Policy and Medicine

Affordable Care Act: Fills Hole in Medicare Part D Prescription Benefit

Nearly 3.6 million people with Medicare saved $2.1 billion on their prescription drugs in 2011 thanks to the Affordable Care Act according to data recently issued by the Department of Health and Human Services (HHS).  Savings for people with Medicare will increase over time. According to a new report issued today from HHS, the average person with Medicare will save nearly $4,200 by 2021 because of the new law. 

“The Affordable Care Act is already saving money for millions of Americans with Medicare,” said HHS Secretary Kathleen Sebelius.  “As we move forward, we will close the donut hole completely and save even more money for everyone with Medicare.” 

The Affordable Care Act provides a 50 percent discount on brand-name prescription drugs and this year, a 14% discount on generics. Last year, it provided a seven percent discount on covered generic medications for people who hit the prescription drug coverage gap known as the donut hole, with 2,814,646 beneficiaries receiving $32.1 million in savings on generics. 

In 2011, the 3.6 million Americans who hit the donut hole saved an average of $604 on the cost of their prescription drugs.  Here is a state-by-state savings figures. 

Data also show that women especially benefitted from the law’s provision with 2.05 million women saving $1.2 billion on their prescription drugs. 

By 2020, the donut hole will be closed completely.  The new report released today by the Department of Health and Human Services finds that this provision and other features of the health reform law will generate substantial savings for people with Medicare. Typical Medicare beneficiaries will save an average of nearly $4,200 from 2011 to 2021. People with high prescription drug costs could save as much as $16,000. 

The savings are a product of provisions in the Affordable Care Act and other cost trends that:

• Decrease prescription drug costs for seniors
• Make preventive services like mammograms free for everyone in Medicare
• Reduce growth in Part B premiums (for physician services)
• Reduce growth in cost-sharing under both Parts A (hospital care) and Part B. 

These announcements come one day after HHS announced that in 2012, Medicare Advantage premiums have fallen by seven percent on average and enrollment has risen by about 10 percent since last year. 

Road to Reform: The Healthcare Regulatory Burden

A recent article from California Healthline looked at some of the regulatory problems our health care system is facing and some of the solutions to those problems that are currently underway. 

The article started off by noting that although President Obama used 570 words to urge Congress to pass the Affordable Care Act in 2010, he barely used even 50 words to discuss health care reform in his State of the Union Address this year.  Perhaps this suggests that his administration realizes the controversy and regulatory burdens the ACA has created, particularly for small businesses. 

Consequently, “As Obama continues to shift away from touting the ACA and focus on its implementation, it's clear that streamlining federal regulations will be a top priority for the White House this year.”  In fact, “the president spent more than 130 words on his renewed cause of streamlining the government.”  Obama twice referenced the need to do away with federal "red tape," a term he never used in his first three addresses to Congress.

Health Care's Regulatory Burden

Doctors in America find themselves cutting red tape or getting stuck in it almost every day.  U.S. physicians already spend nearly four times as much as their Canadian counterparts on administrative tasks, such as filing claims and billing for patient care, according to a recent Health Affairs study.

One study takeaway: the sheer volume of insurance-related paperwork. Staff for U.S. physicians spent 53.1 hours per physician on administrative tasks each week, compared with 15.9 hours for physicians in Ontario. The study also found that time spent on administrative tasks costs each U.S. physician $82,975 annually, compared with $22,205 each for Canadian physicians

And new laws may not necessarily help. The ACA's Physician Payments Sunshine Act -- designed to shine a light on industry contributions -- "will benefit only accountants, bureaucrats and lawyers," a Harvard Medical School physician argued in a Wall Street Journal editorial.

There's also the inherent inertia that keeps regulatory burdens in place, from hard-to-overturn government restrictions to outside interest groups that seek to preserve the status quo.  However, Obama mentioned in his address this year his executive order that federal agencies must "eliminate rules that don’t make sense.”  He noted how the administration has “already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.”  Consequently, the article explained how these reforms are playing out in health care. 

CMS three months ago nixed several federal regulations for health care providers and debuted new rules that allow:

• Hospitals in the same system to have their own governing boards;
• Nurse practitioners and other non-physicians to have more responsibilities;
• Smaller hospitals to outsource some lab tests and radiology tasks; and
• Ambulatory surgery centers to eliminate time-consuming and unnecessary patient rights regulations.

According to HHS Secretary Kathleen Sebelius, the changes "eliminate unnecessary and obsolete standards and free up resources" for providers to focus on patient care. HHS also added that the changes will save the industry $1.1 billion next year and $5 billion over five years.

In addition, the article noted how another important development is that the administration official who oversaw the White House's regulatory brush-clearing -- Jeff Zients, the nation's first Chief Performance Officer -- has been announced as the new head of the White House's Office of Management and Budget.  In his new role, Zients' explicit responsibility will be to advise the White House on ways to cut spending, reduce duplication and stay within the federal budget.  Given how Obama’s first OMB head, Peter Orszag, had made controlling health care costs the centerpiece of his work as the Congressional Budget Office's director, we may see more healthcare regulatory streamlining. 

Physicians Face Cash Crunch – New Payment Models May not Work for Many Private Practice Physicians

According to a recent article from CNN Money, “many doctors are going broke,” creating a “quiet reality that is spreading nationwide and claiming a wide range of casualties, including family physicians, cardiologists and oncologists. 

Industry watchers say the trend is worrisome.  Half of all doctors in the nation operate a private practice.  So if a cash crunch forces the death of an independent practice, it robs a community of a vital health care resource. 

"A lot of independent practices are starting to see serious financial issues," said Marc Lion, CEO of Lion & Company CPAs, LLC, which advises independent doctor practices about their finances.  Doctors list a number of factors leading to their financial woes and preventing them from keeping their practices afloat, such as: 

• Shrinking insurance reimbursements
• changing regulations
• rising business and
• Drug costs among the factors.  

For example, the article noted Dr. William Pentz, 47, a cardiologist with a Philadelphia private practice, and his partners, who had to tap into their personal assets to make payroll for employees last year. "And we still barely made payroll last paycheck," he said. "Many of us are also skimping on our own pay." 

Pentz said recent steep 35% to 40% cuts in Medicare reimbursements for key cardiovascular services, such as stress tests and echocardiograms, have taken a substantial toll on revenue. "Our total revenue was down about 9% last year compared to 2010," he said.  "These cuts have destabilized private cardiology practices," he said. "A third of our patients are on Medicare. So these Medicare cuts are by far the biggest factor. Private insurers follow Medicare rates. So those reimbursements are going down as well." 

Also on his mind, the impending 27.4% Medicare pay cut for doctors that is part of the SGR or “doc fix.”  Pentz noted that if a plan is not worked out, it will put all doctors “under.”  Federal law requires that Medicare reimbursement rates be adjusted annually based on a formula tied to the health of the economy.  That law says rates should be cut every year to keep Medicare financially sound. 

Although Congress has blocked those cuts from happening 13 times over the past decade, most recently on Dec. 23 with a two-month temporary "patch," this dilemma continues to haunt doctors every year. 

Beau Donegan, senior executive with a hospital cancer center in Newport Beach, Calif., noted how “physicians see no way out of the downward spiral of reimbursement, escalating costs of treating patients and insurance companies deciding when and how much they will pay them.”  Donegan knows an oncologist "with a stellar reputation in the community" who hasn't taken a salary from his private practice in over a year. He owes drug companies $1.6 million, which he wasn't reimbursed for.  Dr. Neil Barth is that oncologist.   

