Tea Leaves

Everybody Likes a Healthy Wallet

Tea Leaves is the first of an opinion column that will occasionally appear in Verity Reports.

An old insight was confirmed while I was in the process of researching today’s feature article on bundled payments.  I f you want to predict the future of health care policy then simply apply the tenet:  everybody likes a healthy wallet.

One of the goals of Verity Reports is to give readers an edge about how health reform is changing the medical care environment.   Verity Reports targets activities that will create big changes.   Hopefully, our posts will give you the time to prepare for these changes.  Bundling is a perfect topic to illustrate how we are trying to meet this goal. Bundling is a sleeper issue.   There’s not much about it in the news but there is a lot of activity around this concept.   Therefore, bundling may create a lot of change.  It may be the leading factor in driving down  medical costs …..  and solidly securing health reform.

I know that I am making some pretty powerful predictions”.

Bundling is defined by RAND as a payment system that “ would make a single payment for all services related to a treatment or condition, possibly spanning multiple providers in multiple settings”.  (RAND, Overview of Bundled Payment).   The strategy is currently being tested by CMS in a multi-site demonstration study (CMS’ Medicare Acute Care Episode (ACE) study).    I think that bundling is here to stay because, as it is currently defined, it will transform the current model of medical cost accountability.

In the ACE  study, both hospitals and patients will be monetarily compensated for cutting costs.   In effect, bundling creates a dramatic shift in who carries the burden of creating the cost savings.  The burden is shifted away from hospitals and patients to physicians, medical device/supply manufacturers, and pharmaceutical companies.  This gives hospitals and patients more influence than they have ever had on medical cost.   It also strengthens the staying power of health care reform.

Yes, I know that I am making some pretty big predictions.   Bundling is only now being tested as a cost savings strategy.   Even if the results of the ACE study confirms it as valuable, the practice of bundling will not come into full effect until 2018.   In addition, there is no doubt that the campaign against health reform is real.  Next month’s elections could put avowed health reform opponents into power.   Also, putting physicians, medical device/supply manufacturers, and pharmaceutical companies  on the defensive with bundling — three groups with tremendous political power — could create even greater political push-back on current health care reform policy.

Health care reform, however, is not limited to the political arena.   Health care reform will always be tightly bound by a goal that is fundamental to market economics.   That goal is  revenue generation and everybody likes a healthy wallet. Bundling has the potential of saving money.  Insurance companies are already securing bundling agreements with hospitals.   These agreements will be in place regardless of the future of health care reform.   So stop waiting for change to happen.   It’s already here.

Cost vs benefit: Mental health and substance use disorder treatment coverage expanded

Click here for the full text of the Mental Health Parity and Addiction Act.

With health insurance plan open enrollment season starting, mental health professionals will soon feel the effect of new regulations on mental health/substance use disorder (MHSA) insurance coverage.  Employers are now prevented by the Mental Health Parity and Addiction Act of 2008 (MHPAEA) from insuring employee MHSA treatment costs any differently than medical or surgical care.  MHPAEA also prevents employers from placing annual or lifetime dollar limits that are less favorable than those already imposed on medical or surgical care.

At issue is whether employers (and employees) value mental health/substance use coverage enough to pay any additional costs associated with this expanded coverage

There are critical limitations to MPHAEA.  The law does not apply to small businesses (fewer than 50 employees) and  persons who carry individual health insurance plans.    It does not prevent insurers from opting out of covering the cost of treatment related to MHSA.   Also, it does not mandate that employers offer or that employees carry this kind of coverage.  This scenario should change, however, with the activation of the state-based insurance exchange program (large insurance risk pools) that is scheduled to begin in 2014.  Small businesses and individuals will be eligible to participant in these exchanges.    In line with the MPHAEA, exchange plan benefits must equal medical/surgical benefits.

