increasing the amount of wages subject to Social Security taxes — an idea that the majority of Republicans in Congress oppose.  Social Security is financed by a 6.2 percent tax on an individual’s first $110,100 in wages and is paid by employers and workers.  Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012; the program’s finances are being replace through increased government borrowing.  The Medicare tax rate is 1.45 percent on all wages, paid by employees and workers.

Sebelius Asks Civil Right Activists to Defend the ACA

Monday, April 23rd, 2012

Secretary of Health and Human Services Kathleen Sebelius has asked civil rights activists to help defend the Patient Protection and Affordable Care Act (ACA), noting that the healthcare law faces an “enemy” whose goal is to set American health policy back half a century.  The remarks come two months before the Supreme Court is expected to issue a ruling that could strike down the law.

Sebelius described the ACA as an crucial weapon against racial disparities that have long meant higher infant mortality rates, shorter life spans and limited access to medical services for minorities.  “The enemy is at the door and we know that they would like to dismantle these initiatives,” Sebelius told the annual convention of the National Action Network, a civil rights group led by the Reverend Al Sharpton“Healthcare inequalities have been one of the most persistent forms of injustice,” she said. “Now is not the time to turn back.”

Civil rights advocates and the minorities they often represent form a key segment of the Democratic base, especially if the Supreme Court strikes down Obama’s signature domestic policy achievement.  Research shows that low-income Americans, including many minorities, have significantly less access to medical care and suffer higher rates of childhood illnesses, hypertension, heart disease, AIDS and other diseases.

Designed to bring healthcare coverage to more than 30 million uninsured Americans, the ACA has become a pet target for Republicans mainly because of an `individual mandate that requires most Americans to have healthcare insurance by 2014.  “We’ve got folks who are committed to undoing…the important initiatives that we’ve made in the last few years,” Sebelius said.  “Frankly, they want to go back and undo Medicare and Medicaid from the mid-1960s.  They want to roll us back years and years.”

The House of Representatives voted recently to partially privatize Medicare and convert Medicaid to a block-grant program for states, although the legislation is likely to be stalled in the Senate.  “I’m here to ask you to help,” Sebelius said.  “If we can begin to close the disparities in health, we begin to close disparities in other areas, too.”

Sebelius asked religious leaders, health advocates and other minority leaders to help the Obama administration educate the public about the healthcare law’s many benefits. The law, which becomes fully effective on January 1, 2014, has already benefited minorities by extending private insurance coverage to young adults, providing free preventive services for those with insurance and prohibiting coverage denials for children with pre-existing conditions.

HHS Issues New Rules on Healthcare Insurance Exchanges

Wednesday, April 4th, 2012

The Department of Health and Human Services (HHS) has issued its final rule aimed at implementing state health insurance exchange provisions of the federal healthcare law.  The rule becomes effective 60 days after it is published in the Federal Register.  The regulation outlines details of the exchanges, which are scheduled to launch on January 1, 2014, and offer insurance plan options for individuals and small businesses, as well as federal subsidies for premiums.

The final rule outlines the minimum standards states must meet in establishing and operating their exchanges, such as individual and employer eligibility for enrollment.  The rule also outlines minimum standards that health insurers must meet to participate in an exchange and the standards employers must meet to participate in the exchange.  The regulation offers states “substantial discretion” in how to design and operate their exchanges.  HHS will accept comment on nine sections of the exchange rule, including provisions regarding the ability of a state to allow agents and brokers to assist qualified individuals in applying for advance payments of the premium tax credit and cost-sharing reductions for qualified health plans; Medicaid and CHIP regulations; options for conducting eligibility determinations; and verification for applicants.  This final rule does not address all of the insurance exchange provisions of the Patient Protection and Affordable Care Act (ACA).

“These policies give states the flexibility they need to design an exchange that works for them,” said HHS Secretary Kathleen Sebelius. “These new marketplaces will offer Americans one-stop shopping for health insurance, where insurers will compete for your business.  More competition will drive down costs and Exchanges will give individuals and small businesses the same purchasing power big businesses have today.”

