CMS's most ambitious accountable care payment model to date presents more risk for providers, but offers financial enhancements to sweeten the pot.
With the announcement of a new accountable care payment model last week, federal officials are forging ahead with their efforts to boost value-based payments for Medicare services.
The Next Generation ACO model unveiled last week seeks to advance Medicare's accountable care payment initiatives, according to Patrick Conway, MD, chief medical officer and deputy administrator for innovation and quality at the Centers for Medicare & Medicaid Services.
"Building upon experiences from the Pioneer ACO model and the Medicare Shared Savings Program, the Next Generation ACO… sets more predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality of care," Conway wrote in a CMS blog post.
A fact sheet for Next Generation ACO lists several "core principles" for the new accountable care payment model:
Protecting Medicare fee-for-service beneficiaries' freedom to seek the services and providers of their choice
Engaging beneficiaries in their care through benefit enhancements that directly improve the patient experience and reward seeking care from ACOs
Creating a financial model with long-term sustainability
Using a prospectively-set benchmark that incentivizes quality, rewards both improvement and attainment of efficiency, and transitions away from an ACO's recent expenditures when setting and updating the benchmark
Limiting fluctuations in aligned beneficiary populations and respecting beneficiary preferences by supplementing a prospective claims-based alignment process with a voluntary process
Smoothing ACO cash flow and supporting investment in care improvement capabilities through alternative payment mechanisms
In an indication that the Next Generation ACO is an advanced accountable care payment model, CMS forecasts that only 15 to 20 healthcare organizations will participate. That level of participation would be on par with Pioneer ACO, which currently has fewer than two dozen participants down from 32 at the start.
Healthcare organizations interested in participating in the Next Generation ACO program face a May 1 deadline to submit a letter of intent to CMS.
High Hopes
In a statement provided to HealthLeaders last week, CMS said the Next Generation ACO "offers the highest accountability – or risk – of any ACO model to date, and that risk is paired with ways to better engage the beneficiary and offer services beyond traditional Medicare like [skilled nursing facility] stay without three-day hospitalization, expanded telehealth services, and a reward direct to beneficiaries for using ACO providers."
The statement also provided the rationale behind CMS's estimate for the participation level in Next Generation ACO: "This is a model that tests many new concepts… We also expect organizations willing to assume this level of accountability will have had previous ACO experience and familiarity with similar alternative payments that align reimbursement with value and better health."
Providers Cautiously Optimistic
Healthcare providers say they want to see more details about Next Generation ACO, but are generally positive about the initiative.
Janis Orlowski, MD, chief healthcare officer at the Association of American Medical Colleges, says the Next Generation ACO appears to be a step in the right direction for Medicare's accountable care programs.
"I applaud them for listening to what our concerns were and coming out with a different program. In the end though, the devil is going to be in the details," she said last week. "These programs become very complicated through the course of their development."
Orlowski says Next Generation ACO appears to address two areas in Medicare's accountable care programs that have drawn withering criticism from healthcare providers: long-term stability in the setting of program's financial benchmark and assignment of Medicare beneficiaries to ACO organizations to allow providers to work more closely with their patients.
Orlowski says benchmark calculations for MSSP and Pioneer ACO have been problematic for providers. "Each year, [CMS] has calculated it in a slightly different way," she said. "They're short on details, but what they say is they're creating a model with long-term stability."
Providers will be watching how the Next Generation ACO model addresses the patient-assignment element of the program closely, Orlowski says. "In the fact sheet, they say beneficiaries will still have the flexibility they have in the fee-for-service model, which is a concern for providers. If the issues about beneficiary assignment are not clearer, there will be concerns about the Next Generation ACO."
Robert Wah, MD, president of the Chicago-based American Medical Association, makes similar observations.
"From what we have seen, the new ACO model could be a step forward and may help physicians improve care quality and lower costs. For example, the Next Generation ACO program will help physicians better predict their patient populations and will allow patients to voluntarily choose to become involved in an ACO, both tenets we raised in our comment letter last month. The program will also provide more budget predictability, so ACOs can plan ahead for how to achieve needed savings. The AMA additionally supports CMS' decisions to waive certain Medicare regulations, such as the three-day hospital stay required for nursing home coverage, and to expand the use of telemedicine, which will allow participants to better coordinate care."
Premier Inc. says the Next Generation ACO adds a welcomed accountable care option for Medicare providers, but few organizations are prepared to participate in the new model.
"We believe it's important for CMS to offer a broad array of options that span across the risk continuum. This gives providers the choice to select the model that best fits where they are in the journey to alternative payment and accountable care," Premier said in a statement. However, "it appears to involve even greater risk, providing a range of advanced payment models, including capitation. Since this is probably the most advanced option of all the ACO programs, it's not likely that a plurality of facilities have the skills, capabilities, infrastructure and appetite for the risk that would be necessary to participate. But it still will provide valuable learnings for others that are rapidly working to get there."
The healthcare providers that have the wherewithal to participate in the Next Generation ACO will be playing a trailblazing role in ongoing efforts to push Medicare away from the fee-for-service payment model, Premier suggests.
"We really support CMS' willingness to test new beneficiary engagement strategies using telehealth, home health and skilled nursing care without a prior hospitalization. We also believe that the [new] model's use of reward payments in exchange for receiving services inside the ACO network will be a powerful tool for engaging beneficiaries and incenting choices that lead to better health outcomes at a lower total cost."
Personalized drug therapies based on genetic profiling can help avert hospitalizations and boost compliance, but the economic impact on drug makers has yet to be determined.
One of the largest health systems in Illinois is aiming to become a leader in precision medicine.
Evanston, IL-based NorthShore University HealthSystem formally launched a pharmacogenomics clinic last week and is set to unveil the not-for-profit organization's multifaceted Center for Personalized Medicine by early April, health system officials say.
Henry "Mark" Dunnenberger, PharmD
In addition to the pharmacogenomics clinic, NorthShore's Center for Personalized Medicine is slated to have several core components, such as personalized medicine consult clinics, where genomic specialists will help diagnose and treat patients based on genetic information.
Other elements of the Center for Personalized Medicine include cancer care based on genetic profiling as well as a research initiative to collect and analyze DNA samples from 100,000 people in the Chicago metropolitan area.
Henry "Mark" Dunnenberger, PharmD, a senior clinical specialist at NorthShore who is leading the new pharmacogenomics clinic, said this week that his facility has the potential to benefit a wide swath of patients "across the spectrum of disease care."
