5/8/2013
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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
Alaska Chapter
May 17, 2013
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?
How we would like it to be . . .
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What we expect it will be. . .
What we fear it will be . . .
What we fear it will be . . .
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Turbulence
Affordable Care Act
Entitlements
Budget and sequestration
Payment/delivery system reform
ACA: the political environment
1. No plausible scenario where the
ACA will be repealed, but the law
still doesn’t command broad
public support
2. State engagement/ resistance may
determine the law’s effectiveness
in expanding coverage
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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States Split on Participation in Medicaid Expansion
Source: “Where Each State Stands on Medicaid Expansion,” The Advisory Board Company, March 4, 2013.
WA
OR
ID
CA
NV
UT
AZ NM
CO
WY
MT ND
SD
NE
KS
OK
TX
AR
LA
MO
IA
MN
WI
IL
AK
IN OH
MI
PA
KY
TN
MS AL GA
FL
SC
NC
VA WV
NY
ME VT
NH MA RI
CT
NJ DE
MD DC
HI
Undecided/No Comment (6)
Participating (26)
Leaning toward participating (2)
Leaning toward not participating (3)
Will not participate (14)
Analysis
•The Supreme Court’s ruling on the Affordable Care Act allows states to opt out of the law’s Medicaid expansion,
leaving this decision with state governors and leaders
•Governors of states participating in Medicaid expansion cited support for increased coverage for residents as reason
for opting in; governors of non-participating states cited high cost of expansion as reason for opting out; governors of
undecided states weighing costs of expansion before opting in or out
5/9/13: Update: FL, MO
legislatures turned
down expansion
despite governor’s
support
Source: Kaiser Health Tracking Poll. 11
Expand Medicaid to cover more
low-income people
Keep Medicaid as it is today
Percentage Responding to Survey Question: As you may know, the health care law expands
Medicaid to provide health insurance to more low-income uninsured adults…The Supreme Court
ruled that states may choose whether or not to participate in this expansion. What do you think
your state should do?
* Respondents who answered “Don’t know/Refused” not shown.
Public Opinion on Medicaid Expansion*
(March 2013)
Most Support Medicaid Expansion; Split on Party Lines
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
Impact of Medicaid Expansion on Patients
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/NEJMsa1202099
Impact of Medicaid Expansion on Patients
• After two years:
– Protection from financial catastrophe
– Reductions in rates of depression
– Better access to preventive services
– But no improvement in other health outcomes
“This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.”
Backer, et al, The Oregon Experiment — Effects of Medicaid on Clinical Outcomes, NEJM, May 2, 2013 http://www.nejm.org/doi/pdf/10.1056/NEJMsa1212321
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ACP’s 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
state’s governor and legislators
THANK YOU to the ACP Governors for your participation
in the campaign!
Half of States Opted for Federal Exchanges in 2012
State Exchange Second Most Popular Option
4 Source: “Where the States Stand on Insurance Exchanges,” The Advisory Board Company, Dec. 14, 2012.
Opted for partnership exchange Opted for federally run exchange Opted for state-run exchange
WA
OR
ID
CA
NV
UT
AZ NM
CO
WY
MT ND
SD
NE
KS
OK
TX
AR
LA
MO
IA
MN
WI
IL
AK
IN OH
MI
PA
KY
TN
MS AL GA
FL
SC
NC
VA WV
NY
ME VT
NH MA RI
CT
NJ
DE
MD DC
HI
Totals
Federal: 25
Partnership: 19*
State: 7
*18 states and D.C.
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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100
88
77
66
47
29
14
Medicaid
73
64
55
39
24
12
Medicaid
100 100
53
46
40
28
18
8
Medicaid
100
37
32
28
20
12
6
Medicaid
Source: The Henry J. Kaiser Family Foundation.
Percentage of premium paid by family Percentage of premium covered by subsidy
*For families of four purchasing coverage in the exchange, not through an employer; numbers reflect standard plan for coverage
ACA: A Closer Look
Family Health Insurance Premium Obligations Vary
by Age, Income
Percentage of Premium Paid by Family of Four vs. Covered by Subsidy
Policyholder Age
450%
400%
350%
300%
250%
200%
150%
100%
20 40 60 50 30
100
97
85
73
52
32
15
Medicaid
Family
Income as %
of Poverty
Level
Analysis
• A family of four is eligible for Medicaid at 133%, the same percentage below the poverty level as an individual
• A family of four buying coverage in new state-based health insurance exchanges will be eligible for federal
subsidies if their joint income is below 400% of the poverty level; above 400%, families pay full cost
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/economy/many-americans-unaware-of-health-
care-law-changes/2012/11/20/ee02b0bc-3272-11e2-9cfa-e41bac906cc9_story.html?hpid=z2
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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$60,000
$170,000
$60,000
$357,000
$119,000
$357,000
$0
$50,000
$100,000
$150,000
$200,000
$300,000 $250,000
$350,000
A Beneficiary Lifetime Perspective: Payroll Contributions < Expected Benefits $400,000
Average Average Wages
Medicare Expected Benefits, Lifetime Medicare Payroll Taxes, Lifetime
$188,000 Female
Male
Source: Steuerle CE and Rennane S. "Social Security and Medicare Taxes and Benefits Over a Lifetime.” Washington, DC: The Urban Institute. June 2011.
