0 Medicare Accountable Care Organizations Medical Homes Experimental Potential or Essential

Time to measure some
new Medicare office drapes?

One major and longstanding criticism of CMS numerous innovation and demonstration projects is that they seldom lead to any meaningful orm of the core Medicare program.  In response, the Affordable Care Act created an "Innovation Center."  Despite legions of lobbyists, a third rail dread afflicting our political class and a powerful Medicare voting bloc, the intrepid folks in the Center promise to deliver insights that will advance quality, lower costs, increase access and spare all sacred cows.

Naturally, the thousands of health care experts who regularly read the Disease Management Care Blog have their doubts.  As a result, theyre unlikely to be moved by Karen Davis and colleagues "Medicare Essential" proposal appearing in the May issue of Health Affairs.

Assuming that the most wildly optimistic Accountable Care Organization (ACO) and medical home pilot programs projections are fulfilled, Dr. Davis et al propose the creation of a new "Medicare Essential" program that would co-exist with standard Medicare and Medicare Advantage.

"Essentials" essential purpose would be to finance ACOs and medical homes.  Given the authors enthusiasm, the DMCB is surprised that their Health Affairs paper isnt also recommending measuring drapes for the programs new offices.
 
In "Medicare Essential," Parts A (hospital), B (providers) and D (drugs) would be combined. There would be a single overall deductible, followed by low co-pays for primary care and higher co-pays for specialty and emergency room care Preventive care would have first dollar coverage. Pharmaceuticals would be governed by a single national formulary with low co-pays for generics as well as for perred brands and condition-specific/value-based drugs. Persons in the "Essential" program who are receiving care in ACOs or medical homes (financed with capitation, bonuses, gain sharing and monthly fees) would naturally have even lower co-pays.
 
Using "modeling by the Actuarial Research Corporation" and, as the DMCB understands it, transferring all savings back to the beneficiary, monthly out-of-pocket costs for the average Medicare enrollee could be reduced from the currently level of $427 to $354.  As an added bonus, if the patient used an ACO/Medical Home, the out of pocket would be further reduced to $254.

Case closed, right?

The DMCB isnt too sure.

Dont Measure Those "Essential" Medicare Program Office Drapes Quite Yet: While Davis et al should be commended for sending the savings back to the patient instead of Uncle Sam, their optimistic actuarial "research" projections cant be based on any consistent, statistically significant and real-world published proof.  Thats because there is no consistent, statistically significant and real-world published proof that ACOs and medical homes save money.  Come back, says the DMCB, when you have an analysis based on some real numbers.

Behavioral Economics: Furthermore, we dont know if monthly beneficiary savings of $73 to $173 are enough to move market share away from Medicare and Medicare Advantage to "Essential."  Thats doubly true if ACOs and medical homes, despite their quality, are viewed by patients as another way to impose a restricted network.

Disease Management Playbook: Advocates for the earliest versions of disease management likewise used official sounding projections to confidently project huge benefits for the Medicare program. When reality rudely intruded, the industrys fall was spectacular and almost fatal.  With friends like Dr. Davis similarly doubling down with huge ACO and medical home promises, who needs enemies?

Reinventing A 3rd Wheel? Many Advantage plans have similar co-pay arrangements and are already investing in ACO-like and medical home programs in their networks. They are likewise more than able to leverage out-of-pocket expenses to incent beneficiary behavior.

Suppose You Gave An ACO Party and Nobody Came? The last time the DMCB looked, many parts of the country lacked fully functional ACOs and medical homes. Dr. Davis says beneficiaries will respond by demanding local access to the Essential program and theore turbocharge additional health orm. The DMCB is unaware of any published data that supports that notion and, furthermore, wonders if the local lack of these programs will translate into even more variation in the U.S. health care system.

0 The Dilemma of Medicare Coverage of Reasonable and Necessary Care and Why Its Important

If you get sick, health insurance should cover all the "stuff" necessary to make you better, right?

While that sounds good in principle, Uncle Sam has made it a lot more complicated than that.  As we continue to struggle with health orm, this New England Journal article on "Medicares Enduring Struggle to Define Reasonable and Necessary Care" is very timely.

