CMMI Palliative Care Project

We have a piece in Health Affairs blog describing our Center for Medicare and Medicaid Innovation (CMMI) grant in Palliative Care. We are working with Four Seasons Hospice who is providing care in this model in Western, North Carolina and down into South Carolina. We will be receiving Medicare claims for the first two years of the project in the next month, so should have some sense of the cost before, during and after (most typically hospice election) the palliative care program.

The table below frames the policy landscape for Palliative Care financing in the Medicare program. A key part of the CMMI project will be to propose the outline of how Medicare payments should be changed to facilitate more provision of Palliative Care, including considering the development of an Alternative Payment Model (APM).

A key aspect of this discussion is what type of health care organization can provide all of the care encompassed in a Palliative Care Benefit, and how the creation of new payments approaches can be flexible across different types of local health care delivery markets.

Table 1. Policy Landscape For Financing Palliative Care Services At End Of Life In Medicare

Medicare Benefit
Part A
Hospital Insurance
Part B
Physician Services
(Medical Insurance)
Part C
Commercial Medicare Advantage
Part D
Prescription Drug Coverage
Financing Trust Fund payroll tax and other sources Premiums with deductibles and general revenue (income tax) Commercial premiums with deductibles General revenue (income tax) & premiums with state contributions
Services Hospital, skilled nursing, long-term care, hospice Doctor visits, lab services, durable medical equipment, therapy Private A + B + (D) + additional benefits
• 30 percent population
• Hospice carved out
Prescription drugs
Cost triggers Reduce unnecessary utilization Increase care coordination and goals of care Unknown; unavailable claims for research Symptom management outlay vs. curative
Current movement Hospice “two-tiered” payments with service intensity last seven days Advanced Care Planning CPT codes

Transitioned Care Management codes

Chronic Care Management PBPM

PILOT: Medicare Care Choices Model (test $400 PBPM concurrent care for hospice-eligible beneficiaries)

Aetna Compassionate Care program for under 65 commercial

Numerous proprietary coordinated/ palliative care management programs underway

Review of access, medication reconciliation, polypharmacy, and discontinuation issues
Potential bundles as APM Hospital-based palliative care services

Post-acute care (90-180 days) prior to hospice palliative care services

Primary care (CCM, CPC+, PCMH medical homes) additive for palliative services in PBPM

Specialty care (CCM, medical home) additive in PBPM

Proprietary build on HCC risk score methodology Pharmacy/drug benefit during episode transitions (90-180 days) prior to hospice
Implication of ACO-MSSP Provider groups managing Total Cost of Care (Parts A, B, D) with increasing risk models and flexibility to deliver care across settings where financial control can be leveraged Excluded from MSSP; MA program innovation increasing but not publically shared Clustered resourcing as part of Total Cost of Care

Abbreviations: ACO=accountable care organization; APM=alternative payment model; CCM=chronic care management; CPC+=comprehensive primary care plus; HCC=Hierarchical Condition Category; MSSP=Medicare Shared Savings Program PCMH=patient-centered medical home; PBPM=per-beneficiary per-month

Distributional consequences of widening allowed Actuarial Value bands

One of the major proposals in the draft Center for Medicare and Medicaid Services (CMS) rule that was released on the 15th is to increase the de minimas allowed actuarial value band.  Currently the regulation allows a plan to be included in a metal band if it is within two Actuarial Value (AV) points of the target band for normal bands, and within a point in either direction for the targeted Cost Sharing Reduction Silver plans.  So that means a standard Silver plan which should be a 70% AV could be anywhere from 68% AV to 72% AV.  The proposed modification would allow for a plan to qualify for a band if it was no more than four points below or two points above the target.  A Silver plan would be anywhere from 66% AV to 72% AV.

All else being equal, a lower AV means a slightly lower premium.  It also means higher out of pocket spending for patients. But all else is seldom equal so things can get messy.

This has significant distributional consequences.  And these consequences are not entirely straightforward as the individual market is a complex market.  Let’s start looking at the easiest scenarios and then build in complexity.  We will need to divide the analytical units into four groups.  The vertical split of a 2×2 grid are people who either have met their out of pocket limit or have not incurred sufficient claims to meet their out of pocket limit.  The horizontal split is between people who receive premium tax credits that are keyed to the price of the second Silver and people who are not receiving premium tax credits and thus pay the full premium out of pocket.

We will only look at individual beneficiary consequences.

