How Will Congress Respond to Supreme Court Ruling on Obamacare Subsidies?

A potential crisis is looming with an upcoming Supreme Court Ruling on the Affordable Care Act.

Once again the poorly constructed Affordable Care Act is creating chaos and confusion alike for providers and patients.

Why we are still talking about Obamacare.

At 10 a.m. tomorrow, the nine U.S. Supreme Court justices will take their places on the bench in the marble temple to hear oral arguments in the highly anticipated case King v. Burwell.

Millions of Americans will have to wait several months before the high court decides the future of the subsidies available under the Affordable Care Act, but eyes are already looking from the Supreme Court to Capitol Hill for how lawmakers plan on responding to a ruling.

Republicans in the House and Senate are working to finalize legislation that would help Americans transition from the current system should the Supreme Court rule against the Obama administration.

“[The] question is: Then what?” Republican Reps. John Kline, Paul Ryan and Fred Upton wrote in an op-ed for The Wall Street Journal last night. “What about the people who will lose their subsidies—and possibly their coverage? No family should pay for this administration’s overreach.”

Though nothing has been finalized, the lawmakers are pushing for patient-centered reforms that transfer control of the insurance market from the federal government back to states.

History of the Case

King v. Burwell addresses whether states operating on the federal exchange are eligible for subsidies under the Affordable Care Act.

As it’s written, the law granted subsidies to customers who purchase coverage “through an exchange established by the state.” It also granted the Department of Health and Human Services the authority to create a federally-run exchange, HealthCare.gov, for states that choose not to run their own.

>>> Commentary: Q&A: What Is at Stake in the King v. Burwell Case?

Following the states’ decisions, the IRS issued a ruling that extended the tax credits to include states using HealthCare.gov.

The tax agency’s decision raised red flags for opponents of the Affordable Care Act who argue the IRS violated the law. However, the government has said that in order for the law’s insurance reforms to be successful, nationwide subsidies are needed.

Now, the high court will decide whether the 36 states using HealthCare.gov are permitted to offer tax credits to their residents.

House Republicans Present Their Plan

The Supreme Court isn’t expected to announce a ruling on King v. Burwell until June. However, experts are looking to lawmakers on Capitol Hill to ready a transition plan should the court rule against the Obama administration.

If that happens, health policy experts estimate that approximately 5.5 million Americans could lose their subsidies and see the price of their premiums increase drastically, as the subsidies help keep the costs of health plans down.

“If the court rules against the administration, as any fair reading of the law would demand, millions of individuals and families will hit a major road block: They’ll be stuck with health insurance designed by Washington, D.C., they can’t afford,” Republicans Kline, Ryan and Upton wrote.

Kline, Ryan and Upton are chairman of the House Education and Workforce, Ways and Means, and Energy and Commerce Committees, respectively.

To mitigate the fallout from the increased cost in premiums and lost subsidies, the trio of lawmakers revealed their “off-ramp from Obamacare”—the result of a working group made of House Republicans that designed a proposal for those potentially affected by the Supreme Court’s decision.

The plan is made up of two parts: The first authorizes states to opt out of the Affordable Care Act’s coverage requirements and the employer and individual mandates. The second part of the plan would secure “advanceable” and “refundable” tax credits for states affected by the Supreme Court’s decision.

“So here’s the bottom line: Under Obamacare, government controls your choices,” the Republicans wrote. “Under our proposal, you will. You’ll get to pick a plan that works for you.”

>>> As Supreme Court Prepares to Hear New Obamacare Case, One Senator Is Preparing a Plan B

Senate Counterparts Offer Their Ideas

Echoing the actions of their House counterparts, a trio of Republican Senate leaders penned their own op-ed in the Washington Post to discuss their answer to King v. Burwell.

Sens. Lamar Alexander, Orrin Hatch and John Barrasso, heads of the Senate Health, Education, Labor and Pensions Committee, Finance Committee and Republican Policy Committee, respectively, outlined their plan to help Americans at risk of losing their subsidies.

“When the court rules in King v. Burwell, we anticipate that it will hold the administration to the laws Congress passed, rather than the laws the administration wishes Congress had passed, and prohibit subsidies in states that opted not to set up their own exchanges, as the language of the law clearly states,” they wrote.

The senators’ plan includes providing financial assistance to affected Americans that would allow them to keep their original coverage for a “transitional period.”