Single, Average Wage Single, Average Wage One-Earner Couple, One-Earner Wage Couple, Average Wage
Two-Earner Couple, Two-Earner Couple, Average Wage
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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!
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-releases/7Feb13-health-spending-growth-4-percent-price-14year-low
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/medicarespendinggrowth/ib.cfm
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Payment reform
Policymakers across the spectrum want to get
rid of the SGR (but can’t 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
“New” approaches
ACOs
Episode-of-care bundles (new rule
expected soon)
Risk-adjusted global capitation
PCMH and PCMH-N practices
Light at the end of the SGR tunnel?
House GOP committee chairs offer plan to eliminate
SGR, seeking bipartisan support—August 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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Source: Congressional Research Service. 3
Key Terms
Sequestration 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
Budget Control Act of 2011 (BCA) Mandated sequestration starting Jan. 2, 2013 if Congress
could not reduce deficit by $1.2T–$1.5T over a 10-year
period
American Taxpayer Relief Act
(ATRA) of 2012
Mandates modified sequestration starting March 1, 2013 if
Congress cannot negotiate a way to avoid it
The Federal Budget and Health Care
In 2013, Sequestration Delayed (Without Deficit Deal)
Source: U.S. House of Representatives Committee on the Budget Democrats, “Sequestration: An Update for 2013,” Jan. 17, 2013; Congressional Research Service, “The ‘Fiscal Cliff’
and the American Taxpayer Relief Act of 2012,” Jan. 4, 2013.
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Jan. 17, 2013 BCA start date for
discretionary caps
March 1, 2013 ATRA delayed start date for deficit
reduction sequester
March 27, 2013 ATRA delayed start date for
discretionary caps
Impact on deficit reduction sequester: Two-month delay
prorates 2013 spending cuts by total of $24B
Impact on discretionary caps: ATRA lowers cap for 2013 by $4B and 2014
by $8B to offset cost of delay
Jan. 2, 2013 BCA start date for deficit
reduction sequester
American Taxpayer Relief Act (ATRA) Pushes Sequester to March
Most Believe Sequestration Will Have No Impact on Families
Source: Steven Thomma,“Poll: Sequester Has Not Hit Home,” McClatchy Newspapers, March 10, 2013.
What Kind of Impact Will Sequestration Have on You and Your Family?
Negativ
e
Impact
Positive
Impact
No Impact
Analysis
49% of registered voters believe federal spending cuts will have no effect on them or their families
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Sequester Cuts to Public Health Threat Response Programs
Source: The Washington Post 2013.
Analysis
• Most states will lose less than $1M in federal funding for public health threat response programs due to sequester
• D.C. will sustain the lowest cuts ($57,000); Delaware and Montana also face less than $100,000 in cuts
• The more populous states of California and Texas will suffer the highest cuts ($2.6M and $2.4M, respectively)
OH
WV VA
PA
NY
ME
NC
SC
GA
TN
KY
IN
MI
WI
MN
IL
LA TX
OK
ID
NV
OR
WA
CA
AZ NM
CO
WY
MT ND
SD
IA
UT
FL
AR
MO
MS AL
NE
KS
VT
NH
MA
RI CT
NJ
DE
MD
DC
AK
HI
Cuts to Public Health Threat
Response Programs
$0 - $0.5M
$0.5M -
$1M $1M -
$1.5M Above
$1.5M
Department of Justice, National Institutes of Health
to Incur Major Cuts due to Sequestration
Source: “Flight Delays, Furloughs and Military Cuts, Oh My!,” Matt Vasilogambros, National Journal, Feb. 21, 2013. 35
* List is non-exhaustive
Cuts to Key Government Programs and
Agencies*
(Cuts in Billions)
Note
Several mandatory spending programs are exempt from cuts, including Social Security, Medicaid, food stamps,
veteran’s benefits and the Children’s Health Insurance Program
Federal
Aviation
Administration
National
Park
Service CDC
National
Institutes
of Health
Federal
funding
for health
centers
Global
humanitarian
assistance
Global
health
funding
Global
conflict
prevention
Military
assistance
to foreign
nations USAID FEMA
Head
Start
programs Department
of Justice
National
Science
Foundation NASA
Medicare sequestration:
2% cut in payments to physicians, hospitals,
GME, other providers, estimated to result in
nearly 500,000 job losses
Became effective April 1
Two percent cut will remain in effect for ten
years (unless Congress replaces it)
For more information:
http://www.acponline.org/running_practice/payment_coding/medicare/s
equestration_rules_medicare.htm
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Return of the Grand Bargain?
