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?

CMS Webinar: Learn How to Access and Use Medicare Data

In July 2012, the Centers for Medicare & Medicaid Services (CMS) announced that in July 2013, the platform for the downloadable data on the Medicare.gov Compare websites (Dialysis Facility Compare, Home Health Compare, Hospital Compare, and Nursing Home Compare) would be Data.Medicare.Gov.

The Centers for Medicare & Medicaid Services will be hosting a webinar, “Data.Medicare.Gov: Get Started!” to:

• Provide an introduction to Data.Medicare.Gov, 
• Demonstrate options for accessing the data, and 
• Describe how to make use of the site's tools for exploring and interacting with the data. 

The webinar is appropriate for both technical and non-technical users of Compare website data, for example, researchers, health care administrators, and quality improvement professionals.

WHEN: Thursday May 16, 2013 1:00 PM to 2:00 PM Eastern Daylight Time

WEBINAR REGISTRATION INFORMATION: In order to receive log-in information, you must register for the webinar though the following link: https://cc.readytalk.com/r/vutakpmjxr7j

Participants are strongly encouraged to register early because space is limited and to dial in 10 minutes early to ensure that you are able to connect and view the presentation.

If you are unable to join, you can:

• View the video recording in the Help section of http://www.data.medicare.gov following the event. 
• Visit http://www.data.medicare.gov before or after the event and click the Help button. There you can find a variety of useful videos and resources to help you use the site.

Treasury Releases ACA Proposed Rule on Collection of Additional Medicare Tax

The Treasury Department has released a proposed rule for one of the important revenue-raising provisions in the Affordable Care Act. Under Section 9015 of the ACA, employers are responsible for withholding an “Additional Medicare Tax” on certain individuals’ wages and other compensation. The tax applies to wages and compensation above a threshold amount received after December 31, 2012. According to the IRS Q&A document on this provision, the threshold amounts are $250,000 for married filing jointly, and $200,000 for singles; the rate is 0.9%.

The proposed rule provides guidance for employers and individuals relating to the implementation of the tax, including the requirement to file a return reporting the Additional Medicare Tax, the employer process for making adjustments of underpayments and overpayments of Additional Medicare Tax and the employer and employee processes for filing a claim for refund for an overpayment of Additional Medicare Tax.

New Bi-Partisan Research Group to Focus on Medicare Fiscal Trends

Two top Republican and Democratic health policy experts are coming together to form a research-oriented advocacy group that says its goal is to “preserve Medicare.” The Partnership for the Future of Medicare — led by former CBO director Douglas Holtz-Eakin and Kenneth Thorpe, who led health policy at HHS during the first two years of the Clinton administration — is going to research topics relevant to the Medicare debate during sequestration and beyond.

The group is funded by insurance companies United Health and Humana. But Holtz-Eakin says its decisions and research are not going to be skewed toward the interests of the insurance industry. The group’s initial research will focus on the fiscal challenges facing Medicare, utilization and patterns in Medicare Advantage and fee-for-service programs, and the value of Medicare Advantage plans. Thorpe said one of the group’s goals is “to make sure people understand the factors driving the growth in Medicare spending [and] how those trends are going to persist.”

Thorpe and Holtz-Eakin said that they expect to be around longer than the sequestration talk on Capitol Hill. The debate over Medicare’s sustainability is going to last far longer, they say. The group’s advisory board is made up of: Holtz-Eakin; Thorpe; Katherine Baicker, a professor of health economics at the Harvard School of Public Health; James C. Capretta, a fellow at the Ethics and Public Policy Center and an associate director of the Office of Management and Budget under President George W. Bush; and Kavita Patel and Steven M. Lieberman, both of the Brookings Institution.

As More Employers Drop Coverage, Retirees Turn To Specialized Insurance Exchanges

Kaiser Health News reports that in the past 20 years, the number of companies that provide retiree health coverage has dropped dramatically, leaving seniors with the difficult task of choosing among a variety of plans to supplement their Medicare benefits. It is a choice that can be confusing and has large financial implications.

But a move by some employers is softening the blow. They are contracting with companies that operate insurance marketplaces, called exchanges, where Medicare-eligible retirees can enroll in plans to replace what they used to get from the employer. Working with a counselor, retirees can figure out what coverage best meets their needs - determining, for example, whether to buy Medigap and prescription drug plans or to join a Medicare Advantage plan. (Counselors typically rely on salary but sometimes other sales incentives may factor in their compensation.)

In 1993, 40 percent of employers with 500 or more workers offered medical insurance to their Medicare-eligible retirees, according to human resources consultant Mercer's annual survey of employer health benefits. By 2011, that figure had fallen to 16 percent.

The exchanges can benefit both employers and retirees, experts say. Employers' costs are capped and predictable, with fewer administrative hassles, says Bruce Richards, chief actuary and quality leader for Mercer's health-care business. Meanwhile, because retirees can pick among different plans and rates, "usually most people are better off," he says.

Several exchanges have emerged in recent years. They may work with both employer clients and individual insurance buyers. Some offer a range of products from different insurers, while others offer only one insurer's plans. As more employers start re-thinking their overall health benefits approach and potentially offering their active workers defined contributions to buy their own insurance on an exchange, insurance coverage could become entirely seamless between active employment and retirement, thereby reducing the potential for gaps in care that may increase health care costs in the long term.

CPDP Requests Sign on to Comments on Releasing Medicare Data - DUE 8/8 1pm ET

The Patient Protection and Affordable Care Act requires Medicare data be made available to “Qualified Entities” for performance reporting. In response the CMS’ proposed rule, the Consumer-Purchaser Disclosure Project has developed the attached comments. If you would like to sign-on to the letter, please send your organization’s name to Dena Mendelsohn (dmendelsohn@pbgh.org) by Monday, August 8th, 1pm EDT.

• Sign-On Letter
• Suggested Edits to Proposed Regs