He describes pharmacogenomics as being revolutionary on two medication fronts: dose adjustment and medication selection. "It could be your body doesn't clear a drug very well. It could be that a drug doesn't do you any good. We can pre-emptively modify your therapy."
"It limits trial and error. It alleviates time to improve symptoms. We're providing safer medication, which avoids hospitalization," he says, noting the application of pharmacogenomics in prescriptions of medication helps boost patient compliance. "There are [fewer] side effects… If you can tell patients, 'we tailored this therapy for you,' then they are more likely to take it."
Personal Impact
The molecular biologist leading NorthShore's effort to collect 100,000 DNA samples from Chicagoland residents has experienced the value of pharmacogenomics firsthand.
Kathy Mangold, PhD, had a family history of a serious clotting disorder, deep vein thrombosis, and decided to have her blood analyzed to see whether she had a genetic predisposition for the condition. Testing revealed Mangold had a mutation that increased her risk for blood clots as much as 20 times. And she started taking preventative medication – one aspirin per day.
Mangold, who started working for NorthShore in 1999, also underwent drug metabolism testing for Warfarin, the frontline medication for deep vein thrombosis, and found that her body breaks down the drug more slowly than most patients. "That information sat in my medical record for a long time," she said.
Then in January 2014, Mangold underwent surgery to remove a benign brain tumor. "I didn't have a blood clot when I was in the hospital, but I wasn't as active as I should have been when I got home," she said.
She developed a blood clot in one of her legs and because of information gleaned from the testing years earlier, was prescribed to take Warfarin at a dosage level 40% lower than the standard therapy, but safer for her.
The molecular biologist's personal experience with personalized medicine has benefited several members of her family, as well. "Taking an aspirin a day is a simple fix. I shared [this information] with my family, and they also were tested. They could have a discussion with their physicians to decide the best thing to do."
There are millions of Americans who do not have pharmacogenomics facilities in their communities, but they still can benefit from the technology, Mangold says.
Three of her brothers live in Montana towns with populations as low as 100 people, 30 miles from the nearest hospital. "They could get blood taken and sent off for testing. Then their doctors could consult with us at NorthShore. It's not [a level of care] as grand and complete as we have at NorthShore, but they still had access. They could get this care even in a rural area of Montana."
Mangold said she also shared her pharmacogenomics information with some of her cousins, in part because genetic mutations associated with deep vein thrombosis have been linked to pregnancy complications. "It has had a far-reaching impact on my family."
Pharmacogenomics' Impact on Bottom Lines
In addition to the potential for pharmacogenomics to have a broad impact on patients, the technology is likely to have a significant financial impact on the healthcare industry, Dunnenberger says.
Prescribing the right drug, at the right dosage, at the right time has obvious financial benefits for healthcare providers, including avoidance of costlier interventions such as surgical procedures. "There's a little more cost upfront, but we're pushing to a preventive model of care."
The impact of pharmacogenomics on drug makers, however, "is yet to be determined," Dunnenberger says.
For decades, pharmaceutical companies have banked on a volume-based business model: The more drugs they sell to more people at the highest possible dose, the more profits they have generated. While pharmacogenomics is likely to cut into sales volume for many medications, there is a silver lining for drug makers, he says.
"There are some drugs that never make it to market because of their toxicity profile. Pharmacogenomics could be a method to rescue some drugs: 5 to 10% of patients may be able to tolerate a drug," he said. "In those cases, you have to have a very specific mutation for the drug to work."
The pharmacogenomics clinic at NorthShore is the first of its kind in the Chicago metropolitan area, according to Dunnenberger. Several other large healthcare providers across the country have launched pharmacogenomics clinics and research facilities, including Mayo Clinic's Center for Individualized Medicinein Rochester, MN, and the Center for Experimental Drugs and Diagnostics at Boston-based Massachusetts General Hospital.
Creating a health information exchange that serves as an independent medical record repository for the majority of California's residents has tremendous potential for payers, providers, and patients.
David Watson is seeking to capitalize on a golden opportunity in The Golden State.
David Watson
CEO of Cal INDEX
The University of Southern California graduate is CEO of Cal INDEX, one of the most ambitious health information exchange initiative's in the country. A pair of major payersformed the non-profit HIE in August 2014, with Blue Shield of California and Anthem Blue Cross committing $80 million in seed money to help launch the not-for-profit organization.
In a recent interview, Watson told me how Cal INDEX is building a wealth of healthcare information on the foundation of 9 million records drawn from the HIE's BlueCross BlueShield benefactors.
HLM: How is Cal INDEX is leveraging access to a large set of payer data?
Watson: Most HIEs in the United States started out from the provider perspective. The design of Cal INDEX is much different. It is designed to support both payers and providers, which is a pretty big step. I lived the experience of combining that data when I worked at Kaiser-Permanente. It's a huge step up in terms of value proposition.
[Our BlueCross BlueShield founders] already understand payer data. They want clinical data so they can partner with their providers. Prescription drugs are a simple example of how providers can benefit from Cal INDEX. The payers have the data on where and when prescriptions have been filled… [so] providers can see not only what they prescribed, but also a patient history to see whether the patient is taking the medicine.
HLM:What are the challenges of starting an HIE with a large set of payer data?
Watson: There's really no challenge associated with that. The payers are pretty good at how they manage their data. The challenge is convergence—how to blend payer data well with provider data, which can be different from organization to organization…
When we receive provider data, we have to do data mapping and convert it into standardized codes. It's a little bit of a "one-off" for every health system we touch. That's our challenge. But it's also part of our value proposition. Others don't have to deal with all that mapping and data verification.
HLM: How is Cal INDEX encouraging providers to contribute data to the HIE?
Watson: We're in the stage where we're doing outreach with the providers. In order to participate in our HIE, we follow the philosophy of "to give to get." The providers very much want to have access to the data the payers have to help achieve better results in areas such as medication compliance.
They want to join Cal INDEX to leverage that data… I thought I would have to do more convincing, but providers are reacting to the need for greater access to data. Medicare just announced a goal to have at least 50% of its payments in value-based models, and commercial health plans are adopting value-based payments, too. That signal has been sent and received. Now, the concern among providers is, "Can I get there fast enough?"
HLM: What areas has Cal INDEX targeted for data sharing? In what ways do you hope it will boost care coordination and generate cost efficiencies?
Watson: In California, the main goal seems to be sharing the data so payers and providers can focus on chronic disease populations. They want to increase quality of care and care coordination, and avoid acute episodes that result in hospitalization.
Watson: Our design points are built around the best data security possible. It's one of the things that keeps me up at night because the security of the data is at the heart of my business. The data is encrypted at all steps… We invest a lot of time and energy and money to secure our data. It's just woven into the fabric of who we are.