Among the regulations are a guide to set standards for establishing exchanges; setting up a Small Business Health Options Program (SHOP); performing the basic functions of the exchange; and certifying health plans for participation in the exchange; as well as setting up a streamlined, web-based system for consumers to apply for and enroll in qualified health plans and insurance affordability programs.  The announcement is the culmination of more than two years’ work with states, small businesses, consumers, and health insurance plans.  The administration examined models of exchanges; convened numerous meetings and regional listening sessions across the country with stakeholders; and consulted closely with state leaders, consumer advocates, employers and insurers.  To finalize the rules, HHS accepted public comment to learn from states, consumers, and other stakeholders on how to improve the rules; HHS adapted the proposals based on feedback from the American people.

Unfortunately, many state lawmakers are hesitant to move forward with creating the exchanges until the Supreme Court has ruled on the ACA’s constitutionality, according to Joy Johnson Wilson, federal affairs counsel and health policy director at the National Conference of State Legislatures.  “It’s fair to say that legislation has kind of slowed,” Johnson Wilson said, noting that many lawmakers are taking a “wait-and-see approach” in anticipation of the high court’s oral arguments this month.  Legislators do not want to make plans that have to be revisited and revised, Johnson Wilson said.

Despite the ambivalence of some states, they will be given great flexibility in setting up the exchanges. The concept is the eligibility for determining the premium tax credit is going to be done by the exchange…but also in the state-based exchange to allow — whether it’s a web-based broker or a small-business broker or agent — to interact with the exchange in an automated way,” Tim Hill, deputy director in the Centers for Medicare and Medicaid Services insurance-regulation office, said.

“Those are all relationships that are regulated on the state level…to determine the fee structure for how agents or brokers can be compensated for bringing business to the exchange,” Hill said.  “That’s something we’re going to leave to the state.”  Hill said allowing third-party companies or brokers access the exchanges will help inform people about the insurance exchanges.  “There are lots of folks out there who can generate interest and marketing…it’s a source of leverage that we want to leverage if the states choose to,” Hill said.

Writing on The Hill’s Healthwatch blog, Julian Pecquet notes that “States will have ‘substantial flexibility’ to operate a key provision of President Obama’s healthcare reform law.  The long-awaited final rules expand states’ ability to craft insurance marketplaces that meet their residents’ needs.  This includes allowing states to structure their health insurance exchange in a variety of ways — for example, as a nonprofit entity established by the state, as an independent public agency or as part of an existing state agency.  The final rules also offer each state more time to set up its exchange.  The law requires states to ‘demonstrate complete readiness’ to guarantee they’ll be operational 12 months later.  If states don’t meet the deadline, a federal exchange will take over.  The final rule, however, allows for ‘conditional approval’ if a state is ‘advanced in its preparation’ by January 1, 2013.  In addition, states that aren’t deemed ready for 2014 can apply to operate their own exchange in 2015 or any subsequent year.  ‘HHS may conditionally approve a state-based exchange upon demonstration that it is likely to be fully operationally ready by October 1, 2013, which provides States with flexibility in meeting exchange development timelines,’ according to the regulation.  ‘HHS will provide additional details in future guidance.’”

ACA’s Future Unclear As It Celebrates Its 2nd Birthday

Tuesday, April 3rd, 2012

As the Patient Protection and Affordable Care Act (ACA) celebrates its second birthday, the Obama administration reminded senior citizens – one of the most reliable voter blocs — exactly how much healthcare reform has helped them.  Coverage of the “donut hole” in prescription drug plans saved five million seniors and disabled people $3.2 billion.  According to data from the Centers for Medicare and Medicaid Services (CMS), through the first two months of 2012, roughly 103,000 Americans saved $93 million in the donut hole.  “Without the healthcare law, more than 5.1 million seniors would have faced $3.2 billion in higher drug costs,” Health and Human Services Secretary Kathleen Sebelius said.  The donut hole is a gap in coverage for prescription drugs under what is called Medicare Part D.  Part D covers 75 percent of the cost of prescription drugs until total medication spending for the patient hits $2,800.  Then the hole opens, and seniors must pay out of pocket until they have spent $4,550.  After that, Medicare pays about 95 percent of drug costs.

The ACA sent all seniors who hit the prescription drug donut hole a one-time $250 check.  In 2011 and 2012, seniors in the donut hole receive a 50 percent discount on brand-name drugs.  Additionally seniors covered by traditional Medicare received wellness check-ups and screenings for diseases like cancer and diabetes without paying anything out of pocket.  Under the law, the donut hole phases out in 2020.

