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Perspectives

Health Care Current: May 17, 2016

Teaching health care consumers to sing

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory, and legislative changes.

Teaching health care consumers to sing

When I was a teenager, I really enjoyed playing my Martin D-18 acoustic guitar at parties, with my church group band, and with friends in the garage. I practiced a lot, but there was no amount of practice that could fix my singing. I always had to be careful not to sing too loud because my dog, a golden doodle named Roxy, had better vocals than I, especially when she was hungry and singing for her supper.

My inability to sing has little to do with technique or my hearing and more to do with the fact that I cannot remain in tune with the note. I have come to terms with the fact that some things can be learned and some things just are what they are.

When it comes to health care, many of us also cannot help the genetic cards that we are dealt. Diabetes or heart disease might run in one’s family and, right now, there is no changing that. But, there is one thing that could be taught and learned. Many believe that if you give health care consumers the right tools and technology, they will learn how to shop for coverage and make smart decisions about their insurance.

Based on the Deloitte Center for Health Solutions 2016 Survey of US Health Care Consumers, now in its 8th year, it would seem that a new group of consumers – people who are enrolled through the public health insurance exchanges – are doing just that: learning new habits and turning into savvy shoppers.

Twice as many surveyed consumers say they went online to shop and research coverage options than other consumers (67 percent vs 31 percent), including those that had employer-based coverage (30 percent). As a result, few exchange consumers had surprises in out-of-pocket costs (only one out of four). And, the vast majority appear to understand the complexities of a narrow network, with only nine percent finding out after the fact that their policy did not cover a provider they went to for care. Exchange consumers say they know their costs—95 percent can remember their premium obligation (vs. 85 percent of people with employer coverage), and 92 percent know the amount their premium increased this past year (vs. 83 percent of people with employer coverage).

Exchange consumers also seem to know the rules of the road; 79 percent know that open enrollment is once per year, and 86 percent know that people with low incomes can qualify for premium assistance. More in the exchange group appear to be accepting of tradeoffs they would make for lower premiums as compared with people who have coverage through their employer.

Many of these consumers may not be very familiar with the health care system; 66 percent say that they have not used any hospital services in the past 12 months, and only 29 percent say they have visited a doctor for an illness or injury in the past 12 months. But, 91 percent report that they expect to see a doctor in the next 12 months, which is on par with people in employer-sponsored plans (95 percent).

Similar to the Philadelphia Phillies record this season, the year-over-year comparison appears trending in the right direction. A greater number of exchange consumers feel prepared to handle future financial obligations of their health care, and their satisfaction is on par with those who have employer coverage. Exchange consumers continue to seek value in their health insurance: nearly half (45 percent) switched plans in the last year and one-third looked around at other options and then stayed with their plan from the prior year. Many who looked around report that it was due to issues with cost (69 percent), and one-in-four report they were looking for greater value.

What I think is the most promising statistic is that 57 percent of exchange consumers that report they earn less than $25,000 say they did not have financial difficulty handling out-of-pocket costs. This could mean that the premium subsidies and support for out-of-pocket costs are working as designed.

There is so much more to talk about in the survey results. See for yourself. The Affordable Care Act (ACA) has created a new market for the uninsured but employed and consumers appear to be responding to the tune and singing along. Exchange consumers seem to be showing us that, even if they were uninsured before, they can learn to use and apply tools and technologies to make smart coverage decisions. In the long run, more engaged consumers could get the US to a more affordable and effective health financing model that is sustainable and promotes better living and wellness.

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My Take

By Bill Copeland, Vice Chairman, US Life Sciences & Health Care Industry Leader, Deloitte LLP

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Policy experts suggest creating a new CPC+ACO track for primary care practices

A recent article published in the University of Southern California’s The Evidence Base says that creating a new value-based care option – the Comprehensive Primary Care Plus Accountable Care Organization (CPC+ACO) model – could encourage more small physician practices to adopt alternative payment models and lower total costs of care. In the article, Farzad Mostashari, Bob Kocher, and Mark McClellan write that having two separate programs – CPC+ and the Medicare Shared Savings Program (MSSP) for ACOs – requires physicians to choose. They say that a combined CPC+ACO option could offer monthly management fees with incentives to lower health care costs and reduce the likelihood that primary care practices would leave the MSSP.

