In a blog two weeks ago, we sketched out a multi-part agenda addressing what Community Catalyst believes are the key areas on which consumer advocates should focus in the midst of the current changes in the organization of health services. This week and in the weeks ahead, we will take a little closer look at each element of that agenda, starting with payment reform.

As consumer advocates approach the topic of payment reform we should bear in mind the following adages:

"Every system is perfectly designed to achieve exactly the results it gets."

            --Don Berwick, founder of the Institute for Healthcare Improvement and former administrator of the Center for Medicare and Medicaid Services (CMS)

"Insanity: doing the same thing over and over again and expecting different results"

            --Albert Einstein, Nobel prize-winning physicist, philosopher and humanitarian

"You get what you pay for."


In other words, if we want different results from our health care system, we have to change the way we pay for health care goods and services.

The development of a pro-consumer agenda on payment reform requires us to look at the issue from three distinct points of view: What is that we are trying to achieve? What is it that we are worried about? What are the available opportunities to move the system forward?

What are we trying to achieve through payment reform?

The goal of consumer advocacy around payment should be to maximize the potential benefits of    new payment approaches while minimizing the downside risks. At the same time, consumer groups are not operating in a vacuum. The best way to enter into the debate will be to identify promising opportunities as they unfold in the states, as well as in Washington.

To maximize the benefits of payment reform we should identify and seek to rectify the key weaknesses in the current financing system that relies mainly on fee-for-service (FFS) reimbursement. (Note, this continues to be true notwithstanding the spread of "managed care," since most providers continue to be paid substantially on a fee-for-service basis.)

Those weaknesses are:

  • Too much focus on treatment of discreet episodes of acute illness without adequate attention to management of increasingly prevalent chronic conditions and disabilities
  • Unequal treatment and outcomes for low-income populations, racial and ethnic minorities and other historically marginalized groups
  • High levels of spending on health care services relative to other advanced industrial countries without a concomitant improvement in outcomes 

What are we concerned about?

Reversing the financial incentives inherent in FFS does not automatically bring about the results we are seeking. Ironically, the very populations who have the most to gain from a shift away from FFS also have a lot to lose if financial incentives are not carefully constructed. That's because it may be easier for provider systems subject to cost and quality targets to meet those goals by avoiding or under-serving high need/high cost patients rather than by reengineering care processes.

What is the opportunity?

The ACA accelerated a movement to payment reform that was already underway prior to passage. Through the creation and funding of the Center for Medicare and Medicaid Innovation, CMS has been testing new models of payment and care delivery. More recently, HHS has adopted a goal of shifting 90 percent of Medicare FFS payments "from volume to value" by the end of 2018. This emphasis on payment reform is turning Medicare into an engine of reform. Other initiatives, including the State Innovation Model grants (SIM) and Medicaid Delivery System Reform Incentive Payment (DSRIP) waivers are increasingly bringing states into the act. Changes in how Medicare pays physicians, adopted as part of the legislation replacing the Medicare Sustainable Growth Rate formula, are likely to add yet more momentum to the shift because under the new formula, physicians' ability to get pay increases will be directly tied to their participation in "Alternative Payment Models" that are accepting financial risk.

Toward a pro-consumer agenda

Relatively speaking, altering the incentives of FFS is the easy part. HHS has identified a continuum of payment reforms starting with enhanced payments for care-coordination at one end of the spectrum, and proceeding to creating fully capitated integrated delivery systems responsible for a defined population of patients.

Making sure that new financial incentives achieve their intended purpose is much more challenging. To realize the benefits of payment reform, we must do three key things:

First, we must tie financial incentives directly to improvements in outcomes with particular focus on improving care for high-need/high-cost populations, reducing health disparities and adjusting payments to recognize the greater needs in low-income communities. The failure to recognize that caring for low-income groups presents challenges not fully captured in clinical risk adjustment methods is more likely to undermine the delivery system for disadvantaged groups than it is to improve it. This problem has been observed in the operation of Medicare's Readmission Reduction Program (and CMS has recently acknowledged that its system of risk-adjustment was underpaying Medicare Advantage plans with a high proportion of enrollees eligible for both Medicare and Medicaid).