The seniors’ lobby AARP launched its largest-ever outreach effort with ads and town-hall meetings aimed at defending Medicare and Social Security.  “We’re not leaving it up to chance” that the public hears about the law’s benefits, congressional Seniors Task Force co-chairwoman Jan Schakowsky (D-Ill.) said.  Democrats, Schakowsky said, have made it a “primary organization effort”…”to tell the truth (about the law) over the next several months.”

Writing in The Hill, Julian Pecquet says that “Democrats see the Ryan budget, which is expected to propose replacing Medicare with subsidies for people to buy insurance, as political gold ahead of the November election.  Republicans for their part will spend the week hammering the law’s ‘broken promises’ — higher premiums, employers dropping coverage and the soaring cost of insurance subsidies when compared to the earlier budget window Democrats highlighted when they were debating the law two years ago.  They’re also arguing that the healthcare law hastens Medicare’s insolvency by removing $500 billion from the program to pay for what they call an unsustainable new entitlements.”

In terms of implementing the law to meet the 2014 deadline, the ACA leaves it up to the states to set up health insurance exchanges.  In states that refuse to do that, HHS has the authority to create a federal exchange as a backup — but it could be stretched thin if it has to cover too many states.  At the moment, a number of states are not making plans and the federal exchange could end up covering as many as 15 to 25 states.

Other states are biding their time depending on the outcome of the Supreme Court case — and the elections — to decide what to do next.  There’s an excellent possibility that many of them won’t be far enough along by January of 2013, when HHS has to either certify the states’ exchanges or prepare to run a federal exchange in those states.  HHS has already extended the deadline for states to apply for the grants that will help them run exchanges.  And it’s taking other steps to help states that won’t be ready in time.  But if a lot of states refuse to create the exchanges –and more time won’t help them — HHS will be forced to act.

White House spokesman Jay Carney told reporters that President Obama is looking beyond past battles. “He is focused on a forward agenda right now, and working with Congress and doing the things he can through executive action to grow the economy and create jobs,” Carney said.

Republican leaders, who once accused the president of focusing too much on healthcare and not enough on jobs, now say the White House is moving away from the ACA because of uncertainty over whether or not its individual mandate is constitutional.  In terms of the upcoming Supreme Court oral arguments, Senator Roy Blunt (R-MO) said “I think we’ll win in the end.  Now the question is how long is it until the end.  There’s no question that the president’s plan will not work.”

A differing opinion was offered by Democratic Caucus Vice-Chairman Xavier Becerra (D-CA).  “I think as time goes by more and more people are beginning to support the reform because it starts to apply to them.  The more people see what the ACA does, the more they’re going to like it.”

CMS’ Value-Based Purchasing Program Is In the Works

Wednesday, March 28th, 2012

The Department of Health and Human Services (HHS) is formulating a new initiative to reward hospitals for the quality of care they provide to Medicare patients and reduce healthcare costs.  Authorized by the Patient Protection and Affordable Care Act (ACA), the Hospital Value-Based Purchasing program marks an historic change in how Medicare pays healthcare providers and facilities — for the first time, 3,500 hospitals nationwide will be paid for inpatient acute-care services based on care quality, not just the quantity of the services they provide.

This initiative supports the objectives of the Partnership for Patients, a public-private partnership that will help improve the quality, safety and affordability of health care for all Americans.  The partnership has the potential to save 60,000 lives and up to $35 billion in U.S. healthcare costs over the next three years, including up to $10 billion for Medicare.  Over the next ten years, the Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings.

“Changing the way we pay hospitals will improve the quality of care for seniors and save money for all of us,” said HHS Secretary Kathleen Sebelius.  “Under this initiative, Medicare will reward hospitals that provide high-quality care and keep their patients healthy. It’s an important part of our work to improve the health of our nation and drive down costs.  As hospitals work to improve their performance on these measures, all patients – not just Medicare patients – will benefit.”