Under the CPC+ model, the US Centers for Medicare and Medicaid Services (CMS) will test two alternative payment models for primary care management with approximately 5,000 physician practices starting in January 2017. Primary care practices will select from two tracks:

  • Practices participating in Track 1 will continue to receive fee-for-service payments. They will also receive a performance-based incentive payment from Medicare of $2.50 per beneficiary per month (PBPM) depending on their performance on utilization and quality metrics.
  • For practices participating in Track 2, CMS is introducing the Comprehensive Primary Care Payment (CPCP). Track 2 practices will receive a percentage of their Evaluation & Management (E&M) claims payments for attributed beneficiaries prospectively (this is the CPCP) and lower fee-for-service Medicare payments for E&M claims.

The authors predict that many primary care physician groups will exit the MSSP for CPC+ if faced with choosing between the two. This movement could lower performance in the MSSP model, as some research suggests that physician-led ACOs have outperformed hospital-led ACOs in reducing costs and improving quality. Ultimately, the authors say, allowing practices to select a joint CPC+ACO model may speed progress toward meeting the US Department of Health and Human Services’ (HHS) goal of tying 50 percent of Medicare payments to value by 2018.

(Source: Farzad Mostashari, Bob Kocher, and Mark McClellan, The Evidence Base, “A Comprehensive Strategy for Primary Care Payment Reform in Medicare,” May 9, 2016)

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Implementation & Adoption

Most calls to exchange call center were for help with consumers’ eligibility for financial assistance

Researchers at Georgetown University Health Policy Institute’s Center on Health Insurance Reform found that the most common reason for calls to the Assister Help Resource Center (AHRC) was questions about financial assistance. The federal government commissioned the AHRC to support exchange navigators throughout open enrollment. Implemented in pilot states in 2014, AHRC became available to all of the federally facilitated exchanges for the last open enrollment period. Most consumer questions are resolved without the help of AHRC, so these calls tend to be the most complex cases.

Of the 1,384 calls received by AHRC, the main topics were:

  • 40 percent about eligibility for financial assistance
  • 15 percent on how to project income
  • 11 percent about account creation issues
  • 6 percent regarding changes in circumstances

Two common issues that navigators had were how to help self-employed consumers project their modified adjusted gross income and how to define “household size.” Household size comes into play when enrollees claim adult children or parents as dependents, non-custodial parents need to purchase coverage for their children, or there is a divorce either imminent or already in proceedings. Few calls were about technical problems with exchange platforms or portals.

(Source: Sabrina Corlette, Sandy Ahn, and Hannah Ellison, Georgetown University Center on Health Insurance Reforms, “Understanding the Consumer Enrollment Experience in Federally Facilitated Marketplaces,” May 2016)

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Brookings describes five reasons why health care is vulnerable to cyber attacks

Privacy breaches in the health care industry are common, according to a new study from The Brookings Institution. The group found that 23 percent of all data breaches in 2015 occurred in the health care industry. Mass proliferation of data, driven by health care digitization and the recent rise in available technology, has led to unprecedented amounts of personal health information being collected, shared, and analyzed on a daily basis. As information proliferates, so do breaches. The study found that health care is particularly vulnerable to these kinds of attacks for five reasons:

Updating HIPAA to include standards and practices, such as requiring encryption of sensitive information, could help address new challenges to modern cybersecurity. Greater adoption of cyber insurance could also help; the report projects that cyber insurance will become as fundamental to operations in the next five years as malpractice insurance is today.

Many have called for the Office for Civil Rights (OCR) at HHS to perform more prevention audits of security systems, rather than punitive audits, and to share the results of audits with the broader health care community. Today, the OCR has limited capacity to conduct preventive audits; it may be more feasible for OCR to establish accreditation agencies to certify that organizations meet OCR standards.

Related: Many industry leaders are bracing for increased threats to cybersecurity. The above report was published the same week that PoliticoPro convened experts to discuss cybersecurity concerns. The members of the panel said that stolen health information is extremely valuable, organizations and clinicians need more accountability standards, and that high-profile ransomware attacks on hospitals are bringing these issues into the spotlight. The experts recommended that the administration simplify regulations and give more time for security protection investments made by the health care to mature to determine where opportunities for progress still remain.