HLM: How important is scale for an HIE to achieve success?
Watson: Smaller HIEs simply do not achieve the mass to reach a sustainable revenue model. Some of the early efforts at HIE were self-limiting. We're going to flirt with the other end of that scale. There are more than 35 million Californians. If we can approach that size, I can bring [a wide range of] data to bear, including imaging data and registries.
That extends the value proposition. That piece is untested, but we will test it with the payers and providers to see what kinds of new data will add value to Cal INDEX. Basically, size matters… The more things you want to do, the more important scale becomes.
HLM:What is your biggest challenge?
Watson: While technology can be challenging, the biggest challenges are never technical in my experience. In our case, the biggest challenge has been the legal and regulatory environment. State and federal legislation such as HIPAA never contemplated the sharing models that payers and providers are now using to support care coordination and risk-revenue sharing models such as ACOs, nor did they account for organizations such as HIEs that facilitate the otherwise appropriate sharing of healthcare information.
As a result, financial, operational, and legal issues abound that complicate the provision of services and make them more expensive.
HLM: What has been your biggest success as a startup organization?
Watson: At this early stage in our development, our biggest success is that we've hired an amazing initial team that is committed to our vision of completing the system of care in California. If you gauge success as the right people doing the right things to get to the right result, we've got No. 1, we're working on No. 2, and the market will answer No. 3 in due time.
A health information exchange in New York State is helping several dozen healthcare providers coordinate care and reduce costs, researchers say.
Health insurance exchanges are capable of reducing redundancies in medical imaging, which contributes significantly to care coordination and cost-efficiency gains for healthcare providers, research conducted in New York state indicates.
Ted Kremer
Executive Director, RRHIO
A study, recently published in the American Journal of Managed Care, focuses on the Rochester Regional Health Information Organization, a nonprofit HIE launched in 2006. The study found that dozens of healthcare providers shared medical imaging data through the Rochester HIE, reducing the odds of redundant medical imaging by 25%.
"A technology-driven improvement in care that represents both higher quality and potentially lower costs," is suggested by the findings, researchers conclude.
Several dozen healthcare providers, including hospitals, urgent care clinics, and physician practices, are tapping RRHIO data in the HIE's 13-county service area. RRHIO's executive director, Ted Kremer, MPH, says building partnerships with healthcare providers and key community stakeholders has been an essential element of success for the HIE.
"We did outreach with the imaging providers early on and showed them how providing data to our exchange would in turn make it easier to access prior images done elsewhere. We also had strong support from our county public health department charged with managing [tuberculosis] patients, who were moving between treating institutions and care providers," Kremer says.
Developing the RRHIO has been as much about organizing physicians as organizing data. "Where there were early and enthusiastic adopters, we sought to share their positive experiences with other care providers and with community leaders seeking to realize a more efficient healthcare system."
Those community leaders, Kremer says, "were very helpful in overcoming some of the institutional reluctance there may have been to adopting this multi-stakeholder approach. We also shared with clinical leaders who did not initially see the value of radiology exchange services how various specialty groups and care settings were increasing the use of our services and seeing the value of these services."
Mark Halladay, IT services director for UR Medicine-Thompson Health, says the Canandaigua, NY-based organization and other healthcare providers across the region have benefited from participating in RRHIO. "We have been able to direct more health information through the RRHIO as a common source for other healthcare providers, which has made the information more accessible at lower cost. Also, the RRHIO has increasingly become an additional source of healthcare information for us," he said.
The HIE is user-friendly from the provider perspective. "The RRHIO has provided the appropriate information infrastructure for providing viewing access by providers as well as for incorporating the information into provider electronic medical records."
Catherine Shannon, director of practice management for UR Medicine-Thompson Health, says participating in RRHIO generates significant benefits for physicians. By having results returned electronically, "providers are able to get results much faster than in the paper world… we can also easily and instantaneously graph results over time, a process that would have taken a lot of manual work previously. This helps the providers understand the patient’s progress over time," she says.
Patients also played a pivotal role in RRHIO's development, Kremer said. "Perhaps most importantly, we were fortunate that patients wanted to share their stories, in which image exchange service both improved their care and reduced their challenges of carting imaging studies from place to place."
Rochester RHIO has boosted care coordination and generated cost-efficiency gains in areas beyond medical imaging, Kremer says. "We also include Emergency Medical Services-based data and eldercare social services information to assist with care coordination and care event notification services. Our larger health information exchange services have also shown a reduction in both 30-day [hospital] readmissions as well as emergency department-based hospital admission rates."
'Information Needs to be Accessed and Used'
The lead author of the AJMC study, Joshua Vest, PhD, MPH, an assistant professor at Weill Cornell Medical College in New York City, says the technical approach of Rochester RHIO is relatively simple.
"[It] facilitates health information exchange services for providers in the community. Health information exchange is a fairly straightforward concept: make it easier for physicians, nurses, and other healthcare professionals to get patient information," he says.
"So much patient information is spread across different practices, hospitals and health systems, that getting a comprehensive picture of the patient is difficult. Health information exchange enables providers easier access to that information. We found that when a patient's information was accessed through the health information exchange, it was less likely that the patient would have a repeat imaging exam."
Although Vest and his colleagues did not attach a dollar figure to the medical-imaging cost savings realized by RRHIO's participating providers, the researchers were able to document impressive reductions of redundant imaging in two of the top diagnostic testing categories: radiography and ultrasound. Among physicians accessing Rochester RHIO data, the odds of a repeat ultrasound were reduced 44% and the odds of a repeat radiograph were cut 21%.
For Medicare Part B payments alone from 2003 to 2013, annual spending on ultrasound testing in inpatient settings ranged from about $320 million to about $290 million, according to the Harvey L. Neiman Health Policy Institute.
Vest says HIEs have tremendous potential to increase the quality and cost-effectiveness of healthcare services. "A key factor for success is integrating the technology into clinical workflow. Several studies, ours included, have associated health information exchange usage with reductions in admission via the emergency department, reduced readmissions, and reduced imaging. The key, however, is that the information needs to be accessed and used."
The study notes there have been fewer than 40 studies on the impact HIEs have on healthcare-service utilization. The leader of the Indiana Health Insurance Exchange, one of the oldest HIEs in the country, says more research is needed.
"In the past, some of the HIE services offered in Indiana have been studied and shown both quality improvements and/or economic benefits. However, I wish there were a lot more studies, as quantitative evidence is valuable in a number of ways," IHIE interim President and CEO John Kansky said this week.