Second, we must also capture a portion of current spending on medical care and redirect those resources to address the social determinants of health. Mechanisms for achieving this include hospital community benefits programs, assessment on payers or providers such as the Prevention and Wellness Trust Fund in Massachusetts, or engaging communities in allocating a portion of any shared savings realized by the health care system to meet needs the community itself identifies.

Finally, we cannot ignore excessively high prices. With respect to aggregate system savings, the shift along the spectrum toward capitation will reduce the incentive to boost the overall volume of services, but high unit prices will remain a significant issue that require consumer activism. Two places in particular merit close attention from consumer advocates because the prices paid in the US outstrip payments in other countries. One of these areas is prescription drugs where US consumers pay more than people in other countries for the very same product. Another is hospital outpatient charges. This has become a significant problem as the volume of outpatient services has increased, particularly as hospitals continue to acquire physician practices.

There is a lot of momentum behind payment reform. Because the current arrangements lead to excessive cost relative to outcomes and fail to meet the needs of the most vulnerable populations, consumers should welcome rather than seek to obstruct this shift. At the same time, vigorous consumer advocacy is urgently needed to ensure that the benefits of payment reform are realized and the pitfalls avoided.

Obviously much more detail is needed in order to create an actionable policy agenda. But for now it is important to emphasize that while changing financial incentives are necessary, they alone cannot do the work of positive system transformation. Changes in payment must be accompanied by:

  • structural changes to promote team-based care
  • meaningful consumer engagement
  • better, more person-centered and outcomes-based quality measurement
  • robust consumer-protections, including support for complaint resolution and easy-to-navigate appeal rights to guard against under-service, and
  • proactive efforts to advance health equity such as expanding data collection and promoting a culturally competent workforce.   

These topics will be taken up in future blogs.

UnitedHealth’s recent fretting about their plans in ACA marketplaces not boosting their bottom line as much as they had hoped and open pondering of pulling out of marketplaces next year (while actually expanding this year) is disappointing in the attention it is taking from the fact that over one million consumers have already enrolled only weeks into open enrollment, a faster pace than last year. While the potential erosion of choice in marketplaces is certainly troubling, what underlies this is the reality that these marketplaces are seriously competitive environments where insurers are vying for customers.

UnitedHealth is certainly a big fish in the insurance industry, but they’re a rather small one in the marketplace pond. They opted not participate in the first open enrollment period and subsequently lost out on the opportunity to make a first impression when millions of Americans logged on and purchased quality, affordable health insurance, some for the first time in their lives. The late entry, and perhaps plans offered, has contributed to UnitedHealth representing roughly 5.5 percent of the nearly 10 million Americans purchasing coverage through marketplaces.

And while UnitedHealth may be struggling to find the right recipe to provide attractive benefits and entice consumers to purchase their plans over ones they’ve had in the past, other larger players, such as Kaiser Permanente and Aetna, have shown no indication of slowing down.

One would hope that UnitedHealth would stay in the marketplaces, and even build on their current expansion plans for 2017 and beyond. But at this time, UnitedHealth’s small footprint in the markets fails to make their comments a broader indication of the health of the marketplaces as a whole.

Ultimately, all of the focus on this detracts from the fantastic work navigators and enrollment assisters are doing to ensure that Americans understand their choices, shop around and continue to take advantage of the tax credits available to purchase coverage and avoid the increasing fine by January 31.

The ACA is part of the national fabric; it’s not going anywhere. And while UnitedHealth’s mulling of leaving the market is a point of concern, the millions of consumers shopping on marketplaces across the nation will continue to have a robust menu of plans vying for their business. It strikes me that a lesser business plan would be ignoring these customers completely.

This November, Maine is feeling thankful that the ACA is improving coverage for children and adults with autism. Starting in 2017, Maine’s health plans on the individual and small group market will be required to cover autism spectrum disorder (ASD) services at any age as “habilitative services.”  We advocated specifically on this issue, so we were pleased to see that negotiations between our state and CMS on the final benchmark plan resulted in a positive impact for consumers.

