Category: Medicare

Obama’s Former Health IT Czar Raises $35 Million for New Venture

FMBow-tied and charismatic, Dr. Farzad Mostashari, who led the Office of the National Coordinator of Health IT (ONC) from April 2009 to October 2013, has raised a total of $35 million from leading venture capitalists for his new business, Aledade. Aledade’s senior management includes veterans of athenaHealth and Practice Fusion, both firms which I admire for their entrepreneurship and relative (although not perfect) independence from government.

Like those firms, Aledade will provide its Electronic Health Records to independently practicing physicians. Aledade claims its uniqueness lies in an EHR that will ensure doctors’ win the Accountable Care Organization game. At NCPA, we think that ACOs are unlikely to succeed. Nevertheless, if anyone can pull this off, Dr. Mostashari and his team have got a pretty good edge (in my humble opinion).

Doctor Who Billed Medicare Over $16 Million in 2013 Explains It on YouTube

Last year, I had a very rare opportunity to congratulate the Obama Administration for its decision to release Medicare’s physician payment data for public scrutiny. It followed up quickly with a data dump of hospital claims.

I also anticipated that this would lead the physicians with the highest spending to justify their claims to the citizens at large. Last week, the Administration released the 2013 physician file, which is causing a this to happen. Here is one high-cost specialist explaining his practice on YouTube:

I discovered this thanks to USA Today, which has done a first cut of the 2013 dataset:

Accountable Care Organizations Hate Medicare’s Final ACO Rule

Confident DoctorsLast Thursday, the Centers for Medicare & Medicaid Services published the final rule for Medicare Shared Savings Program Accountable Care Organizations (MSSP ACOs). At almost 600 pages, it differs in many ways from the proposed rule issued last December:

  • Creates a new Track 3, based on some of the successful features of the Pioneer ACO Model, which includes higher rates of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
  • Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries’ care;
  • Establishes a waiver of the 3-day stay Skilled Nursing Facility (SNF) rule for beneficiaries that are prospectively assigned to ACOs under Track 3; and
  • Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings, and announces CMS’ intent to propose further improvements to the benchmarking methodology later this year.

“Successful features of the Pioneer ACO model”? That’ll be a struggle. As we’ve discussed, the Pioneer ACOs have had very meager results, and will probably end up as a footnote to Medicare’s history.

Hip Replacements in L.A.: $12,457 to $17,609

A short drive in the Los Angeles area can yield big differences in price for knee or hip replacement surgery.

New Medicare data show that Inglewood’s Centinela Hospital Medical Center billed the federal program $237,063, on average, for joint replacement surgery in 2013.

That was the highest charge nationwide. And it’s six times what Kaiser Permanente billed Medicare eight miles away at its West L.A. hospital. Kaiser billed $39,059, on average, and Medicare paid $12,457.

The federal program also paid a fraction of Centinela’s bill — an average of $17,609 for these procedures. (Chad Terhune & Sandra Poindexter, “Price of a common surgery varies from $39,000 to $237,000 in L.A.,” Los Angeles Times, June 2, 2015)

Okay, hospital bills are silly. We already know that. Let me point out two things.

“Transparency” Will Not Fix Medicare Physician Fees

The Government Accountability Office (GAO) has released a report criticizing the way the federal government sets physicians’ fees in Medicare. It concludes that “Better Data and Greater Transparency Could Improve Accuracy.”

I doubt it. Note the mind-numbing detail of this process: The government delegates its assumed authority to a group of physicians who comprise the Relative Value Scale Update Committee (RUC). The government “reviewed 1,278 RUC work relative value recommendations for about 1,200 unique (new and existing) services)” in the last four years.

Medicare’s Pioneer ACOs Ending with a Whimper?

UntitledThis blog has covered the mediocre and inconclusive results of Medicare’s Pioneer Accountable Care Organization (ACO) model for a couple of years now. A new research paper in JAMA, the Journal of the American Medical Association furthers the narrative that the much ballyhooed program has very slim results:

 

 

 

Results  Total spending for beneficiaries aligned with Pioneer ACOs in 2012 or 2013 increased from baseline to a lesser degree relative to comparison populations. Differential changes in spending were approximately −$35.62 (95% CI, −$40.12 to −$31.12) per-beneficiary-per-month (PBPM) in 2012 and -$11.18 (95% CI, −$15.84 to −$6.51) PBPM in 2013, which amounted to aggregate reductions in increases of approximately −$280 (95% CI, −$315 to −$244) million in 2012 and −$105 (95% CI, −$148 to −$61) million in 2013. Inpatient spending showed the largest differential change of any spending category (−$14.40 [95% CI, −$17.31 to −$11.49] PBPM in 2012; −$6.46 [95% CI, −$9.26 to −$3.66] PBPM in 2013). Changes in utilization of physician services, emergency department, and postacute care followed a similar pattern. Compared with other Medicare beneficiaries, ACO-aligned beneficiaries reported higher mean scores for timely care (77.2 [ACO] vs 71.2 [FFS] vs 72.7 [MA]) and for clinician communication (91.9 [ACO] vs 88.3 [FFS] vs 88.7 [MA]).

