With a head start on most of the country, Arkansas is pioneering a series of system-wide payment reforms designed to create a value-based healthcare delivery system.
When you think of fiscally progressive, trend-setting states, Arkansas probably is not the first to come to mind.
But the home of the Razorbacks is on the cutting edge of healthcare reform efforts nationwide, with the state building the country's first public-private, universal-payer, value-based healthcare delivery system.
In 2012, state officials launched the Arkansas Payment Improvement Initiative, a gain-sharing/cost-penalty payment system for healthcare providers. The first payers to enter into the new system were the state's Medicaid program and the dominant commercial-insurer duo, Arkansas Blue Cross Blue Shield and Humana.
"Medicaid almost has to lead the way," Andy Allison, the state's Medicaid director, told me earlier this month. "Medicaid typically adopts the policy changes first, then the private payers adopt later."
Arkansas' universal payer system is so innovative, that federal officials are studying whether Congress would have to pass a new law for Medicare to fully participate, Joseph Thompson, MD, the state's surgeon general, told me earlier this month. "We have stimulated debate in the federal Department of Health and Human Services," he said. "They may be concerned they don't have statutory authority."
Thompson told me that a universal payment system can be a powerful driver of change in any state's healthcare reform efforts, such as setting consistent incentives for providers to attain quality and cost containment goals. "We have all of our public and private payers pulling in the same direction," he said. "We are looking at a total system transformation."
I have been politically aware since Jimmy Carter was elected president and a member of the workforce nearly as long. The level of cooperation and conciliation that is on display in Arkansas appears unprecedented.
The political maneuvering to establish and maintain a key element of the state's healthcare reforms, Medicaid expansion, has been an epic struggle.
After Election Day in 2012, Democratic Gov. Mike Beebe faced a huge obstacle in his quest to expand Medicaid to provide coverage for half of the state's uninsured residents – as many as 250,000 adults. Republicans had taken control of both houses in the Arkansas legislature for the first time since Reconstruction. The GOP caucus opposed Medicaid expansion. And 75 percent majority votes were required in the House and Senate to change the state's Medicaid program.
"There were two general groups of Republicans, all of whom don't like the ACA, don't like Obamacare," Beebe told me last week. "Some are honestly opposed, some are afraid of elections."
The political impasse was broken last spring, when a group of business-friendly Republican senators led a drive to expand Medicaid through private insurance policies purchased on the state's new public exchange, Arkansas Health Connector.
The "private option" for Medicaid expansion has since become a rallying cry for expansion advocates in nearly two dozen states where Republican lawmakers have been blocking expansion of the program. Last month, New Hampshire became the latest state to adopt Medicare expansion, again with Republican senators taking up the private option banner.
State Sen. Jonathan Dismang, who helped lead the GOP effort to enact private option Medicaid expansion in Arkansas, told me last week that The Natural State has shown the country how to make the difficult compromises necessary to advance healthcare reform. "We would like to transform Medicaid. We have something that can be replicated in other states," he said. "I feel good about what we've done."
I feel good about it, too. Arkansas is showing the country that it is possible to tear down the political and economic barriers to healing what ails US healthcare.
To fix its "deeply flawed" website, the Maryland Health Benefit Exchange is turning to Access Health CT. Now CT officials are mulling offering similar services to other state exchanges—for a fee.
Joshua Sharfstein
Secretary of the Maryland Department of Health and Mental Hygiene
Officials at the Maryland Health Benefit Exchange have been grappling with a problem-plagued website and are planning to retool their existing platform with software code from the Access Health CT, theConnecticut health insurance exchange.
"Our goal is to have the Connecticut upgrade complete and fully installed before the [next] open enrollment in the fall," Joshua Sharfstein, secretary of the Maryland Department of Health and Mental Hygiene, said Friday. He called the Connecticut exchange's website "well-designed and successful."
"Our main focus has been on the technology," Sharfstein said of top Maryland officials associated with the state's exchange, which surpassed its 260,000 resident target for 2014 enrollment.
In a memo to the Maryland exchange's board of directors dated March 31, state officials including Sharfstein recommend using the Connecticut exchange's website code with "only minor retrofitting for branding, notices, interfaces (including with carriers and with the Medicaid system), and to accommodate Maryland-specific rules."
Sharfstein, state IT Secretary Isabel FitzGerald and Carolyn Quattrocki, acting director of the Maryland Health Benefit Exchange, note in the memo that the state's existing HIX website "has improved dramatically since December." But acknowledge that a rebuild is necessary: "Despite these efforts to improve the system, it remains deeply flawed."
Adopting the Connecticut code is a superior solution to the two other options Maryland officials considered, they wrote. Using the federal government's exchange website code "does not adequately support our business model or Medicaid," the Maryland officials wrote. And "remediating the existing architecture" was deemed too expensive and "would take over 12 months and cost more than $66 million."