“People do not deserve further disruption from this law,” they said.

Additionally, their plan would give power back to states and allow them to design their own health care system.

“[A ruling against the administration] would also give Congress an opportunity—to stop Obamacare’s damage and create a pathway to reforms that move our health care system in the direction of freedom, choice and lower cost,” Alexander, Hatch and Barrasso said.

Experts’ Ideas

The congressional Republicans are in lockstep with aspects of policy proposals offered by conservative experts in response to the Supreme Court’s decision.

Nina Owcharenko and Ed Haislmaier, health policy experts at The Heritage Foundation, outlined their answer to King v. Burwell in a paper released last week.

“Congress and the states should therefore seize the opportunity and clear the way for patient-centered, market-based reforms to take root in the states,” the pair wrote.

The experts encouraged Congress to exempt those in affected states from the Affordable Care Act’s insurance regulations, as well as the individual and employer mandates. Additionally, Owcharenko and Haislmaier advised lawmakers to pass pre-emptive legislation shifting plans from being federally regulated to state-regulated.

However, the experts advised Congress to abandon the “complex and costly subsidies of the ACA,” as they are accompanied by rules, restrictions and penalties.

“The design of the subsidies creates major financial incentive for millions of Americans to shift to plans that qualify for the new subsidies,” they wrote.

The Obama Administration’s Plan

White House officials contend that both those for and against the Affordable Care Act agreed that it was generally understood that those who joined the federal exchange were eligible for the law’s subsidies. And both the president and Health and Human Services Secretary Sylvia Mathews Burwell believe the Supreme Court will uphold the law as it’s currently interpreted.

However, neither the president nor Burwell said they have a contingency plan for if the high court rules the other way.

“We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision,” Burwell wrote in a letter to Republicans last week.

In an interview with Reuters, the president echoed Burwell’s statements.

“If they rule against us, we’ll have to take a look at what our options are,” Obama said. “But I’m not going to anticipate that. I’m not going to anticipate bad law.”

>>> Commentary: What Alexander Hamilton Would Say About King v. Burwell

 Content attributed to the Daily Signal

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The Uberization of Healthcare

The Uber business model will soon come to healthcare. 

Just as Uber changed transportation in positive—and sometimes controversial—ways, healthcare will be infiltrated by startups wanting to change the healthcare model from hospital-centric to patient-centric.  Medical device companies and other healthcare providers that don’t realize that a major shift is taking place will become the equivalent of today’s taxi industry.

While medical technology lags behind consumer technology development due to more regulatory oversight, the Uber model is becoming analogous to what we are currently seeing at our design firm: more and more companies come to us in an effort to “disrupt” existing models. In the decades preceding 2015, medical technology products were solely focused on clinicians, but today’s most progressive companies want to design health products for patients and their caregivers.

Like modern healthcare systems, the taxicab model was inefficient, not mobile, and often unpleasant for the consumer.  Anyone who has tried to get a cab in San Francisco will tell you: it was a model built around the needs of taxi drivers and their companies, rather than their consumer.  Mobile technology has existed for over a decade, but the taxi industry has simply refused to embrace it, holding on to its old ways. Enter Uber.  It uses a mobile platform.  It is GPS-enabled.  It allows a consumer to rate the driver.  It’s paperless.  It’s efficient. And while Uber has faced regulatory pushback, its boldness has been handsomely rewarded.  Regulation typically drafts behind, not ahead, of innovation.

Healthcare hasn’t yet seen its version of Uber.  But the signs are there: within the next decade, Uber-like companies will emerge.

We are seeing a major shift in healthcare brought on by cultural and socio-economic forces.  The population is aging, chronic conditions that require management during patients’ daily lives are on the rise, and Accountable Care is putting pressure on healthcare systems to measure and quantify results.  Alongside these issues, we are seeing widespread connectivity emerge across all economic classes.  Portio Research estimates some 6.9 billion cell phones are currently in use worldwide. That’s up from 2 billion in 2005, according to Wireless Intelligence.

We are also seeing a transformation of the man-machine relationship—we are starting to wear computers, and soon, we will be implanting them into our bodies to connect with our communication systems, cars, and homes.  As artificial intelligence improves, it will help us interact with increasingly smart environments.  In healthcare, highly evolved sensors and powerful algorithms will give us proactive, personalized care. By 2035, the majority of our treatments will occur at home.  Our home will be watching us and helping us track our health.