Verity Reports questions whether employers (and employees) value MHSA coverage enough to pay any additional costs that may be associated with expanded coverage. At issue for critics of the law  is whether MHSA can be definitively proven a medical necessity.  Despite the support of the law from the American Medical Association and American Psychiatric Association, employers question whether the necessity for MHSA treatment can be based on the same assumptions that underlie medical or surgical care coverage.  In comments to the U.S. Departments of the Treasury, Labor, and Health and Human Services, the Society for Human Resource Management (SHRM) argued that mental health advocates have traditionally fought against the “medicalization” of mental health care.   Unlike the medical model  where the physician directs the patient in a course of treatment,  the client and non-medical professional collaborate to define recovery.

Visit the Colette Steward Group website to learn how we can support your health care policy research needs.

The Steward Group presents Verity Reports: news & analysis for medical professionals and patient advocates

VER·I·TY (ver′ə tē).  That which is true; a true assertion or tenet; a truth; a reality.

Our mission. Verity Reports cuts through partisan politics and professional territoriality with insights on current issues that are critical to the medical and patient advocacy communities.

Why Verity Reports? We were very thoughtful in selecting a name for The Steward Group’s news analysis publication.  Verity means truth.  Truth is what The Steward Group is all about.  Our work in based on a sincere desire to help our clients find solutions to some of their most difficult organizational problems.  We’ve helped our clients to identify the needs of the people they are serving,  educate the policymakers about their organization’s  mission,  identify methods to finance the operations of their organizations, and build a strong and committed staff.

Learn more about The Colette  Steward Group.

Fundamental changes to the business of health care

If you listen to the news pundits you are led to believe that health care reform is not a done deal.  Upon closer inspection we find that implementation is well underway and that current initiatives are changing basic assumptions about patient care.

The Steward Group finds that current initiatives are changing the basic assumptions about US health care

In anticipation of the full roll-out of the Patient Protection and Affordable Care Act, the executive branch of the federal government is steadily changing the conventions that have defined US health care.  In this issue of Verity Reports, we focus on two conventions that were knocked down within the last few weeks:

• Medicare providers don’t have to take fraud seriously.
• Health reform doesn’t give hard-working Americans a safety net.

Medicare fraud:  It is time to take it seriously

The medical billing community already knows that Medicare carriers have become increasingly vigilant, however, health reform has raised the stakes.  The Centers for Medicare & Medicaid Services (CMS) is changing from a “pay and chase” to a fraud prevention strategy.

In a press release the DOJ reports that the “Affordable Care Act requires providers and suppliers to establish plans detailing how they will follow the rules and prevent fraud as a condition of enrollment in Medicare, Medicaid, or CHIP.”

Suppliers of durable medical equipment, home health agencies, and Community Mental Health Centers (CMHCs) have been targeted as high fraud risks.

The Steward Group conducts trends analyses to predict how an industry and consumer needs might change over time.

Since May 2009, HEAT, the Medicare Fraud Strike Force, composed of federal and state staff from the Office of the Inspector General and Department of Justice, has charged 465 defendants with defrauding Medicare of more than $830 million dollars.

For example, Drs. Juan De Oleo and Rosa Genao face possible prison sentences of a maximum of 10 to 20 years for health care fraud, money laundering, and the destruction or alteration of records.  In addition, government agents are  recruiting the assistance of Medicare beneficiaries to help stop fraudulent charges to the program.  A fraud hotline can be called 24/7 to report program abuses.

Government funded healthcare:  Benefiting the middle-class

Only a few days ago, Kathleen Sebelius, Secretary of the Department of Health and Human Services announced that nearly 2,000 employers were accepted  into the Early Retiree Reinsurance Program (ERRP). Modern Healthcare reports that the “approved applications represent nearly every sector of the economy: 32% from businesses, 26% from state and local governments, 22% from union sponsors, 14% from schools and other educational institutions, and 5% from not-for-profits.  Reimbursements will begin this fall for the early retirees of these companies.  ”  Modern Healthcare.com.

New rules for new health care

With just these two programs, the landscape of US health care is already changed.

The White House administration has brought Medicare fraud penalties into the realm of street crime.  It has also redefined Medicare as a program that is not just for the elderly and may make supporters of the very people who are most likely to believe that health reform will not benefit to them.

Image:  Pete Souza

Will you have a seat at the policy table?

