HealthCare Roundtable e-News – March 17, 2017

House Republicans Revise Health Care Proposal

House Republicans have modified their health care proposal amid heavy intraparty opposition to the original legislation, but it is still unclear if supporters can put together a majority of votes in the chamber.

GOP lawmakers unveiled their plan to replace the Patient Protection and Affordable Care Act (ACA) on March 6. The combination of, among other things, dropping subsidies for consumers in the state-level insurance exchanges in favor of less generous tax credits to be used in the individual market, repealing the expansion of Medicaid and capping federal Medicaid spending, and exchanging the individual mandate and employer mandate for a 30 percent penalty on the premiums of people who fail to maintain coverage would, the Congressional Budget Office and the Joint Committee on Taxation projected, increase the number of uninsured people by 14 million within a year and by 24 million within a decade.

Those estimates have made some moderate Republicans wary of supporting the “American Health Care Act” (H.R. 1628). Conservatives, meanwhile, have objected that the legislation does not go far enough in scaling back the federal government’s involvement in health care and have derided the GOP plan as “Obamacare Lite.”

The changes announced by House Republican leaders offer some things for both moderates and conservatives. The revisions would, among other things:

  • Repeal certain ACA taxes this year, instead of in 2018.
  • Lower the threshold for tax deductions of medical expenses to 5.8 percent of annual income. This has been interpreted by some as a signal to the Senate that House Republicans would accept an increase in the amount of tax credits provided to older people to help them buy health insurance, should senators choose to make such a change. (Premiums for older beneficiaries would likely increase under the GOP plan, since it would allow insurers to charge them five times the amount they charge younger people. The ACA limits the ratio to 3:1.)
  • Allow states to impose work requirements on Medicaid beneficiaries.
  • Permit states to receive Medicaid funding as a lump sum block grant rather than on a per capita basis, as the original bill required.

The House is expected to vote on the legislation on Thursday. Assuming that all Democrats vote against the bill, which is a near certainty, Republicans can lose no more than 21 of their own votes and still pass it. CNN reported that 19 House Republicans have said they will oppose it, and seven more are leaning in that direction.

One of the Republican opponents of the bill is Rep. Justin Amash of Michigan, a libertarian lawmaker who frequently breaks with the party and has been critical of President Donald Trump. Amash tweeted that he “can’t recall a more universally detested piece of legislation than this GOP health care bill,” and he was unmoved by the revisions: “They haven’t changed the bill’s general framework. They don’t have the votes to pass it. They have seriously miscalculated.”

While there are no revised projections from the CBO, the changes are probably not large enough to make a major dent in the earlier estimates. The senior vice president of the Kaiser Family Foundation tweeted that the legislative revisions “are unlikely to change by much CBO’s estimate of 24 million more people uninsured.”

The legislation is structured so that it can be passed using the budget reconciliation process, which does not allow for filibusters and, thus, requires only a simple majority of votes to get through the Senate, rather than a 60-vote supermajority that would otherwise be needed. Republicans hold 52 of the Senate’s 100 seats, and four GOP senators are already on record opposing the bill’s Medicaid provisions, while several others have expressed doubts about the legislation.

Top of page

Study Identifies ACO Savings

A study of accountable care organizations (ACOs) has found that, at least in their first year, they were successful at saving money, especially for patients with many chronic conditions.

Medicare ACOs, which were created by the 2010 Patient Protection and Affordable Care Act, are intended to encourage health care providers to coordinate care for patients in a way that improves quality, cuts costs and moves providers and patients away from the traditional fee-for-service payment model. As long as quality standards are met, ACOs and Medicare share the cost savings that result from coordinating care.

A study conducted by the University of Pittsburgh Graduate School of Public Health examined Medicare Part D prescription drug benefit beneficiaries in 2012, the first year of Medicare ACOs. It found that spending – all Medicare spending, not just Part D spending – on Part D beneficiaries who were in ACOs was $345 lower than for those who were not in ACOs.

Among beneficiaries with six or more chronic conditions, the savings associated with being in an ACO reached $966.

“This is encouraging because it demonstrates that ACO providers may be prioritizing their focus on beneficiaries with multiple chronic conditions,” said Yuting Zhang, the lead author of an article on the study in Medical Care and an associate professor of health policy and management in the School of Public Health.

Top of page

Justice Department Investigating Insurers for Fraud in Medicare Advantage

The Department of Justice is investigating several insurers who are suspected of fraudulently overbilling Medicare.

In February, the Justice Department joined a whistleblower lawsuit against UnitedHealth Group that accused that company of billing Medicare for services that were never provided to patients and claiming that patients had ailments that they did not have. In a March 14 court filing, the department disclosed that it is investigating Health Net, Aetna, Cigna’s Bravo Health and Humana for possibly committing similar violations.

While the lawsuit names those companies and others in addition to UnitedHealth Group, the department has not joined the lawsuit against them. It stated in its filing that it “has been conducting, and continues to conduct, on-going investigations” of the four companies, but, “Until those investigations are completed, the United States cannot reach a decision about the liability of these other defendants.”

The lawsuit, which was filed by a former finance director for UnitedHealthcare Medicare and Retirement in 2011, accuses 15 companies of submitting false claims to take advantage of Medicare Advantage “risk adjustment” payments, which boost reimbursements for treatments of patients who have multiple or serious conditions.

Top of page

CMS Launches Chronic Care Management Initiative

The Centers for Medicare & Medicaid Services (CMS) has launched an educational initiative to promote chronic care management.

Patients with multiple chronic conditions account for the bulk of health care spending, so chronic care management is typically one of the first places to look when trying to identify potential cost reductions. Two-thirds of Medicare patients have multiple chronic conditions, and one-third have four or more chronic conditions.

CMS’ Connected Care initiative seeks “to raise awareness of the benefits of chronic care management (CCM) … and to provide health care professionals with support to implement CCM programs.” The initiative includes patient education promotional resources for use in clinical and community settings and chronic care management toolkits for health care providers and partners.

“CMS recognizes chronic care management as one of the critical components of primary care that contributes to better health and care for individuals, and holds promise for reducing overall health care costs,” the agency stated.

In January, CMS started offering physician reimbursements “for more complex and more time-intensive chronic care coordination.”

A recent survey conducted by West Corporation found that more than 9 out of 10 patients with chronic illnesses said they need help managing their illnesses, while 70 percent said they want more resources or clarity regarding disease management, and 59 percent said they do not think they are doing everything they could to manage their condition.

Top of page