The simplest scenario to analyze is a market that has converged with multiple carriers.  Indianopolis, Indiana is a good example.  There are two carriers that currently offer Silver plans with 68% AV with similarly narrow networks and very similar pricing.  The strategic logic of that situation will have both carriers offer Silver plans that would be near 66% AV as soon as they could.

That produces a nice simple outcome matrix:

Individuals who are receiving subsidies and have significant claims that matched their out of pocket maximum under a 68% AV Silver are indisputably worse off. They will face higher cost sharing. If all cost sharing is from deductibles (an oversimplification), they will go from having a $4,400 deductible to a $4,850 deductible. They do not benefit from lower premiums as the federal government is the risk bearer and reward recipient of lower premiums as the subsidy formula is based on the federal government filling in the gap between the calculated individual contribution as determined by income and the cost of the second least expensive Silver.

Individuals who have not met their out of pocket maximum and are subsidized for a 68% Silver will still not meet their out of pocket maximum and their post-subsidy premium will not change. They are indifferent.

Individuals who are not subsidized and who meet their out of pocket maximum are almost always worse off. They have a small gain in lower premiums (2% drop in AV leads to a 2.4% premium drop on first estimate) but higher cost sharing. There is a small sliver of individuals whose costs above current cost sharing is less than the premium drop. But this is a sliver of people whose total costs are within $100 of the current out of pocket maximum.

The big winners of this change from a beneficiary point of view are individuals who are not subsidized and who are under the out of pocket maximum. They have no incremental cost sharing and they have lower premiums. If the non-subsidized market is extremely price sensitive this will bring in more healthy individuals as prices will fall slightly.

This is the simplest scenario. This intuition should serve people well, but things will get complicated.
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Initial reaction to CMS 9929P

The Center for Medicare and Medicaid Services (CMS) released a proposed rule for the PPACA Exchanges this morning. These are my initial thoughts that I will most likely change as more information comes in and points are clarified. This rule is fundamentally a technical corrections rule that seeks to make the Exchanges work while favoring insurer interests. It is not a rule that will blow up the Exchanges.

The rule can be broken into two broad segments. The first segment is premium decreasing measures through plan design. This segment seeks to lower the cost of premiums (and incidentally, the cost of premium tax credits) by slightly dropping minimum requirements of coverage. This will benefit healthier individuals who do not receive subsidies and it will disadvantage sicker and more expensive individuals who are subsidized.

The second and far broader portion of the rule is risk pool management functions. The rule making assumes that there is significant intentional gaming of the various enrollment rules which have led to an adversely ill and expensive risk pool as healthy people are finding ways to avoid paying for coverage until

Larry Levitt at the Kaiser Family Foundation has a good general take on the rule making direction.

Now let’s dig into the details. Read more of this post

More on Advance Care Planning in Medicare

This article starts with the Death Panel nonsense, reignited by a Republican Party official in Florida last week, but the second half of the piece is a fairly good discussion of the issues around Advance Care Planning that the Medicare program began paying for January 1, 2016. Some of our recent work shows that the comment period held during 2015 for this pending change was not particularly controversial.

Forget about the nonsense, and read the discussion of the policy reality at stake.

A snippet:

The CMS rule requires no specific diagnosis and sets no guidelines for the end-of-life discussions. Conversations center on medical directives and treatment preferences, including hospice enrollment and the desire for care if patients lose the ability to make their own decisions. The conversations may occur during annual wellness exams, in separate office visits or in hospitals. Nurse practitioners and physicians’ assistants may also seek payment for end-of-life talks.

End-of-life conversations have occurred in the past, but not as often as they should, said Paul Malley, president of Aging with Dignity, a Florida nonprofit. Many doctors aren’t trained to have such discussions and find them difficult to initiate.

“For a lot of health providers, we hear the concern that this is not why patients come to us,” he said. “They come to us looking to be cured, for hope. And it’s sensitive to talk about what happens if we can’t cure you.”

Further on the impact:

Proponents of advance care planning cheered evidence of the program’s early use as a sign of growing interest in late-stage life planning. Being able to bill makes a difference, Malley said.

The new reimbursement led Dr. Peter Sutherland, a family medicine physician in Morristown, Tenn., to schedule more end-of-life conversations with patients last year.

“They were very few and far between before,” he said. “They were usually hospice-specific.”

Now, he said, he has time to have thorough discussions with patients, including a 60-year-old woman whose recent complaints of back and shoulder pain turned out to be cancer that had metastasized to her lungs. In early January, he talked with an 84-year-old woman with Stage IV breast cancer.

“She didn’t understand what a living will was,” Sutherland said. “We went through all that. I had her daughter with her and we went through it all.”