(Source: The Brookings Institution “Hackers, phishers, and disappearing thumb drives: Lessons learned from major health care data breaches,” May 5, 2016)

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Actuaries: Six major factors will drive health insurance premium changes in 2017

A recent issue brief by the American Academy of Actuaries highlights some of the major trends that may impact 2017 health insurance premiums on the individual market. The brief says that six market and regulatory factors are important. Some factors may offset one another (e.g., the expiration of the reinsurance program and the one-year suspension of the health insurance provider tax) while others may cause health plans to raise premiums (e.g., the rising cost of medical services and prescription drug prices).

Analysis: This analysis came as states began to publish health plans’ proposed premium increases for 2017. Similar to prior years, some health plans are proposing to increase premiums, while others have proposed to decrease premiums. HHS set a cap of 10 percent for premium increases in the federal exchanges; health plans requesting premium increases above that must get approval from HHS. Many state departments of insurance have similar caps and require review and approval of large increases.

In 2014, Deloitte’s health actuarial practice modeled the effect of the risk corridors and reinsurance programs’ expiration on health plan premiums. The analysis was based on simulations using Deloitte's Health Care Reform Premium Stabilization Projection model, which incorporates multiple variables affecting premiums, including cost trend, policy, and marketplace factors. In The 10 percent problem: Future health insurance marketplace premium increases likely to reach double digits, we found that premium increases of 10 percent or more could be likely as health plans prepare for the end of the risk corridors and reinsurance programs and try to reach or maintain profitability in 2017. For health plans that mispriced premiums in the early years, even higher premium increases might be needed.

(Source: American Academy of Actuaries, “Drivers of 2017 Health Insurance Premium Changes,” May 2016)

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Recent study of CMS HVBP shows limited improvement in mortality rates

Hospitals participating in the CMS Hospital Value-based Purchasing (HVBP) program have not significantly improved mortality rates for certain conditions since the program launched in 2011, according to recent research. The study, conducted by researchers from the Harvard T.H. Chan School of Public Health, Brigham and Women’s Hospital, and the VA Boston Healthcare System, looked at the 30-day mortality rates for three conditions included in the program: Acute myocardial infarction, heart failure, and pneumonia. The study focused on answering three key questions:

The difference in the 30-day mortality trends between hospitals that participated in the HVBP and ones that did not was small and did not change after the intervention. Mortality rates for conditions that the program targeted were not significantly different from those that were not targeted in the program after the intervention. Lastly, when researchers looked at the lowest performing hospitals before and after the HVBP began, they did not find any meaningful difference between improvements in those hospitals and better performing hospitals.

The researchers say that these findings mean that the quality metrics and incentives in the HVBP program are not the right ones to reduce mortality. These results are consistent with the early results from the first year of the HVBP program, which indicated little to no impact on clinical process measures or patient experience.

(Source: Jose F. Figueroa et al., BMJ, “Association between the Value-Based Purchasing pay for performance program and patient mortality in US hospitals: observational study,” 2016)

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House lawmakers question CMS on MACRA implementation

On May 11, the House Ways and Means Health Subcommittee held a hearing with CMS Acting Administrator Andy Slavitt to discuss implementation of MACRA. Administrator Slavitt said that MACRA is flexible for clinicians, underlining how the regulations can be adapted at the practice-level. He also said it encourages communication between providers and CMS. The lawmakers’ comments centered on three questions:

  • Will MACRA increase the burden of reporting? Lawmakers are concerned that the timeline will not allow clinicians and practices enough time to prepare. Slavitt said that MACRA shifts away from meaningful use toward a system called Advancing Care Information (ACI), which allows clinicians to select the quality reporting measures that apply to their practice. Lawmakers also are concerned that requiring practices to report using “certified electronic health record (EHR) technology” may be unfair because third party vendors control much of the technology changes. ACI changes the 90-day reporting requirement to require a full calendar year reporting period (365 days). The lawmakers said this may cause more practices to file for hardship exemptions.
  • Is the pathway to alternative payment model (APM) eligibility too narrow? CMS estimates that between 30,000 and 90,000 clinicians will qualify for advanced APM incentive payments in the first year. Administrator Slavitt said that the role of the Physician-Focused Payment model Technical Advisory Committee (PTAC) is to review and approve new APMs. The 11-member committee is tasked with receiving and vetting submissions for new Physician-Focused Payment Models before submitting them to CMS for testing and approval. As more models are submitted and approved, more physicians will be able to qualify for advanced APM incentives. Until then, the MIPS program will encourage and reward clinicians who improve quality and reduce costs.
  • How will small or solo providers fare under the law? Lawmakers asked whether small or solo providers will disadvantaged under the new system. The concern stemmed from a table in the proposed rule that estimated 87 percent of solo practitioners and 70 percent of practices with two to nine eligible clinicians are expected to face negative payment adjustments under MACRA. Administrator Slavitt said that the information in the table may not be accurate because it was based on reporting from 2014. He also said that MACRA allocates $20 million per year in technical assistance to small and solo practices to help with their reporting and allows solo or small practices to report in groups. Clinicians who do not meet the minimum threshold of qualifying patients will not have to report at all.

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On the Hill & In the Courts

CMS tightens eligibility parameters for special enrollment periods

CMS issued guidance on May 6, 2016 to limit eligibility for special enrollment periods (SEPs) in the health insurance exchanges. The interim final rule requires consumers to prove that they had minimum essential coverage for at least one of the 60 days before they moved to qualify for an SEP.

SEPs allow individuals who experience qualifying life events, such as a permanent move or becoming a US citizen, to enroll outside of the annual enrollment period. Many health plans have said that consumers have been “gaming” the SEPs, enrolling in coverage when they need it and then dropping their plan after receiving care. SEPs were originally implemented to maximize consumer choice and increase competition in the market, but health plans have said this behavior has destabilized the market, skewed the risk pool, and caused unplanned losses to their business. Under the interim final rule, individuals who did not have minimum essential coverage before their move would be ineligible for an SEP unless they:

  • Recently moved to the US from abroad
  • Are newly eligible because they recently became a US citizen, national, or lawfully present in the country
  • Were recently released from prison
  • Moved from a state where they did not qualify for Medicaid or were ineligible for financial assistance on the exchange

This is not the first time that CMS has narrowed eligibility for SEPs. Since January 2016, it has eliminated six SEPs, tightened enforcement procedures, and begun to clarify eligibility requirements (see the January 26, 2016 Health Care Current).

Related: In the interim final rule, CMS also asked for ways that it can protect small health plans from large risk adjustment assessments. Risk adjustment provisions aim to mitigate health plans’ incentives to only enroll healthy consumers by reallocating funds from health plans with healthier enrollee pools to ones that attract high-cost consumers. Based on the data from the 2014 risk adjustment program, small or rapidly growing health plans often have higher than anticipated risk adjustment charges. In the guidance, CMS encouraged states to find solutions to help these smaller issuers, and said that it would be reconsidering the formula of the risk adjustment program based on actuarial input. However, none of the changes would take effect until 2018.

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HHS launches competition to help improve patients' experiences with medical billing

HHS recently announced a new design and innovation challenge called “A Bill You Can Understand.” HHS Secretary Sylvia Burwell debuted it at the annual Health Datapalooza conference last week. It challenges innovators to design a new medical bill that is less complex and more easily understood by consumers. A panel of federal officials will select winners based on the following criteria:

Designers, developers, digital tech start-ups, entrepreneurs, and other innovators may all apply, and the panel plans to announce the winners at the Health 2.0 Annual Fall Conference in September. Six health care organizations have already agreed to test the winning solutions with their patients. This initiative follows an increasing number of health care providers who have launched efforts to improve transparency in their pricing and patient bills.

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Oregon could be first state to use a Section 1332 waiver for a Basic Health Program

Oregon may become the first state use the ACA’s Section 1332 State Innovation Waiver to set up a Basic Health Program (BHP). The standard BHP option (available through Section 1331) aims to increase insurance options for low-income residents who earn between 133 and 200 percent of the federal poverty level ($32,319-$48,600 for a family of four), but few states have launched one. Analysts say that it may be easier to use the 1332 waiver instead because it is more flexible.

For three years, Oregon has been running a demonstration in Medicaid using Coordinated Care Organizations (CCOs). The 16 CCOs, networks of health care providers, get a capitated budget to provide and manage care for people enrolled in the Oregon Health Plan, the state’s Medicaid program. CCOs include payers, providers, county public health departments, for-profit and nonprofit organizations, and community groups.

