Changing How We Pay for Health Care: Value-Based Reform

Dr. Jack Cochran and Charles Kenney wrote an article on The U.S. Department of Health and Human Services’ recent announcement to move the Medicare program toward value-based payments.

Posted today in The Health Care Blog and originating from a February post on the Kaiser Permanente blog, the authors noted that this effort "is among the most promising recent developments in health care. While changing the way we pay for care will not be easy, we believe that shifting away from fee-for-service to value-based payments could be a catalyst to a better, more affordable health care system in our country."

Also included was an excerpt from NBCH's Value-based Purchasing Guide.

According to the National Business Coalition on Health, a nonprofit organization of “purchaser-led health care coalitions … dedicated to value-based purchasing of health care services through the collective action of public and private purchasers,” the impact would be significant. The coalition takes this position:

 As the business community has learned over the past several decades, maintaining workforce health and preventing illness – particularly chronic conditions – improves productivity and competitiveness, and can lower health care costs over time.

Value-based purchasing can help shift the paradigm of why employers offer health benefits from seeing it as an employee recruitment and retention tool, to seeing it as a chance to improve population health and increase productivity, and ultimately the employer’s bottom line.

The authors concluded that this may be the tipping point in our nation’s complex, often difficult, health care journey. What do you think?

NQF Announces Quality Measurement Priority Topics

Under contract with the Department of Health and Human Services (HHS), the National Quality Forum (NQF) will recommend priorities for performance measurement within five topic areas specified by HHS:

• Adult Immunization— identifying critical areas for performance measurement to optimize vaccination rates and outcomes across adult populations 
• Alzheimer’s Disease and Related Dementias—targeting a high-impact condition with complex medical and social implications that impact patients, their family members, and their caregivers 
• Care Coordination—focusing on team-based care and coordination between providers of primary care and community-based services in the context of the “health neighborhood” 
• Health Workforce—emphasizing the role of the workforce in prevention and care coordination, linkages between healthcare and community-based services, and workforce deployment 
• Person-Centered Care and Outcomes—considering measures that are most important to patients—particularly patient-reported outcomes—and how to advance them through health information technology 

Topic-specific committees will review the evidence base and existing measures to identify opportunities for using performance measurement to improve health and healthcare, and to reduce disparities, costs, and measurement burden. Nominations for the five committees that will make the recommendations are now being accepted; NQF encourages members to apply or to nominate colleagues. Members can also attend the committee meetings in-person or virtually, and can comment on draft recommendations.

HHS Awards $67 Million in Exchange Navigator Grants

Health and Human Services (HHS) Secretary Kathleen Sebelius has announced $67 million in grant awards to 105 Navigator grant applicants in federally-facilitated and state partnership exchanges. These Navigator grantees and their staff will serve as an in-person resource for individuals who want additional assistance in shopping for and enrolling in plans in the exchanges beginning this fall. The $67 million was more than the originally estimated $50 million, and comes entirely out of the ACA-created Prevention and Public Health Fund.

Navigators will be trained to provide unbiased information in a culturally competent manner to consumers about health insurance, the new exchanges, qualified health plans, and public programs including Medicaid and the Children’s Health Insurance Program. The Navigator funding opportunity announcement was open to eligible private and public groups and people who are self-employed who met certain standards to promote effectiveness, diversity, and program integrity.

Navigators will be required to adhere to strict security and privacy standards – including how to safeguard a consumer’s personal information. They will be required to complete 20-30 hours of training to be certified, will take additional training throughout the year, and will renew their certification yearly.

HHS Unveils ACA Website Geared Toward Businesses

HHS has established a new website specifically geared toward helping businesses understand the Affordable Care Act, including their obligations and opportunities under the Act. The site includes a wizard tool that is tailored based on size and location, so businesses can learn about options for providing affordable coverage options to their employees. The site is intended to be a user-friendly hub that connects employers to informational content on tax credits and other provisions of the law from the Small Business Administration, the Department of Health and Human Services (HHS), and the Treasury Department.

The Administration has promised to work with the employer community to ensure the site continues to be a helpful resource for businesses and their employees, including updating the site with additional, timely information.

