Federal Rules Create Big Obstacles for Health Information Technology Entrepreneurs

 

electronic-medical-recordThis blog has long noted the painful consequences of the federal government’s intervention in health information technology (HIT).  Last February, NCPA published an Issue Brief recommending that the federal government’s ambitions in HIT be rolled back. The major problem is the government’s undue influence in Electronic Health Records (EHRs).

Last month, the Administration published the regulations for stage 3 of the Meaningful Use incentives, which both pay and fine doctors for their use of EHRs in accordance with the rules. Margalit Gur-Arie describes the new rules:

Meaningful use stage 3 is adding a host of structured and codified data elements that you will need to collect and record. To that end, you should consider updating your policies as follows:

  • Require each patient to provide an updated resume at least once a year, because you need to continuously collect and update work history, including positions held, and financial information.
  • In collaboration with your attorney, create a crosswalk based on State laws and meaningful use regulations regarding what you must ask or are barred from asking your patients. For example, in some states you are not allowed to ask about guns in the domicile, and for meaningful use you must inquire how often your patient goes to church, and whether he or she is a homosexual (regardless of your specialty). It’s a fine balance, and you don’t want to break any laws.

From Left and Right; Opposition to Flawed Medicare “Doc Fix”

 

The U.S. Senate will have to deal with the flawed so-called Medicare “doc fix” Wednesday at the latest, if doctors are not to suffer a significant drop in their payments from Medicare.

Voices from both right and left have discovered serious problems with the bill, and proposing solutions. Here are three examples:

Fix The Flawed Medicare Doc Fix

 

For over a decade, Congress has struggled with an inadequate formula to calculate Medicare payments to physicians.  The formula results in an amount too low to ensure physicians will continue to see Medicare beneficiaries.  At least once a year, Congress has to pass a short-term increase to Medicare physician payments to prevent fees dropping about 20 percent.  The current boost expired on March 31, 2015, and Congress is currently considering legislation, H.R. 2, to fix the problem permanently.

According to a new Issue Brief published by the National Center for Policy Analysis, the currently proposed legislation is a poor doc fix for two major reasons:

Telehealth Faces Headwinds

 

We’ve cheered the telemedicine compact written by the Federation of State Medical Boards, and hoped that it would lead to a rapid collapse of the barriers facing telehealth providers’ ability to provide services across state lines.

Unfortunately, some medical societies and states are unwilling to move with the times. Last month Arkansas legislators voted down a bill that would have liberalized telemedicine within the state:

During the hearing, Sullivan pointed to several large companies including DirectTV, Kohl’s, Red Lobster, Pfizer, and Home Depot that use telemedicine services in every state except for Arkansas. He also referred to a map, created by telemedicine company Teladoc, which shows that Teladoc offers its services in 48 states, excluding Idaho and Arkansas, though he added that Idaho just passed a bill that would allow Teladoc to operate there.

Now. The Texas Medical Board has moved to stifle Teledoc, a leading telehealth provider – and a Texas company:

The question at hand is whether the Texas Medical Board will change its rules to prohibit physicians in the state from prescribing medications to patients whom they’ve interacted with via phone or online, but have never seen in person.

It is kind of embarrassing that this Luddite approach persists in 2015.

Health IT Juggernaut is Stumbling

 

The gold rush in Health Information Technology (HIT) appears to be winding down. Mercom Capital Group, LLC, reported that venture funding in HIT dropped 35 percent in the first quarter to just $785 million. Well, no trend lasts forever. Still, I have to wonder if investors aren’t getting a little concerned about putting so much capital into a space so dominated by government.

The Office of the National Coordinator of Health Information Technology (ONC), which has an overly ambitious 10-year strategic plan that needs to be rolled back, has pretty much confessed that the $30 billion taxpayers’ dollars spent on Electronic Health Records (EHRs) has been wasted.

Medicaid Managed Care Pharmacy Costs 15 Percent Less Than Fee-For-Service

 

vbnAmerica’s Health Insurance Plans (AHIP), the main trade association for health plans, has released research comparing pharmacy costs in states where Medicaid pharmacy benefits are “carved in” versus “carved out.”

