Turbulence ahead! Fasten Your Seat Belts! What Physicians Can Expect from Health Reform Over the Next Five Years

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Turbulence ahead!Fasten Your Seat
Belts!What Physicians Can Expect from Health
Reform Over the Next Five Years

• Bob Doherty
• SVP, Governmental Affairs and Public Policy, ACP
• Virginia Chapter, ACP
• March 1, 2013

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Health reform from here to there

• Here tens of millions uninsured, uneven quality,
  rising costs, intrusions on patient-physician
  relationship
• There near universal coverage--with better
  quality at a price we can afford? And fewer
  intrusions on patients and physicians?
• How smooth or rough will the journey be?

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How we would like it to be . . .
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What we expect it will be. . .
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What we fear it will be . . .
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What we fear it will be . . .
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Turbulence

• Affordable Care Act
• Entitlements
• Budget and sequestration
• Payment/delivery system reform

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ACA the political environment

• No plausible scenario where the ACA will be
  repealed
• State engagement/ resistance may determine the
  laws effectiveness in expanding coverage

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The role of the states

• Medicaid Accept/reject federal dollars
• Exchanges Set up own exchange, partner with
  federal government, or turn it over to the feds
• Benefits Establish benchmark for plans to be
  offered through state-exchanges or let feds
  determine
• Enrollment help/encourage people to get coverage
  thru Medicaid or exchanges, or do nothing to help

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Expanding Medicaid is a good deal for the states
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Sarah Kliff, Wonkblog, Washington
Post, July 3, 2012 http//www.washingtonpost.com/
blogs/ezra-klein/wp/2012/07/03/why-hospitals-heart
-the-medicaid-expansion-in-one-chart
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More on MedicaidFewer Deaths, Better Health

• Medicaid expansions were associated with a
  significant reduction in adjusted all-cause
  mortality (by 19.6 deaths per 100,000 adults, for
  a relative reduction of 6.1). Mortality
  reductions were greatest among older adults,
  nonwhites, and residents of poorer counties.
• Sommers and Baicker, Mortality and Access to Care
  after State Medicaid Expansions, NEJM, July 25,
  2012, http//www.nejm.org/doi/full/10.1056/NEJMsa1
  202099

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ACPs Medicaid Patient Advocacy Campaign

• Cover letter from College leadership, seeking
  100 U.S. chapter participation
• Concise action plan with one-click links to all
  supporting materials, presentation slides,
  instructions and timetable
• Customized state-specific reports (available
  now!) and press releases to be issued by all
  chapters
• http//www.acponline.org/cln/medicaid_campaign.htm
  
• Template and web interface to send the report to
  each states governor and legislators

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Half of States Opted for Federal Exchanges in 2012

• State Exchange Second Most Popular Option

WA
ME
MT
ND
VT
OR
MN
NH
ID
WI
NY
MA
SD
RI
WY
MI
CT
PA
IA
NE
NJ
NV
OH
DE
IN
IL
UT
MD
CA
CO
WV
DC
VA
KS
MO
KY
NC
TN
OK
AZ
AR
SC
NM
MS
GA
AL
Totals Federal 25 Partnership 19 State 7
LA
TX
FL
AK
HI
18 states and D.C.
Source Where the States Stand on Insurance
Exchanges, The Advisory Board Company, Dec. 14,
2012.
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Enrollment

• States are rushing to decide whether to build
  their own health exchanges and the administration
  is readying final regulations, but a growing body
  of research suggests that most low-income
  Americans who will become eligible for subsidized
  insurance have no idea what is coming.
• Supporters of the health-care law say the plan
  will not be a success without a massive public
  relations campaign to build awareness.
• Many Americans Unaware of Health-care Law
  Changes, Sarah Kliff, Washington Post, November
  21, 2012, http//www.washingtonpost.com/business/e
  conomy/many-americans-unaware-of-health-care-law-c
  hanges/2012/11/20/ee02b0bc-3272-11e2-9cfa-e41bac90
  6cc9_story.html?hpidz2

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States That Chose State-Run ExchangesWill Face
Participation Challenge
Coverage-Resistant Group Obstacle to Participation
Young people May feel that they are healthy and dont need coverage
People employed in farming, fishing, or forestry May be more resistant to coverage because they work in high-uninsured industries
People living in rural areas May have less access to health care providers and may be more difficult to reach when advertising coverage
People in certain minority groups May be wary of government involvement