He has been in the top 10% of oncologists in his region, according to U.S. News Top Doctors' ranking. Still, he is contemplating personal bankruptcy.  That move could shutter his 31-year-old clinical practice and force 6,000 cancer patients to look for a new doctor.  Changes in drug reimbursements have hurt him badly. Until the mid-2000's, drugs sales were big profit generators for oncologists.  In oncology, doctors were allowed to profit from drug sales. So doctors would buy expensive cancer drugs at bulk prices from drugmakers and then sell them at much higher prices to their patients. 

In 2005 however, Medicare revised the reimbursement guidelines for cancer drugs, which effectively made reimbursements for many expensive cancer drugs fall to less than the actual cost of the drugs.  As a result, "Our reimbursements plummeted," Barth said.  Still, Barth continued to push ahead with innovative research, treating patients with cutting-edge expensive therapies, accepting patients who were underinsured only to realize later that insurers would not pay him back for much of his care.  "I was $3.2 million in debt by mid 2010," said Barth. He could no longer care for patients with catastrophic illnesses without scrutinizing every penny first. 

He's since halved his debt and taken on a second job as a consultant to hospitals. But he's still struggling and considering closing his practice in the next six months.

"The economics of providing health care in this country need to change. It's too expensive for doctors," he said. "I love medicine. I will find a way to refinance my debt and not lose my home or my practice."  Until he decides whether to file for personal bankruptcy—which would cause him to lose his 30 year practice and force him to find a way to start over at 60—he’s turning away new patients whose care he can no longer subsidize. 

Small business 101 

The article noted that a “private practice is like a small business.” “The only thing different is that a third party, and not the customer, is paying for the service," said Lion.

While “Doctors are trained in medicine,” they are not trained how to run a business.”  Lion said his biggest challenge is getting doctors to realize where and how their profits are leaking. “On average, there's a 10% to 15% profit leak in a private practice,” he said. Much of that is tied to money owed to the practice by patients or insurers. “This is also why they are seeing a cash crunch.” 

Dr. Mike Gorman, a family physician in Logandale, Nev., recently took out an SBA loan to keep his practice running and pay his five employees. “It is embarrassing,” he said. “Doctors don't want to talk about being in debt.”  But he's planning a new strategy to deal with his rising business expenses and falling reimbursements. 

“I will see more patients, but I won't check all of their complaints at one time,” he explained. “If I do, insurance will bundle my reimbursement into one payment.” Patients will have to make repeat visits -- an arrangement that he acknowledges is "inconvenient.”  “This system pits doctor against patient,” he said. “But it's the only way to beat the system and get paid.” 

Ultimately, with the creation of Accountable Care Organizations (ACO) and the proposal and implementation of several new payment and reimbursement models, doctors will continue to face an uphill financial battle.  We have already begun to see a trend of smaller practices closing and merging with health systems and hospitals, and more physicians are leaving private practices to avoid many of the problems the doctors in this story described. 

While no one questions the tremendous importance of health care reform, the goals it hopes to achieve have costs other than just what it takes to reform our system.  These reforms however, are adversely affecting doctors as well.  Moving forward, more must be done to recognize the financial difficulties private practice physicians are facing.  With a growing shortage of physicians already and a significant influx of millions of patients through the insurance exchanges (if upheld by the U.S. Supreme Court), America must fix the system before patients have no private practices left.

Independent Payment Advisory Board May Be Much Further Off Than Originally Planned

One of the major issues with the Affordable Care Act (ACA) is the repeal of the Independent Payment Advisory Board (IPAB), something a recent article from POLITICO noted is not likely to happen this year. 

However, repeal is not necessary for the next year or two because Medicare spending is actually in check — far from the runaway train the Medicare board’s creators had worried about. Its recent growth rate, 5 percent in 2010, puts it on a trajectory much milder than experts had expected. 

That means the health program for the elderly is likely to meet its first fiscal target without any help from the yet-to-be appointed independent board of experts. The later years, of course, are less predictable and depend on the economy, the impact of the health care reform law and the inclinations of future Congresses.  But in the short term, IPAB’s start date may not matter that much. 

“With the sequester that’s scheduled, and changes through the other budget deals, it could keep Medicare under the targeted growth rate. And that’s something to think about, given some of the limitations and structures on IPAB,” said Jack Hoadley, a health policy analyst at Georgetown University.  Those limitations are abundant. 

The chances that President Barack Obama and the congressional leadership could find 15 highly competent people who want to serve up to six-year terms under very strict ethics rules on a board the Republicans want to dismantle — and who can muster 60 votes needed for confirmation by the cantankerous Senate in an election year — aren’t too hot.  Most people POLITICO contacted said they did not want to be on the board. 

“It’s very unlikely before the election that they would be appointed,” said Harvard University health politics expert Robert Blendon. “Even if there was the funding to pay for them.”  Joseph Antos, a health policy scholar at the American Enterprise Institute, who is no fan of IPAB, put it this way: “There’s a budgetary issue. A membership issue. And a confirmation issue.” 

IPAB’s budget, pared by $10 million in the previous omnibus spending bill, is only one piece of the controversy. It was created by the 2010 health care reform law and charged with keeping per capita Medicare spending in check, based on a formula in the legislation. Recommendations were to be developed in 2013, submitted early in 2014, and take effect in 2015, according to a detailed summary of the provisions by health care law experts at George Washington University. 

The White House, and then-budget chief Peter Orszag, had pushed to make the board part of health care reform. Advocates said Congress just wasn’t good at dealing with Medicare. Some of the spending decisions are technically complicated. For example, how do a bunch of elected officials know what Medicare should pay for a tank of oxygen, let alone some complex new biologic anti-cancer agent?

So the idea was to put some of these decision in the hands of experts — economists, health providers, policy wonks — who have both the technical expertise and the political space to make tough calls.  Congress could disapprove on a fast-track process, but it would have to come up with an alternative way of generating the same amount of savings. The board could not recommend changes that would directly affect beneficiaries, such as higher co-pays or taxes. 

But some in Congress — including some Democrats who generally back the health care reform law — thought IPAB was a bad idea. They see it as a weakening of congressional authority that puts important national health spending decisions in the hands of unelected technocrats. Rep. Frank Pallone (D-N.J.), for instance, said ceding congressional authority to groups like IPAB illustrates the need to reverse “a growing imperialistic presidency.” And he’s an ally of the president on health care. 

Republicans who oppose the health care law take the IPAB argument even further, saying it would damage care quality and move toward rationing.  “Decisions that have significant impact on quality of life — and in the most extreme cases, on life and death — should be made by patients and their doctors. The IPAB would step into the middle of this relationship, and threaten seniors’ access to essential medical care,” Rep. Phil Roe (R-Tenn.), a leader of the repeal movement, has said. 

 “IPAB is an important backstop to help reduce Medicare cost growth if Congress fails to do so. The board’s recommendations will go into effect only if Congress accepts them or if Congress fails to act. IPAB recommendations are required when spending is estimated to exceed the benchmark set in the statute,” said Chris Stenrud, a spokesman for the Department of Health and Human Services. 

Even if IPAB haters get a repeal vote through the House, a similar initiative would most likely die in the Senate.  So for now, the board is basically in limbo. It will exist in the law. But it won’t have any members, and as of now it has no office or staff, according to HHS.  However, time isn’t of the essence, given the unexpected slowdown in Medicare spending. 

Whether that’s a short-term dip, because the economy is forcing people to cut back, or a more permanent reduction in people’s use of medical services is open to debate. But other changes in Medicare finances contained in the health care reform law, plus the 2 percent provider cuts to be “triggered” next year under last summer’s debt ceiling deal, strongly suggest that Medicare spending growth will remain under the IPAB targets at the outset. 

The “trigger” — assuming Congress doesn’t repeal it — is bigger than the cut IPAB is allowed to make at first. And the debt deal includes cuts to hospitals, which are off limits to IPAB the first few years.  Whether the sequester cuts will go into subsequent years is uncertain; the next Congress could undo the work of this Congress. 

