The Centers for Medicare and Medicaid Services’ Quiet Coziness with Wall Street

Roy M. Poses, MD

Posted 12/09/11 on Health Care Renewal

[DSCN0083.JPG]An article from the Project on Government Oversight (POGO) reveals a new aspect of the growing coziness between the US government and big corporations with obvious relevance to health care.

CMS’ Coziness with Leaders of the “Capital Markets”

Here is the introduction and the example most relevant to health care:

Nearly a dozen senior staff at the Centers for Medicare and Medicaid Services (CMS), the giant agency that administers hundreds of billions in federal health care dollars, had been called to a meeting. After a discussion with five Wall Street professionals that lasted nearly two hours, one senior CMS analyst filed an ethics complaint that later went to the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS).

Continue reading “The Centers for Medicare and Medicaid Services’ Quiet Coziness with Wall Street”

Accountable Care Organization Regulations – The ACO is a Camel, Not a Unicorn

David Harlow

Posted 10/31/11 on HealthBlawg

232323232-fp53393-nu=3238-235-766-232923585737;ot1lsiThe final Accountable Care Organization regulations are out, the initial flurry of commentary is out (including my own ACO webinar with simultaneous  #ACOchat tweetchat –available for download/replay soon; slides here now: “ACOs, Bundled Payments and the Future of Health Care“), and we can now all catch our collective breath and contemplate the draft vs. final ACO regulation comparisons, the meaning of this new, final set of regulations, guidances and statements from CMS, FTC, DOJ, OIG, and IRS on ACOs and Medicare Shared Savings Programs, and all of the attendant antitrust, antikickback, Stark, and other fraud and abuse matters, and of course tax issues.

So, now that these final regulations are out, and the mythical characteristics of the ACO will soon be dispelled (see under: unicorn), I propose a new animal kingdom metaphor for discussion of Accountable Care Organizations:

The Camel’s Nose is in the Tent.

The definition of a camel, as those of you who tuned into my ACO webinar already know, is a horse designed by a committee.  And, given the nature of the legislative and rulemaking processes, that’s exactly what we have before us – a camel.

Continue reading “Accountable Care Organization Regulations – The ACO is a Camel, Not a Unicorn”

ACOs: The Good and the Bad

To muted applause and some sighs of relief from providers, HHS released the final ACO regulations last week. 

The final version superseded the much-criticized draft regs published several weeks earlier. This previous draft was widely regarded as imposing overwhelmingly complex rules for the chance of sharing in any gains. As one commentator noted: “The promise of integrated, coordinated and cost-effective care provided by hospital-physician networks had run into the reality of having to invest millions dollars with a questionable ROI, a complex maze of up and downside risk calculations, reams of burdensome quality measures and overlawyered antitrust regulations.

So the final less-unwieldy rules have been relatively well-received. On the other hand, fundamental questions about the viability and impact of ACOs remain:

  1. Will the potential “bonuses” justify the financial investments? Major hospital systems (likely to be the primary ACO sponsors) seem to be willing to play so long as the regulations are not too onerous. And as with other HHS initiatives, those willing to participate are likely to be those who are most confident that they can readily cut costs and gain the savings bonuses. On the other hand, ACOs that aren’t able to do a much better job of coordinating care will be unable to recoup their investments.
  2. Will there be losers? Physicians and hospitals who don’t participate in ACOs may find HHS squeezing rates to be in line with costs of competing ACOs. And even in successful ACOs, hospital staff and individual physicians may be in danger of losing their jobs as the ACOs try to reduce variable costs in order to achieve the “bonus-eligible” level.
  3. Why are hospitals so interested in ACOs? It’s a great opportunity to tie physicians more tightly, thereby guaranteeing referrals and admissions and strengthening the hospitals’ rate negotiating positions.  At the same time, the hospital risk is small; the ACO component is expected to be tiny relative to the size of the Medicare program, and with beneficiary assignment made prospective in the final rules, the costs and risks for participating providers are even less.
  4. Will ACOs really enhance cost-effectiveness? In some cases the answer will be yes, with the ACOs achieving the objectives of their government designers. In other cases, however, the pros of better integrated care will be more than outweighed by the cons of quasi-monopolistic hospital systems able to dictate their terms to insurers and other payers.