Let’s leave the quality measurements aside for now, and focus on the fiscal effects. There appears to be a small positive effect. However, it appears extremely slim and likely even illusory for a number of reasons:

Republicans Reach for Redemption on Medicare “Doc Fix”

Politico reports that Congressional Republicans might be having second thoughts about the extremely flawed, so-called Medicare “doc fix” legislation that they sent to President Obama a few days ago. One of those flaws was that the spending in the bill was not offset by cuts to other federal spending – which is why almost every Democrat in Congress voted for it too.

Well, they appear to be getting the message that NCPA has been sending them since March 25:

…… one GOP source said negotiators had resolved a sticking point over how to offset a recently enacted bipartisan Medicare overhaul that was not entirely paid for. The source said the agreement is likely to offset the overhaul, often called the “doc fix,” starting next year.

Better late than never. How they will get President Obama to sign any bill that offsets spending that was already committed by his signature on March 15 is unclear. (All they had to do in the original bill was remove two short sentences that exempted the spending from the so-called PAYGO scorecards. Had they done so, they would not have to worry about it today.)

Barack Obama Has the Last Word on the Medicare “Doc Fix”

I thought that I had given the last word on the flawed Medicare “doc fix” last Monday. Nope: That honor goes to President Obama. During the three week period the secretly negotiated “doc fix” legislation was being rushed through Congress (“rushed” because the Senate was in recess for most of it), I wrote an article suggesting Republicans who voted for it might be casting their first vote for Obamacare. Well, don’t take my word for it. Now that he’s signed the bill, President Obama has hosted a fabulous garden party for the politicians who voted for it. Yahoo has the whole story, including a photo of Speaker Boehner planting a bipartisan kiss on the cheek of Minority Leader Pelosi. One of my charges was that the law increased federal control of the practice of medicine.

Here’s what the President had to say about that:

“I shouldn’t say this with John Boehner here, but that’s one way that this legislation builds on the Affordable Care Act,” Obama said, adding, “But let’s put that aside for a second.”

Hospitals “Turbocharge” Medicare Claims

Today’s Consumer Price Index release shows a big jump in prices for hospital services. The Wall Street Journal has an exemplary piece of investigative journalism discussing one way hospitals gouge Medicare:

A Wall Street Journal analysis of Medicare claims data and financial filings from medical facilities shows that many hospitals increased prices faster than costs rose, affecting outlier payments. The Journal identified $2.6 billion in overpayments Medicare made to general hospitals between 2010 and 2013 because of overestimates of hospitals’ costs—about one-sixth of outlier payments in the analysis.

At Christ Hospital, more than 40% of outlier payments between July 2012, when the hospital was acquired by an investor group during bankruptcy proceedings, and the end of 2013 were due solely to an increase in prices, the Journal analysis shows.

The Medicare agency took steps in 2003 to deter hospitals from raising prices to increase outlier payments, sometimes referred to as “turbocharging.”

(Christopher Weaver, Anna Wilde Mathews, & Tom McGinty, “Medicare Pays as Hospital Prices Rise,” Wall Street Journal, April 15, 2015)

Well, that’s 12 years ago, and it obviously hasn’t worked. The only way to get hospitals to quite manipulating chargemaster prices is to get the government out of fixing hospital charges.

Means Testing Medicare Premiums

Soon after House Speaker John Boehner and Minority Leader Nancy Pelosi surprised the House of Representatives with a so-called Medicare “doc fix” that would cement important Obamacare gains, NCPA sprang into action and proposed an alternative.

Since March 25, this blog has been heavily loaded with articles addressing the topic. Unfortunately, we were not able to overcome the Obamacare coalition this time, and the legislation passed without amendments.

Many readers have asked why I did not address means-testing Medicare premiums, which account for about $34 billion of the revenue raised in the bill. The answer is that Part B (physician) and Part D (prescription drug) premiums have been means tested for years. The “doc fix” does not include a change in principle in this regard. Also, increased means testing has long been proposed by most Republicans and conservatives, so that measure did not constitute a broken promise like the rest of the bill did.