Technology has set all of this change in motion. It’s up to product designers and developers to ensure that patients have a positive experience with this new technology—that it makes their lives simpler and richer rather than burdening them down. Traditional medical products are developed with an emphasis on physical and cognitive usability. The New Health products, which will meld with our bodies, homes, and lives in a much more intimate way, must create deeper connections between our cognitive, physical, and especially emotional needs.

We are already seeing more empowered patients.  People want information. They want to make their own diagnosis.   They want to research their doctors.  They want their own health data.  And caregivers want to be—and must be—part of the loop.  In 2009, about 42.1 million family caregivers in the United States provided care to an adult with limitations in daily activities at any given point in time. The estimated economic value of their unpaid contributions was approximately $450 billion.  Caregivers want to use connectivity tools to keep track of loved ones—data, connectivity, sharing—even from a distance.  So healthcare will be personal, but also easier for the people who love you.

I imagine a world in the next 30 years that looks like this:  Patients receive personal care around the clock.  Virtual coaches and doctors work one-on-one with patients to optimize day-to-day preventative care.  Everyone has their own virtual care team that lives with them in augmented reality.  Meanwhile, primary care physicians (real humans) are assigned to a pool of patients that they monitor remotely, supported by a team of real human specialists. But much of the “personal” connection will be done through virtual humans.

Today we say, “Use this cane to walk.”  Or, “Use this pump; it’ll save your life,” and assume that users will readily adopt these products. As health companies create products for the modern consumer, they will have to shift their focus toward how these products fit into the larger context of people’s lives. Understanding and meeting patients’ needs and desires will become a bigger differentiator, and more crucial to adoption than ever before.

It all starts now.  Healthcare must shift its focus toward the patient.   Successful medical products will put the patient’s needs first and foremost. Just as Uber has demonstrated with putting the passenger first, ignoring the patient will be fatal for health solutions companies: they will be the new taxi drivers, baffled by how the world has passed them by. 

                              UberHealth

Smartphone Mobile App tests for HIV Syphilis

Let’s be honest: Smartphones aren’t necessarily thought of as devices that help to slow the spread of sexually transmitted diseases. In fact, research has found that transmission rates go up when hookup sites – even ones on the tamer end, like CraigsList – come to town.

But smartphones are also capable of transforming into competitive diagnostic tools, as a team of biomedical engineers out of Columbia University is showing with their new attachment that can detect both HIV and syphilis in a single 15-minute test.

The dongle, as the team writes in the journal Science Translational Medicine, costs just $34 to make (an amount that could drop further if mass produced). It uses the phone’s power and data collection, and incorporates simple optics and fluid control to process a finger prick of blood.

The smartphone dongle uses a scientific test, ELISA commonly performed in clinical laboratories with equipment that costs almost $20,000 USD. The website at the University of Arizona contains an interactive animation displaying the clinical immunology of the antigen/antibody test for HIV.

 

Can we measure the value of patient-centered care? Please join us as we discuss this question and related topics during our next Great Challenges online event focused on “The Role of the Patient.” Moderated by Boston NPR Health Care Reporter Martha Bebinger, our multi-disciplinary group of experts will discuss the rise of patient-centered care, explore how we can standardize its measurement to encourage evidence-based policy changes, and touch on what those potential policy changes might look like.

In the past, healthcare providers dispensed medical care with little questioning by patients; the role of the patient was to listen and follow “doctor’s orders.” Today, however, many agree that in order to arrive at the best outcomes, care must be shaped by what is valuable and meaningful to each individual patient. But can we quantify the efficacy of this approach? As we encourage patients to take an active role in the doctor-patient encounter and as patient-centered care becomes more widely adopted, how will we know when we’ve achieved success? Is it possible to standardize measurement of patient-centered care to build a solid evidence base? And how can we ensure that such an evidence base leads to broad-based policy changes that support more and better patient-centered care?

Today, new health reform policy interferes with patient centered care with prior authorization, and denials. frustrating both provider, patient and family

Join us for a live online event Thursday, February 26 at noon EST to discuss these issues and more with experts on the topic. 

Watch now.