Ultimately, the article noted that in the immediate future, IPAB is unlikely to be an action item. That could buy time either for a more Republican Congress to try to scrap the board after the elections or for the political controversy to subside a bit until both parties decide to set up the board — or a modified version of it — to deal with Medicare’s long-term fiscal challenges. 

More importantly, finding people who want to serve could still be a challenge. Six years is longer than most academics can take a leave of absence, and the government salary is lower than some industry-types might want for that length of time. And the conflict-of-interest rules limit the role of doctors, hospital administrators or others who have provided care under Medicare. 

“You can’t jump out of the practice of medicine and serve on this,” Hoadley said. “You will have to have a certain independence and be at a certain stage of life and be willing to go into the political maelstrom. You will be up there making recommendations that lots of people will dislike.”

CMS Innovation Center: One Year of Innovation

This month, the Centers for Medicare and Medicaid Services (CMS) Innovation Center, created by the Affordable Care Act, released a new report, entitled “One Year of Innovation: Taking Action to Improve Care and Reduce Costs.”  The Report was released on the same day as the Innovation Summit, held last week in Washington, DC.   The new report highlighted how the Innovation Center has already worked to test and support innovative new health care models that can reduce costs and strengthen the quality of health care. 

The day-long Care Innovations Summit, hosted jointly by CMS, the West Wireless Health Institute, and the journal Health Affairs, brought together over 1,000 medical professionals, health care policymakers, academics and investors to explore innovative ways to make health care both affordable and effective. 

“The Affordable Care Act gives us tremendous new tools to innovate and improve our health care system,” said Health and Human Services (HHS) Secretary Kathleen Sebelius.  “We’ll discuss how we can work together to make innovative ideas a reality in communities across the country.” 

The summit displayed nearly half a dozen announcements of major new initiatives by leading health care organizations.  Among these announcements are new “challenges” to reverse the trend of diabetes, advance the field of Alzheimer’s prevention and treatment, and bolster the battle against HIV/AIDS. 

“The level of real excitement surrounding this conference shows not only that people who know health care recognize the urgent need for better health and better care at lower cost, they also are ready to move forward with solutions,” said CMS Acting Administrator Marilyn Tavenner.  

 “The fact that all of these disparate interests share the aim of better health care and are willing to work for it not only means that we’re going to have the best ideas on the table, but also that we’re going to have the expertise and the resources that will ultimately ensure better health at a lower cost will be within the reach of every American,” said Richard J. Gilfillan, M.D., director of the Innovation Center.  

CMS Innovation Report

Through the Affordable Care Act, HHS has been helping providers improve how they deliver health care services, through hospital value-based purchasing, realigned and increased primary care payments, and greater coverage for preventive care. The Center for Medicare and Medicaid Innovation (the Innovation Center), is an important new resource for health care providers dedicated to improving how our health care system works. Its mission is to move quickly to identify, test, and spread delivery and payment models to help providers improve care while cutting costs. 

In the year since opening its doors, the Innovation Center has introduced 16 initiatives involving over 50,000 health care providers that will touch the lives of Medicare and Medicaid beneficiaries in all 50 states and will continue to expand its partnerships and reach in the years to come. These initial efforts are focused on 

• improving patient safety
• promoting care that is coordinated across health care settings,
• investing in primary care transformation,
• creating new bundled payments for care episodes, and
• meeting the complex needs of those dually eligible for Medicare and Medicaid.  

While the U.S. is the global leader in developing new ways to prevent, diagnose, manage, and cure illness, our academic institutions offer the finest education and training available, and our talented physicians, nurses, and clinicians work hard each day to deliver the highest quality care, our health care system is nonetheless full of “barriers, roadblocks, and red-tape.”  And despite having the world’s best hospitals, doctors and nurses, and most advanced medical technology, Americans continue to live sicker and die sooner than citizens of many other nations. 

The obstacles we face range from the way we pay for health care services to a lack of usable, reliable information for patients and clinicians alike—that often keep health care professionals from practicing medicine in a collegial, evidence-based, and patient-centered manner.  Many doctors, nurses, and other providers have had great ideas, good intentions, and determined efforts, but have been thwarted by disincentives and other obstacles to innovation, resulting in a disjointed, inefficient, and costly system. 

However, CMS recognized that some dedicated clinicians and innovative entrepreneurs around the country have found ways to work with other providers and payers in their local communities to break down barriers and redesign care for the benefit of their patients, themselves, and their communities.  For example, large employers and unions are working together to improve the health of their workers by investing in comprehensive primary care, which is decreasing the overall cost of healthcare. Similarly, some health systems have demonstrated that by keeping people healthy in the first place, providing a coordinated care experience, and striving to get care right every time, they can achieve better outcomes and lower costs for their patients. 

Innovative Partnership Options

CMS noted that there is growing consensus that we must move from a volume-based and fragmented health care system to one more based on achieving value for patients and providers through better care, better health, and lower cost.  The agency’s strategy is to partner with the patients, providers, and other payers to test new payment and care models that support providers in transitioning to that new system. 

To implement that strategy over the past year, the Innovation Center actively sought input from a broad array of stakeholders to identify some of the most promising ways to improve care and lower costs. The Innovation Center met with hundreds of outside innovators, held ten regional meetings with over 4,000 attendees, and received nearly 500 significant proposals for improving health care payment and delivery through the “Innovation Portal” on its website. 

Incorporating this rich feedback, the Innovation Center launched an initial menu of initiatives that engage different types of providers and payers at varying levels of experience with care coordination.  Each initiative holds the promise of reducing health care costs, improving quality, and improving health.  All of these models are tests to help identify which care and payment models deliver greater value for our health system and then to rapidly spread what works.  Some of the new initiatives launched by the Innovation Center this year are described below: 

Improving Patient Safety in Hospitals—The Partnership for Patients. Through the Partnership for Patients initiative, the Innovation Center is working with hospitals, physicians, nurses, other clinicians, consumer groups, and employers to reduce hospital-acquired conditions and preventable hospital readmissions. The program is a public-private partnership with over 7,100 organizations participating as of January 2012—including more than 3,200 hospitals. By joining the Partnership, these organizations have pledged to meet the Partnership’s two goals—to reduce preventable harm in hospitals by 40 percent and readmissions to hospitals within 30 days of discharge by 20 percent in the next three years. 

The Partnership is investing up to $500 million in public-private engagement networks that will help hospitals adopt proven strategies to reduce hospital-acquired conditions in their own facilities and systems. The Partnership’s second component, the Community-based Transitions Program, is a $500 million initiative to reward hospitals, physicians, and others who partner together to keep patients out of the hospital after discharge. Taken together, the Partnership has the potential to save 60,000 lives, reduce millions of preventable injuries and complications in patient care and, by meeting its goals, save our health care system as much as $50 billion over 10 years, according to the CMS Office of the Actuary. 

Encouraging Care Coordination—Pioneer Accountable Care Organizations (ACOs) and Advance Payment Models. Today’s system of paying on a per-service basis often discourages—and even financially penalizes—health care providers for working together to coordinate care and keeping patients healthy and out of the hospital or a nursing home. The Pioneer ACO Model tests the rapid transition to a new payment model where experienced organizations are paid according to their ability to improve the health of their patient population, rather than for each specific service they provide.  As we noted recently, starting on January 1, 2012, 32 organizations began participating in the Pioneer ACO Model to test what can be achieved through highly coordinated care for more than 850,000 Medicare fee-for-service beneficiaries. 

A closely related initiative, the Advanced Payment ACO Model, will test whether pre-paying a portion of future shared savings will allow more physician-based and rural ACOs to participate in the Medicare Shared Savings Program, to improve care for beneficiaries and generate greater Medicare savings more quickly.  In the Shared Savings Program, groups of providers come together as accountable care organizations to improve care coordination for Medicare beneficiaries and can share in savings they generate for Medicare if they meet certain quality improvement metrics. The Innovation Center is still accepting applications for Advanced Payment ACOs, which will start in April and July of this year in concert with the first two enrollment periods for the Shared Savings Program. 