HHS Launches Redesigned Website

HHS has redone its Healthcare.gov website, with October 1 in mind, to give it a new “how you can enroll” focus. It also announced that it has opened its 24 hour call center — which is supposed to be able to handle consumer enrollment questions in 150 languages. Over the summer HHS will add new features so that by the time exchange enrollments begins in October people will be able to set up accounts, complete an application online, and shop for coverage. A Spanish version, CuidadoDeSalud.gov, is also being updated.

The site can be accessed from mobile devices and includes “social media, sharable content, and engagement destinations for consumers to get more information,” HHS said. “The new website and toll-free number have a simple mission: to make sure every American who needs health coverage has the information they need to make choices that are right for themselves and their families — or their businesses,” HHS Secretary Kathleen Sebelius said in a statement.

Final wellness programs rule published

Yesterday HHS and the Department of Labor and the Department of Treasury published the long awaited final rule of requirements for workplace wellness programs, allowing employers to require healthy efforts from employees to qualify for lower premiums.

The final regulations, consistent with the Affordable Care Act, focus on nondiscriminatory wellness programs in group health coverage. Specifically, these final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage. The final regulations further increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. These regulations also include other clarifications regarding the reasonable design of health-contingent wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination.

The rule will apply to large employer-sponsored coverage starting next year and most businesses should not have to make more than minor tweaks to existing wellness programs to comply with the new rules.

HHS Publishes Exchange Enrollment Applications

The Department of Health and Human Services has published the final enrollment forms that individuals and families will use when applying for coverage through the ACA health insurance exchanges.  Both applications are considerably shorter than the proposed versions.  The individual application is now only three pages long, and the family application is now seven pages long.  The applications are based on a "no wrong door" approach to enrollment, meaning that an applicant fills out one form, and the exchange assists that applicant in enrolling in the coverage most appropriate for his or her situation, including government programs such as Medicaid, CHIP, or veterans' and military benefits.

An appendix to the family application includes an Employer Coverage Tool, which is a one-page form that employees can take to their employers, and request that the employer fill out information regarding the coverage offered to employees.  Employers have assumed that they would need to interact with exchanges in some fashion, and the form confirms that employees themselves will be the link between employers and the exchanges in making eligibility determinations.  The Employer Coverage Tool also asks whether the employer plans to make any changes to its health insurance benefit offerings within the next year.

New Summary of Benefits and Coverage Information, Including Templates

The U.S. departments of Labor (DOL), HHS and Treasury jointly issued Frequently Asked Questions (FAQs) on April 23, providing seven new questions and answers covering the implementation of the Summary of Benefits and Coverage (SBC) requirements under the ACA. The SBC is intended to provide consumers with consistent and comparable information regarding health plan benefits and coverage.

Along with the FAQs, the departments issued updated versions of the official template and completed sample, authorized for the second year of applicability of the SBC requirements (coverage beginning on or after January 1, 2014, and before January 1, 2015). The only change to the SBC template and sample completed SBC is the addition of data elements indicating whether the plan or coverage provides minimum essential coverage (MEC) and whether the plan or coverage meets the minimum value (MV) requirements. These MEC and MV requirements are what determines whether a plan offered by an employer meets the test for avoiding a penalty payment under the shared responsibility ("pay or play") provision of the ACA.

The guidance also provides relief to plans that are already in the process of preparing its SBC for the second year of applicability and for whom it would be an administrative burden to add the new data element. In such cases, the departments “will not take any enforcement action against a plan or issuer for using the template authorized for the first year of applicability, provided that the SBC is furnished with a cover letter or similar disclosure stating whether the plan or coverage does or does not provide MEC and whether the plan’s or coverage’s share of the total allowed costs of benefits provided under the plan or coverage does or does not meet the MV requirement under the Affordable Care Act.”

HHS Seeks Input on Exchange Design in Partnership and Federal Fallback States

HHS invites you and your colleagues to participate in state-specific conference calls about federally facilitated and partnership exchanges (marketplaces). Call in to hear updates about policies and operations of the exchanges in your state and for an opportunity to ask questions and provide input. HHS will use the information and feedback provided by participants to inform their decisions as they develop exchanges.

Please visit the CMS Open Door Forum (ODF) for call and registration details for your specific state.

Again, these calls are specifically for states participating in a federally facilitated or partnership exchange. If this applies to your state, we encourage you to participate in these important calls to ensure the employer voice is heard.