A $120 million lawsuit filed last month is the newest front in a national insurance carrier's legal campaign against healthcare providers it accuses of price gouging.
Although the opposing sides disagree on the motives, a raging court battle in Texas is part of a national legal strategy at one of the country's largest commercial insurance carriers over healthcare provider billing practices.
J. Edward Neugebauer
Last month, Hartford, CT-based Aetna Inc. filed a $120 million lawsuit against North Cypress Medical Center, which features a 139-bed hospital in Cypress, Texas, and three standalone emergency room facilities. The suit is the latest salvo in a legal struggle that began in February 2013, when North Cypress sued Aetna in US District Court alleging underpayment for medical services.
North Cypress is an in-network provider for several major payers, including United HealthCare, Cigna Healthcare, and Blue Cross Blue Shield of Texas. The healthcare provider is not in Aetna's provider network.
J. Edward Neugebauer, chief litigation officer for Aetna, says the crucial issue in the ongoing legal dispute is an "out-of-network strategy" at North Cypress to incentivize physicians to refer Aetna members to seek care at North Cypress facilities.
"The strategy is, 'Let's go to a market, build up facilities, then we'll find where the doctors are and give them a piece of the action," he said this week. "It's not rational from a member's perspective unless something else is going on. They have these strategies and business plans to get around health plan designs."
In the lawsuit filed last month, Aetna accuses North Cypress of hatching an illegal billing scheme: "The scheme includes paying illegal kickbacks to physicians in exchange for patient referrals disguised as ownership interests in North Cypress, charging grossly excessive fees, implementing improper billing techniques, and forgiving members' financial responsibility (i.e., deductibles, co-pays, and co-insurance), in order to make the scheme work. Absent this, patients would not knowingly be treated at North Cypress and agree to pay much higher out of pocket amounts required under the terms of their plan, when they could get the same services at a fraction of the cost at hospitals in Aetna's network within close proximity of North Cypress."
North Cypress's spokeswoman and attorney say Aetna's lawsuit is more about payer profits than violations of law.
"This is happening a lot these days, where companies file frivolous lawsuits to get media attention," North Cypress spokeswoman Karen Hinton said this week.
Many of the allegations in Aetna's lawsuit have already been aired in court and rejected, she says, referring to a counter-claim the payer filed in the suit that North Cypress launched in 2013. "It's the same complaint filed in a different courtroom. It's classic venue shopping. We're confident this will be sent to the old judge and dismissed, or the new judge will dismiss it. This is the way Aetna does business."
The North Cypress lawsuit against Aetna is slated to go to trial in October.
North Cypress' attorney in the legal struggle with Aetna, J. Douglas Sutter of Houston-based Kelly, Sutter & Kendrick PC, says self-interest is the prime motivation behind the $120 million lawsuit that the insurance carrier filed last month. "There's an incredible amount of competition among the payers. Big plan sponsors like school districts will jump from payer to payer every two years to get the best deal."
Sutter says Aetna has filed multiple lawsuits across the country on behalf of plan sponsors so the insurance carrier can bank a percentage of court-ordered restitution. "The majority of these claims come from plan sponsors." Payers, he says, are awarded as much as 50% of restitution garnered from healthcare providers in billing-practice lawsuits. "[Payers] have a financial incentive in these cases because there is a contingency."
Aetna Filing Coast-to-Coast Lawsuits
Neugebauer, who has been litigating Aetna lawsuits for two decades, says the Connecticut-based payer began noticing a spike in billing for medical services in 2009 and started filing suits related to billing practices in 2010.
"We saw groups of physicians had dramatically increased their charges. Their charging practices were way outside the norm. They were billing at 9,000% of the Medicare rate and expecting to get paid for it."
In addition to the lawsuit against North Cypress, Neugebauer says Aetna has sued physician practices, surgical centers, and other provider organizations in many states, including California, New Jersey, and Pennsylvania. He says the payer has been forced to go to court because strict federal laws against patient referral schemes and kickbacks in Medicare and Medicaid billing do not apply to commercial payer contracts. "We don't have that same kind of regulatory framework or enforcement on the commercial side," he says.
In April 2012, Aetna filed a lawsuit against Houston-based Humble Surgical Hospital, LLC that includes accusations similar to those the payer has leveled in its legal dispute with North Cypress.
"[Humble Surgical Hospital] sought and received millions of dollars in exorbitant fees from Aetna by charging fees far higher than the reasonable charges for the same services in the relevant market," the 2012 lawsuit states. "HSH LLC, through its owner-physicians, is financially abusing Aetna members via referrals to the Center's out-of-network facilities in which the referring physicians have a financial ownership."
Filing lawsuits has helped the payer develop ways to root out improper billing practices. "It's helped us internally to identify these kinds of processes and how to get ahead of them," Neugebauer says. But although it's lobbying for new laws against improper billing practices at healthcare providers. "Litigation is not a good policy mechanism… You can't make consistent policy through litigation."
Lawyer: Aetna Playing Hardball with Providers
Sutter says the wave of lawsuits pouring out of Aetna is a power ploy engineered at the highest levels of the payer's management structure.
"You can see from all the press releases… each release is almost identical in what they're saying," the Houston-based lawyer said. "For the larger providers, Aetna's goal is to pressure them into network. We have four of these lawsuits in the Houston area alone… If the physicians don't cooperate, they just terminate their contracts."
Among the largest insurance carriers in the country, he says Aetna stands out for playing hardball with providers. "[North Cypress is] in-network with almost all the major payers and has been for four years," Sutter said. "It is very difficult with Aetna. They want us at the table so they can dictate their terms."
Economist: Boost Patient Cost for Out-of-Network Care
Uwe Reinhardt, PhD, a healthcare economist, and professor at Princeton University, says Aetna should consider setting stricter rules for payment of out-of-network medical services.
"It occurs to me that the problem here lies in the contract Aetna has with its insured. Aetna could stipulate that when the insured go to an out-of-network facility like North Cypress Medical Center, patients have to pay the hospital directly and then seek reimbursement from Aetna, which would pay the insured what they would pay for an in-network facility, plus perhaps a little more—such as 10% more or something like that. [With that kind of contract,] NCMC would be much less attractive to patients," Reinhardt said.
"Here, it seems that Aetna picks up the whole tab billed by NCMC and the patient pays nothing—an irresistible deal for patients. What kind of insurance contract is that?"
Medicare Advantage is facing financial firestorms on two fronts, with insurers resisting a 2016 payment cut and beneficiary advocates fighting risk-adjustment of star ratings for socio-economic status.
Where you stand depends on where you sit.