Oregon would align the BHP with this CCO model and facilitate competition between private qualified health plans (QHPs) sold on the exchange and CCOs. The state hopes that designing a hybrid marketplace would reduce churn by minimizing the frequency and impact of coverage transitions, maximize the use of available federal funds, support graduated premium and cost-sharing requirements, and incorporate a fixed cost growth rate, mirroring the CCO approach.

Oregon would need waivers from CMS on two federal requirements to implement these changes to the BHP: (1) the requirement that consumers have a choice of at least two carriers, and (2) using a competitive bidding process when selecting standard health plan carriers. Currently, certain areas of the state only have one CCO, and contracts with the state do not have to go through an open bid process.

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Around the Country

Governors push Congress to approve emergency Zika funding

The National Governors Association (NGA) says Congress should respond to the Zika virus outbreak with emergency funding to enable advance planning and preparation. 

On April 1, the US Centers for Disease Control and Prevention (CDC) and NGA hosted a Zika Action Plan Summit to increase preparedness for Zika virus transmission. Since then, locations like New York and New Orleans have released Zika response plans. Program elements include:

  • Appointing a Zika coordinator
  • Creating or enhancing preparedness plans with strategies for communication, surveillance, laboratory testing, mosquito control, outreach to pregnant women, and blood safety
  • Coordinating efforts at the state and local levels
  • Monitoring for Zika cases in travelers returning to the US, and preventing clusters of Zika infections
  • Reducing and monitoring the mosquito population

To date doctors have diagnosed 472 cases of Zika in the US; 44 of the cases are in pregnant women.

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Researchers are using new sources of data in the fight against cancer

Because cancer is caused by multiple mutations, researchers have long recognized that cancer is not one disease that can be treated with one single therapy. Even cancers of the same tissue or organ vary significantly in their molecular details and respond differently to treatments. Cancer patients have different genetic makeups, both in their healthy cells and in their tumors. The more researchers can learn about these differences, the more clues they can have to help develop new therapies and learn why some patients respond well to certain treatments, why some tumors are so resistant to treatment, and how people of different ages or ethnicities are affected.

Only a small fraction of patients are treated at research centers, so a lot of patient data does not go further than the pathology lab or their provider’s office. Looking to make better use of this data, researchers at Broad Institute/Dana-Farber Integrative Cancer Biology Program formed the Metastatic Breast Cancer Project with the intent of finding people on the Internet who are willing to share their information for research purposes. Since its launch less than a year ago, the project has recruited around 1,700 men and women with metastatic breast cancer—cancer that has spread beyond the breast. Most of the patients have provided some information about their condition, and a little more than half have agreed to share medical records, tumor samples, and saliva for genetic sequencing.

Before launching, the team built support in the breast cancer community, including popular bloggers and patients or coalitions with a heavy presence on social media.

To encourage participation, participants only have to sign a consent form and provide the names of their treatment sites and physicians. Staff at the Broad Institute then get the patient records and already-biopsied tumor samples. Patients can also provide a saliva sample in a kit the Institute mails them and can provide information about other conditions they have. The data goes into the Institute’s study. By the end of the year, the Institute’s goal is to contribute to a new federal database called the National Cancer Institute Genomic Data Commons, launching soon, so that other researchers can use the data.

In another example of leveraging real world evidence to understand cancer better, the Dana-Farber Institute is partnering with Fitbit to launch a study with more than 3,000 participants to examine breast cancer recurrence in people who are overweight or obese. Previous studies have shown a link between overweight and obesity and breast cancer. This study will take place over six years and focus on women who have already been diagnosed with breast cancer and are overweight or obese to see if weight loss lowers risk of breast cancer recurrence.

Analysis: At last week’s Seventh Annual Health Datapalooza in Washington, DC, Vice President Joe Biden said that combining data and technology could have an incredible impact on saving lives, improving health, and moving cancer research forward. He emphasized the value of sharing data to avoid having disparate, siloed information that leads to duplication of efforts and inefficient use of resources. Building online communities and leveraging social media and data from wearables are a few examples of real world data sources that may be a rich source of health care information for researchers, patients, and other health care stakeholders.

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Breaking Boundaries

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