• Analysis
• Exchanges cannot work to cover uninsured state
  residents unless most residents participate and
  fund the exchange
• States must spend big to publicize exchanges to
  coverage-resistant groups
• Washington State hired GMMB as part of a 9.3M
  advertising plan, Nevada hired KPS3 Marketing for
  6M, and Hawaii hired Millici Valenti Ng Pack for
  1.2M, all in hopes of increasing insurance
  participation

Source States Struggle With How to Sell Their
Exchanges, Paige Winfield Cunningham, Politico,
Jan. 2013.
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New essential benefits rule

• Defines benefits that all new individual and
  small groups must provide
• States must select benchmark for plans offered
  through exchanges
• About half the states have already selected the
  plan they will use as a model, meaning that
  insurers there can now start designing plans for
  sale
• States that do not choose a benchmark plan will
  default to one selected by the federal government

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Entitlement reform

• Having campaigned against Medicare premium
  support and Medicaid block grants, no prospect
  that President Obama will agree to them, or that
  the Senate majority would enact them
• But something has to be done Grand Bargain tied
  to tax reform/revenue deal? Incremental
  adjustments?

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A Beneficiary Lifetime Perspective Payroll
Contributions lt Expected Benefits 400,000
357,000
357,000
Medicare Expected Benefits, Lifetime Medicare
Payroll Taxes, Lifetime
350,000
300,000 250,000
188,000
Female
200,000
Male
170,000
150,000
119,000
100,000
60,000
60,000
50,000
0
Single, Average Wage Single, Average Wage
One-Earner Couple, One-Earner Wage Couple,
Average Wage
Two-Earner Couple, Two-Earner Couple, Average
Wage
Average
Average Wages
Source Steuerle CE and Rennane S. "Social
Security and Medicare Taxes and Benefits Over a
Lifetime. Washington, DC The Urban Institute.
June 2011.
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But there is good news on health care costs!

• The last time health care costs went up this
  slowly
• Was making hit records!

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Good news on health care costs!

• Fourth consecutive year of record-low growth
  compared to all previous years in the 50-plus
  years of official health spending data.
• Health care prices had the smallest increase in
  14 years, rising in December 2012, by 1.7
  percent compared to December 2011, the lowest
  year-over-year growth since February 1998.
• Altarum Institute. Health Spending Growth Near 4
  percent for Fourth Year Price Growth at 14-Year
  Low. 7 February 2013. Accessed at
  www.altarum.org/health-systems-research-news-relea
  ses/7Feb13-health-spending-growth-4-percent-price-
  14year-low

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Good news on health care costs!

• Medicare per capita costs went up by only a
  fraction of a percent in 2012 (0.4 percent), much
  less than the rate of growth in the economy (3.4
  percent growth per capita). Over the three year
  period from 2010-2012, Medicare spending per
  beneficiary grew an average of 1.9 percent
  annually, or more than 1 percentage point slower
  than the average annual growth of 3.2 percent in
  per capita GDP (that is, at GDP-1.3).
• Kronick R, Po R. Growth In Medicare Spending Per
  Beneficiary Continues To Hit Historic Lows.
  Office of The Assistant Secretary for Planning
  and Evaluation, U.S. Department of Health Human
  Services. 7 January 2013. Accessed at
  http//aspe.hhs.gov/health/reports/2013/medicaresp
  endinggrowth/ib.cfm

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Budget and sequestration

• Fiscal cliff averted (for now)
• But cuts, effective March 1, will endanger public
  health, medical research, workforce, and access

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Key Terms
Updated Feb. 5, 2013
Measures meant to reduce federal spending
primarily consists of deficit reduction
sequester, mandating automatic, across-the-board
spending cuts for federally funded programs in
order to meet national budget goals, and
discretionary caps, limiting future federal
spending
Mandated sequestration starting Jan. 2, 2013 if
Congress could not reduce deficit by 1.2T1.5T
over a 10-year period
Mandates modified sequestration starting March 1,
2013 if Congress cannot negotiate a way to avoid
it
American Taxpayer Relief Act (ATRA) of 2012
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In 2011, Sequestration Mandated if No Deficit
Deal Struck
Updated Feb. 5, 2013
Budget Control Act of 2011 (BCA)
Raised U.S. debt limit for short term to prevent
default
Established 12-member Joint Select Committee
(Super Committee) charged with reducing deficit
by 1.2T 1.5T over 10-year period
Mandated long-term deficit reduction through
sequestration threat if Super Committee failed to
reach goals
Super Committee failed to meet objectives
Congress faced sequestration threat in 2013
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In 2013, Sequestration Delayed (Without Deficit
Deal)
Updated Feb. 5, 2013