Health Care in President Obama's 2014 Budget Proposal

On April 10, President Obama released his proposed budget for Fiscal Year 2014. The release of the President's Budget (usually occurring in early February) is mostly a symbolic measure. Congress is not required to act on any of the proposals, and most observers agree that the partisan deadlock between the Republican-controlled House and Democratic-controlled Senate will continue, and little, if anything, is likely to be enacted out of the President's proposal.

However, the Budget does represent the Administration's policy priorities, and with major provisions of Affordable Care Act set to be implemented in 2014, there are a lot of health care-related proposals. Among the highlights are:

• An additional $800 million for CMS’s insurance exchange operations, along with an additional 280 employees to work on exchange implementation.
• Cuts to Medicare — more than $300 billion in provider payments and $50 billion from seniors, mostly in the form of increased cost sharing for higher-income beneficiaries.
• A proposal to close the Medicare prescription drug doughnut hole by 2015 — a full five years ahead of the ACA’s target date of 2020.
• Expanding and simplifying the tax credits provided to small businesses for their non-elective contributions to employee health insurance. The expansion would cost $720 million in 2014. 
• $18.4 million for CMS to ensure compliance with MLR and rate-review processes.
• Instead of the SGR formula or a specific SGR "fix," the budget calls for a “period of payment stability lasting several years” to allow the development of “accountable payment models.”
• A one-year delay of the ACA’s scheduled reductions in Disproportionate Share Hospital (DSH) payments to safety-net hospitals; the reductions are scheduled to go into effect in 2014, but the White House wants to wait a year to get a better sense of how much the law reduces the number of uninsured now that Medicaid expansion is optional for states.
• Inclusion of a MedPAC recommendation to cut Graduate Medical Education payments to hospitals by $11 billion over 10 years.
• Elimination of the Preventive Health and Health Services Block Grant program, administered by the CDC. The program funds a variety of state efforts, including emergency medical services, home health services, and fluoridation. It is not the same thing as the Prevention and Public Health Fund in the ACA.

Again, this is the President's proposed budget for Fiscal Year 2014; none of these changes or funding levels are in place, and likely may never happen. NBCH continues to monitor the federal budget process and proposals from Congress, and will keep members informed if any significant health-related budget changes are enacted.

HHS Publishes Final Regulation on Reinsurance Program

On Friday, March 1, HHS published a final rule that includes the final regulations for the Temporary Reinsurance Program under the ACA.  Upon publication of the proposed rule, NBCH submitted a comment letter on behalf of our members commending HHS for proposing flexible standards and options for counting plan enrollees, but expressed concern about the unanswered questions still remaining such as treatment of disease management and wellness programs, and the interaction between the TRP and state high-risk pools.

The final rule reiterates that the reinsurance contribution applies to enrollees in "major medical coverage."  The following exclusions to major medical coverage are clarified by HHS:

• stand-alone vision and dental
• plans that cover prescription drugs only
• stand-alone HRAs and HSAs
• employee assistance, wellness, and disease management programs, to the extent they do not provide major medical coverage
• stop-loss and reinsurance policies

Several commenters requested that retiree-only coverage be excluded, but HHS maintains that it does not have the statutory authority to do so.

In the final rule, HHS clarifies that states cannot collect additional funds beyond those required to administer the ACA TRP from ERISA-covered self-insured health plans.  States are still allowed to operate their own high-risk pools outside of the ACA program, but these states cannot collect contributions from self-insured employers whose plans are covered under ERISA.

The final regulation indicates that future guidance on the mechanics of submitting the TRP payments is forthcoming.  NBCH will continue to monitor agency activity on this program.

NIH Funding Opportunity for Obesity Policy Evaluation

The National Institutes of Health (NIH) announced a new funding opportunity announcement for applications that propose to evaluate large scale policy or programs that are expected to influence obesity related behaviors (e.g., dietary intake, physical activity, or sedentary behavior) and/or weight outcomes in an effort to prevent or reduce obesity.