There is one more fundamental problem with the present ACO design: by randomly assigning Medicare beneficiaries to ACOs, much of the opportunity to impact the highest cost cases may be lost. A more targeted approach might begin to show the savings that the Medicare program desperately needs. On the other hand, HHS’ track record of success with its chronic care demonstrations gives little confidence that the government could indeed achieve these potential savings.

The bottom line seems to be: ACOs will generally demonstrate the virtues of integrated care (something that was known already), while in too many cases encouraging monopolistic hospital systems to become even more entrenched.

Roger Collier used to be CEO of a large health care consulting practice. Now he writes at Health Care Reform Update.

Anti-RUC Suit Challenges Process for Setting Doc Pay Scales

Merrill Goozner

Posted 10/25/11 on Gooz News 

Whither CMS? That’s the issue raised by Brian Klepper and David Kibbe in their post on the Health Affairs website this morning. The Center for Medicare and Medicaid Services faces a November deadline for answering a complaint by six Georgia physicians that claims the American Medical Association’s Relative Value Scale Update Committee (RUC) violates the Federal Advisory Committee Act. The RUC periodically sends recommendations to CMS on how it should reimburse different physician services. As Klepper and Kibbe point out, this specialist-dominated committee, after what are the medical equivalent the early 20th century factory efficiency studies conducted by Frederick Winslow Taylor, decides that the value of cataract surgery, for instance, is 12.5 times the value of a primary care office visit.

Continue reading “Anti-RUC Suit Challenges Process for Setting Doc Pay Scales”

CMS’ Opportunity: A Lawsuit Offers A Chance To Reform Physician Payment

Brian Klepper and David C. Kibbe

Posted 10/25/11 on the Health Affairs Blog

By mid-November, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) must respond to the legal complaint filed in a Maryland federal court by six Augusta, Georgia family physicians.

These doctors are not asking for money, but for relief from the negative effects brought about by CMS’ twenty year reliance on the American Medical Association’s Relative Value Scale Update Committee (RUC) for valuing doctors’ work. They are asking CMS to enforce the Federal Advisory Committee Act(FACA), which requires that regulatory agencies shield themselves from undue special interest influence. In the process, they are asking CMS to rethink Medicare’s approach to physician payment, with a mind toward recognizing and valuing primary care’s ability to treat the whole patient within a larger system of care. They are asking CMS to develop payment policy that supports the needs of patients over those of professional groups.

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CMS Wants Docs To Ante Up To CMS Poker Game

Michael Millenson

Posted 10/20/11 on Forbes

In a high-stakes political, clinical and economic poker game that goes by the name of Accountable Care Organizations (ACOs), the Centers for

Medicare & Medicaid Services (CMS) has just issued a call for doctors and hospitals to grab some chips and ante up.

The set-up goes like this: one of the biggest potential changes in how health care is actually delivered contained in the Accountable Care Act was ACOs.

They’re voluntary, but they allow doctor- or hospital-led organizations that take responsibility for coordinating the care of at least 5,000 Medicare beneficiaries to get reimbursed at a higher rate for providing better-quality, lower-cost care. It’s supposed to be a win-win-win for providers, patients and taxpayers and part of a more general move towards “value-based purchasing.”

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Accelerating Innovation At The Centers For Medicare And Medicaid Services

Donald Berwick and Richard Gilfillan

Posted 10/21/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc. 

Innovation has revolutionized medicine.  Technology enables us to peer into the depths of the human body to diagnose disease, offer life-saving pharmaceutical treatments, and unlock the power of genomics to help predict, diagnose and treat disease.

Innovation is vital to our health care system and has made the American health care the envy of the world in many respects.  Despite this progress, it’s also true that too often—as any health care provider will tell you—we still deliver and pay for health care the same as we did 50 years ago.

Continue reading “Accelerating Innovation At The Centers For Medicare And Medicaid Services”