Posted on June 13, 2013
For thirty years, the Medicare and Medicaid programs have furnished additional payments to hospitals that furnish a disproportionate share of services to low income populations. Despite the fact that the two disproportionate share hospital (DSH) programs share a common mission, they function differently in terms of how the funds actually move to hospitals and in the formulas used to make DSH payments. The Affordable Care Act makes significant adjustments in both DSH programs beginning in 2014 in anticipation of a significant expansion in the proportion of people who have health insurance coverage. With the United States Supreme Court’s decision in 2012 in NFIB v Sebelius, which permits states to opt out of the Medicaid expansion without risking the loss of federal funding for their existing Medicaid programs, the downward DSH payment adjustments become an even more significant matter for hospitals that treat large volumes of low income patients...
Posted on January 16, 2013
Experts and stakeholders agree the current health care system is unsustainable. By 2020, health care spending will comprise almost 20% of the gross domestic product. Furthermore, an ever growing body of evidence clearly indicates that the system is not experiencing improvements in quality that are reflective of the cost growth. The Patient Protection and Affordable Care Act (ACA) takes significant strides towards the transformation of the American health care delivery system from a system that rewards volume to a system that rewards quality and value. The programs and initiatives...
Posted on January 8, 2013
Both the Senate and the House passed H.R.8 (89-8 and 257-167, respectively), the American Taxpayer Relief Act, on January 1, 2013. President Barack Obama signed the Act into law on January 3, 2013. The measure extends Bush-era income and other tax cuts for individuals and families making up to $400,000 and $450,000 respectively. For individuals and families above this income threshold, the bill increases taxes from 35% to 39.6%. H.R. 8 also postpones...
Posted on December 5, 2012
Beginning January 1, 2014, millions of previously uninsured individuals will gain access to health insurance coverage under the Affordable Care Act (ACA). On November 20, 2012, the Obama Administration proposed a series of regulations that move the nation significantly toward full implementation. These proposed rules will be analyzed at greater length in coming GPS Implementation Brief updates. In the meantime, this overview summarizes the major federal implementation matters that the Administration has recently released or is expected to address in policy or program implementation in the coming weeks and months as the 2014 full implementation date approaches. Together, these matters address...
Posted on November 14, 2012
Historically, the American health care system through its siloed delivery and reimbursement models has failed to support a patient-centered and coordinated delivery system. Fragmentation has resulted in a health care system where potentially avoidable hospital readmissions, duplicative testing, and medication errors are common. Widespread adoption and use of Health Information Technology (HIT) has the potential to decrease these occurrences by enabling providers to electronically exchange health information with other providers and their patients across settings of care to better coordinate patient care. Recognizing the potential benefit of widespread use of HIT, in 2009 Congress authorized...
Posted on September 19, 2012
A February 2011 Implementation Brief titled “Medicare Quality Measurement and Reporting Programs” addressed Congress’ continuing efforts through the Affordable Care Act (ACA) to transition the Medicare program from a traditional volume-based fee for service purchaser of health care items and services to a value-based purchaser. The ACA took significant steps to move beyond financial and other incentives for quality measure development, measurement, and reporting to financial and other incentives for actual improvements in care delivery (e.g., value-based purchasing). Since the initial 2011 brief, the Centers for Medicare and Medicaid Services (CMS) has made significant progress in implementing Congress’ vision. That progress is described below.
Posted on July 18, 2012
The Affordable Care Act (ACA) included a number of provisions designed to improve the delivery of health and long-term care support services for individuals who are eligible for and enrolled in both the Medicare and Medicaid programs, commonly referred to as “dual eligible.” An earlier Health Reform GPS Implementation Brief outlined these changes. Among the provisions identified in the Brief was new demonstration authority provided to the Department of Health and Human Services (HHS) to permit states to waive certain provisions of Medicare law to better coordinate care for dual eligibles, new grant funding available to as many as 15 states to plan and implement integrated programs of care for dual eligibles, and the release of a July 11 State Medicaid Director (SMD) Letter providing preliminary guidance to states on demonstration models designed to improve care coordination for dual eligibles, including both capitated and fee-for-service models. This Brief provides an update on the financial alignment model outlined in the SMD letter, with a focus on subsequent guidance to states and health plans seeking to participate in capitated demonstrations. This demonstration is being followed closely at the federal level, and both...
Posted on February 24, 2012
Health policy experts and lawmakers believe that measuring and publicly reporting information about the performance of physicians, hospitals, and other health care providers is critical to improving health care quality and controlling costs. Advancing health information access and transparency is a goal of the Patient Protection and Affordable Care Act (ACA) , which includes a number of provisions to incentivize quality measurement and reporting and to enable more informed consumer decision-making. Across the country, community organizations, such as the Alliances participating in the Robert Wood Johnson Foundation’s Aligning Forces for Quality initiative, have been demonstrating the power of using private payer and Medicaid medical claims data to measure and publicly report on provider performance. Their work could be further strengthened by access to Medicare claims data because it is the single largest pool of information about how health care is delivered in America. Combining Medicare data with data from other public and private payers such as Medicaid and employer sponsored plans, holds the potential to generate more complete and accurate provider performance measurement information, thereby further empowering consumer engagement and quality improvement.