'New Revenue Stream' The website code the Connecticut exchange is being provided to Maryland at no charge because Access Health CT is a quasi-public agency that is not yet authorized to charge for HIX-related goods and services. Jason Madrak, chief marketing officer at Access Health CT, said last week in a phone interview that handing over the website code is the least ambitious of three lines of HIX business his colleagues are considering to offer other states.
"Code is code," he said of the gratis deal with Maryland, one of the first major upgrade agreements between public exchanges since they were launched under the Patient Protection and Affordable Care Act last fall.
"There is some expertise that is valuable, and we would be open to providing that to them," Madrak added of assistance to the Maryland exchange. "Now that they have the code, the ball is in their court."
Madrak called providing the code an example of "exchange-in-a-box" HIX services. Under that scenario, there would be "little involvement on our part." In contrast, a full suite of HIX administration services would require hands-on involvement. A third option would be a level of services somewhere in between.
"We are actively trying to turn this into a business operation," he said, adding Access Health CT officials want to offer "valuable services to other exchanges to literally generate a new revenue stream."
Madrak said there would be some "administrative issues to work through" before the Connecticut exchange could start charging for HIX services. A key issue is deciding on a form of payment, Madrak said. A couple of options under consideration are a consultancy fee and monthly "member" fee.
Access Health CT, which is widely viewed as one of the strongest public exchanges in the country, has a strategic edge over most of the other exchanges, Madrak said. "We are able to take more of a leadership position because we were stable in our enrollment period, and now we can be forward thinking."
As they look to the future, Connecticut officials see an opportunity to play a large part in a regional HIX mix. "The country probably doesn't need 50 individual exchanges," Madrak said.
In a display of unprecedented cooperation and compromise, Arkansas is on the verge of creating the country's first public-private, universal payer, value-based healthcare delivery system.
Imagine you are the Democratic governor of a rural state that has struggled for decades to help provide healthcare services for all of its citizens.
This is the second part of a multi-part series on healthcare payment reform in Arkansas. Read Part I.
Out of your state's 2.9 million residents, a half million people lack health coverage.
With 100 percent financial support from the federal government, you can expand the state's Medicaid program and offer health insurance to 250,000 residents. Medicaid expansion would build on a high-risk gamble you had recently taken to create a value-based medical payment system across the state. It also would help address a $300 million Medicaid gap in the state's budget.
But almost every Republican in the state legislature views Medicaid as hopelessly broken. And you need 75 percent majorities in the GOP-controlled House and Senate to change the state's Medicaid program.
Now you know how Arkansas Gov. Mike Beebe felt heading into the legislature's key votes on Medicaid expansion in April 2013.
"The real issue was the 75 percent vote. That was the key to this whole problem," Beebe said in phone interview Tuesday, noting he had a powerful ally in his bid to expand Medicaid as part of a grand strategy to transform the financing of healthcare in Arkansas. "The logic dictates that you do it."
Medicaid expansion has become one of the fiercest fronts in the political battle over the federal Patient Protection and Affordable Care Act, with about half of the states having adopted Medicaid expansion. Many chose the relatively straightforward route through growth of existing Medicaid programs.
But Arkansas is among several states that have decided to expand Medicaid through a "private option," using the 100 percent federal expansion financing to fund private insurance policies for the poor purchased through the state's PPACA exchange, Arkansas Health Connector.
"Medicaid is the driving force here," says David Wroten, Executive VP of the Arkansas Medical Society. Two players dominate the modest commercial payer market: Arkansas Blue Cross Blue Shield at No. 1 and Humana a distant second. "The real results are confined to the Medicaid program and Blue Cross Blue Shield," he says.
'You're Hurting Your Own People'
Beebe has championed education, economic development and tax relief since becoming governor in 2007, and he is reluctant to take on the mantle of healthcare reform. "Education and economic development are still my primary focuses," he says. "They make all the other problems easier to solve."
But the former hospital board member said no public official, especially the state's chief executive, could ignore the need to enact system-wide healthcare reforms as the Medicaid funding gap raised alarm in 2011. "You've got to be a counter puncher sometimes," he says. "You can't ignore problems even if they weren't your chosen focus."
"The old fee-for-service model was broken," Beebe said. "I wanted to see where we could go to get away from fee-for-service."
Finding a way to get Medicare expansion through the legislature became a top priority. The governor said he has told leaders of other states "they are crazy to their face" for bucking Medicare expansion. "You're going to pay for it whether you take it or not," he says of the cost of providing medical care to the poor, particularly for hospitals as the federal government scales back Disproportionate Share Hospital payments for uncompensated care.