That maxim of bureaucratic politics, known as Miles' Law, covers a lot of ground in deciphering the proposed 2016 Medicare Advantage payment rate for insurance carriers.
The perspective of the Centers for Medicare & Medicaid Services represents the rosiest payment rate scenario. Upon release of the MA proposed payment rate and rule changes Feb. 20, Sean Cavanaugh, director of CMS's Center for Medicare, declared that CMS had set "stable rate policies" for the value-based alternative to traditional fee-for-service Medicare.
CMS is forecasting a -0.95% cut in next year's MA payment rate. With a relatively complicated formula applied county-to-county nationwide, MA payment rates can vary widely plan to plan and geographically. Built-in variables include a "growth rate" reflecting expected expenditures on MA beneficiary services and funding cuts mandated under the Patient Protection and Affordable Care Act.
CMS has added a positive spin to the proposed 2016 MA payment rate, contending that most insurance carriers should post 2016 revenue in the black after their beneficiaries are risk-adjusted for chronic illnesses. Cavanaugh says risk-adjustment "coding" of beneficiaries should boost 2016 MA health plan revenue 2% next year, resulting in a 1.05% total revenue impact from the proposed MA payment rate and rules.
The view from insurance carrier boardrooms is dark.
In a Form 8-K filing with the Security and Exchange Commission on Feb. 20, Lexington, KY-based Humana Inc. pegs its expected revenue impact from the proposed 2016 MA payment rate at -2.45%. Humana reports that the insurance carrier's gloomier forecast is "primarily driven" by proposed changes in CMS risk modeling, which would result in a "larger-than-average decline… given the company's geographic and member diagnosis mix."
America's Health Insurance Plans, the industry's trade association, is making dire MA predictions. AHIP commissioned an actuarial report on the proposed 2016 MA payment rate that was released Feb. 25. Prepared by New York-based Oliver Wyman, it pegs the expected revenue impact of the proposed MA payment rate at -1.2% and includes a warning about the cumulative impact of revenue declines at MA health plans, which took a -4.0% hit in 2014 and -5.2% haircut this year, according to the management consultancy.
The cutbacks "could result in a high degree of disruption in the MA market," the report states. "This includes the potential for plan exits, reductions in service areas, reduced benefits, provider network changes, and MA plan disenrollment due to declines in plan value from 2014 to 2016."
The view from Wall Street is neither as positive as the CMS perspective nor as negative as the health plan vantage point.
"Overall, when you look at the Medicare Advantage numbers, they're very good," says Stephen Zaharuk, senior vice president at Moody's Investors Service. He notes that MA premiums have been stable for several years, with enrollment growing steadily to more than 16 million seniors this year, accounting for about one-third of the total Medicare beneficiary population.
Zaharuk estimates the revenue impact of the proposed 2016 MA payment rate at -1.45%. He arrived at this figure by subtracting a 0.5% revenue increase CMS is anticipating from payment bonuses linked to MA quality-star ratings. The five-star program gives insurance carriers financial bonuses for crossing the four-star threshold. Zaharuk says he tried to set a "pure rate" forecast: "Let's just look at it without all the bells and whistles."
Consecutive years of MA payment rate cuts are forcing insurance carriers to perform "a balancing act," he says, which pits continued growth in beneficiary enrollment against unpopular changes in plan design such as reduced benefits or increased premiums. "It's been a series of cuts year after year after year."
Price inflation for medical services has also been cutting MA health plan bottom lines, Zaharuk says. "Insurance carriers are getting more conservative in how they price their plans… There's a constant erosion of reimbursement that's going to be hard to maintain."
In a "credit outlook" report published by Moody's Investors Service Feb. 26, Zaharuk wrote that the MA payment rate squeeze has reached a pivotal phase.
"Although the proposed [2016] reduction is less than the 3%–5% reduction that companies had to absorb this year, the proposed rate decrease will challenge insurers to provide products that continue to attract seniors. Over the past several years, MA membership has grown despite the decline in rates to the insurers. However, we believe that at some point continued reimbursement cuts will reverse this trend. The proposed reduction for 2016 may not tip the scales, but every cut makes it more difficult for insurers to maintain the level of benefits they have provided to their members.
In 2015, insurers used a combination of increased premiums, lower benefits and narrower provider networks to compensate for lower reimbursement rates. Although overall MA membership increased, insurers have exited some markets and some have recorded decreases in their membership."
Accounting for Socio-Economic Status in Star Ratings
Miles' Law also applies to the simmering controversy over risk-adjusting MA star ratings to reflect the impact of beneficiary socio-economic status (SES).
Under the proposed 2016 MA payment rate and rules, CMS plans to down-weight six MA star ratings to account for the impact of SES.
MA health plans with many economically disadvantaged beneficiaries, particularly members who are dual-eligible for Medicare and Medicaid, have been pressing CMS to risk-adjust MA star ratings to reflect downward pressures on quality performance that insurers attribute to SES.
"Multiple MA organizations and [Medicare Prescription Drug Plan] sponsors believe that plans with a high percentage of dual-eligible (Dual) and/or low-income subsidy (LIS) enrollees are disadvantaged in the current Star Ratings Program. Similar claims have been made about other Medicare quality measurement programs such as readmission rates," according to the MA 2016 Draft Call Letter released on Feb. 20.
CMS is conducting an ongoing research effort to determine the impact of beneficiary SES on MA star ratings performance. The early results of the research prompted the agency to act, according to the letter.
The Willimantic, CT-based Center for Medicare Advocacy (CMA), a non-profit group that provides education, advocacy, and legal services for beneficiaries, has a negative view of risk-adjusting MA star ratings for SES.
Kata Kertesz, a CMA attorney who has authored a multi-pronged critique of risk-adjusting quality stars for SES, says the change to the ratings program is misguided. "Decreasing the weight of measures that CMS has found to disproportionately impact dual-eligible beneficiaries will in essence increase the star ratings for plans, without actually improving care for dual-eligible beneficiaries in these areas."
She believes the rule change risks institutionalizing disparities in care. "We are concerned that risk adjustment will mask these disparities and disincentivize healthcare [organizations] from making the changes that could equalize care, making quality analysis and quality ratings useless. The root of the disparities in care is not likely to be addressed if the differences are concealed through the automatic and inaccurate inflation of performance scores, and will only perpetuate these real differences in care."
Sooner rather than later, political and economic pressure appears destined to break the decade-long gridlock over fixing Medicare's broken formula for physician payment.
This could be the year.
With the beginning of spring training in Florida and Arizona, hope is swelling the hearts of baseball fans across the country.
