Health Care Current: October 27, 2015

From transactional to transformative: Rethinking human services delivery

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.

From transactional to transformative: Rethinking human services delivery

“There is nothing more important than a good, safe, secure home.”

This quote from Rosalynn Carter, who has dedicated the last four decades to improving the quality of life for people around the world, was the first thought that came to mind when I read Rethinking human services delivery: Using data-driven insights for transformational outcomes.

The report begins with a simple story about a man who had repeated visits to the emergency department until some medical staff paid him a visit at his home. At the heart of the story lies a lesson that can be shared with anyone working in human services delivery today: As a result of the way we structure our programs, health and human services agencies today can sometimes miss important information about the actual lives of individuals and families—information that can lead them to miss the mark on getting the right services and supports to individuals so they can improve lives. Today, by design, many agencies take a program-centric view of the world and are often more transactional in nature than they are transformational.

How can human services agencies be transformational? How can we help human services agencies focus their resources on doing the right work, for the right people at the right time, and thus achieve meaningful results? It’s about looking above and beyond the output measures that are engrained into programs. It’s about making sure that quantitative transactions are making qualitative changes in people’s lives. Take the following as an example: a transactional interaction is when a human services agency focuses only on identifying the services an individual is eligible for and signing them up. A transformational agency will go further to help ensure those services and programs align with that person’s goals and how he or she wants to achieve them.

A transformational system can impact the health care programs that human services agencies provide to their citizens. It can target services to those who not only are neediest, but also the costliest individuals—doing good while reducing costs. It can also help agencies capture the right individuals (e.g., super utilizers) early, prevent their cases from escalating, identify redundant services, and streamline those that add the most value to individuals’ lives. Goals in a transformational system can be living, breathing ones that change if new populations become a priority.

This will likely require human service agencies to change their business processes. But, changes in business processes may bring positive changes across the board. Standardizing, rationalizing, and automating services can not only reduce costs, but also relieve caseworkers – the front line workers – from much of the paperwork and administrative tasks that bog them down today. In turn, their time will be freed up to focus on enhancing the lives of their clients.

Advances in technology and analytical techniques have made it easier than ever for human services agencies to move beyond transactional service delivery. It can start with three priorities:

A transactional system only captures and tracks what is wrong. A transformational system considers the why and uses information to determine what to do and to track the outcome of that intervention in real time so that it can change course as needed.

For example, when the District of Columbia’s Department of Human Services’ Economic Security Administration looked at overhauling the Temporary Assistance for Needy Families (TANF) program, it faced a group of recipients who had languished on the rolls for years. In 2011, the agency decided to turn that around. It turned to a solution-focused assessment, which asked questions like “With the problems you face, how do you manage to get through every day?” and “What have you tried to address your problems? What worked and what didn‘t?” Instead of focusing only on “doing things right,” the District began focusing on “doing the right thing” for its clients. While the redesigned program is still in its early phases, the initial evaluation showed a tenfold increase in work activity among TANF recipients.

In the past, when human services executives wanted to drive change, they typically changed the people doing the work or the policies driving their work. Today, they can focus on the business processes to affect change. Perhaps it is not just a safe, secure home that everyone needs. Some may need transportation to get to medical appointments and others may need in-home assistance when they have to leave a care recipient to get their own needs met. In the end, if human services agencies can focus on the transformational services, rather than the purely transactional services, they could see life-changing outcomes—ones that not only meet individuals’ needs, but also are efficient and cost effective.

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PS. For more information about the recent Deloitte Insights article, Rethinking human services delivery: Using data-driven insights for transformational outcomes, please reach out to its main authors, B. J. Walker and Tiffany Dovey Fishman.

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My Take

By Mark Price, US Public Sector Leader, Deloitte Consulting LLP


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CMS may adjust Medicare Advantage star ratings for demographic characteristics

Andy Slavitt, the acting administrator of the US Centers for Medicare and Medicaid Services (CMS), told health plans at an America’s Health Insurance Plans (AHIP) conference last week that the agency may change how it calculates Medicare Advantage (MA) star ratings. CMS is considering adjusting how it factors socioeconomic characteristics of beneficiaries into the system. Slavitt said that CMS plans to propose policy changes and request industry feedback later this fall.