"These states that are just saying 'no' are paying for the rest of us and not getting anything in return at the expense of their people and their hospitals… You're hurting your own people."
In Arkansas, Republicans embraced an innovative approach to Medicaid expansion that broke The Natural State's political gridlock on the issue. "The approach we took is appealing to some of them," the governor said of Republican lawmakers, singling out a "pragmatic and business-friendly" GOP faction in the Arkansas legislature. "There's an ideological appeal to doing it with private insurance."
State Sen. Jonathan Dismang, (R-Beebe), says Republicans who joined with Democrats to approve private option Medicaid expansion felt compelled to act because of the Medicaid budget gap. "We felt we had to do something. Largely, it was out of necessity," he said.
Dismang says he and many of his Republican colleagues view private option Medicaid expansion as a way to fix the program. "We felt we had to something very substantial. Membership was not going to be satisfied with tweaks here and there."
Many conservative members of the Republican caucus worried about the long-term prospects of Medicaid expansion, including the program's ability to evolve with the changing healthcare landscape and the federal government's commitment to paying for expansion.
"I can understand the concerns from the other side, the concerns about sustainability," Dismang said of Republican lawmakers who opposed Medicaid expansion. But the benefits of using private insurance through the exchanges to fix Medicaid could hold promise nationwide, he noted.
"We are decreasing our existing (fee-for-service) Medicaid rolls. These (newly covered) individuals are going to have private insurance cards. They're going to have skin in the game," he says. "From my perspective, we had a broken system. … We were hundreds of millions short. We attacked traditional Medicaid and made some reforms there."
Medicaid Struggle Far From Over
In addition to enticing Republican lawmakers with the private option, the state's Medicaid expansion pact requires the program to clear the 75 percent legislative hurdle every year. In February, renewal of Medicaid expansion barely passed in the Senate, 27–8. Last month, four rounds of balloting were necessary in the House to gain passage, with a razor-thin 76–24 final vote.
And monumental work remains to control Medicaid costs, Wroten said. Physicians represent a fraction of Medicaid spending in Arkansas, with payments to individual doctors who are not hospital employees accounting for as little as 2 percent of the state's total Medicaid budget, according to the medical society leader. "We're small players in this," he said.
"Eventually, we need to do payment reform for the entire Medicaid program," Wroten says. "We all joined this effort with the expectation that this would be a system-wide change… We can cut the physician budget in half and not make a dent in the Medicaid budget."
Promising Start
Beebe, who is ineligible to run for re-election in the fall due to term limits, says anecdotal evidence and early results from Arkansas' healthcare reform efforts are positive. He cites the experience one obstetrician has had with the state's new medical payment system, which allows high-value physicians to share in cost savings but makes high-cost physicians pay some reimbursement money back.
"He was going to lose money on every baby and he was a fine doctor," the governor said. "As a matter of routine, his staff was sending every placenta to a pathologist, which was totally unnecessary and expensive. A little bit of self-examination can totally change your overall costs."
Many Arkansas leaders deserve credit for the House and Senate votes last April that cleared the way for Medicaid expansion, Beebe says, as well as for other vital reforms such as the value-based medical payment system and improved care coordination through primary care medical homes.
"We've really got to give a lot of credit to a lot of people," he says of state officials and members of the coalition who have been pushing Arkansas' healthcare reform efforts forward, including Wroten, Surgeon General Joseph Thompson, Arkansas Hospital Association President Robert "Bo" Ryall, state Medicaid Director Andy Allison, state Department of Human Services Director John Selig, and "Republican and Democratic legislators who got this done."
Medicare's release of physician payment data holds great potential for the industry's shift toward value-based payments. While medical associations are opposed to pay transparency, one physician explains why he supports it.
"When it comes to privacy and accountability, people always demand the former for themselves and the latter for everyone else." – novelist and futurist, David Brin
Transparency is a prominent panel in the patchwork quilt of federally driven healthcare reform efforts across the country. In particular, transparency in billing for medical services is widely viewed as a critical component in establishing a value-based US healthcare system.
The logic is compelling: Informed patients will seek out physicians who provide high-quality medical services at the lowest cost, informed physicians will use data to improve the efficiency of their practices, and informed health plans will apply pressure to healthcare providers who fall short of providing value to their patients.
But last week, the American Medical Association, Medical Group Management Association, and other physician groups blasted federal officials over the release of Medicare physician payment data that had been kept secret under a court injunction since 1979. The justification for keeping the data secret included this dire warning—payment confusion would spread throughout the land and careers would be unjustly destroyed.
AMA President Ardis Dee Hoven, in a statement released by her organization, made clear why she's opposed to the Medicare data dump, "releasing the data without context will likely lead to inaccuracies, misinterpretations, false conclusions, and other unintended consequences."