  Measuring the Value of Patient-Centered Care

Mobile Health App Scams

The U.S. Food and Drug Administration has released guidelines for mobile health apps, and soon will have enforcement power to eliminate scams such as this one.

Smartphone and tablet users should be wary of mobile health apps whether they are on iOS or Android. The potential marketplace is enormous globally.  Euro regulators will also be surveying offerings from vendors as well.

If you’re worried about melanoma, head to the doctor — not the app store. On Monday, the Federal Trade Commission announced it has cracked down on two companies that charged customers up to $4.99 for apps that claimed to help them detect early signs of melanoma.

You get the idea. According to the FTC, the app makers had no evidence to provide support for their apps’ claims that they could assist consumers detect melanoma, which is a form of skin cancer.

The Mole Detective app first appeared in 2012 and was marketed by a U.S. company while MelApp appeared in 2011 from a U.K. firm. The apps sold from $1.99 to $4.99 in the Apple and Google app stores.

A search of Apple’s app store shows both apps have now disappeared, and a search for “melanoma” turned up no results.

The scheme is so far-fetched that the best way to explain it is through these pictures from the FTC, which show how the apps — named MelApp and Mole Detective — claimed to use smartphone cameras to assess skin conditions:

FTC to regulate sales of mhealth apps

In an announcement Monday, the FTC states marketers of MelApp and Mole Detective acted deceptively in claiming the apps can detect melanoma symptoms based on photographs a consumer uploads to the app. Two of the four companies involved with the apps have agreed to stop making unsupported and unsubstantiated claims.

"Truth in advertising laws apply in the mobile marketplace," said Jessica Rich, director of the FTC's Bureau of Consumer Protection, in the announcement. "App developers and marketers must have scientific evidence to support any health or disease claims that they make for their apps."

The settlement with New Consumer Solutions prohibits the vendor from claiming an app can detect or diagnose melanoma unless the claim is supported by "competent and reliable scientific evidence in the form of human clinical testing of the device." It prohibits the company from making misleading or unsubstantiated health claims about a product or service, and includes a $3,930 fine. The FTC is pursuing a litigated judgment against non-settling defendants Lasarow and his company.

In regard to MelApp, marketing began online in 2011 by Health Discovery, which sold the app for $1.99. The FTC settlement bars the company from the same stipulations cited for New Consumer Solutions. The settlement prohibits Health Discovery from making any other misleading or unsubstantiated claims about a device's health benefits or efficacy, and includes a fine of $17,963.

The FTC decisions were split votes, with a dissenting vote issued by Commissioner Maureen Ohlhausen in both cases.

For more information:
- read the FTC announcement
- read the commissioners' statement in favor of the decision
- read the dissenting commissioner statement

Potential buyers must be aware of scams in mobile health apps.  General health information apps have no regulatory oversite. However remote monitoring and wearable technology will require  certification by the FDA, FTC and other agencies as yet unknown.

The mhealth industry has to deal with  Blurred Lines during this relatively early period of development.

Before the Federal Trade Commission or Food and Drug Administration tackle another mobile health technology investigation, the two federal agencies--both of which are charged with protecting consumers--need to huddle up in a conference room, lock the door and not come out until they produce a clear map of what they're responsible for when it comes to oversight and regulating such tools.

Why? Because right now it's getting quite difficult to figure out who's keeping on eye on the shallow end of the mobile health technology pool and who's watching the deep end. And anyone who's had a pool or spent time at a public pool know that a lack of supervision at either end can lead to potential disaster.

the FTC describes itself as working "for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them." The FDA, for its part, describes its focus as being "responsible for protecting the public health by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, our nation's food supply, cosmetics, and products that emit radiation."

That may be all well and good, but it really doesn't answer the big question: Is the FTC going to be the one and only lifeguard when it comes to the mHealth technology pool. Additionally, what role, if at all, will the FDA play as more mHealth cases come to light?

Precision Medicine

Several weeks ago President Obama declared this the new era of 'Precision Medicine'.  In reality precision medicine has existed for decades. Several areas include blood transfusions. Blood is serotuped to minimize the possibility of transfusion reactions by matching blood tupes between donor and recipient. The same applies to transplants, kidney, heart-lung and other organs.

• If you need glasses, you aren't assigned a generic pair. You get a prescription customized for you.
• If you have an allergy, you get tested to determine exactly what you're allergic to.

