Weekend Update

Happy Easter and Passover! The FEHBlog is back from travelling to Argentina. Highlights of the trip included mini-trekking on the Perito Moreno glacier in Patagonia, visiting the Recoleta Cemetery (excellent English speaking tour guide), and the food.

The process of creating the list of essential benefits continues. The Labor Department's Secretary sent the Labor Department's Secretary a required report on benefits typically offered by employer sponsored health plans. A statement from the HHS Secretary explains that

Beginning this fall, HHS will launch an effort informed by the [Institute of Medicine] IOM’s [to be released] recommendations to collect public comment and hear directly from all Americans who are interested in sharing their thoughts on this important issue. I’m confident that this process will ensure all Americans have a seat at the table and strengthen our health care system.”

Qualified health plans operating in the state based health plan exchanges will be required to offer the HHS mandated essential benefits. Employer sponsored plans, including FEHB plans, will not be permitted to place annual or lifetime dollar limits on HHS mandated essential benefits.

HHS issued a proposed rule governing Medicare Part A payments to inpatient hospitals effective for discharges on or after October 1, 2011, the beginning of the next federal government fiscal year. The proposed rule would create a 1.5% increase in diagnosis related group payments. Also

To provide hospitals with an incentive to improve care coordination, the Affordable Care Act directs CMS to implement a Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 to certain hospitals that have excess readmissions for certain selected conditions.  Today’s proposed rule proposes measures for rates of readmissions for three conditions -- acute myocardial infarction (or heart attack), heart failure, and pneumonia.  CMS is also proposing a methodology that would be used to calculate excess readmission rates for the program.  Additional conditions may be added in future rulemaking.  The payment adjustments will apply to hospital payments in FY 2013, beginning with discharges on or after Oct. 1, 2012.

HHS is accepting comments on the proposed rule until June 20, 2011, and the agency expects to issue the final rule on August 1, 2011.

On a related patient safety note, AHIP issued a white paper on ensuring quality through appropriate diagnostic imaging. "According to the paper, health plans are using a variety of tools to help improve the quality and affordability of care patients are receiving with respect to imaging tests.  These strategies emphasize “the use of standards to safeguard patient safety and promote imaging quality, physician education, and the use of evidence-based guidelines.” Also the Centers for Medicare and Medicaid Services published a report on its physician quality reporting and e-prescribing programs

CMS’s 2009 Physician Quality Reporting System and ePrescribing Experience Report states that 119,804 physicians and other eligible professionals in 12,647 practices who satisfactorily reported data on quality measures to Medicare received incentive payments under the Physician Quality Reporting System totaling more than $234 million—well above the $36 million paid in 2007, the first year of the program. Under the ePrescribing Incentive Program, CMS paid $148 million to 48,354 physicians and other eligible professionals in 2009, the first payment year for the program. Results show that participation in the Physician Quality Reporting System has grown at about 50 percent every year, on average, since the program began.

Last month, HHS issued a long awaited proposed rule governing the participation of accountable care organizations in the Medicare Program next year. The AMA News featured a report on provider reactions to the proposed rule captioned "Skepticism greets Medicare ACO shared savings program."

Advocate Physician Partners, an alliance of 3,800 physicians in Illinois, is in the first year of a shared savings program with BlueCross BlueShield of Illinois. Officials are studying the CMS rule, but they are not sure if Advocate will participate as a Medicare ACO next year, said Mark Shields, MD, senior medical director of the Oak Brook, Ill.-based alliance.
"It's a significant hurdle to succeed with the Medicare ACO program as the regs are now written," Dr. Shields said. "It's not the place for an organization that has not already done significant care reorganization." For instance, the ACO proposal requires that 50% of the physicians are meaningful users of electronic medical records as defined by the Dept. of Health and Human Services.

AIS reports that private insurers may diverge in certain respects from the Medicare rules when forming their own ACOs.

The Labor Department's ERISA Advisory Council issued a report on improving Health Care Literacy, an Affordable Care Act objective. The report included the following recommendations:

Seek consistency of health care-related terminology among Federal agencies, insured and self-insured plans. The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act ("PPACA" or "Affordable Care Act") requires the Department of Health and Human Services to develop consistent definitions of commonly used terms such as "copayment," "coinsurance," and "deductible." The DOL should use these terms in its communications and encourage use of these standard definitions in all benefit communications.

Permit flexibility in delivery of the summary of benefits and coverage explanation (often referred to as the "four page notice") required under the Affordable Care Act. Plan sponsors will be required to provide this summary of essential group health plan benefits and coverage. The Council views this as a very good opportunity to promote health care literacy and believes that the DOL provide plan sponsors with flexibility to determine the most effective way to distribute this document to plan participants. 

The FEHBlog ran across the Standard & Poor's website for its monthly healthcare economics indices for the United States. "The indices are calculated monthly, and published with a 6-8 week lag. The indices are released to the public at 9AM on the third Thursday of each month." According to the most recent report for the month of February 2011,

Over the year ending February 2011, healthcare costs covered by commercial insurance rose by 7.97%, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of 3.22%, as measured by the S&P Healthcare Economic Medicare Index. This is the lowest annual rate of growth posted for the Medicare Index in its six-year history.