Secrecy is at Odds with Reform
Few black-and-white statements can be made about reforming the delivery of healthcare in the United States. The issues are complicated and US healthcare is a sprawling industry that directly impacts more than 300 million people.
But when I was reporting last week's release of the Medicare physician payment data, California-based cardiologist Earl Ferguson, MD, PhD, shared a clear-cut truth with me: "This is just one step," he said. "We need to have a lot more transparency in government and health plans. We can't keep everything secret if we're going to reform the system."
Nowadays, doctors are a grumpy lot. No one likes being placed under tighter scrutiny or seeing their business' costs outpacing revenue, which is what makes Ferguson's perspective so precious.
Soon after I joined the HealthLeaders staff in January, the California cardiologist was among my first physician interviews. He had recently published a book on US healthcare reform and his passion is palpable. Ferguson is not only fighting to reform the country's healthcare delivery system, he is committed to saving a noble profession.
'Find Out What's Rational'
When we talked last week, I could tell the good doctor was hesitant to break ranks with the AMA over the release of the Medicare physician payment data. But for Ferguson and a growing legion of physicians who are willing to enter the political fray to fight for what they feel is right, conscience trumps self-interest.
"We really need to start looking at this data," he told me. "We need to get all these people together and find out what's rational, rather than having bureaucrats and others making decisions for us."
The Medicare physician payment data released last week provides claims information for 880,000 physicians. The data includes the types of procedures doctors perform and the volume of services. "[This type of] information will be invaluable to people," Jennifer Schneider MD, vice president of analytics at San Francisco-based Castlight Health, told me last week.
Although she dislikes the term "Big Data," Schneider says the Medicare physician payment information's full transparency potential will be realized when researchers combine it with other databases.
"The release of this information and the overlay of other information becomes really powerful," she told me, noting that the Medicare data could be combined with commercial payer claims to create a more complete financial picture of a physician's practice.
As the courts and lawmakers tackle releasing more information about physicians, health plans and other healthcare system stakeholders, I hope they are guided by Ferguson's undeniable truth: "We can't keep everything secret if we're going to reform the system."
A federally backed drive to create a value-based healthcare delivery system in partnership with providers and payers is under way nationwide. Three years ago, an unprecedented financial crisis prompted Arkansas "to bet the farm" on a similar value-based healthcare model.
This is first of a multi-part series on healthcare payment reform in Arkansas. Read Part II.
Soon after the federal Patient Protection and Affordable Care Act became law in 2010, the Arkansas, consistently ranked near the bottom in many US health statistics, faced a healthcare system financial calamity.
Years of skyrocketing costs had pushed the sustainability of the state's healthcare system to the brink and baby boomers had swollen the Medicaid program's rolls. When lawmakers opened the 2011 legislative session in Little Rock, they gazed into the maw of a 2012 Medicaid program gap estimated at more than $300 million. Some estimates were as high as $400 million.
The state's political, healthcare, and business leadership faced a Herculean challenge. "We were hitting a cliff and we had to take dramatic measures," says Arkansas Surgeon General Joseph Thompson, MD.
"The financial picture for the state was coming into focus," says Andy Allison, Arkansas' Medicaid director, adding "the wave of disability" enrollment in Medicaid programs hits before the age of 65. "We have been receiving the baby boom in disability enrollments through the Medicaid program for several years… The program faced a real question of sustainability."
1 in 4 Uninsured
Arkansas has also faced a chronic healthcare coverage problem.
When Arkansas launched its new public health insurance exchange in the fall under the PPACA, about one quarter of the state's adult population below the age of 65 had no health insurance, Thompson says.
Of those half million Arkansans, about 250,000 were eligible to obtain insurance through the state's "private option" expansion of Medicaid and about 250,000 were eligible to obtain insurance through the new exchange with federal tax credit subsidies.
State reforms launched two years before the PPACA exchanges are now accelerating alongside federal reform initiatives. "We've been able to bring all the payers together," Thompson says of Arkansas' new public-private healthcare payment system, which includes Medicaid and the state's top private insurers.
The Natural State is building a robust electronic health records infrastructure, and is among the first in the country to move to Stage 2 of the federal Meaningful Use program.
PCMH
On the provider side, Arkansas has adopted the medical home model for team-based care. As is the case in most rural states, medical resources are scarce in Arkansas. One county is served by a single doctor.
But medical homes, which are linked to payers and other providers through EHR, can provide coordinated care at an affordable cost. With a widespread population and relatively modest medical infrastructure compared to more urban states, Arkansas officials decided the medical home model would be superior to accountable care organizations. "We've chosen to empower the local physician and put him in the driver's seat," he says.
"We are looking at a total system transformation," the pediatrician adds. "From our internal perspective, we're betting the farm on this."