Logrolling and market power in contract talks

Typically, full service health insurance companies will have several clusters of business. There is the low cost government cluster of Medicaid and SNP managed care. There is the medium cost government supported sector of Medicare Advantage, CHIP and low cost Exchange plans. And then there is the higher premium cluster of employer sponsored fully insured (ESI) plans and Administrative Services Only (ASO) self-insured employer plans. I worked at a full service firm. I was on the Medicaid geek team for the last three years.

Recently, I brought up the Rogers, Chernew and McWilliams Health Affairs paper on the impact of market power on local level provider and insurer pricing. They were only looking at employer sponsored insurance market power. They found what was to be expected. Entities with high relative market power got “better” rates from their point of view compared to entities with low market power. This was a good set of results as they were able to math up the trade-offs and attach some real numbers to the intuition.

My question though is how to account for the results if we are to assume that log-rolling in negotiations occurs?

An insurer might have a low market share for the high premium ESI/ASO market in a region. That same carrier could have a very high market share of the Medicare Advantage market. If that carrier is talking with a hospital that has never been in network to sign a comprehensive, all products contract, does the negotiation’s plausible agreement region get defined by each line of business’s relative market share or is the plausible agreement region defined solely by a blended dollar weighed market share?

More practically, does a hospital say that in order to get a stream of the Medicare Advantage money they’ll take lower than anticipated by RCM commercial rates or the carrier offer slightly higher Medicare Advantage rates to buy access for the employer side plans?

My intuition is that this type of log-rolling happens a lot. So how does it get measured and evaluated?

I don’t know.

Death panel nonsense back?

A Florida county Republican Party official said there were “death panels for Medicare beneficiaries over age 74” yesterday at a town hall meeting. There are not. Watching the video, it is unclear if the fellow was just saying something to try and make it through a meeting, or if he really believes this. Both are bad.

Just last week in BMJ Palliative Care (bmjspcare-2016-001182-bhavsar), we published an analysis of the federal register comments for the proposed rule (now policy since Jan 1, 2016) that let Medicare pay physicians for Advance Care Planning in which they discussed wishes and preferences with patients and family members. Very few of the comments submitted were negative, and we entitled the piece “The Death of Outrage Over Talking About Dying.”

Maybe we spoke too soon….

Nrupen A. Bhavsar, Sara Constand, Matthew Harker, Donald H. Taylor, Jr. The Death of Outrage Over Talking About Dying.BMJ Supportive and Palliative Care 2017;early online, accessed February 12, 2017.

Potential impact of new ACA rulemaking

Politico evidently got their hands on a leaked draft rule making document for the insurance exchanges. There are a couple of significant tweaks in the rules. The most important thing so far is that the draft document accepts the ACA as it is and works on the margins. It is not an attempt to blow things up. But let’s look at the details:

The administration is also looking to slash the 2018 enrollment period in half. It would run from Nov. 1 to Dec. 15, rather than through the end of January 2018 as the Obama administration had proposed.

The logic of this rule is that a December 15th end date means every policy starts on January 1st. This will do two things. First it will add more paid member months in the pool as the current open enrollment period has both February 1 and March 1 start dates. Secondly and more subtly, it will shift the enrollment of the healthiest cohort on average from a March 1 start date to a January 1 start date. The paid premium pool will be slightly healthier.

This is not a bad idea. It would be similar to what happens in Medicare. I would tweak it slightly. I would try to line up the ACA open enrollment period with the Medicare open enrollment period so that we develop a national window where everyone worries about next year’s healthcare at the same time.

HHS is also considering tough new rules around special enrollment periods, which insurers complain have allowed some Obamacare customers to wait until they get sick before signing up for coverage. All individuals who sign up outside the standard enrollment window will be required to provide documentation proving they’re eligible before coverage takes effect.

The logic of this change is that there are some people who have attempted to go off-Exchange to get a policy during a Special Enrollment Period and were denied because they could not document the qualifying event. They then went on-Exchange and attested to their qualifying event and got covered. Insurers in Covered California believe that the higher cost SEP enrollment added two to three points of cost to their base policies. Some of that makes sense as it is a narrowly self-selecting pool of very motivated buyers. It is much like COBRA in that regard. But this is an anti-gaming rule.

The aim of the rule is to drive more healthy people into the pool during open enrollment and make the cost of going uncovered higher. It will lead to fewer people getting enrolled during a SEP.

These two rules could probably go into place without significant opposition. The other proposals below the fold will face significant public, political and legal opposition.

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