According to Drs. Neumann and Chambers, Medicare has always covered medical services that are "reasonable and necessary." As new approaches, drugs and medical technologies have been released, youd think coverage would be based on an objective analysis of outcomes and cost effectiveness.

Youd be wrong.

Years of differing interpretations, patient advocacy, Congressional meddling, regulatory carve-outs and case law have generated a miasma of bureaucratic complexity that will guarantee the incomes of thousands of lawyers for years to come.

Not that CMS hasnt tried to be reasonable about "reasonable and necessary." According to the article, in 1989 CMS specifically proposed that the words "cost effective" could be used to assess new technology. That proved too controversial. It later tried "least costly alternative language" for coverage of durable medical equipment and Part B medications.  This too was dismantled by the courts when plaintiffs argued that the term "reasonable and necessary" could only be applied to medical services, not to the costs of those services.

How ironic. Even though CMS is making "value-based purchasing" judgements for hospital payments and costs can be factored in the coverage of preventive services, that still doesnt apply to new technologies and drugs.

The latest dysfunction is CMS pretzel logic of "coverage with evidence  development" approach to medical devices, essentially agreeing to coverage that is conditional on CMS evaluation of additional outcomes data.  Unfortunately, CMS ability to collect and interpret these kinds of data in the current political environment remains an open question.

Outside of Medicares cost travails, why is all of this important?

1) Medicares price tag was $509 billion in 2010, taking 12% of the federal budget. While there are other drivers of cost, such as aging, coverage arrangements, income, pricing, administrative costs and defensive medicine, technology could account from 38% to more than 65% of the current growth (inflation) in spending.  Medicares historic inability to control this does not bode well for future cost projections.

2) This is not a partisan issue and there are no partisan solutions.

3) Commercial insurers generally use Medicares coverage criteria to define their own benefit structure.  Medicares problems are everyone elses.

4) This is another reason why Medicare is banking on ACOs.  By delegating management and the associated risk of all these thorny coverage issues, theyre hoping ACOs can do within three years what CMS couldnt do in three decades. Well see.

0 The Centers for Medicare Medicaid Services CMS Gets Nudged to Do Something About Shared Decision Making SDM

Medicare tackles the shared decision
making requirement in the ACA

In a recent New England Journal of Medicine article, Emily Lee and Ezekiel Emanuel point out that its high time for the Centers for Medicare and Medicaid Services (CMS) to wake up and do something about Section 3506 of the Affordable Care Act.

Thats the section of the law that deals with "shared decision making" (SDM):

"The Secretary shall establish a program to provide for the phased-in development, implementation, and evaluation of shared decision making using patient decision aids to meet the objective of improving the understanding of patients of their medical treatment options...."

In particular, they argue that CMS should expedite the creation of an independent entity that would certify and implement patient decision aids and begin piloting SDM among Medicare beneficiaries who are contemplating having one of the 20 most frequently performed procedures (a list can be found on page 3).

And they dont stop there. 

They recommend that Medicares coverage for the "top 20" should be made contingent on the documented delivery of SDM to the beneficiary

"To give such a requirement teeth, full Medicare reimbursement could be made contingent on having documentation in the patients file of the proper use of a decision aid for these 20 procedures. Providers who did not document the shared-decision-making process could face a 10% reduction in Medicare payment for claims related to the procedure in year 1, with reductions gradually increasing to 20% over 10 years. This payment scheme is similar to that currently tied to hospital-readmissions metrics."

In contrast to the NEJM readership, the thousands of regular visitors to the Disease Management Care Blog arent surprised. Theyve known all along that "shared decision making was an important if unknown part of the Affordable Care Act.  To them its not news that SDM is an evidence based approach that combines patient engagement with physician participation to optimize the utilization of potentially harmful therapies.

Pity that CMS leadership isnt regularly reading the DMCB.  Whether a NEJM article by one of D.C. health care mandarins spurs CMS to action remains to be seen.

Stay tuned!