Payment Reform Plays Key Role
The roots of Arkansas' push for a "patient-centered" healthcare system reach back to 1998, with the forming of the Arkansas Center for Health Improvement. On its website, ACHI bills itself as "a nonpartisan, independent health policy center dedicated to improving the health of Arkansans." Thompson, who joined the ACHI staff 15 years ago, serves as the organization's director.
The heart of the state's healthcare reform efforts is the Arkansas Payment Improvement Initiative, which was launched in 2012 and is expected to be fully in place by 2017. The payment initiative has "two complementary strategies" to use multi-payer market muscle to promote adoption of reforms among healthcare providers:
Population-based healthcare services provided through medical homes and other "delivery models that bear responsibility for the complete needs of a population."
Episode-based care with "team-based management of services provided to a patient frequently spanning multiple encounters with the delivery system, such as hip replacement."
The PCMH-based payment model is a key component of Arkansas' drive to create a value-based healthcare delivery system. It provides financial incentives for providers to excel in care coordination, quality and cost containment, according to ACHI: "Providers share in the savings or excess costs of an episode depending on their performance for each episode."
Payer's Perspective
The multi-payer payment system Arkansas has established pushes customary boundaries of healthcare insurance industry cooperation.
With the Medicaid shortfall looming in 2011, Democratic Governor Mike Beebe gave Arkansas' commercial health insurers a choice, "pay better as opposed to paying more," says Steve Spaulding, VP of enterprise networks at Arkansas Blue Cross Blue Shield.
When executives from the state's top commercial insurers—Arkansas BCBS, Humana, and QualChoice—sat down with state Medicaid officials, "we had more in common than we thought we did," Spaulding says. "We were both focused on creating more affordable healthcare."
Now Arkansas BCBS, Humana, and QualChoice are building a value-based payment system in a multi-payer format that includes the Medicaid program. One of the last hurdles for the payment reform initiative is to get Medicare on board.
"There's no other region that coordinates as well as Arkansas payers," says Alicia Berkemeyer, director of enterprise networks at Arkansas BCBS, "We're all in line for the same goal. At least once per week, all the payers get together… We've become friends. We check on each other at Christmas."
Spaulding says Arkansas is showing the nation, particularly rural states, a new way to deliver healthcare. "The time has passed for there to be adversarial relationships in healthcare delivery," he says. "If we can't do better, then shame on all of us."
This is Part I of a multi-part series on healthcare payment reform in Arkansas. Part II will explore how payment reform was implemented.
Despite an official prediction that MA health plan payment rates will be essentially unchanged in 2015, Cigna, Aetna, and Humana expect payments to fall next year.
The federal Centers for Medicare & Medicaid Services announced Monday that Medicare Advantage health plan payment rates in 2015 would increase an average of 0.4 percent. But insurers are forecasting a three percent cut in 2015 MA payments.
"While Cigna continues to review and assess the full impact of CMS's 2015 rate changes, it's clear that the full 2015 impact will include a reduction in payments, " a Cigna spokeswoman said in an email Thursday.
"Our estimated impact to the industry is consistent with analysts' reports that the Medicare Advantage program is facing an average three percent cut from 2014 to 2015, when factoring in CMS changes with ACA and other industry fees set to take effect in 2015. "
In February, CMS proposed to cut MA payment rates at least 1.9 percent. An analysis conducted on behalf of America's Health Insurance Plans pegged the proposed cut higher, at 5.9 percent.
Cigna says CMS responded to pressure from AHIP, seniors, lawmakers and healthcare providers who opposed cuts to MA payments, but the agency should have gone farther.
"We are pleased that CMS listened to the concerns raised by seniors who rely on this program as well as the multitude of providers that spoke about the resources the Medicare Advantage program provides to this vulnerable population. Both seniors and providers made their viewpoint clear to Congress and other stakeholder organizations about the harm the proposed cuts would have had on beneficiaries who rely on Medicare Advantage plans for their health benefits and coverage, " the Cigna representative said.
"While the recently announced final changes are slightly more favorable than the initially proposed draft rates, the Medicare Advantage program is still facing cuts in 2015 on top of the significant impact seniors already bore as a result of CMS's six percent cuts in 2014. "
Aetna officials also urged CMS to avoid any potential cuts to MA health plan payments in 2015.
"CMS's final rates announcement recognizes the great value that approximately 15.9 million seniors receive from their Medicare Advantage plans, which yield satisfaction rates of 90 percent, " a spokeswoman said in an email Thursday.