• FACT SHEET: President Obama's Precision Medicine Initiative
• Precision Medicine is Already Working to Cure Americans: These are Their Stories

Genomics has been added to the specificity testing of disease and therapy.  Oncology (cancer treatment has become specific to cancer antigens and the development of targeted immune therapy.

Other applications:

• The drug ivacaftor treats the underlying cause -- not the symptoms -- of a particular genetic variation of cystic fibrosis.
• A variety of cancer patients are now routinely undergoing molecular testing as part of their care -- and their doctors are choosing treatments based on this information.
• Physicians at the University of Michigan 3D-printed a personalized tracheal splint that saved the life of a critically ill infant with a weak trachea.

President Obama's message describes the coordinated effort between government, hospitals, clinicians and research scientists to harness our new tool to combat some diseases.

Precision Medicine Initiative

Right now, most medical treatments are designed for the average patient.

Enter Precision Medicine: health care tailored to you.

Far too many diseases do not have a proven means of prevention or effective treatments. We must gain better insights into the biology of these diseases to make a difference for the millions of Americans who suffer from them. Precision medicine is an emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person. While significant advances in precision medicine have been made for select cancers, the practice is not currently in use for most diseases. Many efforts are underway to help make precision medicine the norm rather than the exception. To accelerate the pace, President Obama has now unveiled the Precision Medicine Initiative — a bold new enterprise to revolutionize medicine and generate the scientific evidence needed to move the concept of precision medicine into every day clinical practice.

Medicare Launches Performance-Based Cancer Payment Model

CMS is beginning to 'flesh out' new payment models by selecting Cancer and Oncology as a test bed.  The model appears to be similar to a baseline prepaid and capitated model, with an incentive paid for quality outcomes.

A great challenge will be converting from the FFS system to one based on quality of care. Prepaid models emphasize cost saving by providers in order to maintain profitability. 

Oncology Care Model (OCM)

From the CMS Innovation web site:

"The Center for Medicare and Medicaid Innovation (CMS Innovation Center) is developing new payment and delivery models designed to improve the effectiveness and efficiency of specialty care. Among those specialty models is the Oncology Care Model, an innovative new payment model for physician practices administering chemotherapy. Under the Oncology Care Model (OCM), practices will enter into payment arrangements that include financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients. The Centers for Medicare and Medicaid Services (CMS) is also seeking the participation of other payers in the model. This model aims to provide higher quality, more highly coordinated oncology care at a lower cost to Medicare.

Cancer diagnoses comprise some of the most common and devastating diseases in the United States: more than 1.6 million people are diagnosed with cancer each year in this country. A majority of those diagnosed are over 65 years old and Medicare beneficiaries. Through OCM, the CMS Innovation Center has the opportunity to achieve three goals in the care of this medically complex population:  better care, smarter spending, and healthier people.

Select link to open options for 

The goal of OCM is to utilize appropriately aligned financial incentives to improve care coordination, appropriateness of care, and access to care for beneficiaries undergoing chemotherapy. OCM encourages participating practices to improve care and lower costs through an episode-based payment model that financially incentivizes high-quality, coordinated care. The CMS Innovation Center expects that these improvements will result in better care, smarter spending, and healthier people. Practitioners in OCM are expected to rely on the most current medical evidence and shared decision-making with beneficiaries to inform their recommendation about whether a beneficiary should receive chemotherapy treatment. OCM provides an incentive to participating physician practices to comprehensively and appropriately address the complex care needs of the beneficiary population receiving chemotherapy treatment, and heighten the focus on furnishing services that specifically improve the patient experience or health outcomes."

Another CMS goal is to provide a model for private insurer payments.

OCM encourages other payers to participate in alignment with Medicare to create broader incentives for care transformation at the physician practice level. Aligned financial incentives that result from engaging multiple payers will leverage the opportunity to transform care for oncology patients across a broader population. Other payers would also benefit from savings, better outcomes for their beneficiaries, and information gathered about care quality. Payers who participate will have the flexibility to design their own payment incentives to support their beneficiaries, while aligning with the Innovation Center’s goals for care improvement and cost reduction.