Barbara L. McAneny, MD
And as the March 31 deadline approaches to avoid a Draconian 21% cut to physician payments under Medicare's widely despised Sustainable Growth Rate formula, a glimmer of hope is flickering in the hearts of healthcare industry stakeholders.
If willpower is an ingredient of success, then the tipping point is nearing in the ongoing struggle to repeal and replace SGR.
"As long as SGR is in place, we will continue to dig a hole," Barbara McAneny, MD, chairperson of the American Medical Association Board of Trustees, told me recently. "We are going to spend money on healthcare, and why do we keep pretending we're not?"
The New Mexico-based oncologist is hoping Congress will act decisively and judiciously to end the SGR saga once and for all. "If my major payer underpays me for medical services and threatens to cut my payment by 21% on April Fool's Day, how can I invest in my practice?" she says.
And she cautions against a radical shift at Medicare that could harm physicians in resource-poor areas of the country. "I don't think fee-for-service will ever go away. It will be a part of what we do in the future in some way."
Still, McAneny is hopeful: "I am optimistic they will get it done. There are people in Congress who want to do it."
A strong measure of political will to scrap SGR was displayed last month, during a two-day SGR hearing before the House Energy & Commerce Committee's health panel. Democratic and Republican members of the subcommittee were unanimous in their animus toward SGR, and broad support was voiced to build upon last winter's repeal-and-replace deal. The title for the hearing was hopeful: "A Permanent Solution to the SGR: The Time is Now."
Rather than rating the intensity of the rhetoric, the testimony of former US Sen. Joseph Lieberman (I-CT) was the most instructive in gauging the political appetite for slaying SGR.
Lieberman testified about one his hallmark issues: the national debt. His most astute political observations were interspersed between repeated calls for "Doc Fix" prescriptions with "pay-fors." He called last winter's repeal-and-replace deal an "extraordinary achievement," declaring during a question-and-answer portion of the hearing that "It would be a tragedy of will not to find the money to fund this bipartisan agreement you've made."
Last winter's deal was one of the few instances of major legislation to gain bipartisan support in both houses of Congress in 2014. "What you've done is worth supporting," the former senator reassured the House members in the closing minutes of Day 1 of the subcommittee hearing. "It's a bipartisan, bicameral improvement, and Lord knows it might just start a cycle of virtue here [in Washington]."
Healthcare reform advocates are clamoring for federal officials to step up to the plate and take a homerun swing at value-based payment models as an essential element to crafting a long-term SGR fix.
Harold Miller, CEO and president of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, was a keen observer of last month's SGR hearing in the House. He is advocating a long-term SGR fix that would be financed largely with cost-efficiency gains generated from implementation of value-based payment models such as bundled payments.
After the House hearing, Miller said McAneny had shown lawmakers the light with her testimony, if they wanted to see it.
McAneny told the subcommittee that many providers are ready to forge ahead with value-based payment reforms including her colleagues in New Mexico, where she has pioneered demonstration projects with federal grant funding to boost patient engagement and care coordination.
Her written testimony includes an impassioned plea: "[Demonstration] projects have dramatically reduced the rate at which their patients have had to go to an emergency room or be hospitalized for complications, saving Medicare far more than the cost of the services supported by the grants. But in most cases, the improvements in care and the savings achieved in the demonstration projects end when the demonstration ends, because there is no way to sustain the projects under the current payment system."
Miller says McAneny and innovative healthcare providers like her are offering lawmakers a golden opportunity to fix SGR and move Medicare away from its expensive fee-for-service payment model. "She's already doing it, but she can't sustain it."
Paying for a Doc Fix
Patrick Dunham, chief executive at Smyrna, GA-based Curant Health and co-author of a 2014 study about the positive impact of medication therapy management on hospital readmissions, believes value-based payment reforms matched with value-based redesigns of healthcare services could finance an SGR fix.
"The value placed on preventative care needs to increase. By value, we mean outcomes divided by costs. Metrics and payment models for improving outcomes (increasing the numerator in that equation) should include greater reimbursement for services like medication management that drive higher levels of adherence," Dunham told me recently.
"Simultaneously, rewarding providers that demonstrate measurable cost reductions, especially before patients 'go acute,' and driven by an improvement in outcomes should be included in any new legislation that intends to shift from fee-for-service to value-based care. Our demonstrated ability to reduce readmissions in the Medicare population is a perfect example."
As they ponder the fate of SGR over the next month, Dunham urged lawmakers to embrace a mindset that is not fixated on cost.
"Our healthcare system exists in an environment with a 50-year-old model and stakeholders who don't want to see change. While too many of the stakeholders are continuing to fight over the bottom line of their balance sheets and the bottom line of the value equation (cost), we will continue working with our colleagues like Sharon Dudley-Brown at Johns Hopkins and to prove that collaborative care, inclusive of enhanced medication therapy management, has a major positive effect on the top line of the value equation, outcomes, to the benefit of all stakeholders."
In its proposed rules and payment rates, federal officials double down on efforts to wring value out of the Medicare Advantage program.
It's all part of the plan.
Proposed Medicare Advantage payment rates and rules for 2016 released Friday feature an average proposed revenue impact on health plans pegged at -0.95%. When risk-adjusted to reflect costs associated with treating elderly populations, such as chronically ill patients, MA health plans should post modest 1.05% revenue growth in 2016, federal officials say.
In a conference call with reporters Friday afternoon, Sean Cavanaugh, director of the Center for Medicare, said the proposed payment level and rule changes for 2016 represent "stable rate policies" that embrace a drive started last month to boost value-based contracting in Medicare.
He said the proposed payment rates and rules, which include down-weighting six MA quality star ratings to reflect the impact of socio-economic status (SES), exemplify the shift to value-based payment models in Medicare. "The principles and goals [of value-based contracting] apply to Medicare Advantage and Part D as well," Cavanaugh said, referring to Medicare's prescription drug program.
Calculations resulting in the proposed average payment rate cut of -0.95% were based on a number of assumptions:
MA Growth Rate: +1.7%. The ranks of MA beneficiaries have grown 42% since the passage of the Patient Protection and Affordable Care Act in 2010, according to the Centers for Medicare & Medicaid Services. More growth is forecast in MA enrollment, which CMS tallied at 16 million last year, or about one third of all Medicare enrollees.
Quality star rating changes: +0.5%. This figure includes anticipated revenue gains from the positive trend in the MA quality star ratings program combined with proposed rule changes such as down-weighting several MA star ratings measures to reflect SES impact.