"Despite CMS's actions [since February], Medicare Advantage plans will still face rate decreases for 2015. Aetna continues to evaluate the impact to our Medicare Advantage and Part D products but is committed to taking steps to ensure that our plans continue to provide beneficiaries with the great value and service they have come to expect. "
In a filing Tuesday with the federal Security Exchange Commission, Humana reported that the adjustments CMS had made since February shaved less than 1 percent off the company's previous estimate of a 2015 MA payment rate cut: "Based on a preliminary review of the Final Rate Notice, Humana expects a Medicare Advantage funding decline from CMS for 2015 of approximately 3 percent versus the previously expected funding decline of 3.5 to 4.0 percent. "
Tuesday's Humana SEC filing also provides a pair of key milestones for insurers in the 2015 MA timeline:
Bid designs for carriers' MA policy offerings are due at CMS by June 2.
Humana plans to share 2015 operating margin, earnings and membership expectations during the fourth quarter of 2014 after CMS makes 2015 benefit designs for the entire sector available.
The federal Centers for Medicare & Medicaid Services released a potential treasure trove of 2012 Medicare physician claim information. The release, which makes the data public for the first time since 1979, is "a huge step to making the Medicare system more transparent," CMS says.
Early Wednesday morning, the federal Centers for Medicare & Medicaid Services released a potential treasure trove of 2012 Medicare physician claim information.
Hours later on a conference call with media, CMS officials presented a spirited defense for making the data public for the first time since 1979, when a US District Court issued an injunction that blocked its release due to privacy concerns. The injunction was lifted last May.
"CMS has taken another huge step to making the Medicare system more transparent," Principal Deputy Administrator Jonathan said. "For too long, this information was not made public."
He started with the contention that "the public has a right to know this information," which includes Medicare payment and utilization data for about 880,000 physicians nationwide. The total of the Medicare payments to physicians tallied in the 2012 data is about $77 billion.
Another factor Blum cited was wide variance in doctor payment data from state to state and within state borders. The release of the claims data will help stakeholders, patients, and the public "better understand the variation," he said. "We know there is waste in the system. We know there is fraud in the system."
Blum expressed hope that stakeholders, the press, and members of the general public would use the data in ways that will help contain healthcare costs and promote quality. "We are asking for the public's help," he said.
'We're Definitely Concerned'
The American Medical Association, which was a plaintiff in the federal court case that prompted the 1979 injunction, raised a slew of red flags Wednesday, unveiling a guide to help anyone mining the newly released Medicare claims data for insightful information.
In a statement issued simultaneously with CMS's release of the physician pay information, AMA President Ardis Dee Hoven, MD said her group was "disappointed that CMS did not include reasonable safeguards that would help the public understand the limitations of this data."
"We believe that the broad data dump today by CMS has significant shortcomings regarding the accuracy and value of the medical services rendered by physicians," Hoven said. "Releasing the data without context will likely lead to inaccuracies, misinterpretations, false conclusions, and other unintended consequences."
"Thoughtful observers concluded long ago that payments or costs were not the only metric to evaluate medical care. Quality, value and outcomes are critical yardsticks for patients. The information released by CMS will not allow patients or payers to draw meaningful conclusions about the value or quality of care."
Allison Brennan, senior advocacy advisor at the Medical Group Management Association, says that her group shares the AMA's concerns over unintended consequences flowing from release of the Medicare claims data.
"If people are drawing conclusions from this data… it's only representative of a portion of a physician's patient population," she said in a phone interview Wednesday. Brennan noted the physician claims data does not include millions of patients in Medicare Advantage health plans, Medicaid programs, or people who have healthcare coverage through commercial payers. "You have no way of knowing."
MGMA fears some doctors could suffer unfair harm to their reputations from the data release. "We're definitely concerned," she said.
Finding Common Ground
Earl Ferguson MD, PhD, a Ridgecrest, CA-based cardiologist and healthcare reform advocate, says CMS and physicians need to work together to release as much healthcare delivery information as possible.
"It's the right thing to do. The more information we have to make informed decisions the better," he said in a phone interview Wednesday. "There are probably a lot of physicians out there who don't want to see this information 'out there.' But I think it's necessary for the reforms to move forward."
Ferguson is also Medical Director of National Rural ACO, a firm that helps organizations change payment models. He acknowledges that some people will inevitably draw unfounded conclusions from the Medicare claims data. He believes, however, that the benefits of advancing transparency are significant and vital to creating a value-based healthcare delivery system.
"This is just one step," he says. "We need to have a lot more transparency in government and health plans. We can't keep everything secret if we're going to reform the system."
Ferguson has published a book about healthcare reform and says more cooperation and accountability will be decisive for transparency and other reform initiatives.
"You need to look at the data," he says. "We need to get all these people together and find out what is rational, rather than having bureaucrats and others making decisions for us… Things have been dictated to physicians and patients. We have to hold everybody accountable for doing what is correct and right. I don't see that happening enough."