Medicare Fee For Service (FFS) OCM incorporates a two-part payment system for participating practices, creating incentives to improve the quality of care and furnish enhanced services for beneficiaries who undergo chemotherapy treatment for a cancer diagnosis. The two forms of payment include a monthly per-beneficiary-per-month (PBPM) payment for the duration of the episode and the potential for a performance-based payment for episodes of chemotherapy care. The $160 PBPM enhanced care management payment will assist participating practices in effectively managing and coordinating care for oncology patients during episodes of care, while the potential for performance-based payment will incentivize practices to lower the total cost of care and improve care for beneficiaries during treatment episodes."

Eligibility and How to Apply

"All practices and payers who wish to apply for participation in OCM-FFS must first submit a non-binding letter of intent (LOI). LOIs for interested payers are due by 5:00 pm EDT on March 19, 2015. LOIs for interested practices are due by 5:00 pm EDT on April 23, 2015. LOI forms are available for download (see Additional Information below), and will only be accepted through the Oncology Care Model email inbox at OncologyCareModel@cms.hhs.gov.

Practices and payers that submit timely, complete letters of intent (LOIs) will be eligible to submit applications:"

Introductory Webinar

A webinar introducing the core concepts of OCM, including application instructions, will be available to the public from 12:00 – 1:00 pm EST on February 19, 2015. Advance registration is not required. For additional information, please visit the Oncology Model webinar page.

Additional Information

• Oncology Care Model Fact Sheet
• Oncology Care Model Press Release
• Oncology Care Model Frequently Asked Questions (PDF)
• Oncology Care Model Request for Applications (PDF)
• Oncology Care Model Letters of Intent: Payer (PDF)  |  Practice - single location (PDF)  |Practice - multiple locations (PDF)
• Oncology Care Model Application Templates:  Payer (PDF)  |  Practice (PDF)

_______________________________________________________________________________________

This OCM pilot program may well forecast the proposed model for other disease entities.  Oncology is a 'wastebasket terminology that attempts to describe a wide variety of tumors ranging from malignant melanoma to cancer of the breast.  Thus far it does not seem to address cancer diagnosis, surgical treatment, radiation treatments and/or novel immune therapies.

Much like the Pioneer ACO program this is a test bed or pilot program. Hopefully CMS will evaluate this for several years prior to rollling it out. 

As of October 2014 CMS released a more complete picture of Pioneer ACO Results .

These ACO-level data reflect the range of experiences across Pioneer participants. Some ACOs have sustained positive performance to date, while others have seen diminishing rates of return. Those organizations more committed to clinical transformation, patient outreach, and organizational change may be more likely to do better, but further analysis of differences in performance could enable the Pioneer Program and ACOs to achieve bigger impacts over time.

"It is hard to know what the third performance year of the Pioneer program will show, but as noted earlier, the Pioneer Program has already lost over a third of its original 32 participants. Despite the decline in participation and mixed results so far, CMS remains optimistic and committed to the program, and the overall number of Medicare, Medicaid, and privately-insured individuals in ACO arrangements continues to rise. We can anticipate a proposed rule impacting the MSSP, likely later this Fall, which will impact elements of the Pioneer ACO program. Regulatory changes that may help increase the ability of the Medicare ACO programs to support better care while ensuring sustainability include: adjustments to attribution methods, benchmark calculations, collection and sharing of data with ACOs, updating performance measures, linking to other ongoing payment and delivery reforms, and creating more financial sustainability for program participants. The current Pioneer program can be a key step toward effective payment reform, but further steps are needed to assure long-term success."

(Editorial comment)

It is likely the new model for payment will have mixed success. This approach requires an integrated system and experience in measuring performance. Small groups and practices face many obstacles, and will be disadvantaged. 

ACOs Are the Latest Assault on Private Medical Practice

Richard Amerling, M.D. explains, "In a critique of Accountable Care Organizations (ACOs) last October I wrote: “Now comes news that three more of the original groups will jump ship, leaving only 19 of the original 32 still on board. A nearly 50 percent attrition rate should be seen as a death knell for the concept, as these were likely the best of the best, and the inducements most generous. Reasonable people would head back to the drawing board. But we are dealing with government bureaucrats, health policy wonks, and administrators. They will damn the torpedoes and push on at flank speed.”