• American Taxpayer Relief Act (ATRA) Pushes
  Sequester to March

Impact on discretionary caps ATRA lowers cap for
2013 by 4B and 2014 by 8B to offset cost of
delay
Jan. 17, 2013 BCA start date for discretionary
caps
March 27, 2013 ATRA delayed start date for
discretionary caps
March 1, 2013 ATRA delayed start date for deficit
reduction sequester
Jan. 2, 2013 BCA start date for deficit reduction
sequester
Impact on deficit reduction sequester Two-month
delay prorates 2013 spending cuts by total of 24B
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ATRA impact on physicians

• No 27 Medicare pay cut (through 2013)
• Does not advance permanent SGR reform
• Paid for by cuts in disproportionate share
  payments to hospitals, Medicare Advantage,
  ambulance services, other non-physician providers
• Reduces physician practice expense payments for
  advanced imaging

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ATRA impact on physicians

• Does NOT cancel Medicaid primary care increases
  to offset cost of blocking SGR cut
• Directs HHS to improve advanced clinical data
  registries for Medicare reporting proposals
• Sequestration, postponed only until March, could
  result in cuts in critically important health
  programs

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Non-Defense Cuts Focus Heavily on Medicare,
Medicaid
Non-Defense Cuts Health Care
Estimated Department of Health and Human Services
Cuts from Sequestration for FY2013
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Payment reform

• Policymakers across the spectrum want to get rid
  of the SGR (but cant agree on how to pay for
  it)
• And move away from volume to value
• But FFS will be a component of value-based
  payments, even as FFS itself will change

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New approaches

• ACOs
• Episode-of-care bundles (new rule expected soon)
• Risk-adjusted global capitation
• PCMH and PCMH-N practices

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Light at the end of the SGR tunnel?

• House GOP committee chairs offer plan to
  eliminate SGR, seeking bipartisan supportAugust
  vote (?)
• Bipartisan Medicare Physician Payment Innovation
  Act re-introduced, supported by ACP (no cuts for
  five years, higher updates for E/M, transition to
  new models)
• Medicine unified 133 physician organizations,
  including AMA and ACP, offer principles for
  reform, commitment to new approaches

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ACP advocacy

• Build upon and ensure coverage gains from the
  Affordable Care Act
• Reduce intrusions on Patient-Physician
  relationship
• Improve fee-for-service AND influence new models
  of payment

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SNHC 2013 improving the system

1. Renew commitment at both the national and state
   levels to effectively implement the coverage
   expansions and related policies under the ACA,
   with particular attention to ensuring the poorest
   and most vulnerable patients have access to
   affordable coverage.
2. Replace across-the-board sequestration cuts,
   prevent future disruptions and instead enact
   fiscally-and socially-responsible alternatives.

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SNHC 2013 improving the system

1. Eliminate Medicares SGR formula and support the
   medical professions commitment to transition to
   new payment models.
2. Implement policies to recruit and retain primary
   care physicians.
3. Reduce firearms-related injuries and deaths by
   improving access to mental health services,
   supporting research, and enacting reasonable
   controls over access to firearms

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SNHC 2013 reducing barriers to patient-physician
relationship

1. Ensure that any payment reforms have, as an
   explicit goal, allowing physicians to spend more
   appropriate clinical time with their patients.
2. Reforms to hold physicians accountable for the
   outcomes of care (measurable performance on
   quality, cost, satisfaction and experience with
   care) should concurrently eliminate the layers of
   review and second-guessing of their clinical
   decisions.

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SNHC 2013 reducing barriers to patient-physician
relationship

1. Harmonize (and reduce to the extent possible) the
   measures used in the different reporting
   programs, work toward overall composite outcomes
   measures rather than a laundry-list of process
   measures.
2. Provide more clinically relevant ways to satisfy
   the requirement that physicians must transition
   to using ICD-10 codes.

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SNHC 2013 reducing barriers to patient-physician
relationship

1. CMS must reduce administrative barriers, improve
   bonuses to incentivize ongoing quality
   improvements, and broaden hardship exemptions. If
   necessary, Congress and CMS should consider
   delaying the penalties for not successfully
   participating in quality reporting programs, if
   it appears that the vast majority of physicians
   will be subject to penalties because of
   limitations in the programs themselves.