The announcement encourages innovative scientific partnerships between researchers and public or private partners (e.g., community based organizations, local governments, school districts, employers), and defines policy broadly to include both formal public policies at local, state and federal levels of government, and organizational level policies, such as those implemented by large organizations, worksites or school districts. Examples of appropriate studies include, but are not limited to, the following:

• Introduction of food or beverage taxes/subsidies/price changes/other incentives;
• Infrastructure initiatives such as retailers offering healthier food options in underserved areas;
• Changes to workplace food and/or physical activity environment;
• Polices expected to influence available options and purchasing, such as calorie labeling in restaurants, menu or food product reformulation, and supermarket layout or pricing strategies;
• Significant changes in policy or practice in large healthcare organizations that are expected to improve weight outcomes; such as changes in reimbursement, incentives, or wide scale implementation of prevention or treatment services;
• Modifications to the built environment to encourage active transportation or leisure physical activity, such as the implementation of bike lanes in urban areas, multi-use trails, subsidies for public transit, upgrades of sidewalks, or improved access to parks and recreation facilities.

The application cycle opens on May 5, 2013 and applications are due on June 5, 2013.

Community Health Alliance awarded status as a CO-OP by HHS

Community Health Alliance, based in Knoxville, TN, announced on Tuesday that it has been awarded status as a Consumer Operated and Oriented Plan (CO-OP) by the U.S. Department of Health and Human Services (HHS). The designation, won through an extremely competitive application process, allows the CO-OP to borrow up to $73 million from the federal government to provide high quality, affordable and consumer-driven health insurance to Tennessee consumers and businesses starting in 2014.

Community Health Alliance is a non-profit mutual insurance company that will be governed by a Board of Directors elected from among its members. To keep its CO-OP designation, Community Health Alliance is required to return value and profit back to its subscribers in the form of consumer-friendly benefit plans, reduced premiums and/or expanded services.

“Community Health Alliance is an exciting development in the marketplace for our state”, said Community Health Alliance President/CEO, Jerry Burgess. “It brings together purchasers, health care providers and others to work on new ways to keep insurance costs down and people healthy. There’s a lot of good work already done in our state that we can and will build upon – this is an exciting next step forward.”

A CO-OP is a private company, not a government program, and all loans must be repaid within 15 years. Congress’ intent in creating CO-OPs was to provide consumers and employers with a truly not-for-profit, consumer-focused health plan alternative that will compete fairly with other insurance companies. COOPs are licensed by state insurance departments and come under the same state regulations as all other carriers. Community Health Alliance will begin enrolling members in the fall of 2013, for coverage effective 2014.

Additional details can be found here. For more information visit the Community Health Alliance website at www.communityhealthalliancetn.org or contact Jerry Burgess, President/CEO, Community Health Alliance, 888-415-3332, jburgess@communityhealthalliancetn.org.

NQF's Measures Application Partnership (MAP) Submits Recommendations to HHS

On Friday, June 1, the Measure Applications Partnership (MAP), convened by NQF, submitted the latest in a series of reports to HHS that provide guidance regarding performance measurement in three important areas: care provided to Medicare-Medicaid dual eligible beneficiaries, care provided in cancer hospitals exempt from Medicare’s prospective payment system, and hospice and palliative care. The reports are notable, in that they address some of our country’s sickest and most vulnerable populations, and also address the unique measurement needs and gaps of those whose needs span multiple settings of care.

• Measuring Healthcare Quality for the Dual Eligible Beneficiary Population: Final Report to HHS
• Read the Press Release
• Performance Measurement Coordination Strategy for Hospice and Palliative Care
• Read the Press Release
• Performance Measurement Coordination Strategy for PPS-Exempt Cancer Hospitals
• Read the Press Release

More information about the work of the MAP is available on the NQF website.

New Public Data Resources

Several new health care related websites that we believe will be useful to members, have launched in recent weeks:

The Health Care Cost Institute is a private, independent, nonprofit entity committed to creating the nation’s most comprehensive source of information on health care costs and utilization, and promoting research on the drivers of escalating health care costs and utilization in the U.S. As the first effort of its kind to create and maintain a regularly updated repository of commercial health care cost information, HCCI’s mission is to promote independent research and analysis on the causes of rising US health spending; to provide policy makers, consumers, and researchers with better, more transparent information on what is driving health care costs; and to help ensure that, over time, the nation is able to get greater value from its health spending. The database includes 5,000 hospitals and more than 1 million different medical service providers from commercial health plans operated by Aetna, Humana, Kaiser Permanente and UnitedHealthcare.