Matching Payment to the Patient Experience—Bundled Payments for Care Improvement.  Patients experience care in episodes, often visiting multiple doctors’ offices, hospitals, and laboratories as they seek treatment and recovery.  But today’s system of paying separately for each service often leads to disjointed care, poor outcomes, and a confusing and frustrating experience for many patients. The Bundled Payments for Care Improvement initiative builds on episode-based payment models pioneered in the private sector by redesigning payment to match the patient experience. 

It offers providers four patient-centered episode of care models to choose from, allowing providers the flexibility to choose the conditions they believe make sense to bundle, decide how best to work together to deliver high-quality, coordinated episodes-of-care, and determine participating providers’ share of payment. Health care organizations will give Medicare a discount off the current cost of care for the episodes covered under the initiative, thereby ensuring Medicare Trust Fund savings. 

Revitalizing Primary Care—The Comprehensive Primary Care Initiative and The Federally Qualified Health Center Advanced Primary Care Practice Demonstration.  Communities with high-performing health systems share a common trait: a strong primary care backbone.  Through various investments such as free Medicare Wellness visits and enhanced reimbursement for primary care as a result of the Affordable Care Act among other initiatives, CMS has made the commitment to strengthen the primary care system.  However, general practitioners still often struggle to find time to spend with each patient due to the increasing demand from patients and lagging supply of primary care practitioners. The Innovation Center has launched multiple initiatives to strengthen primary care by supporting clinicians willing to comprehensively manage and coordinate the care of their patients, particularly those with serious or chronic diseases with the goal of reinvigorating the primary care system. 

The Comprehensive Primary Care Initiative is a collaboration between public and private payers and primary care practices to support patient-centered primary care in communities across the country.  Primary care practices will receive new, public, and private funding for primary care functions not currently supported by fee-for-service (FFS) payments, including an opportunity to share net savings generated through this program.  In return, participating practices will agree to give patients 24-hour access to care, create personalized care plans for their patients, and coordinate with other providers to ensure patients are getting healthy and staying well. 

The Federally Qualified Health Center Advanced Primary Care Practice Demonstration tests whether advanced primary care practice at community health centers can improve care and patients’ health, and reduce costs.  In October 2011, 500 community health centers in 44 States were selected to receive approximately $42 million over three years to reorganize as Patient Centered Medical Homes and improve the coordination and quality of care they give to people with Medicare and other patients. 

New Models of Care and Payment to Support Medicare-Medicaid Enrollees.  The Innovation Center is committed to working with other purchasers of health care—both private and public—to ensure care is improving across patient populations. Working with the CMS Medicare-Medicaid Coordination Office, the Innovation Center is empowering States to test new payment and service delivery models that will help improve quality of care, and reduce the costs of care, for the nearly nine million people enrolled in both the Medicare and Medicaid programs. These Medicare-Medicaid enrollees account for 21 percent of Medicare beneficiaries but 36 percent of Medicare spending, and 15 percent of Medicaid recipients but 39 percent of Medicaid cost. 

To date, 15 States have been awarded design contracts of up to $1 million to develop new ways to meet the needs of this complex population.  Additionally, the Innovation Center and the Coordination Office have offered States the opportunity to move beyond the design phase and test new models of payment and care coordination in their States. Thirty-eight States and the District of Columbia have expressed interest in working with CMS. 

Engaging Local Innovators—Health Care Innovation Challenge.  The Innovation Center recognizes that many of the best ideas will come from physicians, other health care providers, and innovative thinkers in communities across the country. Announced in November 2011, the Health Care Innovation Challenge award up to $1 billion in grants to applicants who put into practice the most compelling new ideas for rapidly delivering better health, improved care and lower costs to people enrolled in Medicare, Medicaid and CHIP, particularly those with the highest health care needs. The initiative is also looking for new models of workforce development and deployment to support the transition toward high-value care. Awards will range from $1 million to $30 million for a three-year period. 

Supporting Individuals to Help Transform Health Care—Innovation Advisors Program.  Crucial to the efforts of transforming the health care system is supporting individuals who can test and refine new models to drive delivery system reform. The Innovation Center seeks to deepen the capacity for transformation by creating a network of experts in improving the delivery system for Medicare, Medicaid, and CHIP beneficiaries. The Innovation Advisors will: 

• Utilize their knowledge and skills in their home organizations or communities in pursuit of the three-part aim of improving health, improving care, and lowering costs through continuous improvement;
• Work with other local organizations or groups in driving delivery system reform;
• Develop new ideas or innovations for possible testing of diffusion by the Innovation Center; and
• Build durable skill in system improvement throughout their area or region. 

In December 2011, the CMS Innovation Center selected 73 individuals out of 920 applications through a competitive process to participate in the initiative. The first group of Innovation Advisors is starting their six-month intensive orientation and applied research period in January 2012. 

Discussion 

The Innovation Center is not only testing new models of care delivery and payment, it is also changing the way CMS partners with providers and conducts demonstration projects.  Learning from previous CMS projects and feedback from the health care community, the Innovation Center is committed to providing participants more timely and useful data necessary to improve and coordinate care, rapid-cycle evaluations on their performance, and a new array of opportunities to learn from each other as they innovate. 

The Innovation Center is also piloting new ways to spread lessons learned, so that success is not just a report—but tangible to providers and patients across the country. That’s why every Innovation Center initiative includes a “diffusion” element that matches participating organizations with experts in the field and peer organizations to discuss successes and learn from mistakes. Providers will have tools and resources available to them and will be expected to help diffuse best practices, lessons learned, and improved care strategies so that innovation is not limited to a demonstration site or only one particular community.

 

Patient Centered Outcomes Research Institutes National Priorities for Research and Research Agenda – Laying a Foundation for Comparative Effectiveness Research

One of the bigger pieces of the Patient Protection and Affordable Care Act (PPACA) was the idea to lower healthcare costs through comparative effectiveness research (CER).  To achieve this goal, PPACA (Section 6301 and Section 10602, Public Law 111-148), created the Patient-Centered Outcomes Research Institute (PCORI), an independent, non-profit health research organization.  PCORI will have an estimated $3 billion over the next decade to fund CER. 

PCORI was created to conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions. PCORI’s research is intended to give patients a better understanding of the prevention, treatment and care options available, and the science that supports those options.  Its mission is to fund research that offers patients and caregivers the information they need to make important healthcare decisions.  PCORI focuses on CER that compares options for preventing disease and providing treatment and care by: 

1.  Identifying national priorities for research.
2.  Creating a research agenda based on identified priorities.
3. Funding research consistent with these priorities and agenda.
4. Providing patients and their caregivers with useful research information. 

Consequently, PCORI recently issued its draft list of National Priorities for Research and Research Agenda.   PCORI will provide a 53-day public comment period on its first National Priorities for Research and Research Agenda. The comment period begins on Monday, January 23, 2012 and concludes at 11:59 p.m. ET on Thursday, March 15, 2012. 

Responses received through www.pcori.org will be displayed for public view on the website.  Click here to fill out the online form to provide comments on the draft priorities and research agenda.  Public comments can also be mailed to:

Patient-Centered Outcomes Research Institute
Public Comments
1701 Pennsylvania Ave. NW,
Suite 300
Washington, DC 20006 

PCORI will also hold a National Patient and Stakeholder Dialogue on Monday, February 27, 2012, from 10:00 a.m.-5:00 p.m. EST, at the National Press Club in Washington, D.C.  The event will dedicate three and a half hours to receiving public comment, and include presentations by PCORI and a roundtable discussion involving patient advocates, clinicians and others from the health care community. Individuals may attend in person or remotely via webcast and teleconference. 