The Hospital Value-Based Purchasing initiative is just one part of a broad effort by the Obama Administration to improve the quality of health care for all Americans, using important new tools provided by the ACA.  The Partnership for Patients brings together hospitals, doctors, nurses, pharmacists, employers, unions, and state and federal government committed to keeping patients from getting injured or sicker in the health care system and improving transitions between care settings.  The Centers for Medicare and Medicaid Services (CMS) is investing up to $1 billion to drive these changes.  Additionally, proposed rules allowing Medicare to pay new Accountable Care Organizations (ACOs) to improve coordination of patient care are also expected to result in better care and lower costs.

In essence, the program rewards hospitals that perform well on quality measures relating both to clinical process of care and to patient experience of care, or those making improvements in their performance on those measures.  Hospitals that meet performance criteria will receive higher compensation.  The hospital value-based purchasing program, which is expected to become effective in fiscal 2013 for payments for discharges occurring on or after October 1, 2012, would make value-based incentive payments based on how much the hospitals’ performance improves certain quality measures during a baseline timeframe.  The better a hospital’s performance or improvement during the performance period, the higher the hospital’s value-based incentive payment would be, according to CMS.

According to CMS estimates, approximately 50 percent of the facilities participating in this Hospital Inpatient Value-Based Purchasing program will receive a net increase in their Medicare payments.  The other half will see a net decrease.  Neither the increase nor the decrease will exceed one percent in the first year, CMS said.  The better-performing hospitals in the first year have the potential to receive value-based incentive payments totaling as much as two percent of Medicare reimbursement, or a net one percent extra,  CMS sees the program as “the next step in promoting higher quality care for Medicare beneficiaries.”  When the program gets underway, CMS said, the government will reward hospitals on the basis of “actual quality performance,” and not just data.

Jean Moody-Williams, director of the Quality Improvement Group within CMS’ Office of Clinical Standards and Quality, said the Hospital VBP Program is funded by a one percent withholding from participating hospitals’ diagnosis-related group (DRG) payments; hospitals excluded from the program will not have that one percent withheld from their DRG payments.  “The goal of CMS through the Hospital Value-Based Purchasing Program is to link payments to quality outcomes,” Williams said.  “We really are starting to get away from asking, ‘How much did you do?’ to ‘How well did you do and how was it for the patient?'”

The American Hospital Association (AHA) has serious reservations about the program, noting that “CMS has not met its requirements with respect to certain measures.  This failure will unfairly and adversely impact the hospital field and even undermine the intent of the law, which is to provide opportunities for hospitals to improve their performance.”

According to the AHA, the problem “is exacerbated in the outpatient PPS (prospective payment system) rulemaking cycle because it builds on policies that fail to comply with the law’s requirements.” AHA also expressed concern with how the agency handled the notice and comment process for the hospital VBP program, which “made significant changes to this program in three separate regulations,” and suggested that the agency choose a single regulation in which it will make any future changes to the program.

2011 Was a Good Year in Medicare Fraud Battle

Tuesday, March 6th, 2012

The Department of Justice recovered nearly $4.1 billion stolen in healthcare fraud schemes during 2011, according to the Obama administration.  That is a 58 percent increase when compared with 2009.  “This is an unprecedented achievement — and it represents the highest amount ever recovered in a single year,” said Attorney General Eric Holder.  The Justice Department reported that more than 1,400 people were charged with fraud in 500 cases.  More than 700 have been convicted.  “We’re regaining the upper hand in our fight against healthcare fraud,” said Health and Human Services Secretary Kathleen Sebelius.  The numbers are part of the Health Care Fraud and Abuse Control Program Annual Report, which is submitted to Congress every year.

Holder and Sebelius gave credit to their Medicare Fraud Strike Force teams for tracking down crime in areas with “hot spots” of unexplained Medicare billing.  The strike forces include prosecutors and investigators from the FBI, the Justice Department and the Health and Human Services Office of Inspector General.

According to Sebelius, aggressively pursuing health care fraud is a great investment.  “Over the last three years, for every dollar we’ve spent, we’ve put more than seven dollars back in the hands of American taxpayers,” she said.  The money goes into the Medicare Trust Fund, the U.S. Treasury and state treasuries.

From 2009 to 2011, the federal government collected $7.20 for every dollar spent on fighting fraud, according to the HHS inspector general.  That’s an increase from the $5.10 for every dollar spent between 1997 and 2008.  “It demonstrates that our collaborative efforts to prevent, identify and prosecute the most egregious instances of health care fraud have never been stronger,” Holder said.  “Over the years, we’ve seen that as these crimes harm all of us — government agencies and programs, insurers and healthcare providers, and individual patients.”