HHS' Assistant Secretary for Planning and Evaluation (ASPE) launched the Health System Measurement Project, which brings together trend data on a limited set of key health system measures from multiple data sources to provide a picture of the status of the U.S. health system. The Project focuses on ten critical dimensions of our health care system covering the availability, quality, and cost of care, the overall health of Americans, and the dynamism of the system. The Project examines the evolution of these aspects of our system over time. It also assesses the status of these dimensions of the system with respect to subgroups of the population, with a particular emphasis on vulnerable populations.

In addition, a new website from The George Washington University, Health Information and the Law, is designed to serve as a practical online resource to federal and state laws governing access, use, release, and publication of health information. Constantly updated, the site addresses the current legal and regulatory framework of health information law and changes in the legal and policy landscape impacting health information law and its implementation with commentary and key documents. The site offers descriptions and links to individual federal and state statutes, is searchable on topics such as ‘antitrust,’ ‘confidentiality,’ ‘privacy,’ ‘quality,’ and ‘security of information,’ and provides timely analyses of key health information law issues. It also allows users to see and understand the application of the law in their own geographic areas and how state law intersects with federal requirements and programs.

Study Finds Consumers Choose High-Value Health Care Providers When Given Good Cost and Quality Information

When asked to choose a health care provider based only on cost, consumers choose the more expensive option, according to a new study funded by HHS’ Agency for Healthcare Research and Quality (AHRQ) that appears in the March issue of Health Affairs.

The study found that consumers equate cost with quality and worry that lower cost means lower quality care. But higher costs may indicate unnecessary services or inefficiencies, so cost information alone does not help consumers get the best value for their health care dollar, according to the study."

More information is available here.

HHS Bulletin Proposes Standards for ACA Essential Health Benefits

In mid-December, the U.S. Department of Health and Human Services (HHS) issued the Essential Health Benefits Bulletin (EHBB).

HHS did not issue a detailed rule on what “essential benefits” must be included in the new health exchanges and are deferring to the states on what essential health benefits package should look like. They issued a pre-regulatory bulletin that says states will have the flexibility to choose from four different coverage options already available in their states, an approach that could result in different benefits throughout the country. HHS officials said this bulletin will guide them as they write the regulations in the future.

New initiative from Partnership for Patients aimed at improving hospital care

HHS announced a new program focused on providing hospitals across the country will new resources and support to make health care safer and less costly by targeting and reducing the millions of preventable injuries and complications from health care acquired conditions.

An initiative of the Partnership for Patients, a nationwide public-private collaboration to improve the quality, safety, and affordability of health care for all Americans, $218 million will go to 26 state, regional, national, or hospital system organizations. As Hospital Engagement Networks, these organizations will help identify solutions already working to reduce healthcare acquired conditions, and work to spread them to other hospitals and health care providers.

The 26 organizations receiving awards are:

President Obama nominates Tavenner to take Berwick's post at CMS

The Obama administration on Wednesday nominated CMS principal deputy Marilynn Tavenner to replace outgoing administrator Donald Berwick, MD.

Berwick, in tandem, announced his resignation – which comes after a political impasse, in which Republicans effectively blocked a Senate confirmation. Read the full article...

Community Based Care Transition Program Stakeholder Call

The Community Based Care Transitions Program (CCTP) will be holding a conference call on Tuesday, November 29th, from 1:00pm-2:30pm (ET), to allow stakeholders to hear directly from some of the newly selected sites. CMS staff will provide additional information about the program and be available to answer questions. Call in #: (800) 837-1936 Conference ID: 29693317

WHAT: Community Based Care Transitions Program Stakeholder Call

WHEN: Tuesday November 29th 1pm-2:30pm (ET)

CALL IN: (800) 837-1935 Conference ID: 29693317

Click here for the first site selections for the Community Based Care Transitions Program: http://www.cms.gov/DemoProjectsEvalRpts/downloads/CCTP_FirstSiteSelections.pdf. Comments or questions can be sent to: CareTransitions@cms.hhs.gov. For more information about the Community Based Care Transitions Program, visit http://go.cms.gov/caretransitions.