Obama FY 2013 budget
IME cuts
Part D drugs
Single Medicare deductible
More means-testing
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
www.acponline.org/pressroom/snhc_release13.htm?hp
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SNHC 2013: improving the system
1. Effectively implement the coverage
expansions and related policies under the ACA
2. Replace across-the-board sequestration cuts.
3. Eliminate Medicare’s SGR formula and
transition to new payment models.
4. Implement policies to recruit and retain
primary care physicians.
5. Reduce firearms-related injuries and deaths
SNHC 2013: reducing barriers to
patient-physician relationship
1. Payment reforms must allow physicians to
spend more appropriate clinical time with
patients.
2. Payment reforms to hold physicians
accountable for outcomes of care should
eliminate second-guessing of clinical
decisions leading to those outcomes.
SNHC 2013: reducing barriers to
patient-physician relationship
3. Harmonize and reduce numbers of measures.
4. Reduce administrative barriers in current
Medicare reporting programs, improve
bonuses, and broaden hardship exemptions; if
necessary, consider delaying penalties.
5. HHS should provide more clinically relevant
ways to satisfy ICD-10 requirement.
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SNHC 2013: reducing barriers to
patient-physician relationship
6. Improve the functional capabilities of
EHRs.
7. Standardize claims administration and
pre-authorization requirements.
8. Enact medical liability reforms.
9. Government should not interfere with
physician free speech and the patient-
physician relationship.
Resources for you:
Redesigned ACP advocacy/public
policy website
Practice Planner
Internists’ Guide to Health System
Reform
Social media
Search by topic!
Search
library by key
words
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NEWLY UPDATED!
Practice planner
5/8/2013
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Follow me at@bobdohertyACP
ACP advocacy on payment reform
It’s not just about new payment
models—ACP advocacy has
resulted in big wins for
internists on improving
Medicare and Medicaid fee-for-
service
Transition of Care Management
(TCM) Codes – Good News for IM
Could result in a 3-5% increase in overall payment to an Internist from Medicare alone, even with sequestration!
ACP was actively involved in designing, valuing, and getting CMS (and other payers) to pay for these codes…
And we’re not finished yet.
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Transition Care Management (TCM)
Codes
CPT Code 99495
• Communication with the patient or caregiver within two business days of discharge.
• Via phone, e-mail, or in person.
• Involves medical decision making of at least moderate complexity
• A face-to-face visit within 14 days of discharge.
CPT Code 99496
• Communication with the patient or caregiver within two business days of discharge.
• Via phone, e-mail, or in person.
• Involves medical decision making of high complexity
• A face-to-face visit within 7 days of discharge.
More information on these can be found at:
http://www.acponline.org/running_practice/payment_coding/coding/tcm_codes.htm
And in the November/December 2012 issue of Internist
How much are the TCM services
worth?
CPT Code Payment (for a physician
office)
99495 $164
99496 $231
Using the 2012 conversion factor (and does not account for the overall 2% sequestration cut)
Will also vary by payer and geography
Is approximately $60 more than just billing an E&M office visit
Beyond the TCM Codes
Currently working on Complex Chronic Care Coordination codes – expected to involve the development/implementation of care plans
CMS is interested in continuing down this pathway:
• Specifically in services that “offer the promise of higher-quality care and lower overall health care costs”—leading to the medical home model…
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Higher Medicaid pay (most states)
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 E&M 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
Medicaid primary care parity
Increases Medicaid payments in 2013 and
2014 to no less than Medicare
Average national gain of 73% in 2013 but
varies by state
But Alaska’s Medicaid payments already are
higher than Medicare, so no gain for your state
Kaiser Commission on Medicaid and the Uninsured, How Much Will Medicaid Physician Fees for
Primary Care Rise in 2013? Evidence from a 2012 Survey of Medicaid Physician Fees, December
2012, http://www.kff.org/medicaid/upload/8398.pdf
Medicare to Medicaid fee ratios, by
state
<.60 (8 states
. 61 ‐.75 (14 states
.76‐.85 (16 states and DC)
.86‐1.00 (8 states) >1.00(3 states)
http://kff.org/health-reform/issue-brief/how-much-will-medicaid-physician-fees-for/
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
Summary
Coming up: new battles on spending
and revenue, immediate cuts to
essential programs including 2%
Medicare pay cut
Entitlement reform will (must)
happen—but how and when? Cuts in
GME, other ACP priorities?
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
(in almost all states . . .)
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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?fulltext=ACP+universal+health+insurance&submit=yes&x=15&y=9
3
Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008
Why does it matter? Because being uninsured is a matter of life and death
Age
U.S.
populatio
n
(millions)
Percent
uninsured
within
age
group
Total deaths
Uninsured
excess
deaths ).
:
2000
2001
2002
2003
2004
2005
2006
Total:
21,000
23,00
Year Number of deaths due to uninsurance
2000 20,000
2001 21,000
2002 23,000
2003 24,000
2004 24,000
2005 25,000
2006 27,000
Total 165,000 Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008
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?