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Last Build Date: Thu, 25 May 2017 17:55:42 +0000


The Burgeoning “Yelpification” Of Health Care: Foundations Help Consumers Hold A Scale And A Mirror To The Health Care System

Thu, 25 May 2017 17:55:42 +0000

From flashy tech start-ups in Silicon Valley to modernized insurers in New York, everyone wants to “disrupt” health care. In practice, this is immensely more challenging than it sounds. Electronic health records (EHRs), more than a decade ago, were expected to revolutionize how health information is stored and shared. Yet, even today, 36 percent of office-based EHRs don’t permit secure messaging between patients and physicians, and 37 percent do not even allow patients to view their records. Instead, we see such sharing happening outside the traditional health care system, through Apple HealthKit and HUGO, mechanisms for people to carry their records in their pocket, on their phone. It represents a somewhat surprising and growing trend—patients won’t wait and are disrupting health care themselves. Over the years, a slew of tools have developed to help patients with their health care decisions. Medicare’s Hospital Compare, the Leapfrog Hospital Safety Grade, Healthgrades ratings for physicians, and many other tools exist to help direct patients toward high-quality care. Yet, what is drawing in patients is Yelp—the website widely known for consumer-driven restaurant reviews. Yelp is beginning to play a role in helping patients with their health care decisions. But whether Yelp ratings will drive patients in the right direction—toward high-quality providers—is still unclear. In an April 2017 New York State Health Foundation (NYSHealth)-funded study, the Manhattan Institute explored the extent to which Yelp ratings of hospitals in New York State correspond to objective outcomes measures across all of a hospital’s patients. The study found that higher Yelp ratings are correlated with better-quality hospitals and can offer consumers a useful, clear, and reliable tool that can be easily accessed. In short, for one very important measure—potentially preventable readmissions—Yelp ratings appear to have a moderately strong correlation with that measure. That is, higher Yelp scores for hospitals are associated with lower readmission rates. These results build on prior evidence that found a similar relationship between Yelp scores and Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experience measures for the hospitals in the study. But while this research has helped to move the needle on validating Yelp as an important asset in the tool chest of health care quality tools, there are still important questions left unanswered. For starters, do the disparate (and often contradictory) messages from existing rating systems have the potential to help non-savvy patients identify higher quality providers? Or do those messages just lead such patients to throw up their hands in frustration? Whether Yelp ratings contribute to this potential confusion or help generate greater understanding isn’t clear yet. Indeed, Yelp ratings of hospitals are in their infancy—relatively low sample size over the years and concentration in more urban areas mean that a wait-and-see approach might be best. However, the hope is that consumers’ trust of Yelp as a platform, and the open-ended, more personal nature of reviews, will over time build up into a useful metric of hospital quality. Both insurers and providers should also explore how user-generated reviews can help them to obtain information about patients with different needs—here, the free-form style of Yelp text reviews can be an advantage, in both understanding what patients value most and what they are most concerned about. Like any observational study, Yelp reviews have their strengths and weaknesses—but their wide availability, and essentially zero cost, make them an attractive tool for researchers who want to better understand how patients and consumers really interact with the health care system. Yelp also reveals a “secret sauce” for the health care system—that is, in the rush to keep building new health care metrics, we forget that patients want to hear from other patients. A study by Public Agenda, released in April 2017, ex[...]

