Tag Archive: CMS

One year after jettisoning single payer, Vermont now looks to control medical costs via expanded “all payer” ACO

One year after Vermont abandoned its plan to move to a single payer health finance framework amid concerns over the ability of tax revenues to cover rising medical utilization costs under that payment model, the state is rolling out an alternative aimed at reining in those costs. It would do so through a proposed “all payer model.” The model builds on the Patient Protection and Affordable Care Act’s Medicare Shared Savings Program Accountable Care Organizations (ACO) model in which providers share risk with reimbursements tied to the overall cost and quality of care provided rather than discrete medical procedures under the traditional fee for service model. Reflecting the pervasiveness of costly, chronic health conditions no longer largely confined to the Medicaid eligible population, the Vermont proposal would expand that model to all forms of reimbursement, including Medicaid and commercial plans:

The State would agree to coordinate with Medicaid and commercial insurers, and in return the federal government would allow Medicare to participate in the ACO value-based payment model. As is true today, health care providers’ participation in ACOs is voluntary; the ACO must be attractive to providers and offer an alternative health care delivery model that is appealing enough to join.

The goal of the proposed all payer model is to limit the annual growth of statewide medical spending to 3.5 percent with a maximum spending growth of 4.3 percent:

The goal of this financial target is to bring health care spending closer to economic growth. When health care costs grow faster than Vermont’s economy, Vermont families find their premiums rising faster than wages. This is also true in the state’s Medicaid budget, which grows faster than the revenue sources used to fund it.

The board’s authority to regulate reimbursement rates exists under current state law, according to a term sheet outlining the proposal. Vermont will seek any necessary waivers from the federal government to operate the all payer model, noting the state has jointly developed a policy framework and the needed waivers in consultation with the federal Health and Human Services Department’s Center for Medicare & Medicaid Services.

The fee for service reimbursement model is no longer suitable and is “antiquated” according to the Vermont proposal:

When the fee-for-service health care payment model was devised over 50 years ago, the average life expectancy of Americans was significantly shorter than it is today, and the burden of chronic disease was smaller. The Centers for Disease Control and Prevention (CDC) reports that treating people with chronic diseases accounts for 86 percent of our nation’s health care costs. Health care reimbursement was designed to pay for acute medical conditions that required a single visit to the doctor or a single hospitalization. By contrast, persons with chronic conditions require regular, ongoing care across the continuum of traditional medical services and community-based services and supports. Fee-for-service reimbursement makes it difficult for innovative health care providers to adapt to the changing needs of the population that they serve. The antiquated system provides clear financial incentives to order additional tests and procedures, yet it does not reward doctors and other health care professionals for providing individualized and coordinated care for complex chronic conditions. In the end, patients may receive care that is expensive, fragmented, and disorganized.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Medicaid beneficiaries likely to get coverage in some state exchange marketplaces

Medicaid beneficiaries appear increasingly likely to participate in health benefit exchanges in at least some states in 2014.  Two Medicaid-eligible populations may end up getting commercial health insurance via the exchanges:  those whose incomes fluctuate above and below Medicaid eligibility levels and those residing in states that have opted not to expand the Medicaid eligibility cutoff to 133 percent of federal poverty guidelines.  Both scenarios require waivers from the Center of Medicare and Medicaid Services (CMS).

The first group would be offered exchange products called Medicaid bridge plans authorized under guidance issued by CMS on December 10, 2012.  This is the so-called “Tennessee Plan” since that state originated the concept and is designed to ensure continuity of medical care of Medicaid beneficiaries so they don’t have to change plans and providers as their incomes rise and fall.

The second population would participate in the exchange marketplace under the so-called “Arkansas Plan” in states that have not chosen to expand Medicaid eligibility to those earning up to 133 percent of federal poverty as authorized by the Patient Protection and Affordable Care Act.

In California, legislation that would expand that state’s Medicaid eligibility has failed to advance for nearly two months amid state fiscal concerns over the long term cost share impact and to what extent counties should participate in the cost share.  Legislation authorizing Medicaid bridge plan products for those earning up to 200 percent of federal poverty, SBX1-3, has passed the Senate and awaits action in the state Assembly.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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