CMS research found that health plans that enroll more low-income and disabled individuals score worse on certain measures in the star rating system. CMS conducted similar research in 2014, but found only a small effect on health plans with greater proportions of low-income subsidy (LIS) and dual-eligible enrollees, individuals eligible for both Medicare and Medicaid.

The Medicare Payment Advisory Commission (MedPAC) has also found that plans with more young, disabled enrollees have lower star ratings. To analyze this, MedPAC looked at 19 out of the 42 measures that are not case-mix-adjusted. It found that six of the 19 measures showed differences between low-income enrollees. MedPAC discussed several different strategies to alleviate this, including separately calculating scores for peer groups of plans based on their enrollee population and setting thresholds and performance levels based on population groups.

Background: MA plans receive ratings on a one-to-five star scale. Plans with four stars or higher receive bonus payments. Health plans with three or fewer stars over three consecutive years will be flagged as low performers and can be removed from MA. Many analysts and health plans have said that star ratings should be risk adjusted based on the proportion of low-income subsidy (LIS) or dual-eligible enrollees they enroll because otherwise they are more likely to look like low quality plans and miss out on bonuses.

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Implementation & Adoption

EHR stakeholders agree to interoperability standards

Executives from 12 electronic health record (EHR) vendors representing more than 50 percent of the market agreed to interoperability measures at a conference last week. To date, efforts to operationalize interoperability have not moved far beyond the idea that better connected systems would improve sharing and interpretation of patient data. The vendors aim to create a definition of interoperability and publish transparent measures for health information exchange. They created a survey to assess vendors’ interoperability capabilities. Current measures only assess that data was shared.

Health data interoperability and measurement has been a topic of great interest to government agencies and industry stakeholders. The Office of the National Coordinator for Health Information Technology (ONC), the federal group leading the administration’s health information technology efforts, recently published an interoperability roadmap (see the October 13, 2015 Health Care Current). The document outlines specific goals to improve data-sharing capabilities throughout health care and across provider sectors. The ONC and industry aim to implement a plan and continue to monitor interoperability in this way and evaluate advances.

Analysis: Health care is evolving quickly, and health care organizations want more from their EHR systems. When Meaningful Use (MU) started with the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009, users sought systems to help document visits between providers and patients. Accountable care organizations (ACOs) largely did not exist, and outside of integrated delivery networks, few organizations participated in alternative payment models (APMs) that focused on value or outcomes. Even some of the MU Stage I requirements, such as the requirement to share data with patients by burning them a CD, are dated now.

With value-based care, new priorities, such as data sharing, care coordination, patient engagement, and predictive analytics, have emerged. Consolidation among providers and overall convergence in the industry has accelerated the need for interoperability, not just for EHRs, but also for medical devices, wearables, and more. With the greater need to connect applications and sites to meet new payment models and operational challenges, many hospitals and health care systems may begin to buy products that are proven to be interoperable and, in some cases, interchangeable. While government has a role to set and enforce rules and point the industry in the right direction, market forces will likely continue to set priorities in the future.

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FDA Center for Devices and Radiological Health publishes 2016 priorities

Members of the Regulatory Science Subcommittee at the US Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) recently published the regulatory science priorities for fiscal year 2016. CDRH oversees medical device and radiation-emitting products’ safety, effectiveness, performance, and quality performance. Its goal in setting regulatory science priorities is to reduce time to market for products, improve device safety, and reduce regulatory burden.

Through the priority setting process, CDRH identified 10 focus areas for 2016:

(Source: US Food and Drug Administration, Center for Devices and Radiological Health, “Regulatory Science Priorities (FY2016),” October 20, 2015)

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Study examines impact of medical loss ratios on health plans in the individual market

Researchers at the Urban Institute recently reviewed medical loss ratio (MLR) data from 2010 to 2014 to find that average MLRs (the percentage of revenue going to health care spending) in the individual market rose during that period. The ACA set minimum MLRs for health plans operating in the individual and small-group (80 percent) and large-group markets (85 percent). Spending in excess of that amount is returned to consumers in the form of rebate checks.