PCORI will conduct additional forums in cities across the United States, which will include focus groups, involving patients, caregivers and clinicians, to obtain and incorporate more public input and feedback on the draft national priorities for research and research agenda.   

After incorporating public input, the first National Priorities for Research and Research Agenda will be adopted by the PCORI Board of Governors before primary research funding announcements are issued.   A report will be published on www.pcori.org that summarizes the input received with an explanation of how the input led to any changes in the draft priorities and agenda. The revised National Priorities for Research and Research Agenda will be adopted by PCORI’s Board of Governors during a special public meeting in April. 

Subsequent priorities and agendas will be achieved through a “due diligence” process that includes dialogue with a broad range of stakeholders, input through a formal public comment process and additional forums, including focus groups, PCORI presentations to various audiences, outreach through PCORI’s website and other vehicles, advisory panels and stakeholder meetings. 

Nine different Priority Setting Organizations contributed to the formulation of PCORI’s draft research priorities/agenda, including AHRQ, IOM, National Quality Forum; and HHS; many of which received significant public input.  The priorities and agenda will inform the development of PCORI’s first primary research funding announcements, which will be made in May.  "These priorities and agenda give a framework to and identify the broad questions that must be addressed so that patients can make better and more personalized decisions in partnership with their clinicians across all areas of health," said PCORI Executive Director Joe Selby, MD, MPH. 

The institute plans to announce an initial round of about 40 grants, drawn from 856 applications, in May. A second round of grants, for projects linked to the research agenda, will be issued in December, he said. PCORI is a learning organization.  Once the initial priorities and agenda are adopted, PCORI will work closely and continuously with all stakeholders to refine the agenda and to identify specific areas and questions where PCORI’s research can have the greatest impact. 

This process will include analysis of PCORI’s Pilot Projects Grants Program and the applications in response to PCORI’s first primary research funding announcements. Any future revisions to the priorities and research agenda will include a formal public comment process and additional forums. 

However, Robert Dubois, chief science officer for the National Pharmaceutical Council noted that, if PCORI gets “1,000 grants submitted on 400 different topics, who is going to make the decision on, say, whether they should fund a project on low back pain, but not one on multiple sclerosis?”  Dubois says the thematic approach taken by PCORI will lend itself to one of the institutes’ goals – creating a self-sustaining and robust research environment.  But he says a portion of the funding should be directed “toward actual, unanswered clinical questions.”

Additional challenges facing such research also include political controversy and the difficulty of translating research findings into changes in medical practice. Republican opponents of the law say the institute will lead to government-directed rationing as it judges treatments. Representative Thaddeus McCotter, a Michigan Republican, has introduced legislation to eliminate the agency.

Over time, more money should be shifted to comparing treatments, said U.S. Representative Kurt Schrader, an Oregon Democrat who wrote legislation to create a comparative effectiveness research agency in 2009. The provision of the health law that created Selby’s institute echoes Schrader’s bill, which had some Republican support at the time. The research plan is “a little broader in scope” than he envisioned when he wrote his bill, Schrader said in a telephone interview. “The worry I would have is they are not going to get down to specific projects.”

Ten CER priorities areas from existing literature were identified. The first five priority areas (prevention, acute care, care coordination, chronic disease care, and palliative care) encompass the complete health cycle from staying healthy to treating conditions to reducing pain and suffering. The second five (patient engagement, safety, overuse, information technology (IT) infrastructure, and the impact of new technology) include issues that are systemic in nature to healthcare. All but one of the 10 priorities (impact of new technology) appear in at least three of the seven processes. Prevention appears in all seven and patient engagement in six. 

Research List and Agenda 

PCORI prioritized five research areas for patient-centered comparative clinical effectiveness research: 

Comparative Assessments of Prevention, Diagnosis, and Treatment Options. The research goal is to determine which option(s) work best for distinct populations with specific health problems. Comparing the effectiveness and safety of alternative prevention, diagnosis, and treatment options to see which ones work best for different people with a particular health problem.  40% of funding. 

Improving Healthcare Systems. Focuses on ways to improve healthcare services, such as the coordination of care for patients with multiple chronic conditions. Comparing health system-level approaches to improving access, supporting patient self-care, innovative use of health information technology, coordinating care for complex conditions, and deploying workforce effectively.  20% of funding. 

Communication and Dissemination. Looks at ways to provide information to patients so that they, in turn, can make informed healthcare decisions with clinicians.  Comparing approaches to providing comparative effectiveness research information and supporting shared decision-making between patients and their providers.  10% of funding. 

Addressing Disparities. Assures that research addresses the healthcare needs of all patient populations. This is needed as treatments may not work equally well for everyone.  Identifying potential differences in prevention, diagnosis or treatment effectiveness, or preferred clinical outcomes across patient populations and the healthcare required to achieve best outcomes in each population.  10% of funding. 

Accelerating Patient-Centered and Methodological Research. Includes patients and caregivers in the design of research that is quick, safe, and efficient.  Improving the nation’s capacity to conduct patient-centered outcomes research, by building data infrastructure, improving analytic methods, and training researchers, patients and other stakeholders to participate in this research. 20% of funding. 

PCORI’s Proposed Research Agenda

Comparisons of Prevention, Diagnosis, and Treatment Options. Research should focus on 1) clinical options with emphasis on patient preferences and decision-making, 2) biological, clinical, social, economic, and geographic factors that may affect patient outcomes.

Improving Healthcare Systems. Research should focus on 1) ways to improve access to care, receipt of care, coordination of care, self-care, and decision-making, 2) use of non-physician healthcare providers, such as nurses and physician assistants, and the impact on patient outcomes, 3) system-level changes affecting all populations, diseases, and health conditions.

Communication and Dissemination. Research should focus on 1) strategies to improve patient and clinician knowledge about prevention, diagnosis and treatment options, 2) methods to increase patient participation in care and decision-making and the impact on health outcomes, 3) communication tools that enhance decision-making and achieve desired outcomes, 4) ways to use electronic data (“e-health records”) to support decision-making, 5) best practices for sharing research results.

Addressing Disparities. Research should focus on 1) ways to reduce disparities in health outcomes, 2) benefits and risks of healthcare options across populations, 3) strategies to address healthcare barriers that can affect patient preferences and outcomes. 

Accelerating Patient-Centered and Methodological Research. Research should focus on 1) ways to improve the quality and usefulness of clinical data in follow-up studies, 2) methods to combine and analyze clinical data that follow patients over time, 3) use of registries and clinical data networks to support research about patient-centered outcomes, including rare diseases, 4) strategies to train researchers and enable patients and caregivers to participate in patient-centered outcomes research. 

Establishing the Scope of the Research Agenda 

By design, the agenda did not cover all the activities that PCORI sees as part of its mission. For instance, it does not describe how PCORI intends to invest in efforts to maintain active engagement with patients and all other stakeholder groups over time. It does not describe how PCORI, in partnership with the Agency for Healthcare Research and Quality (AHRQ) and the U.S. Department of Health and Human Services (HHS), will invest in efforts to disseminate research findings or build capacity for patient-centered outcomes research through training programs or infrastructure development. 

This document is the foundation upon which the first set of PCORI funding announcements will be developed. Taken together, the series of funding announcements that PCORI will produce, beginning in mid-2012, will create a portfolio of research that builds from this agenda and is consistent with Congress’ intended purpose. 

The Research Agenda by design did not specify a restricted set of conditions or treatments that PCORI will study. Although some previous prioritization efforts have focused on specific high-prevalence or high-cost conditions, PCORI’s priorities and agenda do not place such limits on the scope of research that will be supported. 