Effective January 2011, the new Center for Medicare and Medicaid Innovation (CMI) will begin full-scale operations to test  innovative payment and service delivery models.  The goal is to cut program expenditures while preserving or enhancing the quality of patient care.

…. almost all of the reform of the delivery system potential hinges on this innovation center.

Focus on provider payment and practice management

The Commonwealth Fund (6/8/10) reports that CMI will be responsible for developing at least 18 reform models specified in the new health reform law, including:  patient-centered medical homes, promotion of care coordination through salary-based payment, community-based health teams to support small-practice medical homes, use of health information technology to coordinate care for the chronically ill, and salary-based payment for physicians.

The Steward Group can help you develop position papers on issues that are important to your group.

In order to achieve the law’s ambitious timetable, Centers for Medicare and Medicaid Services (CMS) Administrator Don Berwick announced last Monday that Richard Gilfillan, MD, has been named the Acting Director of the CMI.  Gilfillan currently directs CMS’ performance-based payment policy staff.   Before joining CMS,  Gilfillan was a consultant for Geisinger Consulting Services.

Politically sensitive research agenda

Gail Wilensky, former chief of the Health Care Financing Administration (now the CMS) told Kaiser Health News (9/29/2011) that Dr. Gilfillan will have quite a “juggling act”.  He added that Dr. Gilfillan’s position “is one of the most important positions in HHS because almost all of the reform of the delivery system potential hinges on this innovation center.  It is as key a position as there is.   “There will indeed be pushback from people who see themselves as losers in the face of this change” and the director must be “politically savvy and sensitive but still being willing to be a risk taker.”

Members of National Health Care Workforce Commission named

The fifteen members of the  National Health Care Workforce Commission were named last week by Gene L. Dodaro, Acting Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO).  The creation of the commission was mandated by the health reform law and is charged to “to serve as a national resource for Congress, the President, and states and localities; to communicate and coordinate with federal departments; to develop and commission evaluations of education and training activities; to identify barriers to improved coordination at the federal, state, and local levels and recommend ways to address them; and to encourage innovations that address population needs, changing technology, and other environmental factors”.

Each of the following commissioners bring expertise in health care workforce policy and practice. 

• Peter Buerhaus, PhD, RN, Professor of Nursing and Director, Center for Interdisciplinary Health Workforce Studies, Institute for Medicine and Public Health, Vanderbilt University Medical Center. Dr. Buerhaus will serve as Chair of the Commission.
• Sheldon Retchin, MD, MSPH, Vice President for Health Sciences, Virginia Commonwealth University and Chief Executive Officer, VCU Health System. Dr. Retchin will serve as Vice Chair of the Commission.
• Brian J. Isetts, PhD, Professor, Department of Pharmaceutical Care and Health Systems, University of Minnesota College of Pharmacy.
• Harold M. Maurer, MD, Chancellor, University of Nebraska Medical Center.
• Thomas Ricketts, PhD, Professor, Department of Health Policy and Management, University of North Carolina Gillings School of Global Public Health, and Deputy Director for Policy Analysis, Cecil G. Sheps Center for Health Services Research.
• Mary Mincer Hansen, RN, PhD, Director, Masters in Public Health Program, College of Health Sciences, Des Moines University.
• John E. Maupin, Jr., DDS, President, Morehouse School of Medicine.
• Neil M. Meltzer, MPH, President and Chief Operating Officer, Sinai Hospital, Baltimore, MD.
• Fitzhugh Mullan, MD, Professor of Public Health and Pediatrics, George Washington University.
• Steven Zatkin, JD, consultant to health plans
• Katherine A. Flores, MD, Director of the University of California (UCSF) Fresno Latino Center for Medical Education and Research.
• Kim Gillan, Workforce Development and Training Coordinator, Montana State University’s Billings (MSUB) College of Professional Studies and Lifelong Learning.
• Lisa Renee Holderby, Director of Health Equity, Community Catalyst.
• Deborah King, Executive Director, 1199SEIU Training and Employment Funds.
• Richard Krugman, MD, Vice Chancellor for Health Affairs, University of Colorado Denver and Dean, University of Colorado School of Medicine.

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