CMS has released the final 2017 Essential Health Benefits (“EHB”) Benchmark plans, which define benefits that must be covered in each state.  As a reminder, states were given the opportunity earlier this year to select a new EHB for 2017 and beyond. For Maine, one of the most significant changes is that the 2017 Benchmark Plan eliminates the age limit for treatment for ASD.  This is significant for two reasons: first, the previous benchmark plan only covered services up to age five; and second, Maine state law requires that services be provided up to age ten,  but there was no requirement to cover the services beyond age ten.  Therefore, covering services for individuals at any age will be a marked departure from the current coverage practices and will open up access to needed services for many consumers. Habilitative services are necessary for people diagnosed with autism because these services help people learn or maintain functional skills for the first time rather than regain them. For an autistic child, this means access to speech, physical and occupational therapy.

Practically speaking, this means that starting in plan year 2017, any of the insurance plans being offered in Maine’s insurance Marketplace and many small employer plans will be required to cover autism services for anyone at any age.  Additionally, even though there are visitation or treatment limits imposed for other habilitative services such as physical and occupational therapy, for the 2017 benchmark plan, there will be no such limitations imposed for ASD treatments. We know that, particularly for children, treatment limits can be a barrier to getting needed care. Thanks to the ACA, we can ensure children and adults with autism will have more robust access to habilitative care.

In states like Maine where the Governor and his administration are opposed to the ACA, small wins like ASD in our state go a long way. The addition of this benefit is a renewed opportunity to talk about the coverage benefits extended through the ACA—the benefits that must be extended to all consumers. We encourage everyone to check out what is in your EHB plan as a platform to highlight the benefits that have worked well and map our work moving forward.

And we know that there is room for improvement. One important consideration, however, is that plans require that treatments be medically necessary. Showing medical necessity can be particularly tricky with respect to mental and behavioral health services, including ASD services, like Applied Behavioral Analysis (“ABA”), so it will be extremely important for providers to document the medical necessity for those plans and do so following the requirements for each plan.

As we pause to be grateful for this step forward for persons with autism, we will continue to work with our fellow advocates to monitor how the EHB Benchmark Plan is serving our most vulnerable Mainers. We can do this together by collecting stories and elevating the benefits of the ACA for consumers. Most importantly, as we engage consumers during our 3rd  outreach and enrollment period, we must help consumers understand what they are entitled under the ACA and what pathways exist when they run into problems. We as advocates can be instrumental in building the complaint data state by state to ensure that the promise of the ACA is kept for everyone.

Kate Clearwater, Esq., MPH
Policy Director
Consumers for Affordable Health Care Maine

"The biggest issue is the health of our state... Our health is a barrier to economic growth," Jason Bailey, Director of the Kentucky Center for Economic Policy told MSNBC. "That's why kynect and Medicaid expansion are such a huge opportunity for our state."

Two weeks ago, Kentuckians elected a new Governor who has promised time and again to dismantle the state’s health insurance marketplace, known as kynect, and scale back Medicaid expansion through an 1115 waiver. After almost two years of Kentucky being heralded as a national model for closing the coverage gap, it’s sobering to think of all the health gains the state stands to lose.

Kentucky leads the nation in the decrease in uninsured, dropping from 14.3 percent in 2013 to 8.5 percent in 2014, while the uninsured rate for children dropped from 5.9 percent to 4.3 percent. To date, Kentucky has enrolled more than 500,000 people in a state of just 4.4 million. It’s an impressive number, but the real benefits of expanded coverage go far beyond that. What's been so exciting for health advocates across Kentucky is that we're already starting to see positive results from the expansion of Medicaid. In the first year of the expansion, there has been a dramatic spike in preventive screenings and services as well as visits to primary care providers.

According to a recently released quarterly snapshot from the State Health Access Data Assistance Center (SHADAC), a health policy research institute at the University of Minnesota, breast cancer screenings in the second quarter of 2015 totaled more than 9,000 for the approximately 400,000 covered under the expansion, compared to just shy of 1,200 screenings for the traditional Medicaid population of more than 900,000 individuals. Likewise, screening rates for hepatitis C, diabetes, and colorectal cancer, among others, have all increased significantly since the expansion.

What this tells us is working Kentuckians are being proactive with their health and seeking out preventive services before they get sick, which can mean better health and cost savings down the road. In addition to our health gains, expanded coverage has also led to job creation, an increase in payments to providers and a decrease in uncompensated care. All of these things add up to more jobs, more local spending and a stronger economy. To see how much Kentucky is benefiting, take a look at our expanded coverage infographic.