The Health Care Fraud Prevention and Enforcement Action Teams (HEAT) sent 175 people to prison, with an average sentence of 47 months, according to the Justice Department.  The teams were created in 2009.  “I expect that we will be expanding those efforts to additional cities,” said Peter Budetti, director for the Centers for Medicare and Medicaid Services’ Center for Program Integrity.

The Patient Protection and Affordable Care Act (ACA) sets aside $350 million in healthcare fraud-fighting funds. One of the law’s provisions requires  providers and suppliers wishing to participate in the Medicare, Medicaid, and the Children’s Health Insurance Program that have been deemed to be at higher risk of fraud or abuse to undergo license checks and site visits to confirm legitimacy.

Writing in the Christian Science Monitor, Warren Richey puts this in historical perspective.  According to Richey, “During President Bush’s eight years in office, nearly $1.6 billion was recovered on average each year by federal agents and prosecutors.  In contrast, the Obama administration has recovered an average $3.6 billion per year during each of the past three years.  Fighting healthcare fraud is essential in an administration that is seeking to dramatically increase the level of federal control over the nation’s health insurance system.

But it is unclear from the report to what extent the increased recoveries are a function of more efficient law enforcement or simply the rampant nature of fraud against the government.  Estimates are that healthcare fraud diverts more than $60 billion a year from public health care to criminal enrichment.  Administration officials insist they are bringing fraud, waste, and abuse under control.”

In its fiscal year 2013 budget, HHS proposes to continue making progress against healthcare fraud by increasing support through mandatory and discretionary funding.  The mandatory funding level is $1.3 billion. HHS is requesting $610 million in discretionary funds.  In its FY 2013 budget request, the Justice Department requested $294.5 million in mandatory and discretionary funding to continue the fight against  healthcare fraud.

According to Holder, the department’s civil division filed 1,000 new civil cases in addition to 1,000 pending actions.  The work resulted in $2.4 billion in recoveries under the federal False Claims Act, he said.  “These are stunning numbers,” Holder said.

Healthcare Providers Must Innovate to Trim Costs

Wednesday, February 8th, 2012

A top official from the Centers for Medicare and Medicaid Services (CMS) recommended that providers — including hospital executives — should research technology-driven changes in their systems with the goal of improving care and reducing costs.  “We need to decide now whether to make the commitment to adopt innovation that will fundamentally change the way we operate, change the way we deliver care, change the way we think about these organizations that we run,” Dr. Richard Gilfillan, acting director of the CMS’ Center for Medicare and Medicaid Innovation, said.  “This is not an abstract notion; this is a very concrete question that each of us will have to answer.”

Healthcare leaders who join in such an overhaul in their care delivery will likely find that the main obstacle is in changing how they are paid, Gilfillan said.  “We can ask people to keep folks from going back to the hospital, but if we pay health systems for putting more people in the hospital, we’ll get what we have today: a lot of hospital care,” he said.  Medicare will encourage private payers to change payment approaches by undertaking its own changes.  Specifically, Gilfillan said, once his office identifies payment practices that result in improved clinical outcomes and reduced spending, the HHS secretary will implement those throughout Medicare administratively.  “As you can see, this is a powerful tool for changing the way we deliver care,” Gilfillan said.

The large number of senior citizens covered by Medicare and low-income Americans covered by Medicaid suggests that any changes that serve those patients could soon be adopted throughout the system.  “The reality is that over the years, the private sector has by and large followed Medicare’s lead in payment systems,” Gilfillan said.  “Medicare has been the most innovative payer if you look back over the last 30 years.”  With $10 billion in funding through the end of 2019, Gilfillan anticipates rolling out additional initiatives before too long.  These could encompass ideas that emerge at an “innovation summit”.

Created by the Patient Protection and Affordable Care Act (ACA), the Innovation Center works to test and support innovative new healthcare models that reduce costs and strengthen the quality of care.  “The Affordable Care Act gives us tremendous new tools to innovate and improve our health care system,” said Health and Human Services Secretary Kathleen Sebelius.  “We discussed how we can work together to make innovative ideas a reality in communities across the country.”