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SNHC 2013 reducing barriers to patient-physician
relationship

1. Improve the functional capabilities of EHR
   systems, the ability of those systems to report
   on quality measures and ensure that those systems
   improve rather than add to workflow inefficiency.
2. Payers should standardize claims administration
   requirements, pre-authorization, and other
   administrative requirements even in advance of,
   and in addition to, the ACAs simplification
   rules.

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SNHC 2013 reducing barriers to patient-physician
relationship

• Congress should enact meaningful medical
  liability reforms including health courts, early
  disclosure of errors, and caps on non-economic
  damages.
• State and federal authorities should avoid
  enactment of mandates that interfere with
  physician free speech and the patient-physician
  relationship.

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ACP advocacy on payment reform

• Its not just about new payment modelsACP
  advocacy has resulted in big wins for internists
  on improving Medicare and Medicaid fee-for-service

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New CMS rules big wins for IM!

• New CPT codes 99495-99496 Medicare will pay
  physicians for transitional care management
  services, the non-face-to-face time they and
  their clinical staff spend on patient cases.
  Until now, only the face-to-face reimbursed
• National pay of 164-231, depending on whether a
  patient is seen within 7 or 14 days of discharge,
  prior to geographic adjustment
• Combined with other changes in the Medicare fee
  schedule, total 2013 gain for IM of 4-5 in total
  Medicare payments
• These gains are on top of ACAs 10 Medicare
  primary care bonus (Average of 8000 more each
  year for qualified internists, 2011-15)

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New CMS rules big wins for IM!

• Medicaid pay parity rule, effective 2013-2014
  increases payments for evaluation and management
  and vaccine services to no less than Medicare
  rates, paid fully by federal government
• CMS agreed with ACP that increases should apply
  to both primary care internists and IM
  subspecialists
• Applies to EM codes 99201 through 99499 to the
  extent that those codes are covered by the
  approved Medicaid state plan or included in a
  managed care contract
• Also, applies to services not covered by
  Medicare New and Established Patient Preventive
  Medicine Counseling Risk Factor Reduction and
  Behavior Change Intervention and Consultations

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Medicare to Medicaid fee ratios, by state
lt.60 (8 states . 61 -.75 (14 states
.76-.85 (16 states and DC)
.86-1.00 (8 states) gt1.00(3 states)
How Much Will Medicaid Physician Fees for Primary
Care Rise in 2013? Evidence from a 2012 Survey of
Medicaid Physician Fees, Kaiser Family
Foundation, December 2012 ORG
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ACP go to resource for members to prepare for
changes

• Practical guides
• Social media
• Policy summaries
• Advocate newsletter
• Coming soon timeline of pending changes
  (regulation, payment, MOC) and promotion of
  resources from ACP

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NEWLY UPDATED!
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http//advocacyblog.acponline.org/
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Summary

• 2012 election the ACA is here to stay, only a
  minority of voters favor full repeal, but
  electorate remains divided, and law remains
  deeply unpopular in some states
• States are the new battleground decisions on
  Medicaid and exchanges may determine how
  effective the ACA is in covering uninsured

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Summary

• Coming up new battles on spending and revenue,
  immediate cuts to essential programs including 2
  Medicare pay cut
• Entitlement reform will (must) happenbut how and
  when? Cuts in GME, other ACP priorities?

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Summary

• ACP advocacy improve the system, reduce barriers
  to patient-physician relationships
• ACP advocacy is paying off big wins for
  internists in Medicare and Medicaid pay

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The destination

• A nationwide program is needed to assure access
  to health care for all Americans, and we
  recommend that developing such a program be
  adopted as a policy goal for the nation. The
  College believes that health insurance coverage
  for all persons is needed to minimize financial
  barriers and assure access to appropriate health
  care services.
• Ginsburg, et al, American College of Physicians,
  Position Paper, Annals of Internal Medicine, May
  1, 1990 www.annals.org/search?fulltextACPunivers
  alhealthinsurancesubmityesx15y9

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• Elaine Dickinson (flight attendant) There's no
  reason to become alarmed, and we hope you'll
  enjoy the rest of your flight. By the way, is
  there anyone on board who knows how to fly a
  plane?