The researchers looked at the standardized reports that health plans submit to the National Association of Insurance Commissioners (NAIC) starting in 2011 (based on 2010 claims). They found three overarching trends:

MLRs for these years reflect health plans’ best estimates for spending, including their expectations about what revenue they will receive from the three premium stabilization programs – risk adjustment, reinsurance, and risk corridors. Health plans underestimated the receipts they would get from the reinsurance program this year. As a result, actual MLRs could be lower because the reinsurance payments would increase health plan revenues. The risk corridor program will also decrease the variation in the average MLRs because it limits losses and profits for health plans in the individual and small-group market. Finally, the risk adjustment program, which pays health plans that enroll high-risk individuals, could reduce variation within individual markets in the states.

(Source: Lisa Clemans-Cope and Michael Karpman, Urban Institute, “Changes in Claims, Premiums and Medical Loss Ratios Across and Within States’ Individual Markets Between 2010 and 2014,” October 2015)

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CMS requests comments on care episode groups

On October 15, 2015, CMS released a request for comment on a particular element of physician payment in Medicare: how to define care episode groups. Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), care episode groups were created to measure resource use. The care episode groups will play a significant role in determining Medicare payments to health care professionals under the Physician Fee Schedule in the future.

The request for comments highlights the administration’s need for input on issues such as:

  • What specific clinical criteria and patient characteristics should be used to classify patients into care episode groups and patient condition groups?
  • How should CMS approach development of patient condition groups for patients with multiple chronic conditions?
  • How can care coordination be addressed in measuring resource use?

Beginning January 1, 2018, CMS will require Medicare claims to include new codes that correspond with the care episode and patient condition groups. They will also require new codes intended to capture health care professionals’ relationships with patients. CMS will use the care episode codes and the patient condition codes to compare similar patients, care episodes, and patient condition groups for specific periods of time and to determine Medicare payments in the new systems. As discussed in the October 21, 2015 RegPulse post, MACRA required CMS to develop the care episode groups to account for a target of at least 50 percent of expenditures under Medicare Parts A and B. The target may increase over time.

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On the Hill & In the Courts

Congress passes PACE Innovation Act

Last week, the House passed the Program of All Inclusive Care for the Elderly (PACE) Innovation Act. The Senate passed the bill before it went into recess in August, so it now goes to the president to sign into law. The bill will expand PACE to individuals with disabilities or who are at risk for being placed in a nursing facility. The Center for Medicare and Medicaid Innovation oversees the program.

The goal of PACE is to provide coordinated medical care and long-term services to older individuals who want to live in the community, rather than in nursing facilities. As of January 2015, PACE organizations – provider-sponsored health plans and provider organizations – provided care to more than 34,000 individuals in the US. Research has shown that the PACE program can efficiently and effectively treat individuals who have multiple and complex care needs and can reduce the need for placement in a nursing facility, which reduces costs over time. The bill will allow more individuals to enroll in the program, even if they are not over the age of 55.

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E&C discusses Medicare Medication Therapy Management program

Last week, the House Energy and Commerce health subcommittee held a hearing to discuss the Medicare Part D Medication Therapy Management (MTM) Program, which seeks to improve prescription drug management and adherence for Part D Plan (PDP) beneficiaries. The hearing comes shortly after CMS announced that it will pilot the Enhanced MTM Model in 2017 (see the October 6, 2015 Health Care Current). The Enhanced MTM pilot will allow PDP sponsors to be more innovative in the services they provide and the beneficiaries and conditions they target. If the five-year pilot is successful, CMS may scale up the pilot or a modified version of the program to PDPs across the nation.

CMS Director of Delivery System Reform, Tim Gronniger explained some of the issues that the pilot aims to address and how CMS will design the model. One issue with the regular MTM program is that some patients who could benefit from the services (e.g., individuals with diabetes but no other chronic conditions) do not qualify for the program. For the pilot, CMS has asked Part D sponsors which qualifying conditions should be included. It also asked who should qualify for help with cost-sharing in the program.

The second set of panelists said that improvements could extend the reach of the program:

  • If the pilot is successful, CMS should extend regulatory flexibility to all PDPs. This may encourage more PDPs to take a patient-centered, comprehensive approach to improve medication use in Part D. 
  • PDPs may be able to intervene before diseases progress or before additional complex conditions develop if CMS expands beneficiaries’ eligibility for the program.
  • CMS could evaluate health plans better if the program focused more on clinical outcomes rather than process measures.

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SAMHSA to test prospective payment system for mental health services

Last week, the Substance Abuse and Mental Health Services Administration (SAMHSA), CMS and Assistant Secretary of Planning and Evaluation (ASPE) announced they would distribute $22.9 million to states to pay for setting up community-based programs to address mental and substance use disorders. The planning grants will go to 24 states, and later eight states will participate in a pilot program to test a prospective payment system for mental health care providers.