CMS Should Continue Innovating Health Care Payment And Delivery

Thu, 25 May 2017 16:30:53 +0000

Editor’s Note: This is the second in a five-part Health Affairs Blog series, produced in conjunction with the Bipartisan Policy Center, examining current issues and care models in the delivery system reform effort. Each post will be jointly authored by Democratic and Republican leaders in health policy. Check back for the next entry in the series on June 1. As a predominant purchaser of health care in the United States, federal health insurance programs must remain committed to advancing smarter approaches to health care payment and delivery. As former administrators of the Centers for Medicare and Medicaid Services (CMS) and its predecessor, known as the Health Care Financing Administration (HCFA), we each played a role—in both Republican and Democratic administrations—in implementing important bipartisan modernizations of Medicare payments for health care providers. In 1991, the HCFA implemented a demonstration to bundle hospital and physician payments for an entire hospital stay for heart bypass surgery, a pre-cursor to the larger bundled payment movement under way today. More recently, in 2016, CMS finalized regulations to implement significant changes to Medicare physician payments that were required under the bipartisan Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. At their core, both payment reforms seek to promote efficiency within health care delivery, while better linking payment to quality outcomes. CMS, through the programs under its discretion, can wield important influence as a health care purchaser. The agency directly governs payment policy for the Medicare program, which served 56 million beneficiaries in 2016 and plays an indirect role in delivery system reform in the Medicaid program, which covered an additional 71 million individuals last year. Medicare payment amounts, and to a lesser extent Medicare payment policies or models, can also form the basis of commercial payers’ negotiated provider payment rates and reimbursement approaches. Through Medicaid and initiatives to align Medicare’s programs with states and commercial payers, such as the initiative to align quality measures across Medicare and private-sector payers, these initiatives can influence care provision across whole communities. CMS has shown preliminary success in shifting Medicare’s delivery system into value-based care. The agency has already met its initial goal of tying at least 30 percent of Medicare payments to quality performance or value-based arrangements by 2016 and remains on track to cross 50 percent by 2018. By propelling transformative changes in the way federal programs pay for health care, CMS can improve care quality and better control care costs in its own programs, while also sending a strong signal to participants in the private health insurance market. Through Medicaid and initiatives to align Medicare’s programs with states and commercial payers, these initiatives can influence care provision across whole communities. CMS and the Center for Medicare and Medicaid Innovation (Innovation Center) should continue to draw on lessons from payment innovations advanced by vanguards in the private sector. High-performing integrated health systems, such as Kaiser Permanente and the Geisinger Health System, have long excelled in developing and testing novel risk-bearing payment models. CMS has successfully developed a communication channel, in its Health Care Payment Learning and Action Network, through which the agency can help educate care providers and clinicians about the mechanics of new payment models in development. CMS should continue to leverage that communication forum in a “two-way” approach, seeking out input from clinicians on ways to improve federal payment models, based on private-sector experiences. CMS should also coordinate closely with the MACRA-established Physician-Focused Payment Model Technical Advisory Committee to continue to gain insight into private-sector models that could be replicated in federal programs. In the same vein, the[...]