The American Medical Association says the public should exercise caution when interpreting the 2012 Medicare payment data for physicians, saying "the manner in which CMS is broadly releasing physician claims data, without context, can lead to inaccuracies, misinterpretations and false conclusions."
The American Medical Association is urging members of the public to exercise caution when interpreting the 2012 Medicare payment data for physicians released by the Centers for Medicare & Medicaid Services early Wednesday.
Soon after the data was made available on the CMS website, the AMA released its "Guide to Media Reporting on CMS' Medicare Physician Claims Data," featuring this stern warning to anyone attempting an analysis: "Medicare claims data is complex and can be confusing and the manner in which CMS is broadly releasing physician claims data, without context, can lead to inaccuracies, misinterpretations and false conclusions."
The guide cautions anyone trying to analyze the claims data about several potential pitfalls:
Data errors are possible because "there is currently no mechanism for physicians and other providers to review and correct their information."
The data does not measure quality because it "solely focuses on payment and utilization of services so it cannot be used to evaluate the value of care provided."
The data may not accurately reflect Medicare payments to an individual doctor because many residents, physician assistants, nurse practitioners and others under the doctor's supervision can all file claims under that physician's National Provider Identifier number.
The data is an incomplete representation of the services physicians provide because it is not risk-adjusted to reflect the overall health of a doctor's patient population.
Payment amounts vary based on where a service was provided.
In a statement issued Tuesday night before the data was released, Ardis Dee Hoven MD, president of the AMA, said the impact of making raw Medicare claims data public would not be positive.
"We think that the data dump will likely lead to a lot of confusion and misrepresentations," she said. "There are a number of steps that were not taken to overcome and clarify the limitations of the data to make it helpful, accurate, complete and clear."
A startup health plan draws its customer service approach from the Ritz-Carlton and L.L Bean. The call center answers by the third ring, and reps have authority and information to fix problems.
"Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves."—Steve Jobs
Consumers have emerged as the key players in a range of healthcare reform initiatives. Newly empowered individuals are widely viewed as a driving force for change, with federal regulators banking on informed patients to push for value in their dealings with healthcare providers and payers.
Successful health plans have seen the rise of the consumer on the horizon.
After J.D. Power and Associates released its consumer satisfaction ratings for health plans last month, I called a half dozen of the top performers in regions across the country to learn about their approaches. Overwhelmingly, they focus on good member experiences. These businesses "get it."
"The recognition Tufts Health Plan received from J.D. Power reflects our efforts to enhance the member experience, collaborate with providers, and support each other," James Roosevelt Jr., Tufts Health Plan's CEO, told me in an email. "This type of direct focus on taking care of the member is what makes the difference—it's the way we do business. This recognition is a terrific accomplishment."
James La Rosa, MD
Chief Customer Experience Officer for
North Shore-LIJ CareConnect Insurance Co.
Now a startup health plan is drawing from other industries and organizations known for outstanding customer service. James La Rosa, MD, is chief customer experience officer for North Shore-LIJ CareConnectInsurance Co., the insurance division of Great Neck, New York-based North Shore-LIJ Health System. He told me recently that customer service was at the heart of the health system's business plan when the decision was made about four years ago to create an in-house health plan.
"We would be able to offer customer service that knocked their socks off," La Rosa says of the vision for NSLIJ CareConnect. The health plan's call center was modeled on customer service programs at the Ritz-Carlton Hotel Company and outdoors retail giant L.L. Bean Inc. "We've had customers drop off chocolates and cakes at our site."
By answering all customer calls within the third ring, NSLIJ CareConnect has a caller drop rate under 2%, he says. For most health plan customers, "the major issue they have is with the phone tree. How is the member going to feel during a call? That's the Ritz model."
NSLIJ CareConnect has followed L.L. Bean's lead in providing robust customer service at the call center level. "They have authority to rectify issues," La Rosa said of L.L. Bean call center employees.
At the NSLIJ CareConnect call center, employees have dual computer screens in front of them: one with a patient's health plan information, the other with medical history information. And the call center has easy access to a medical officer to help answer patients' questions quickly.
The focus on customer service is paying off not only for the health plan but also for the entire health system, La Rosa says. NSLIJ CareConnect has low complaint rates and patients do not call back "four or five times for the same issue." Health plan employees can quickly connect patients to emergency medical services and other healthcare providers in the NSLIJ Health System. "We're integrating all the services we offer through the health system through the health plan," he says.
La Rosa, who practiced as a physician for 20 years, has seen the value of good customer service in medicine and business.
"We treated our patients like gold. Your appointment would be on time," he says of his practice. "It was very difficult to do. We answered every patient's call. If we made a mistake, we made a mistake. It was a very open model.…You look at successful companies; they're the ones with good customer service. You look at Amazon, and their customer service is amazing."