Rather than focusing on specific conditions or treatments, PCORI’s initial approach specifies a set of questions and topics PCORI believes are most in need of attention – across a range of conditions and treatments. Within any topical area, studies may focus on specific diseases, conditions and interventions, or they may be cross-cutting, including broader study populations or examining interventions or other questions that apply across multiple diseases and conditions. 

This approach recognizes the likelihood that as PCORI begins its funding program, researchers partnered with stakeholders are well-positioned to present a range of compelling questions. Ultimately, decisions about funding will depend on the quality of applications – with special attention to the likelihood that the research may lead to improvement in patient outcomes, as determined by alignment with PCORI criteria. 

Targeted opportunities may focus on specific conditions or diseases, treatment modalities, outcomes or on themes that are cross-cutting. PCORI will work diligently to avoid redundancy, coordinate with other research entities, and will seek opportunities for collaboration with these entities. 

The portfolio of research supported by PCORI will be balanced based upon the characteristics of study populations such as age, gender, race/ethnicity, socio-economic status, and disease or conditions. PCORI has a commitment to include studies of patients with rare conditions as well as those with more common illnesses. Especially needed are studies to improve care and outcomes for patients faced with multiple conditions. All funded studies will have a strong orientation to the patient perspective and all will have patients involved in the development of the research, its governance and oversight, and its dissemination strategy. 

The Research Agenda does not specify preferred study designs or analytic approaches.  Instead, it recognizes that various PCOR questions might be investigated by a variety of scientifically-valid methods and approaches. In accordance with Act (Section “(C) FUNCTIONS”), research focused on developing new methods and/or improving the science and methods of patient-centered outcomes research (PCOR) is specifically included in the Agenda. PCORI’s Methodology Committee is currently developing standards for the design and conduct of different types of PCOR. These standards will be disseminated and used in the evaluation of PCORI applications. 

Discussion 

Overall the selection of topics by PCORI shows that they understand that in order to successfully transform the health care system, one has to start at the foundation and ask the big questions.  Much of the focus of PCORI support and criticisms has been focused on PCORI studying treatments, but if the system is inefficient, then studying treatments may not necessarily be the best use of public funds.  

If one really gives thought to the problem subjects such as compliance, socio economic access to therapies and social customs such as men delaying seeing a physician play a much larger role in the outcomes of patients than the treatments themselves.

State of the Union, Bio Pharmaceutical Jobs and Innovation

Tonight, President Obama is set to make his State of the Union Address.  Many have speculated that with the United States Supreme Court set to determine the constitutionality of the Patient Protection and Affordable Care Act (PPACA) in late March, Obama should use his Address to defend health care reform and to highlight some of the benefits that have already been achieved.  Consequently, a recent article from the National Journal discussed a few of the issues dealing with health care reform that President Obama should address. 

First, Doug Peddicord Executive Director of the Association of Clinical Research Organizations, noted that the President “should absolutely defend this accomplishment (health care reform) in his speech and use this chance to make a pitch in front of the SCOTUS.”  He said that the President should remind people that because of PPACA, “no one will be rejected for health insurance, even if they have, what the insurance industry liked to call ‘pre-existing conditions.’”   

He noted how health care reform is “making healthcare more accessible and affordable through insurance exchanges and accountable care organizations (ACOs) that ensure physicians are working together to provide patients quality care and not worrying about how many tests they should run.”  Peddicord also noted how PPACA closes the so-called ‘donut hole’ under Medicare Part D to lower the cost of prescriptions for seniors. 

Despite these important initiatives, Peddicord recognized that the ACA is not perfect.  Specfically, he asserted that, he would “work with anyone, Republican or Democrat, to make sure this landmark legislation doesn’t stifle job creation and innovation.”  In particular, he noted that Section 6002, better known as the Physician Payment Sunshine Act, deserves specific scrutiny.” 

He noted how the Sunshine Act was “not part of my original health care reform proposal and, ironically, it was slipped into the health reform bill without full and thoughtful consideration.”  He quoted the proposed regulations that were issued a few weeks ago to demonstrate the ridiculousness of the legislation:

“For example, if once during the calendar year, a sales representative from an applicable manufacturer brings $25 worth of bagels and coffee to a solo physician's office for a morning meeting, regardless of the number of individuals who partake, the per covered recipient cost is $25. Since this falls above the $10 minimum threshold for reporting a payment or other transfer of value…this meal must be reported. However, if the practice group includes five physicians, then the per-covered recipient cost is $5 (regardless of whether all five physicians actually consumed any of the food provided), so the payment would not need to be reported.” 

Based on this provision and his other analysis, Peddicord correctly recognized that the Sunshine Act “does nothing to increase access to care or improve outcomes – two things that inspired me to work so hard on health reform. Rather, it’s indicative of the government overreach that has left so many Americans frustrated. We should not – and, if I have anything to do with it, we will not – have government bureaucrats counting bagels!” 

In addition to Peddicord’s comments, John Castellani President and CEO of the Pharmaceutical Researchers and Manucatrers of America (PhRMA) offered his advice about what President Obama should speak about in his State of the Union Speech.  He maintained that Obama should talk about jobs and the economy. 

Castellani noted that, “the biopharmaceutical sector is particularly interested” in what Obama will propose to create more jobs and fix the economy, since innovative industries such as the life sciences industry are job-creators and tremendous contributors to our nation’s economic growth. 

He noted how, “innovation and economic growth go hand-in-hand.”  For this reason, it is his hope that the President also spends significant time talking about the value of innovation.  The PhRMA President said the companies “are very interested in hearing specific policy proposals on how we can ensure that America remains the world-leader in innovation, particularly medical innovation.”  

He asserted that, President Obama should use this “opportunity to propose ideas that will foster medical innovation in the long-term rather than focusing on short-term policies that do not encourage, and in some cases may detract from, future medical progress.”  Additionally, he maintained that , “at a time when our economy is still fragile, it is essential that government and industry work together to help create jobs and improve the economic outlook – and a sound innovation agenda is critical to meet these important goals.” 

Accordingly, he laid out “Four inter-connected policy pillars that he believes are important to sustain the economic and scientific eco-system, advance medical innovation and protect U.S.-based biopharmaceutical jobs are the following: 

1. A regulatory framework to spur innovation – meaning a predictable, consistent and robust regulatory system supported by the best, experienced regulators using the latest, best science;
2. A thriving public/private scientific ecosystem – meaning better collaboration and cooperation;
3. A business environment that embraces biomedical progress – meaning an understanding that the science, while potentially amazing, is difficult, the investment costs high and the rewards are uncertain;
4. A healthcare system that better recognizes the value of medicines – meaning innovative medicines contribute both to improving patient health and can help control short- and long-term healthcare costs. 

Ultimately, as we all watch the State of the Union speech tonight, hundreds of millions of Americans will begin to see and wonder how the President, almost two years later, will defend his health care reform bill and how he will ensure that Americans realize the goals and promises the landmark legislation hoped to achieve. 

HHS Publishes Medicaid Quality Measures

Recently, the Department of Health and Human Services (HHS) published a notice finalizing the initial core set of 26 care quality standards for Medicaid adult beneficiaries, as mandated by the Section 2701 of the Patient Protection and Affordable Care Act (PPACA), which added new section 1139B to the Social Security Act (the Act). 

The standards, which states can use to report on care quality, focus on six key clinical areas: prevention and health promotion, management of acute conditions, management of chronic conditions, family experiences of care, care coordination, and availability of care.  Another provision of the health care reform law requires HHS to create a uniform reporting format for these quality measures by Jan. 1, 2013. 

Background 

Section 2701 directs the Secretary of HHS to identify and publish for public comment a recommended initial core set of health care quality measures for Medicaid-eligible adults.  Additionally, the statute requires the initial core set recommendation to consist of existing adult health care quality measures in use under public and privately sponsored health care coverage arrangements or that are part of reporting systems that measure both the presence and duration of health insurance coverage over time and that may be applicable to Medicaid-eligible adults.  