Posted on January 26, 2012
Improving the quality of care delivery and reducing explosive growth in healthcare costs is a cornerstone of The Patient Protection and Affordable Care Act (ACA). It reflects the shared understanding that the current silo-based approaches to care delivery that focus on settings of care (e.g., physician office, hospital) rather than care delivery across multiple providers and setting (e.g., episodic) are not working. Costs are increasing at an unsustainable pace, and evidence from leading researchers collectively points to serious deficiencies in health care quality and the disconnect between high spending and health care quality. To foster the development of more collaborative and...
Posted on January 13, 2012
Section 3403 of the Affordable Care Act (ACA) established the Independent Payment Advisory Board (IPAB), a 15-member panel of appointed experts that will recommend cost-saving measures for Medicare. In the face of controversy about its structure and powers, legislation has been introduced in the 112th Congress to repeal its establishment.
Posted on November 8, 2011
While a primary aim of the Affordable Care Act (ACA) was to increase access to affordable health insurance coverage, a critical, although less publicized, component of the law is a series of provisions designed to improve health care quality and efficiency and to advance the concept of “value-based purchasing.” The Agency for Health Care Research and Quality (AHRQ) defines the concept of value-based purchasing as holding “providers of health care accountable for both the cost and quality of care.” AHRQ notes that “value-based purchasing brings together information on the quality of health care, including patient outcomes and health status, with data on the dollar outlays going towards health. It focuses on managing the use of the health care system to reduce inappropriate care and to identify and reward the best-performing providers. This strategy can be contrasted with more limited efforts to negotiate price discounts, which reduce costs but do little to ensure that quality of care is improved.”
Posted on November 1, 2011
Hospitals in the United States readmit an average of 20% of Medicare patients within thirty days of their initial discharge. These readmissions cost the Medicare program an estimated 12 billion dollars each year and may be an indicator of poor quality of care where the readmission was potentially preventable. In its June 2007 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) classified many hospital readmissions as potentially preventable. Based on these recommendations, Congress included the Hospital Readmissions Reduction Program (HRRP or Program) in the Affordable Care Act. CMS issued the final rule implementing the HRRP on August 18, 2011, although CMS will continue to clarify additional details of the program through future rulemaking.
Posted on September 14, 2011
Historically, the Medicare program has passively purchased health care services for Medicare beneficiaries. Hospitals and other providers delivered services to Medicare beneficiaries and the Medicare program paid for the services without any indication of the quality or value of the care delivered. However, as costs have continued to escalate at an explosive pace without discernible improvements in the quality of care delivered, Congress and Medicare administrators have re-evaluated this passive payment methodology. Premised on the belief that the Medicare program must transition to be an active purchaser of high quality, cost-effective care, value-based purchasing uses financial incentives to both incentivize improved quality of care delivery and reduction of costs.
Posted on August 10, 2011
According to the Centers for Medicare and Medicaid Services (CMS), in 2008 there were an estimated 9.2 million individuals who were eligible for and enrolled in both the Medicare and Medicaid programs (commonly referred to as “dual eligibles”). Two-thirds of dual eligibles qualify because they are over age 65, while the other third qualify because of a disability. Dual-eligible beneficiaries typically have multiple chronic conditions that require a higher level of care and result in increased spending relative to other Medicare and Medicaid beneficiaries; however, their care is not usually coordinated. Policymakers have expressed concern that the lack of coordination between the two programs results in higher costs and poorer health outcomes than would be achieved if Medicare and Medicaid services were better integrated.
Health Insurance Exchanges Update: Qualified Health Plans, Reinsurance, Risk Corridors and Risk Adjustment
Posted on July 19, 2011
A major problem in the U.S. health care system is the lack of affordable health insurance options for individuals and small businesses. These groups also have no easy way to compare plans in terms of premium cost, benefits and cost sharing, provider networks, or quality of care provided. The Affordable Care Act (ACA) seeks to address these problems by making private health insurance available to qualified small businesses and individuals through health insurance Exchanges beginning January 1, 2014.
Posted on July 6, 2011
Health policy experts and lawmakers believe that measuring and publicly reporting information about the performance of physicians, hospitals, and other health care providers is critical to improving health care quality and controlling costs. Advancing health information access and transparency is a goal of the Patient Protection and Affordable Care Act (ACA), which includes a number of provisions to incentivize quality measurement and reporting and to enable more informed consumer decision-making.
Posted on June 8, 2011
A high number of deaths occur every year due to potentially preventable adverse events, including medical errors, in the hospital setting. The most commonly cited research on this topic was published by the Institute of Medicine (IOM) in 1999. The IOM report, "To Err is Human: Building a Safer Health System" stated that hospital acquired conditions (HACs) caused by medical errors are a leading cause of morbidity and mortality in the United States. More recently, a 2007 study found that of 1.7 million infections acquired while a patient was receiving treatment in a hospital, 99,000 resulted in death in 2002. In addition, there is also a significant cost burden associated with potentially preventable HACs. In 2000, the Centers for Disease Control and Prevention (CDC) published a report estimating the cost burden of HACs to be almost $5 billion.