Building Additional Serious Illness Measures Into Medicare Programs

Thu, 25 May 2017 14:14:41 +0000

The Need For Better Measures The US health care system is not delivering the care that patients with serious illness need and want. For example, although most people say they would like to die at home, nearly 70 percent die in nursing homes, intensive care units, or other medical settings. Given that approximately 70 percent of people who die in the United States each year are Medicare beneficiaries, the new administration has an opportunity to implement changes to significantly improve the quality of end-of-life care. Sen. Mark Warner (D-VA) highlighted this opportunity during the confirmation hearing of then-Rep. Tom Price (R-GA) for secretary of the Department of Health and Human Services. Senator Warner cited the Care Planning Act of 2015, a bill he introduced to provide, among other things, coordinated care services for Medicare beneficiaries in the latter stages of a serious illness. While the bill was not passed in that Congress, Senator Warner underscored the bipartisan support, noting the bill’s co-sponsor Sen. Johnny Isakson (R-GA), for improving care for seriously ill patients. Senator Warner received Representative Price’s assurance that he would work with Senators Warner, Isakson, and others on these important issues. The exchange between Senator Warner and now-Secretary Price reflects the broad consensus that care for patients with life-threatening illnesses needs to improve. According to the National Academy of Medicine’s (NAM’s) 2014 report “Dying in America,” “Despite considerable progress, significant problems remain in providing end-of-life care for Americans that is high quality and compassionate and preserves their choice while being affordable and sustainable.” Seriously ill patients need better care. But that will not happen without new tools for measuring the quality of care these individuals receive and the effects of any interventions. The development and implementation of serious illness quality measures will help policy makers establish which needs of individuals with a serious illness should receive priority as providers focus on delivering care that is of higher quality and value. Better understanding of the patient experience will also ensure that people with an advanced illness are not neglected while the health system continues its transition from the traditional fee-for-service payment system to one that rewards value. Although quality measures have proliferated in nearly all areas of medicine, that is not the case for palliative and end-of-life care. Both NAM’s “Dying in America” report and its 2015 “Vital Signs: Core Metrics for Health and Health Care Progress” pointed to end-of-life care as a critical area in need of significant and improved quality measure development. A number of groups have taken up the call to make progress in the way end-of-life quality is measured. For example, the National Consensus Project for Quality Palliative Care, a collaborative effort of six major leadership organizations in the hospice and palliative care fields that are interested in standardizing the measurement of care, conducted foundational work by establishing clinical practice guidelines for critical domains—such as program structure and physical symptom management—in palliative care. Projects such as the University of North Carolina’s Peace Hospice and Palliative Care Quality Measures and RAND Corporation’s Assessing Care of Vulnerable Elders have developed measures. The Measuring What Matters initiative—led by the American Academy of Hospice and Palliative Medicine and the Hospice and Palliative Nurses Association—identified a number of high-priority measures essential to high-quality palliative care. Some innovative palliative care programs are using locally developed, nonvalidated indicators. The National Quality Forum (NQF) has formed a permanent standing committee that will review current and future measures for scientific reliability as well as tackle larger issues, including gaps i[...]

New CBO AHCA Estimate: Decreases In Savings And Uninsured, Potential Market Instability For States With Major Waivers

Thu, 25 May 2017 04:52:47 +0000

Late in the day on May 24, 2017, the Congressional Budget Office and Joint Committee on Taxation (collectively referred to here as the CBO) released their third and final cost estimate regarding H.R. 1628, the House American Health Care Act of 2017. The cost estimate focuses primarily on changes that occurred after the CBO scored the original bill on March 13, 2017, and the manager’s amendment on March 24. The CBO report is on the whole not good news for supporters of the House version of the AHCA. The primary changes addressed by the new score are those added by the MacArthur Amendment, which would allow states to obtain waivers 1) from the Affordable Care Act’s essential health benefits (EHB) requirement and 2) to impose health status underwriting for about one year on individuals who have a lapse in coverage. It also covers amendments added in late March and early April that delayed the repeal of the Medicare surcharge for higher income taxpayers and added $15 billion in funding for maternity, mental health, and substance use disorder services; $15 billion for “invisible risk sharing”; and $8 billion in patient stability funding for states that accepted the MacArthur amendment waivers to assist those who lose community rating protection. Headline Numbers The headlines are that the AHCA would, for the period of 2017 to 2026, reduce direct spending by $1.111 trillion and revenues by $0.992 trillion, for a net deficit reduction of $119 billion, $32 billion less than projected by the second CBO report on the bill. The CBO projects that 23 million people would lose coverage under the AHCA as passed compared to the number covered by the ACA, 1 million fewer than the CBO projected would lose coverage under its last estimate. The CBO believes that premiums would be somewhat lower on average in the individual market under the most recent amendments than under the earlier versions of the bill, but that health insurance would be unaffordable for individuals with health problems in some states. Indeed, the CBO projects that individual insurance markets could destabilize in one sixth of the country under the new amendments. The largest savings in the AHCA would come from cuts in Medicaid, including repealing the ACA’s Medicaid expansion ($834 billion over ten years), and repeal of the ACA’s tax credits ($665 billion). These would be offset by increases in spending for the AHCA’s tax credits ($375 billion) and the Patient and State Stability Fund (PSSF) ($117 billion)—the CBO believes that the full $138 billion provided by the AHCA for the PSSF would not in fact be claimed by the states. The largest increases in the deficit would come from the repeal of the penalties under the individual and employer mandate ($210 billion) and from repeal of various taxes on wealthy people and corporations and modification of various tax preferences ($662 billion, according to the Joint Committee on Taxation). The biggest changes in the May 24 cost estimate from the earlier estimate are due to an increase in revenue of $68 billion from the delay in the repeal of the Medicare tax surcharge on people earning more than $200,000 a year ($250,000 for joint returns) until 2023, offset by an increase in expenditures of about $100 billion, including about $38 billion more for the Patient and State Stability Fund; the remainder is attributable to “changes in the number of people estimated to have nongroup and employment-based insurance,” and “difficulties in the implementation and enforcement of the tax credit.” The CBO projects that 14 million more people would be uninsured in 2018 than under the current law, primarily because of people who would drop coverage with the end of the individual and mandate penalties. The number of people who were uninsured compared to those covered under current law would increase to 19 million in 2020 and 23 million in 2026, when a total of 51 million under age 65 would be uninsured. Increases in the uninsured would b[...]