Amid fanfare, the Secretary of HHS Sylvia Mathews Burwell recently announced plans to move 50 percent of Medicare spending into ACOs and other forms of “payment for value.” This initiative is being pushed through by special interests that expect to benefit. Patients and practicing physicians, the people most affected, are simply not represented. The HHS plan “aligns with the [AMA’s] commitment to work toward innovative care delivery reform that will promote high-quality and efficient care for our nation’s seniors who count on Medicare, while reducing the administrative and regulatory burdens physicians face today.”

And so the leaders of “organized medicine” (AMA) are on board with policies that will lead to the destruction of private medical practice, which depends completely on the much-maligned fee-for-service payment mechanism. Perhaps they don’t fully comprehend the implications of what they are endorsing. The fee-for-service private medical system has been the bedrock of American medical care. Far from driving up costs, private medicine is the one part of the system holding down costs. The never-ending regulations and hurdles from third-party payers, both private and governmental, impose costs in a private medical office. A direct pay (non-third-party) medical practice is a model of efficiency. A patient visits the doctor and pays directly for the visit at the point of service. No bill to an insurance company is generated (though the patient may choose to submit a claim). Personnel dedicated to billing, obtaining various prior authorizations, and following up on denied claims, are eliminated.

Richard Amerling, MD (New York City) is an Associate Professor of Clinical Medicine and an academic nephrologist at Mount Sinai Beth Israel in New York. Dr. Amerling received an MD from the Catholic University of Louvain in 1981. He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania. He has written and lectured extensively on health care issues and is President of the Association of American Physicians and Surgeons. Dr. Amerling is the author of the Physicians' Declaration of Independenceand is a seasoned speaker and on-air contributor.

  

What’s Wrong With Obama’s Rush to Change Doctors’ Medicare Payments

John O'Shea, M.D.

"Health and Human Services Secretary Sylvia Burwell has unveiled a major initiative to push Medicare physicians and other medical professionals out of fee for service (FFS), which pays based on specific services rendered, and into alternative payment models (APMs).

Before deciding that all Medicare providers must abandon Medicare fee-for-service, the Obama administration should make sure they have somewhere else to go."

Early studies and pilot programs reveal that APMs are exceedingly difficult to implement and there are few indicators that it will improve quality of care.  

"APMs generally include models such as Accountable Care Organizations (ACOs), 

Patient-Centered Medical Homes (PCMHs), 

Bundled Payments (BP) and various Pay for Performance (P4P) programs that emphasize aggregating payments and making doctors and other medical professionals accountable for the quality as well as the cost of patient care. The goal is better quality, more efficient health care."

"But make no mistake: the results to date on the performance of APMs do not support the administration’s enthusiasm. For example, a 2014 RAND study that extensively reviewed the performance of APMs found little, if any, effect in terms of quality improvement or cost reduction. In a separate report, “Modern Healthcare noted that, “The launch and operation of Medicare ACOs has been somewhat rocky, exposing flaws that some experts and providers worry will undermine participants’ ability to succeed."

According to early Centers for Medicaid and Medicare Services results, less than half (54) of the initial 114 organizations that participated in ACOs achieved savings and of those, just 29 saved enough money to receive “shared savings” bonuses. In addition, for the 29 participating pioneer ACOs (more experienced organizations), the results showed that only nine achieved significant savings.

In addition to results in terms of quality and costs–results that are mixed at best–medical professionals have found that ACOs are exceedingly difficult to implement. Research by the Medical Group Management Association found implementing and/or optimizing an accountable care organization was one of the top five challenges for members, with 60.2 percent of respondents to one survey saying implementing ACOs was one of the biggest challenges, making it the fifth most challenging issue overall. In fact, of 44 issues facing medical practices, the top challenge for Medical Group Management Association members was preparing for new reimbursement models that include greater financial risk for practices.

There is another reason for caution. The reality is this: APMs as they currently exist are not available to all medical professionals. ACOs and PCMHs, two of the most common APMs are primary care-based models that have yet to encompass specialty care. Given the complex compliance requirements, physicians in smaller practices and rural settings will find it financially and administratively difficult, if not impossible to participate, leading more doctors to forgo private practice, exacerbating the trend toward market consolidation.

Granted, fee for service may have its flaws, but before blindly pushing Medicare doctors and other medical professionals out of fee for service and over the cliff, the Obama administration should be sure they have a safe place to land. The Brave New World of APMs may not be the panacea that Team Obama seems to think it is.

The current, previous administrations and congress failed to anticipate administrative barriers to proposed programs.