But even more compelling than the data are the stories of Kentuckians who have gotten coverage. Like Tammy Cox from Pineville, who used her coverage for a physical and mammogram. And the Barr family, farmers from Meade County, who are self-employed and worried that an accident could bankrupt them.

Kentucky also stands to lose a lot if we move to the federal Marketplace. The notion that kynect is only duplicative of the federal Marketplace and provides no value just simply isn't the case. kynect provides a lot of outreach and education to Kentuckians about how to enroll in health insurance, and, more importantly, how to use their new coverage. There are kynectors trained to provide face-to-face assistance who live and work in communities all across Kentucky. Stories like Jennifer Gates’, a kynector from Clay County who has helped to keep a homeless man insured and on diabetes treatment, demonstrate that our kynectors have become trusted resources in their communities and don’t stop at getting someone an insurance card. They go above and beyond that to connect people with a source of care.

These are some of the many ways we can tell that kynect and expanded coverage are working. It doesn't make sense to throw that away for a one-size-fits-all federal system that doesn't provide the same level of assistance or education to Kentuckians. And with Kentucky sitting at 47th in the nation on health status, it's critical that we continue to do everything we can to ensure that people have access to affordable care when they need it.

Author: Emily Beauregard, Kentucky Voices for Health

Reason Slowly Gaining Ground Over Ideology in Medicaid Debate

When the Supreme Court ruled that states were not required to expand Medicaid to cover all poor adults, as originally envisioned by the ACA, it touched off a fierce political struggle that continues to roil statehouses across the country. Most recently, three Kansas lawmakers, all moderate Republicans, found themselves bumped off of a committee with jurisdiction over Medicaid because of their support for expansion.

With the 2016 election looming, political paralysis seems to rule the day (except in Montana, where more than 5,000 enrollees flocked to the newly expanded Medicaid program in its first week), but there are signs that the days of lying down in the road to prevent low-income people from getting health coverage are numbered. Consider:

In a recent poll of five swing states conducted for Community Catalyst’s On Message and SEIU, overwhelming majorities of voters in states that have yet to expand (Florida and Virginia) and states that have expanded (Ohio and Pennsylvania), including both Democrats and Republicans, supported expansion.

In deep south states such as Alabama and Louisiana, closing the coverage gap is emerging as a very real possibility.

The Kentucky Governor-elect and Tea-Party darling Matt Bevin was already forced to backpedal on his plan to repeal the expansion, and many astute observers expect that, as in Arkansas, the budgetary cost of repeal will persuade lawmakers to preserve the program.

And in Washington, Republican Senators are hesitating to cast a vote for a reconciliation bill that would repeal the enhanced federal funding for Medicaid expansion because they don't want to come out in favor of taking health insurance away from thousands of people in their home states.

In some respects, the 2016 election looms as the final existential threat to the survival of the ACA. But the takeaway is that even if there were an ACA opponent in the White House, repeal would be harder to achieve than the political rhetoric suggests. And if a supporter of the ACA retains the presidency, there is a real chance that the ground could shift rapidly under the feet of the obstructionist caucus.

Warts and All

But if the ACA seems here to stay, that doesn't mean everything is rosy. The issue of affordability (and the strategies insurers are using to hold down premiums) is a growing concern. According to a recent report from the Urban Institute, as financial support for purchasing health insurance tapers off, the percentage of people who are eligible for coverage but unenrolled rises.

Meanwhile, a different type of affordability problem is emerging for those with serious and chronic health conditions. The tactics insurers are using to keep premiums down and expand their market share is leading many to offer benefit packages that restrict access to necessary treatment, skinny-down provider networks and impose high out-of-pocket costs. For example, many silver-level plans restrict access to HIV medications and/or charge substantial co-payments. 

If anti-ACA fever were to break in Washington, these are problems that Congress could address (and indeed, the On Message/SEIU poll showed these are the types of issues voters want to see their elected officials tackle). What is more likely is that federal and state regulators and state lawmakers are going to have to tackle the affordability challenge without help from Congress for the foreseeable future.