Market Momentum, Spillover Effects, And Evidence-Based Decision Making On Payment Reform

Wed, 24 May 2017 14:57:05 +0000

While insurance coverage and access dominate policy conversations now, issues of the cost and quality of care are not far from the surface. To achieve value for the health care dollars that we spend and to make coverage and care more affordable, policy makers and payers have sponsored a broad range of activity around payment reforms to support new models of care. So much activity in the public and private sectors raises a fundamental question: With so many diverse reforms taking place, how is it possible to generate the evidence needed for informed decision making about payment reforms for the future? A Bumper Crop Of Payment Reforms After a decade of experiments with pay-for-performance that typically focused on clinical process measures and showed only modest behavioral impacts, payers began to tackle value-based purchasing with “core” health care dollars instead of marginal reward payments. Early public- and private-sector initiatives that focused on patient-centered medical homes, episode-based payments, and accountable care organization (ACO)-like models such as Massachusetts’ Alternative Quality Contract (AQC) and Medicare’s Physician Group Practice Demonstration engaged leading providers in a handful of markets. Their influence was plain in key provisions of the 2010 Affordable Care Act that established the Medicare Shared Savings Program and the Center for Medicare and Medicaid Innovation (Innovation Center), to focus on both bringing to scale the concept of a Medicare ACO and empower the agency to test and scale other payment and care delivery initiatives. Since then, the number of Medicare ACOs has grown from 120 in 2012 to more than 520 this year. The Innovation Center has announced or launched nearly 40 initiatives, involving providers in every state and more than 18 million people, with commercial and Medicaid initiatives also proliferating. The Medicare Access and CHIP Reauthorization Act of 2015 and delivery system reform goals promoted by the Department of Health and Human Services (HHS) in the last administration only added fuel to the fire. The ubiquity of payment and delivery system reform initiatives has generated tremendous interest in these issues in the trade press and at trade meetings. A burgeoning industry of consultants and tool developers seek to serve providers engaged in such reforms. While it’s difficult to estimate the precise percentage of practicing clinicians currently participating in reforms, we know that they represent every state, many medical specialties, and diverse health care facilities such as home health agencies, acute care hospitals, and skilled nursing facilities. It’s difficult to imagine that this level of market awareness and activity does not affect the behaviors of even providers who are not explicitly participating in a payment initiative. Many of the aforementioned consultants and tool developers also serve providers considering or preparing to participate in reforms. The Centers for Medicare and Medicaid Services’ (CMS’s) Transforming Clinical Practice Initiative explicitly aims to improve providers’ readiness for reforms. The proximity of peers and competitors who are participating further builds pressure for other providers to react. Spillover effects can thus take several forms: from one payer’s beneficiary population to another payer’s population within the same physician organization; from a provider participating in a reform to nonparticipating providers in the same market; and from the signals payers and policy makers disseminate nationally to diffuse markets. While we do not have extensive evidence on the magnitude of reform spillover effects, we can predict their directional impact on the evaluation of reforms. First, the ubiquity of reforms makes it increasingly challenging for evaluators to identify valid comparison populations; it also complicates the strategies that evaluators must use to collect data and adjust for partic[...]