Risk model revision: -1.7%. In an ongoing effort to scrap fee-for-service payment models, CMS is moving away from risk modeling the MA beneficiary population based on medical diagnoses, favoring actual-cost measures such as episodes of care. "In recent years, CMS began collecting encounter data from MA plans to develop more accurate payment models. In 2015, CMS added encounter data as an additional source of diagnostic data used to calculate risk scores," according to a fact sheet released with the proposed MA payment rate and rule changes.
Transition to PPACA rules: -0.8%. This figure includes services required for MA health plans being phased in over several years.
Cavanaugh said a "coding trend," which reflects the percentage of beneficiaries with risk-adjusted health coverage factors such as affliction with chronic illness, should put most MA health plans in the black for 2016. "The industry has historically been able to achieve a 2% increase," he said, noting that most MA plans should anticipate a 1.05% revenue impact from the proposed payment rate and rule changes.
The 2016 MA payment rate and rules are set to be finalized April 6. The public may submit comments to CMS until March 6.
Chilly Response from Health Plan Association
Mirroring its criticism of MA payment rate cuts last winter, the industry group America's Health Insurance Plans says CMS is putting a valuable value-based program at risk.
"There's wide recognition that providing stability to the Medicare Advantage program is critically important for the more than 16 million seniors enrolled," AHIP President and CEO Karen Ignagni said in a statement released by her office Friday. "CMS is now proposing additional cuts to Medicare Advantage at a time when healthcare costs are projected to increase. Protecting the millions who rely on this program should mean no further cuts. "
On Monday, AHIP circulated a letter signed by more than three dozen business groups. "Annual cuts to the MA program continue to jeopardize employers, employees, providers, and patients' choices in coverage under Medicare," the letter states. It was sent to CMS on Feb. 18.
In the proposed MA star ratings rules released last week, CMS officials say there is enough evidence showing the impact of SES on MA star ratings performance to start reforms. "Our preliminary analyses have revealed both practical and statistically significant evidence of differential outcomes for [low-income] beneficiaries," the proposed 2016 rules state.
Six MA quality star ratings are slated for down-weighting under the proposed 2016 rules:
Breast cancer screening
Colorectal cancer screening
Blood-sugar-controlled diabetes care
Osteoporosis management in women who had a fracture
Rheumatoid arthritis management
Reducing fall risks
CMS proposes reducing the weight of these star ratings measures by 50%.
In its review of MA star ratings for SES impact, CMS focused on 19 of the 46 star measures in the MA and Part D programs, according to the proposed 2016 rules. Several of the excluded star-rating measures are already risk-adjusted for SES, the proposed rules state.
Research on the impact of SES on MA quality star ratings suggests that several SES characteristics affect star rating performance, CMS says, including educational attainment, dual eligibility for Medicare and Medicaid, self-rated general health status, and age.
'It Could Have Been Worse'
Ashraf Shehata, US advisory leader for health plans at KPMG, says the annual ritualistic pushing and pulling over the MA payment rate is off to a relatively mild start.
"It could have been worse," he said Monday, noting the down-weighting of some MA star ratings for SES impact is a significant concession to health plans. "They're trying to encourage plans to welcome all beneficiaries… CMS wants to see the Medicare Advantage program continue."
Shehata says KPMG industry polling shows commercial insurance carriers have reached an MA plateau, with participation in the value-base program falling from 35% of carriers polled in 2012 to 24% in 2013.
"This is really for the plans with good care management and strong provider networks," he said, noting that the MA market includes payers ranging from well-established "Blues" to innovative healthcare providers. "Even some hospitals are opening MA plans because that's what their patients are asking for."
The proposed 2016 MA payment rate and rules reflect an "underlying theme" guiding Medicare officials, he says.
A pledge from CMS to enforce MA provider directory rules that are designed to boost transparency for patients indicates that the agency "is going to be much more watchful over risk-based payments. They're tightening up on areas that haven't been too tight," Shehata says.
In the second year of open enrollment, signups in the public health insurance exceeded 10 million—an increase of 40%—despite a last-minute rush and computer glitch. But a health insurer leader gives the exchange performance mixed marks.
For the operators of the fledgling public health insurance exchanges, no news was good news—until a computer glitch and call center anguish struck over the Valentine's Day weekend.
Compared to the chaotic inaugural open enrollment season for the Patient Protection and Affordable Care Act–spawned exchanges, the second open enrollment period that was set to close Feb. 15 had been relatively serene.
As of Feb. 11, at least 10.1 million Americans had either renewed a health plan or purchased a new one on the exchanges, federal officials said last week during a conference call with reporters. If all of those health plans are effectuated, including payment of the first month's premium, year-over-year enrollment in the exchanges would spike more than 40%.
Unlike the first open enrollment that nearly collapsed in the fall of 2013, the past three months slipped by with few dire headlines about the functionality of HealthCare.gov, the federally operated website that drives exchanges in three dozen states. New features on the website such as a window-shopping tool and a more adequately staffed call center had eased the enrollment process, federal exchange CEO Kevin Counihan said during last week's call.
"You talk to folks and the difference in the enrollment experience between this year and last year is pretty dramatic," the HIX czar said. "When it's easier for people to enroll, they also tell their friends that it's easier to enroll. It's the second year. It's getting just a bit more established."
This weekend, though, the HIXes hit Heartbreak Hill.
In a sprint-to-the-finish call center crush that started Friday, would-be HIX health plan beneficiaries faced long wait times that were experienced through Sunday's midnight enrollment deadline. On Valentine's Day, a data-verification feature failure on HealthCare.gov prompted a special enrollment extension through Feb. 22. The data verification glitch reportedly stopped about 500,000 people from enrolling.
Barring more last-minute shopper woes this week, the "front-end" of the federally operated exchanges appears to be moving in the right direction, however.
"Our call center reps have taken more than 12.1 million calls, and more than 8.2 million users have accessed the window-shopping tool on HealthCare.gov," Andy Slavitt, principal deputy administrator of the Centers for Medicare & Medicaid Services, said during last week's conference call. Call center traffic had increased 37% from Feb. 4 to Feb. 11 and callers were experiencing "minimal wait times," he said.
"That data tells me that our approach of making things more accessible, simpler, and easier for consumers was the right approach, and these are lessons we will take into the coming year."
Slavitt also reported an enrollment spike in the South, where several states such as Texas have high numbers of uninsured and underinsured residents. After cautioning reporters about the "apples to oranges comparison" of pre-effectuated health plan applications during open enrollment to the effectuated number of health plans at the end of last year, he said several Southern states had experience explosive HIX growth. "Texas has 85% more sign-ups. Louisiana 88%. South Carolina 94%. Mississippi has 97% more folks signing up for coverage," he said.