By January 1, 2012, the Act requires the Secretary to Establish a Medicaid Quality Measurement Program to fund development, testing, and validation of emerging and innovative evidence-based measures. 

By January 1, 2013, the Act requires the Secretary to Develop a standardized reporting format for the core set of adult quality measures and procedures to encourage voluntary reporting by the States. 

By January 1, 2014 the Act requires the Secretary to Annually publish recommended changes to the initial core set that shall reflect the results of the testing, validation, and consensus process for the development of adult health quality measures. The Secretary must also include in the report to Congress the quality of health care of children in Medicaid and the Children’s Health Insurance Program (CHIP) similar information for adult health quality with respect to measures. This report must be published every 3 years thereafter in accordance with the statute. 

By September 30, 2013, the Secretary must Collect, analyze, and make publicly available the information reported by the States. 

HHS noted that, “States that chose to collect the initial core set will be better positioned to measure their performance and develop action plans to achieve the three part aims of better care, healthier people, and affordable care as identified in HHS’ National Strategy for Quality Improvement in Health Care. 

Medicaid Quality Measures 

The initial core set of quality measures for voluntary annual reporting by States has been determined based on recommendations from the Agency for Healthcare Research and Quality’s (AHRQ) Subcommittee to the National Advisory Council for Healthcare Research and Quality, as well as public comments, before being finalized by the Secretary. 

Over the next year, CMS will phase in components of the Medicaid Adult Quality Measures Program that will help to further identify measurement gap areas and begin testing the collection of some of the initial core measures. The Medicaid Adult Quality Measures Program will focus on developing and refining measures, where needed, so that future updates to the initial core set can meet a wider range of States’ health care quality measurement needs. 

By September 2012, CMS will release technical specifications as a resource for States that seek to voluntarily collect and report the initial core set of health care quality measures for Medicaid-eligible adults. Additionally, as required in statute, by January 1, 2013, CMS will issue guidance for submitting the initial core set to CMS in a standardized format. Lastly, the Secretary will launch a Technical Assistance and Analytic Support Program to help States collect, report, and use the voluntary core set of adult measures. 

To draft the measures, a subcommittee was broken into four groups, which represent the main dimensions of healthcare related to adults in Medicaid: 

• Adult health
• Maternal/reproductive health
• Complex health care needs
• Mental Health and Substance Use

A total of 35 measures received a majority vote from the full Subcommittee. The measures voted upon by the Subcommittee included recommendations from each workgroup that were based on the original 51 measures as well as new measures identified through public comment that were brought forth by each workgroup. The Adult Health work group recommended eleven measures for inclusion in the initial core set. The Maternal/Reproductive Health work group recommended six measures. The

Complex Health Care Needs work group recommended nine measures and the Mental Health and Substance Use recommended nine measures.

In the final round of voting, 24 measures ultimately received a majority vote by Subcommittee members. In order to ensure priority populations were fully represented and that the goals of planned initiatives could be monitored, we then added two measures originally proposed for the draft core set (PC-01 Elective Delivery and Timely Transmission of Transition Record). The Subcommittee deferred the decision to CMS and AHRQ on which of the two HIV-related measures under consideration (HIV/AIDS Screening: Members at High Risk of HIV/AIDS and HIV/AIDS: Medical Visits) would be included in the core set. Upon discussion with colleagues from the Centers for Disease Control and Prevention and the Health Resources and Services Administration, the decision was made to include the measure originally proposed for the core set, HIV/AIDS: Medical Visit.

A total of 26 are included in the initial core set including:

-          Breast cancer screening

-          Cervical cancer screening

-          Flu shots for adults ages 50-64

-          Controlling high blood pressure

-          Adherence to antipsychotics

Overall the list of quality measures is an step towards better quality in Medicaid patients this is a fairly truncated list for the most part attached to HEDIS measures.  It will be interesting to see how they are applied and implemented in the coming months.

Patient Centered Outcomes Research Institute: Comparing Systems of Care

One of the bigger pieces of the Patient Protection and Affordable Care Act (PPACA) was the idea to lower healthcare costs through comparative effectiveness research.  To achieve this goal, PPACA (Section 6301 and Section 10602, Public Law 111-148), created the Patient-Centered Outcomes Research Institute (PCORI). 

PCORI was created to conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions. PCORI’s research is intended to give patients a better understanding of the prevention, treatment and care options available, and the science that supports those options. 

Research commissioned by PCORI aims to produce information patients and their health care providers can trust.  Patients will play a major role in PCORI’s work by telling PCORI what health care outcomes they value.  PCORI will make sure the results of its research are provided to patients and clinicians in ways that are responsive to their needs and interests and easy to understand.  PCORI is an information resource, not a care provider.  In releasing its research findings, PCORI will ensure that its research is not construed as mandates for practice guidelines or coverage recommendations. 

Patient-centered outcomes research is designed to inform health care decisions by providing evidence on the effectiveness, benefits and harms of different treatment options for different patients. The evidence is generated from studies that compare drugs, medical devices, tests, surgeries or ways to deliver health care. This research recognizes that the patient’s voice should be heard in the health care decision making process. PCORI’s research will be responsive to the preferences, values and experiences of patients in making health care decisions and the impact diseases and conditions can have on daily life.

 According to Anne C. Beal, M.D., M.P.H., chief operating officer of PCORI, the goal of the institute is “to provide easy-to-understand information to patients so they can make the most informed health care decisions” and to "help people decide what's best for them in getting their desired health outcome.”

The quasi-governmental institute is partially funded through a $1-per-enrollee fee on certain insurers; the fee increases to $2 per person in 2013. It is enforced by the IRS. The new organization and its financing recently drew an attack from the Senate Republican Policy Committee.  According to the committee's blog, this fee "represents a complete turnaround from an Administration that campaigned against taxing health benefits."

But Beal defends the levy, saying it would She said more progressive insurers see this fee as an investment into PCORI's mission. "[Insurers] are interested in paying for the right care at the right time for the right patient--it’s not just about writing a check, but it’s also about making sure people get the best they can out of the health care system." 

Beal, the No. 2 at the new institute under Executive Director Joe Selby, comes to PCORI after leading the Aetna Foundation, the philanthropic arm of Aetna Inc. There, she emphasized three areas: preventing obesity, racial and ethnic health care equity, and integrated care. Beal says she’ll carry that experience into her new role: "Health equity is going to be one of the priority areas within [PCORI’s] research agenda." 

In December, 856 project proposals flooded the PCORI office vying for funds. By March, the burgeoning staff at PCORI will have picked approximately 40 projects to fund with $26 million in grants over two years. Those will help set the tone for PCORI’s standards of research. Consequently, Kaiser recently interviewed Beal to discuss the aim of PCORI and how the institute will lessen health disparities. 

Beal explained that PCORI will fund research that will show patients what options they have for treatment and what the “outcomes” will be for a particular procedure or treatment.  For example, whether one procedure has less pain or leads to longer life, or means more time off from work. This means PCORI will be able to tell patients “what the outcome is in terms of pain, what the outcome is in terms of days off from work, what the outcome is in terms of longevity. 

She also explained how there is a patient representative on the Board and that for every granted reviewed by PCORI, there will be “at least three patient representatives to make sure that not only is [the proposal] an interesting question, but is it a meaningful question to the patient.” 

In discussing ways PCORI will address health disparities, obesity and health care delivery systems, Beal noted that “one of the most exciting promises of PCORI is … comparing systems of care.” She noted that “being able to look at the role of the health system in achieving high quality care is important, as well as being able to do it in underserved settings, or large minority-serving settings.”  Beal explained that PCORI has different priority areas and health equities are certainly one of them. 