First Trump Administration ASPE Report On ACA Notes Premium Increases

Wed, 24 May 2017 14:55:59 +0000

During the first seven years of the Affordable Care Act, the Obama administration’s Office of the Health and Human Services Assistant Secretary for Planning and Evaluation (ASPE) put out a series of reports (twenty in 2016 and eight in the first few weeks of 2017) evaluating the effects of the ACA. The reports largely described the ACA as a success. In April, Dr. Stephen Parente, a health economist from the University of Minnesota, was nominated by the Trump administration to head up ASPE. Dr. Parente has a history of criticizing the ACA and of working on conservative replacement proposals. He provided analysis supporting HHS Secretary Tom Price’s ACA replacement plan in conjunction with the conservative American Action Forum as well as analysis of Paul Ryan’s Better Way proposal.  Parente was also an advisor to John McCain’s 2008 presidential campaign. As early as 2014, Parente published opinion pieces predicting that the premiums for ACA plans would explode in 2017. On May 23, 2017, ASPE published the first Trump administration ACA report, “Individual Market Premium Changes, 2013 – 2017.” The report compares premiums in the individual market in 2013, before the ACA’s market reforms and affordability programs went into effect, as gleaned from medical loss ratio reports filed by insurers, with average premiums in states as shown by CMS data. The report finds that premiums more than doubled in the 39 states between 2013 and 2017, from an average of $232 to $476. In three states the premiums tripled or more. The press release accompanying the report, quoting an HHS spokesperson (not from ASPE), states: With data that shows average premiums doubling nationwide and Americans paying nearly $3,000 more for health insurance per year, this report is a sobering reminder of why reforming our healthcare system remains a top priority of the Trump Administration. The status quo is unsustainable. Unlike Obama era ASPE reports, the report focuses only on premiums, not on the actual cost of health insurance to the majority of marketplace enrollees who qualify for premium tax credits that dramatically reduce the amount they must pay for coverage. An ASPE report released late in 2017 analyzing premiums for 2017, for example, highlighted the fact that 8 in 10 marketplace enrollees could get coverage for $100 a month or less, less than half the cost of 2013 plans. The new ASPE report acknowledges that the 2013 MLR and 2017 CMS data are not strictly comparable. But more importantly, individual market coverage before 2014 often failed to cover many of the benefits that insurers must currently cover under the essential health benefits, such as maternity or mental health and substance use disorder services, or even prescription drugs. Although lifetime limits had been outlawed by 2013, many plans still had annual limits on coverage. More than half of individual market enrollees were in plans with actuarial values below the minimum allowed by the ACA.  Older enrollees were charged more than three times the rates charged younger enrollees. Most importantly, people with preexisting conditions could be denied coverage, either for themselves or for their medical conditions. In New Jersey, which had community rating before the ACA, premiums have only increased 12 percent since 2013. The report acknowledges, “The changing mix of enrollees and adverse selection pressure has likely been a significant cause of the large average premium increases in the individual market over this four-year period” Of course, the Trump administration believes in the principle of providing more choice. It believes that the country would be better off if coverage were available that was less comprehensive, had higher cost sharing, charged higher rates to older people and lower rates to younger people, and used high risk pools to cover some people with preexisting conditions. ASPE is respo[...]