Chris Johnston
Associate VP of New Business
and Consumer Solutions,
Health Alliance Plan
Chris Johnston, associate vice president for new business at Detroit-based Health Alliance Plan, which is part of Henry Ford Health System, says the federally operated exchanges have improved but are still a work in progress.
"It was evident from the first open enrollment that CMS grossly underestimated what they were getting into and how to manage the entire process. The technology was inadequate, many of the rules and guidance from CMS were changing throughout the open enrollment period, and general public confusion was very evident," he told me. "For 2015, their change in technical expertise certainly helped, with fewer instances of the website going down. Many of the rules also had greater clarity. I would certainly have to credit the National Association of Health Underwriters (NAHU) for playing a huge part in educating the government on how this industry works, which helped CMS fix many of the issues."
Johnston says federal officials face several HIX market maturation challenges, particularly development of the Small Business Health Options Program (SHOP) exchanges. "There is still a great deal of room for improvement for not only how CMS corresponds with insurance carriers through technology, but also how their call center disseminates information to the general public. Also, the SHOP exchange has yet to prove its viability due to technology issues and for its complex and unrealistic regulations surrounding tax credits."
Uncertainty clearly remains an X factor on the exchanges.
From my perspective, the most important number in the HIX equation is 10 million, which is the rough estimate of individuals who will have healthcare coverage through the exchanges this year. Before the launch of the public exchanges in 2013, the ranks of uninsured and underinsured individuals swelled into the tens of millions. Many of these Americans relied on the emergency room, where they received episodic care in the most costly of settings.
For the sake of these millions and the ability of this country to improve healthcare in communities from coast to coast, I'm hoping the next HIX open enrollment is smoother from start to finish.
Lawmakers across the country are formally considering legislation that would streamline the process for physicians who seek to practice medicine in multiple states.
Despite sniping from critics, a proposal for an interstate licensure scheme for healthcare professionals, the Interstate Medical Licensure Compact, is advancing in several state legislatures.
Humayun Chaudhry, DO
President and CEO of the FSMB
"Since the model Compact legislation was finalized by state medical board representatives and released to the states for their consideration at the end of 2014, it has been introduced in 12 state legislatures and endorsed by 26 state medical and osteopathic boards. We expect both counts to continue to grow," Humayun Chaudhry, DO, president and CEO of the Federation of State Medical Boards, said last week.
The Compact is making steady progress in state capitals across the country. It was recently passed by the South Dakota Senate. The Utah House Health and Human Services Committee passed it out of committee by a vote of 11 to zero. And in the other states it is being considered and reviewed by committees of jurisdiction. "We expect a number of state legislatures to begin adopting the Compact this year," Chaudhry says.
A draft of the Compact, which aims to help ease staffing shortages at rural hospitals and break down barriers to expansion of telemedicine, was crafted last summer. It describes a scenario under which healthcare professionals would designate a "state of principal license" and register for licensure through state authorities participating in the Compact. The draft legislation calls for a commission to administer the Compact, with two voting members from each participating state serving as commissioners.
So far, the draft has been introduced at statehouses in Iowa, Maryland, Minnesota, Montana, Nebraska, Oklahoma, South Dakota, Texas, Utah, Vermont, West Virginia and Wyoming. The FSMB is tracking the legislation's progress on the organization's website.
Chaudhry says the Compact has garnered widespread support among healthcare providers and political leaders. "Sixteen US senators wrote to the FSMB last year to express their support for the legislation. The Compact also has the support of the American Medical Association, the Council of Medical Specialty Societies, the Society of Hospital Medicine, and many other national and state provider, hospital, and specialty organizations. Consumer and patient advocacy organizations like the South Dakota AARP chapter have also been very supportive of the Compact and its potential for improving access to care."
'False and Misleading Attacks'
The FSMB has lashed out at critics of the Compact, among them Independent Physicians for Patient Independence (IP4PI) and the Association of American Physicians and Surgeons (AAPS). In a letter to the US Senate dated Jan. 26, AAPS called the Compact "little more than a pretext for transferring state sovereignty to out-of-state, private, wealthy organizations" and called for "an investigation of the FSMB to "[evaluate] the very reason for their existence on top of state licensure boards and specialty boards."
In a statement released last month, the FSMB accused Compact critics of "false and misleading attacks."
"The FSMB became aware of a number of false and misleading public statements made by individuals and organizations opposing the Interstate Medical Licensure Compact that were creating confusion in several states," Chaudhry says. "The FSMB subsequently released a document debunking this misinformation so that legislators and the broader medical community have accurate information on which to make informed decisions."
Those so-called myths include erroneous contentions such as "the definition of a physician in the Compact is at variance with the definition of a physician by all other state medical boards" and "the Compact would supersede a state's authority and control over the practice of medicine."
An AAPS spokesperson called the Compact a "private, quasi-governmental power grab."
"Many physicians maintain licenses in several states. There is already a lot of reciprocity, which states could expand without any help from FSMB," AAPS spokesperson Jane Orient, MD, says.
"The Compact clearly undermines physicians' due process rights. It could be very coercive indeed. If a physician faces loss of licensure in one state, say if it passes a law requiring participation in Medicaid, he could be delicensed in all Compact states. And if he loses certification, perhaps someday for political reasons, say for declining to do abortions … he would lose his Compact licenses, for starters."
Orient says licensure reforms should be made at the state level rather than through an interstate initiative such as the Compact. "States could do a lot to streamline their own application process. When did an added layer of bureaucracy ever streamline anything?"
The American Legislative Exchange Council, an Arlington, VA-based non-profit organization that favors limited government, free markets, and federalism and is engaged in impacting legislation across the country, is also critical of the Compact. Sean Riley, director of the ALEC Task Force on Health and Human Services, said Friday that the Compact is well intended but has significant flaws.
"ALEC supports the goals of the Compact to increase access to telemedicine and help provide new opportunities for doctors to deliver care in today's highly mobile workforce. However, ALEC members are concerned with language in the draft that excludes qualified physicians who do not maintain specialty certification, particularly if the shared goal of the Compact is to expand access to the underserved," Riley says.
Critical Mass of States Needed to Launch Compact
Several states will have to enact laws codifying the model legislation before the Compact can seat commissioners and launch.
"The model Compact sets a minimum of at least seven states to enact the legislation in order to enable functionality and the creation of an interstate commission. The commission would be charged with the administrative functions of the Compact and be led exclusively by members of participating state medical boards," Chaudhry says.