In the evolving healthcare marketplace, it behooves health plans to cater to their customers. Otherwise, their competitors will be doing the catering.
Jonathan Blum
Principal Deputy Administrator of CMS
With the blessing of a federal judge, CMS is releasing Medicare data on physicians, including types of services, average submitted charges, and standard deviation in submitted charges.
The federal government's shift toward healthcare data transparency continues.
Centers for Medicare & Medicaid Services officials are planning to release payment and other Medicare data on 880,000 physicians across the country as soon as Wednesday, April 9. A federal court injunction had kept the data under wraps since 1979, but a US District Court ruling in Florida last spring lifted the injunction.
In May, CMS made public chargemaster data for the 100 most common Medicare inpatient diagnosis-related group (DRGs).
"CMS plans to publicly release a data set on the types of medical services and procedures furnished by physicians and other healthcare professionals as well as certain payment and charge data related to those services," Jonathan Blum, principal deputy administrator of CMS, says in a lettersent April 2 to the American Medical Association and the Florida Medical Association.
Both physician organizations that were parties in last spring's District Court case, a CMS official wrote that making the data public would help the drive to create a value-based US healthcare delivery system.
"This public data set will include number of services, average submitted charges and standard deviation in submitted charges, average allowed amount and standard deviation in allowed amount, average Medicare payment and standard deviation in Medicare payment, and a count of unique beneficiaries treated."
In the letter, Blum, also made the claim that release of the data is required under the Freedom of Information Act.
AMA President Ardis Dee Hoven MD wasted no time responding to the CMS letter, issuing a statement on April 2 that is highly critical of the forthcoming release of the Medicare data.
"The AMA is concerned that CMS' broad approach to releasing physician payment data will mislead the public into making inappropriate and potentially harmful treatment decisions and will result in unwarranted bias against physicians that can destroy careers. We have witnessed these inaccuracies in the past," Hoven wrote. "To guarantee that information is accurate, complete, and helpful, the AMA strongly recommends that physicians be permitted to review and correct their information prior to the data release."
On the same day Blum sent his letter to the AMA and the FMA, he also wrote about the release of the Medicare data in a post on the CMS blog. He contends that release of the Medicare data will help achieve several goals including greater transparency in medical services.
"This data contains information on more than 880,000 health care professionals in all 50 states who collectively received $77 billion in payments in 2012 for services delivered to beneficiaries under the Medicare Part B Fee-For-Service program. With this data, it will be possible to conduct a wide range of analyses that compare 6,000 different types of services and procedures provided, as well as payments received by individual health care providers," Blum wrote.
Legal Battle Over Injunction
In a US District Court ruling last spring, Judge Marcia Morales Howard wrote that the AMA and FMA had made three arguments against lifting the 1979 injunction:
Neither the facts nor the law had changed since 1979
The revenues that individual physicians receive for their services to Medicare patients continue to be private information
The public interest in preventing Medicare fraud had not changed since 1979
In a decision that proved crucial in the lifting of the 1979 injunction, Howard ruled that applicable federal law had changed significantly over the past three decades.
In the April 2 letter, Blum said CMS had considered physician privacy when deciding whether to fight release of the Medicare data. "The Department weighed the privacy interests of physicians and the public's interest in shedding light on Government activities and operations and has determined that the public's interest outweighs the privacy interests," Blum wrote.
'The Right Thing to Do'
Jennifer Schneider MD, vice president of analytics at San Francisco-based Castlight Health, says there is a simple and compelling reason to release the Medicare physician data. "It's the right thing to do," she said in a phone interview Tuesday.
Castlight specializes in selling healthcare information services to self-insured employers to help businesses provide affordable health insurance options to their workers. The firm was founded in 2008 "to tackle one of healthcare's fundamental problems—the lack of transparency in the price and quality of health care," according to the company's web site.
In addition to changes in federal law that cleared the way for Judge Howard to lift the 1979 injunction against releasing the Medicare data, there have been major changes in US healthcare that make the data a potential gold mine for reform advocates, Schneider said. "The costs-per-head for healthcare have risen dramatically," she said. "The costs have risen higher than the income level."
Schneider says releasing Medicare data will shine light on differences in physician fees that will expose doctors who are not delivering good value to their patients. "The price variance" among many medical procedures "is between three- and 10-fold," she says.
Knowing the types and volume of procedures physicians perform will be particularly useful to patients, Schneider said. Knowing the types of procedures a physician performs indicates areas of expertise and procedure volume is a well-established metric for gauging medical outcomes.
Combining Medicare physician data with other sets of information such as commercial claims and quality data has the potential to accelerate efforts to create a value-based US healthcare delivery system, Schneider says. "The release of this information and the overlay of other information… becomes really powerful."