Trump Budget Proposes Big Health Cuts

Tue, 23 May 2017 19:18:12 +0000

As has been widely reported, President Trump’s proposed fiscal year 2018 budget, released on May 23, 2017, would cut corporate and personal income taxes, particularly for higher-income taxpayers, increase defense and border security spending, and cut spending for health and social programs. Projected spending cuts across virtually all federal government health programs would be dramatic. Over the next ten years, the budget proposes cutting Obamacare” outlays by $1.25 trillion, resulting in $250 billion in deficit reduction, through the American Health Care Act’s program amendments. Beyond that, Trump’s budget would cut Medicaid spending by $610 billion and cut CHIP by $5.8 billion (while extending it through 2019. Medicaid would apparently be cut beyond the AHCA reductions by increasing the stringency of per capita cap and block grant reductions already included in that bill. CHIP funding would be cut by eliminating the 23 percent increased federal funding match added by the ACA and by no longer providing federal CHIP dollars for children from families with incomes above 250 percent of the federal poverty level. States would also be allowed to transfer children from families with incomes below 133 percent of FPL, who had been transferred from CHIP to Medicaid, back to CHIP. The budget would cut funding for the Food and Drug Administration for 2018 by over $850 million, but increase user fees by $1.3 billion, resulting in a program increase of $450 million. The budget would cut 2018 cut funding for the Centers for Disease Control by $1.3 billion and funding for the National Institutes of Health by $5.8 billion. It would eliminate the Agency for Health Care Research and Quality, folding it into the NIH with reduced funding. Substance Abuse and Mental Health budgeted funding would be cut by almost $400 million. Funding for the Center for Medicare and Medicaid Innovation would increase by $114 million. The HHS budget promises to fund efficient operations and necessary activities to provide a stable transition from the “burdensome requirements of Obamacare to a patient-centered health care system.” The budget includes $471 million for the ACA exchanges in 2017, $453 of which is to go to program operations such as eligibility, call center operations, and information technology. To this will be added an expected $1.3 billion in user fees, for total exchange funding of $1.7 billion. The 2017 Obama budget requested $2.1 billion for exchange operations, including $535 in budgeted funding and $1.6 billion in user fees. The 2018 HHS budget projects the expenditure of $28 million in rate review grants and $59 million in state exchange grants that remain unspent from previous appropriations. The budget also proposes abolishing the Independent Payment Advisory Board, saving $16 million for 2018 but costing $7.6 billion over 10 years. The Department of the Treasury budget projects the expenditure during 2018 of $32 billion in advance premium tax credits, $6.3 billion in cost-sharing reduction payments, and $4.5 billion in funding for the Basic Health Program. All are described as “mandatory” funding. Finally, the budget proposes a number of “medical liability reforms,” that would generally limit access to the courts and damages recoverable by individuals injured by medical negligence. This has been a favorite project of HHS Secretary Price. The budget projects that the proposed changes in medical liability law would save HHS programs almost $32 billion over ten years and the federal government $55 billion. Presumably the federal reforms would preempt state law, which currently governs medical liability. Of course, the President’s budget is only a statement of the administration’s priorities. Any 2018 spending bill that emerges from Congress is likely to look very different. [...]

Measuring Value Based On What Matters To Patients: A New Value Assessment Framework