Posted on April 20, 2011
An earlier Implementation Brief provided an overview of the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs), which was established by §3022 of the Affordable Care Act (ACA) by adding §1899 to the Social Security Act. On April 7, 2011, the federal Centers for Medicare and Medicaid Services (CMS) published a proposed rule implementing the MSSP. This proposed rule was accompanied by several additional policy documents:
Posted on March 30, 2011
To improve the quality of health care delivered to Medicare beneficiaries, the Centers for Medicare and Medicaid Services (CMS) has historically used its demonstration authority to test new delivery and payment models that incentivize providers to improve the quality of care they deliver. Congress has bolstered these initiatives through a series of laws designed to augment CMS’ authority to implement these programs on a broader scale. For example, as authorized under the Medicare Prescription Drug and Modernization Act of 2003 (MMA) and extended by the Deficit Reduction Act of 2005 (DRA), CMS provides a full annual payment update to hospitals that report on specific quality measures. Failure to participate results in a two percent decrease in the annual payment update. Similarly, as authorized by the Tax Relief and Health Care Act of 2006 (TRHCA) and extended by the Medicare Medicaid and SCHIP Extension Act of 2007 (MMSEA) and Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), CMS provides a bonus payment to physicians that report on specific quality measures.
Posted on February 23, 2011
More than 40% of the U.S. population has one or more chronic condition. Although the likelihood of having a chronic disease increases with age, approximately half of working-age Americans has at least one chronic condition. The prevalence of chronic diseases is increasing in both the elderly and non-elderly populations, with a significant increase in the number of people with multiple chronic diseases. Increased spending on chronic diseases in Medicare is a significant driver of the overall increase in Medicare spending over the last twenty years. Nevertheless, given the high cost of treating chronic diseases, the Affordable Care Act (ACA) includes many provisions to encourage chronic disease management as part of the overall emphasis on improving the efficiency of health care.
Posted on February 18, 2011
Approximately 10 million American seniors and individuals with disabilities need long-term services and supports (LTSS), and the number is expected to increase to nearly 21 million by 2040. Private long-term care insurance represents only a fraction of long-term care financing, due to a host of issues ranging from the high cost of insurance premiums to concerns about the high rate of coverage denials. Medicare only covers short-term skilled nursing care services and home health services, and Medicaid, the primary payer of LTSS (almost 50%), covers a range of services, but is only available to low-income individuals with disabilities. In the Patient Protection and Affordable Care Act (ACA), Congress addressed the long-term care needs of the elderly and disabled by making a number of changes in Medicaid coverage of home and community based services, and by establishing the Community Living Assistance Services and Support (CLASS) program, a voluntary, federally administered health insurance program designed to assist eligible individuals in purchasing long-term community living services and supports.
Posted on February 9, 2011
Health care quality represents a constantly recurring theme in U.S. health policy. Traditionally, the Medicare program has paid for health care services on a fee-for-service basis with the exception of inpatient hospital services, which are paid based on Diagnosis Related Groups (DRGs) under the prospective payment system (PPS), and the Medicare Advantage and Prescription Drug plans, which are paid on a capitated basis. All payment systems tend to incentivize something; in the case of fee-for-service, it is indiscriminant increases in volume of services provided, while in case-based or capitation systems it is indiscriminant reductions in volume. The challenge is to promote both quality and value while also apportioning financial risk appropriately. Because Medicare has relied principally on a fee-for-service approach to payment for physician and other services (and even while hospital payments are case-based under the PPS, it does not discourage multiple admissions and readmissions), the program has experienced incredible growth in the volume of services. At the same time, Medicare lacks a program-wide and deliberate approach to promoting quality and value.
Medicare Prescription Drug Coverage: Discount and Rebate Program and Aid to Low-Income Beneficiaries
Posted on May 27, 2010
The new health reform law phases out the coverage gap under Medicare Part D byreducing over time the amount of cost sharing incurred by beneficiaries for both generic and brand name drugs in the coverage gap. The law also establishes a “coverage gap discount program” as a condition of Part D program participation for pharmaceutical manufacturers.
Posted on May 13, 2010
Health reform establishes a Center for Medicare and Medicaid Innovation (CMI) and empowering and directing the CMI to “test innovative payment and service delivery models to reduce program expenditures under the applicable titles [Medicare and Medicaid] while preserving or enhancing the quality of care furnished to individuals under such titles.”
Posted on May 5, 2010
A Medicare pilot program will be set up under the new health reform law to test “bundled payments” for certain “applicable conditions” around a hospitalization.
Posted on April 29, 2010
Introduces Accountable Care Organizations on a voluntary basis by directing the Secretary of Health and Human Services to develop a “Medicare Shared Savings Program.”