The grants are part of a larger effort to better integrate behavioral and medical care. SAMHSA evaluated the applicants on their ability to use evidence-based practices and serve adults with serious mental illnesses, children with serious emotional disturbances, and individuals with long-term and serious substance use disorders. States must use the grants to certify community behavioral health clinics, gather input from stakeholders, establish prospective payment systems for certain services, and prepare for participation in the demonstration program.

The planning grants will last until October 2016 when states will be invited to apply for a two-year demonstration program that begins in January 2017.

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Around the Country

CMS releases FAQ on small-group expansion law

Last week, CMS published a frequently asked questions document on the Protecting Affordable Coverage for Employees Act, which made optional the January 1, 2016 deadline for expanding the definition of small group employers for states (see the October 6, 2015 Health Care Current). The Act revises the ACA to allow states to continue using their current definition for employers in the small group health insurance market, instead of expanding the definition to employers with 51-100 employees, which the ACA mandates beginning in 2016. The FAQ addresses questions on the implementation of the new law.

States can extend their small group employer definition through “any state action within the authority of the applicable state regulatory agency that makes the definition legally binding on health insurance issuers in the state.” CMS asked states to tell the administration by October 30, 2015 if they expand the definition on the original date, January 1, 2016. If they decide on another date, states should declare their decision to expand “as soon as practicable.”

CMS said states that run their own Small Business Health Options Program (SHOP) exchange may allow health plans to resubmit rate filings if the state elects not to expand the definition. However, health plans in states that use the platform for their SHOP exchange and expand the definition of small employer may not resubmit rates in the first quarter of 2016.

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Digital pill may help medication adherence

Although many patients have benefitted from the availability of oral medications, the pills a physician prescribes have the best chance of treating illness when the patient follows the drug regimen and takes the pills as prescribed. Research has shown that as many as 20 percent of people who get prescriptions do not fill them, and half of patients do not take them as prescribed. Non-adherence to medication can result in poor outcomes and increase health care costs because of avoidable follow-up treatments, visits to the emergency room, and treatment failure.

Researchers at UMass Medical School are beginning a pilot study to explore this challenge through the use of an ingestible sensor or “digital pill” that would allow physicians to monitor patients taking oral medications. Preliminary research in the Journal of Medical Toxicology outlined the challenge and potential for an ingestible biosensor system. The pilot study will build on this work and explore the use of a gelatin capsule with an embedded wireless sensor designed to hold medicine. The patients in the study will take the medicine as they normally would and the capsule will dissolve in the body. Once ingested, stomach acid will activate the transmitter-containing pill and a small hip-mounted device then would download critical information to the web. In almost real-time, the care team will be alerted as to whether the patient has taken their medication.

In the pilot study, researchers will study medication adherence of approximately 30 patients who are prescribed the opioid drug oxycodone on an as-needed basis after receiving treatment in the emergency room for a below the knee extremity fracture. Researchers hope the digital pill will help them get a sense of how and when the patients take their medications and how many pills they take.

Analysis: There are several reasons for non-adherence to medication, including people forgetting to take the medicine, not being able to afford to fill or refill the prescription, and side effects that make the medication unpleasant. Medication adherence to date has relied on indirect measures of adherence including patient self-report, pharmacy refills, electronically triggered pill bottles, and pill counts. Real-time monitoring of prescription drug usage, such as the kind this research focuses on, could increase medication adherence.

In response to the US health care system shift from volume- to value-based care, the life sciences industry is increasingly exploring the use of real-world evidence and other data to emphasize a product’s clinical, safety, and economic impact (e.g., comparative effectiveness) to better demonstrate and communicate the value of various drugs and devices. Product development at some biopharma firms has moved beyond production of individual therapies to other services, attributes, and capabilities that may enhance the product’s efficacy and go beyond the pill to help improve patient outcomes. Technologies such as a “digital pill” may increasingly be part of the value proposition conversation, since they may help increase adherence and improve treatment.

(Source: Peter Chai, et al, “Utilizing an ingestible biosensor to assess real-time medication adherence, Journal of Medical Toxicology, August 6, 2015)

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Breaking Boundaries

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