Tue, 23 May 2017 15:00:12 +0000

We spend 18 percent of our national gross domestic product on health care. As health care spending continues to grow and as we appropriately drive the health care system toward a payment system that rewards value instead of volume, it is imperative that we promote conversations on how to define value. To do this, it is critical that we first answer the question: value to whom? Value in health care can mean different things to different stakeholders. Payer priorities may not match up with manufacturer concerns, and both may assess value entirely differently than public health entities. However, no matter which of these stakeholders is measuring value, it’s important that value assessments always robustly consider and measure what matters most to the ultimate consumers of health care: patients. The patient perspective on value is of particular importance now, as patients are responsible for more and more of the costs of their care. Today, more than 1 in 4 Americans report facing challenges paying for their medical bills and about 79 percent of cancer patients report moderate to catastrophic financial burden related to their care. Low-income families often spend more than 20 percent of their after-tax income on out-of-pocket health care spending, even when enrolled in low- or no-deductible plans. Not surprisingly, a recent Kaiser Family Foundation poll found that two-thirds (67 percent) of Americans, irrespective of political affiliation, feel that lowering out-of-pocket costs for health care should be a top priority for President Donald Trump and Congress. But despite the drive toward value-based health care reimbursement and patients’ ever increasing financial stake in their own health care treatment, many traditional value assessment tools fail to consider value from the patient’s perspective. Recently, a Health Affairs Blog post from the National Pharmaceutical Council (NPC) outlined the limitations of many new tools for value assessment, positing that we have much more work to do—in particular in considering “what’s important to patients.” The authors critiqued five prominent value assessment models developed by the American College of Cardiology/American Heart Association, the American Society of Clinical Oncology, the Institute for Clinical and Economic Review (ICER), the Memorial Sloan-Kettering Cancer Center (DrugAbacus), and the National Comprehensive Cancer Network. The NPC makes a number of important recommendations for improvement; however, the piece fails to take into account the progress already being made. In particular, the Avalere-FasterCures Patient-Perspective Value Framework (PPVF) version 1.0—developed in collaboration with a multistakeholder steering committee—has made significant progress in framing a new way to assess value from the patient perspective. The Patient-Perspective Value Framework Integrating patient perspectives into value assessment frameworks will not only help patients, but it will also enable pharmaceutical and medical device manufacturers, providers, and payers to develop, deliver, and pay for products that provide a more meaningful benefit to patients and higher value to society. Through a process that included significant public input and collaboration with other value framework developers, Avalere and FasterCures published version 1.0 of the PPVF on May 11, 2017. Unlike the existing frameworks in which input from patients or other stakeholders is limited, the PPVF process included stakeholders from the start, including a significant number of patient groups. Twenty-three organizations contributed to the framework’s development as members of the PPVF steering committee. In addition, more than 230 individuals and organizations offered feedback to the draft PPVF. Importantly, 80 percent of the feedback came directly from patients, caregivers, and patient advoca[...]

Insurers, Marketplaces Face Uncertainty As Parties Seek Further House v. Price Delay

Mon, 22 May 2017 17:49:32 +0000

On May 22, 2017, the House of Representatives and the Department of Justice jointly asked the District of Columbia Court of Appeals to continue to hold House v. Price in abeyance, presumably for another 90 days as contemplated by the court’s earlier order. The next status report would be due on August 20, 2017. The court is expected to respond to their request in the near future. Legal Background As readers of this Blog know, this case was known earlier as House v. Burwell. The Affordable Care Act (ACA) requires insurers to reduce out-of-pocket limits and other cost sharing for enrollees in marketplace silver plans with household incomes not exceeding 250 percent of the federal poverty level. The House challenged the federal government’s reimbursement of insurers for these payments under the ACA, claiming that no money had been appropriated and that the payments were thus unconstitutional. The lower court accepted the position of the House on this issue and enjoined the reimbursement until Congress appropriated funds to cover them, but stayed its order pending appeal. The Obama administration appealed. The House asked for additional time to respond, and then, after the election, sought a further delay to give the Trump administration time to develop a position in the litigation. The Trump administration has yet to take a position on whether the payments are legal or not. The Danger Of Continued Uncertainty For Insurers And The Marketplaces Leaving the appeal in abeyance leaves the insurance industry in limbo. It is being reported that the administration will continue making the payments while the case is pending, but the Trump administration has to date refused to commit itself formally to continue to make the payments for any definite period of time. President Trump has suggested several times that he might cut payments off or might use continued payment of the CSR reimbursement as a bargaining chip to get Democrats to support changes to the ACA. Insurers, however, must notify the federal government of their preliminary decision whether or not they will participate in the exchanges for 2018 by June 21. In most, if not all, states, they must file their rates for 2018 before that time. Final exchange-qualified health plan rates are due by August 16, 2017, before the next 90-day status call would be due. Approximately 7 million exchange enrollees qualify for cost-sharing reductions, nearly 60 percent of all enrollees. The cost-sharing reductions are expected to cost insurers that offer qualified health plans about $7 billion this year, more in coming years. The Kaiser Family Foundation projects that insurers would have to raise their silver plan rates by an average of 19 percent, 21 percent in Medicaid non-expansion states, above premium increases they would otherwise seek in order to cover lost CSR payments. As Oliver Wyman and the Urban Institute have pointed out, these premium increases would result in corresponding increases in premium tax credits, increasing the cost of the total subsidy program for the federal government, making it possible for persons eligible for premium tax credits to purchase bronze plans for free and gold plans for little more than silver plans, and making more people eligible for tax credits. The premium increases would also, however, make health insurance in the individual market unaffordable for many people whose income is too high to qualify for premium tax credits. These scenarios presume, however, that insurers would not decide that exchange markets, or even the individual market as such, are just too risky and abandon them. The individual market constitutes a small part of the total business of most larger insurers, which depend much more on the large group market, administering self-insured employer plans, and Medicare and Medicaid managed care. A number of insurers ha[...]