Ultimately, Beal noted how PCORI is funded through 2019 and that in 10 years she hopes that the institute will improve patient care and patient experience.  She envisons PCORI becoming “a go-to place for patients and … even for their providers.” She also noted PCORI wants to be innovative, “whether it’s creating new apps, or thinking about a webpage or a YouTube channel, nothing is off the table.”  She noted that publishing PCORI’s work in a journal is “not the way to get to patients,” and instead, the institute must think about how to make PCORI’s work relevant to patients.

 

CMS Selects 32 Pioneer Accountable Care Organizations

The Centers for Medicare & Medicaid Services (CMS) announced the final list of 32 Pioneer Accountable Care Organizations (ACO) to start in the new year. CMS estimates that care coordination between hospitals, physicians and other caregivers under the Pioneer ACO model could save Medicare up to $1.1 billion. 

CMS noted that the Pioneer ACO Model is a CMS Innovation Center initiative designed to support organizations with experience operating as ACOs or in similar arrangements in providing more coordinated care to beneficiaries at a lower cost to Medicare.  The Pioneer ACO Model is also designed to support organizations with a new payment model, allowing them to provide more coordinated care to beneficiaries at a lower cost to Medicare.  The Pioneer ACO Model will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients, and reducing Medicare costs. 

The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment. The Center also offers technical support to providers to improve the coordination of care and share lessons learned and best practices throughout the health care system.  It is committed to refining the Medicare, Medicaid and CHIP programs to deliver better care for individuals, better health for populations, and lower growth in expenditures. 

The Pioneer ACO Model was designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements.  The selected organizations were chosen for their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA).  These organizations were selected through an open and competitive process from a large applicant pool that included many qualified organizations. 

According to a press release from the Department of Health and Human Services (HHS), the Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years. 

Under this initiative, Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs. 

Among the list are Banner Health Network in Arizona, Dartmouth-Hitchcock ACO in New Hampshire and Eastern Vermont, Monarch Healthcare in Orange County, Calif., as well as Beth Israel Deaconess Physician Organization, Partners Healthcare and Steward Health Care System, all in Massachusetts.  CMS chose 32 out of a pool of competitive applicants through a lengthy and open process, according to CMS. 

Selected Pioneer ACOs include physician-led organizations and health systems, urban and rural organizations, and organizations in various geographic regions of the country, representing 18 States and the opportunity to improve care for about 860,000 Medicare beneficiaries. 

"Pioneer ACOs are leaders in our work to provide better care and reduce health care costs," said Health & Human Services Secretary Kathleen Sebelius. "We are excited that so many innovative systems are participating in this exciting initiative - and there are many other ways that health care providers can get involved and help improve care for patients." 

The Medicare Shared Savings Program and the Advance Payment ACO Model, both announced in October 2011, are also ACO options for providers.  The Medicare Shared Savings Program, which was established by the Affordable Care Act, provides incentives for ACOs that meet standards for quality performance and reduce cost while putting patients first.  The Advance Payment ACO Model will provide additional support to physician-owned and rural providers participating in the Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.  More information about the full menu of options for providers and how to apply to participate is available here.  

As the forerunner to the Medicare Shared Savings Program, the Pioneer ACO model will allow those organizations and individual providers that already are experienced in coordinating care to reap the benefits earlier and more of them. These groups will move more rapidly from a Shared Savings model to a population-based payment model, according to the press release. 

The first performance period of the Pioneer ACO model will start Jan. 1, 2012.  In the first two performance years, the Pioneer Model tests a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO. 

In year three of the program, those Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model. Population-based payment is a per-beneficiary per month payment amount intended to replace some or all of the ACO’s fee-for-service (FFS) payments with a prospective monthly payment.  

The Pioneer ACO Model is distinct from the Shared Savings Program. The Shared Savings Program fulfills a statutory obligation set forth by the Affordable Care Act to establish a permanent program that develops a pathway forward for groups of health care providers to become ACO’s, while the Pioneer ACO Model is an initiative designed to test the effectiveness of a particular model of payment. Final rules for the Shared Savings Program were published in November 2011. 

The Pioneer ACO Model differs from the Medicare Shared Savings Program in the following ways, among others: 

• The first two years of the Pioneer ACO Model are a shared savings payment arrangement with higher levels of savings and risk than in the Shared Savings Program.
• Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population-based payment arrangement and full risk arrangements that can continue through optional years four and five.
• Pioneer ACOs are required to develop similar outcomes-based payment arrangements with other payers by the end of the second year, and fully commit their business and care models to offering seamless, high quality care. 

Additionally, during the application process, organizations were invited to propose alternative payment arrangements. CMS established two alternatives to the core payment arrangement discussed above based on this input. Both of these alternatives follow a shared savings model in years one and two, and provide an option for a partial population based payment that removes limits on rewards and risks in year three. These arrangements will allow Pioneer ACOs more flexibility in the speed at which they assume financial risk.  Under the Pioneer ACO Model, CMS will prospectively align beneficiaries to ACOs, allowing care providers to know at the beginning of a performance period for which patients’ cost and quality they will be held accountable. 

"We know that health care providers are at different stages in their work to improve care and reduce costs," said Marilyn Tavenner, acting Administrator of CMS. "That's why we've developed a menu of options for Medicare to meet doctors, hospitals, and other healthcare providers where they are, and begin the conversation of how to enhance the care they are offering to people with Medicare." 

In addition, under the Pioneer ACO Model, beneficiaries will maintain the full benefits available under traditional Medicare (fee-for-service), as well as the right to receive services from any healthcare provider accepting Medicare patients. 

Moreover, to ensure beneficiaries receive high quality care and enjoy a positive experience, CMS has established robust quality measures that will be used to monitor the quality of care provided and beneficiary satisfaction. These measures mirror those in the Shared Savings Program. 

To be eligible to participate in the Pioneer ACO Model, organizations are required to be providers or suppliers of services structured as: 

1)    ACO professionals in group practice arrangements;

2)    Networks of individual practices of ACO professionals;

3)    Partnerships or joint venture arrangements between hospitals and ACO professionals;

4)    Hospitals employing ACO professionals; or

5)    Federally Qualified Health Centers (FQHC).   

Health Information Technology 

By the end of 2012, Pioneer ACOs must attest and CMS will confirm that at least 50% of the ACO’s primary care providers have met requirements for meaningful use of certified electronic health records (EHR) for receipt of payments through the Medicare and Medicaid EHR Incentive Programs. 

Minimum Number of Aligned Beneficiaries  

Beneficiaries are aligned to ACOs through the healthcare providers that choose to participate. CMS will review where a beneficiary has been receiving the plurality of his/her primary care services, and use that information to establish which beneficiaries are aligned to a participating provider. If a primary care provider chooses to participate in an ACO, the beneficiaries aligned to him or her through this process would be aligned to the ACO. If a beneficiary receives less than 10 percent of their care from a primary care provider, CMS will review where a beneficiary has been receiving the majority of his/her specialty services to determine alignment. 

Participants generally must have a minimum of 15,000 aligned beneficiaries unless located in a rural area, in which case are to have a minimum of 5,000 beneficiaries. In order to be aligned, beneficiaries must be enrolled in original, fee for service Part A and B Medicare. They cannot be participating in Medicare Advantage plans. 

Participation of Other Payers  

The Innovation Center believes that Pioneer ACOs will be more effective in producing improvements in the three-part aim of better care for individuals, better health for populations, and slower growth in expenditures if they fully commit to a business model based on financial and performance accountability. The Innovation Center therefore requires Pioneer ACOs to enter similar contracts with other payers (such as insurers, employer health plans, and Medicaid) such that more than 50 percent of the ACO’s revenues will be derived from such arrangements by the end of the second Performance Period.