“The level of real excitement surrounding this conference shows not only that people who know healthcare recognize the urgent need for better health and better care at lower cost, they also are ready to move forward with solutions,” said CMS Acting Administrator Marilyn Tavenner.  “The fact that all of these disparate interests share the aim of better healthcare and are willing to work for it not only means that we’re going to have the best ideas on the table, but also that we’re going to have the expertise and the resources that will ultimately ensure better health at a lower cost will be within the reach of every American,” Gilfillan said.

In the meantime, the Obama Administration also released a new report highlighting the success of the Center for Medicare and Medicaid Innovation.  The Center for Medicare and Medicaid Innovation’s role is limited to testing payment incentives and healthcare delivery methods within Medicare and Medicaid, as well as the Children’s Health Insurance Program.

MLK & Healthcare Reform

Monday, January 30th, 2012

A recent byline article in Forbes magazine by Carolyn McClanahan, M.D., CFP, raises many issues about healthcare in the year 2012.  According to McClanahan “The New England Journal of Medicine’s (NEJM) article on the fate of healthcare reform in 2012 greatly saddens the optimist in me. It discusses four important events, and I’ll share my “simplistic view” of these events:

“State legislatures getting in gear to fill their role assigned by the ACA.  As I’ve discussed previously, we have a complicated healthcare system which is expensive and inefficient.  Instead of simplifying, each state will implement or delay implementing the law based solely on their political interest.  This is not productive.”

“The second event is the Supreme Court’s ruling on the legality of the ACA in May. It is possible that the entire law could be struck down, (albeit unlikely).  If this scenario plays out, we will have wasted billions implementing parts of the law to date.  Another more likely scenario is the law will be upheld but the mandate that everyone purchase health insurance be thrown out.  This would severely weaken the law because people will only buy insurance when they are sick.  There will still be a requirement that insurance companies have to sell insurance to everyone regardless of health status.  This is not financially feasible.  Most likely, the law will stand, but who really knows?”

“The third key event is the deadline for states to apply for federal grants to operate their health insurance exchange.  State who don’t apply will either have to cede control of the exchanges to the federal government or pay for the cost of implementation themselves.  State governors and legislatures against the ACA, like my home state of Florida, risk turning away resources and having more of the federal government running the show.  Talk about the law of unintended consequences.”

“The fourth key date is the election in November.  If President Obama wins re-election, implementation will continue.  If he loses, the winner will have a difficult time repealing the law unless the Republicans can win 60 seats in the Senate.  So what is their plan?  Have everyone drag their feet on implementation or do a half-baked job.  Wouldn’t it be nice if instead they came up with a good plan to fix the parts that are not working?  Simplify and clean up the mess of the insurance part of the law and implement with speed and clarity the good parts like preventive care initiatives, rebuilding our primary care workforce, and improving our ability to handle large disasters.”

A similar viewpoint was expressed by Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, who said that access to healthcare is the next civil rights frontier.  According to Sebelius, “On Martin Luther King Day, it is easy to congratulate ourselves on our progress in moving beyond segregated schools, lunch counters and drinking fountains. The hard question is this: what injustices do we still accept that should, in fact, be intolerable?  Surely Dr. King would find the next civil rights frontier in healthcare, with nearly 50 million uninsured, almost 45,000 deaths annually due to lack of insurance, and more than half of all personal bankruptcies linked to illness and medical bills.”

“While the Affordable Care Act will bring improvements, such as decreasing the ranks of the uninsured, supporting community health centers, and investing in prevention, it leaves many gaps. At least 23 million people will still be uninsured in 2019. Tens of millions will be underinsured, one serious illness away from financial ruin. Most people who suffer medical bankruptcy had private insurance before getting sick. And medical bankruptcy is a cruel double whammy. Already beset with pain, anxiety and fear – due to serious illness – families find themselves financially devastated.  This doesn’t happen in other industrialized countries, which have high-quality health systems that cover everyone.”

As a department, we are committed to ensuring that all Americans achieve health equity by eliminating disparities and doing what we can to improve the health of all groups, including the poor and underserved,” Sebelius said. “One of the most important ways we are doing this is through our new health care law, the Affordable Care Act.”