Health Insurance Benefits Should Be Equitable, Not Necessarily Equal

Mon, 22 May 2017 14:29:38 +0000

As policy makers grapple with potentially undoing or modifying the largest expansion of health insurance in a generation, the cost and generosity of benefits hold center stage. Traditional underpinnings of insurance plans—premiums, deductibles, copayments, and coinsurance—frequently create barriers to the optimal use of these plans by consumers. They also can exacerbate inequities in health care, by inhibiting the use of services known to benefit health. Novel approaches to insurance plan design to produce a more equitable and efficient distribution of health care expenditures are warranted. Following the principle of equality, insurance benefit designs traditionally have offered the same benefit structure to all enrollees. Consumer cost sharing at the point of service is typically uniform regardless of need or potential clinical benefit—often it’s based on the acquisition cost. This one-size-fits-all mentality seems like a great idea on the surface but can create deeply unfair outcomes. For example, in a traditional tiered pharmacy benefit, patients have the same out-of-pocket cost for a life-saving cardiac drug as they do for a medication that treats an annoying, but ultimately benign, toenail fungal infection. Or, a patient with a chronic disease enrolled in a high-deductible health plan must pay the full cost of medications and supplies to control their illness until the plan deductible is met, reducing adherence to treatments that keep people healthier and offset later costs. Sometimes these examples are shared as unintended policy quirks of our current system, but when the issue is access to needed care, it becomes an awfully cruel joke. Instead, we should be designing insurance coverage in a way that provides access to care for people who need it, when they need it. That requires a subtle but important shift from equal access to equitable access. The first approach treats all people, regardless of clinical need, the same. The second recognizes that clinical need is an essential factor in determining where to direct resources and does not apologize for treating people with different needs differently. There are a number of innovations in plan design that address the issue of inequities, including pairing insurance benefits with social or clinical supports for people with chronic disease and enhancing coverage for products that improve upstream risk factors, such as the Diabetes Prevention Program. A feasible and effective approach to better aligning expenditures with patient-centered outcomes is value-based insurance design (VBID). VBID structures consumer cost sharing around the idea of clinical nuance, which recognizes that the value of medical services depends on who receives it, who provides it, and where it is provided. This nuanced strategy supports the goals of equity by reducing financial barriers to specific services for targeted populations who need them most. This approach can also be used to deter the use of services when there is low or no expected clinical benefit to the patient. To be sure, VBID addresses financial barriers to treatment, and there are myriad other access barriers that contribute to health inequities. Nevertheless, it represents an important step in promoting equitable access to care and the use of value in determining how to best spend limited health care resources. VBID is being used across a wide variety of populations in both commercial and government-funded health insurance, including Medicaid, collectively bargained benefits, and a large number of employer plans. In January 2017, the Centers for Medicare and Medicaid Services launched a Medicare Advantage demonstration permitting plans to offer, for the first time, a different level of benefits to Medicare Advantage members based on their clinical diagnoses. Still, th[...]