Archive for Alternative payment models

 

Mandatory Payment Models Coming to Medicare?

Even as CMS rolls out new, voluntary Medicare alternative payment models, it is contemplating making participation in future models mandatory rather than voluntary, as is currently the case.

Or so Centers for Medicare & Medicaid Services administrator Seema Verma told a gathering in Baltimore last week.

At the heart of the idea, Verma told her audience, is that while CMS is pleased with participation in voluntary accountable care organization models, organizations are choosing to participate in ACO models they think would benefit them most while posing little or no downside financial risk.  The agency may need to move away from that approach to advance its efforts to transform more of Medicare into a value-based payment program.

Learn more in the Fierce Healthcare article “Verma: Trump administration mulling mandatory payment models.”

Adverse Selection May Explain Rising ACO Costs

Hospital ACO costs are rising because of the sicker patients they attract, a new study suggests.

According to researchers at University of Wisconsin Health, patients served by traditional Medicare or by physician-led accountable care organizations often switch to hospital-led Medicare ACOs as they encounter health problems, bringing those hospital-led ACOs sicker patients than those otherwise served by such organizations.  As a result, the per patient costs of hospital-led Medicare ACOs often rise more than those of the costs of traditional Medicare and physician-led ACOs.  Often, these shifts are encouraged by patients’ medical specialists.

Hospital-led Medicare ACOs have been criticized for their failure to control rising costs but this adverse selection may explain that failure, researchers found.

Learn more in the Health Affairs study “Hospital ACO costs are rising because of the sicker patients they attract, a new study suggests.”

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MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s April agenda were:

  • Expanding the use of value-based payment in Medicare
  • Medicare Shared Savings Program performance
  • Redesigning the Medicare Advantage quality bonus program
  • Increasing the accuracy and completeness of Medicare Advantage encounter data
  • Evaluating patient functional assessment data reported by post-acute-care providers
  • Options for slowing the growth of Medicare fee-for-service spending for emergency department services
  • Options to increase the affordability of specialty drugs and biologics in Medicare Part D
  • Improving payment for low-volume and isolated outpatient dialysis facilities

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

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Mixed Verdict: Home Health Leads to More Readmissions But Lower Costs

Readmission rates are greater for patients discharged from hospitals to home health care than they are for those discharged to skilled nursing facilities but home health services cost so much less than nursing homes that home health saves money even with the higher numbers of hospital readmissions.

This is one of the major findings of a new study comparing differences in outcomes for patients who are admitted to skilled nursing facilities upon discharge from the hospital to those for patients who go direct home and receive home health services.

The study also found no meaningful differences in patient mortality or functional outcomes.

Readmissions from home health are 5.6 percent greater than those from skilled nursing facilities but with the much lower cost of home health services, Medicare saves, on average, more than $5400 over the first 60 days after discharge when patients are discharged to home health services rather than nursing homes.

Hospitals, it appears, prefer to discharge patients to nursing homes – perhaps, the study’s authors suggest, because of concern for their own readmission rates, which are subject to review and penalty under Medicare’s hospital readmissions reduction program.  Also, relatively few hospitals participate in alternative payment models that encompass …

State to Experiment with Global Budgets for Rural Areas

The Commonwealth of Pennsylvania plans to launch an experiment in which participating health insurers will fund global budgets to care for residents served by selected rural hospitals.

The program seeks to preserve access to care in rural parts of the state by stabilizing the financial health of struggling rural hospitals.

According to a Pennsylvania Department of Health news release,

The Rural Health Model is an alternative payment model, transitioning hospitals from a fee-for-service model to a global budget payment. Instead of hospitals getting paid when someone visits the hospital, they will receive a predictable amount of money. Payment for the global budget will include multiple-payers, including private and public insurers.

The global budgeting project is a joint venture of the state’s Department of Human Services, Department of Health, Insurance Department, the Pennsylvania Office for Rural Health, five participating hospitals, and five health insurers.  The federal Center for Medicare and Medicaid Innovation, another partner, is investing $25 million over five years to fund a rural health redesign center to support the project’s launch.

The state hopes to add more hospitals and insurers in the future.

The project is needed, according to the state, because “Nearly half of all rural hospitals in …