“Carved in” means that a managed care organization manages the benefit. “Carved out” means the Medicaid bureaucracy manages it directly. The latter costs a lot more:

  • Across 28 states using the carve-in model, the net cost per prescription was 14.6%lower than the average net cost per prescription in states not carving in pharmacy.
  • This 14.6% differential created a $2.06 billion net savings in state and federal expenditures in FFY2014 for states deploying the carve-in model.
  • The seven carve-out states had a 20% increase in net costs per prescription from FFY2011-FFY2014 — in stark contrast to the 1% increase in net costs per prescription experienced by the 6 states that recently switched from a carve-out to a carve-in model.
  • The seven carve-out states “missed” a total of $307 million in savings in FFY2014 which would have occurred had they used a carve-in model.

Seven of 10 Doctors See Effects of Climate Change on Patients!

 

Just within the last couple of weeks, we’ve seen Congressional Republicans join with Democrats to buy into the idea that the federal government knows how to pay doctors for “quality” and “value.” It is the main concept behind the misconceived Medicare “doc fix” bill that the Senate will consider next week.

So, if we are going to surrender even more of this power to the federal government, it might be interesting to see what the Administration thinks is important:

“The challenges we face are real, and they are clear and present in people’s daily lives,” said senior presidential adviser Brian Deese in a telephone conference call with reporters on Tuesday. Seven in 10 doctors are seeing effects on their patients’ health from climate change that is “posing a threat to more people in more places,” Deese said. (Bloomberg Politics).

Medicare Advantage Plans Become Entrenched

 

Cheerful Senior Man Having His Blood Pressure TakenThe Centers for Medicare & Medicaid Services (CMS) has announced that payments to Medicare Advantage plans will increase by 1.25 percent next year. Less than a month ago, the plan was to cut payments by 0.95 percent.

Medicare Advantage plans are comprehensive plans that seniors can chose instead of the traditional Medicare Fee-For-Service (FFS) model.Because they are offered by private insurers, Obamacare was supposed to crush Medicare Advantage.

However, this is the third year the Administration has flinched from cuts that would deny people access to these plans. More seniors are in Medicare Advantage today than when Obamacare was passed.

We think Medicare Advantage plans are a good thing, and a foundation for further Medicare reform. So, this development is good news. Further, there appears to be bipartisan agreement that Medicare Advantage is a good thing:

Democrats were wary of a program launched by Bush that they saw as a giveaway to insurance companies.

But as time has passed, support has grown in both parties for the program.

“The worst fears were not materialized,” said Rep. Gerry Connolly (D-Va.), who signed the letter this year against the cuts. “It’s growing in popularity among our constituents and it provides an option.” (Peter Sullivan, The Hill)

Paying for the Medicare Doc Fix is Easy

 

A similar version of this Health Alert appeared at Forbes.

Late last month, an overwhelming bipartisan majority in the House of Representatives approved the Medicare Reauthorization and CHIP Extension Act (MACRA), a fiscally irresponsible approach to increasing the amount the federal government spends on Medicare’s physicians’ services. Medicare’s Physician Fee Schedule is tied to an inflation formula that is inadequate to pay physicians enough to keep seeing Medicare patients. While Congress has had to increase this amount every year, those increases have always been funded by offsets from other federal spending.

This is the first time politicians of both parties have ignored this rule, increasing Medicare’s physicians’ payments perpetually and not paying for it. Worse, gimmicks obscure the true cost of the bill. Further, the bill would centralize federal control of the practice of medicine along the lines of Obamacare. The bill faces a lot of pressure to pass the Senate next week, especially because Medicare will have to start paying doctors according to a significantly lower fee schedule on April 15. So, the Senate needs to fix the bill very quickly before approving it.

There are three responsible approaches: A shorter “doc fix” that increases physicians’ Medicare payments by no more than two years, which can be easily offset just like 17 previous doc fixes have been; including MACRA on the “pay as you go” (PAYGO) scorecard, making its spending subject to sequestration; or finding $141 billion of offsets required to make the entire bill budget neutral.

More Than One in Five Obamacare Enrollees From 2014 Have Not Re-Enrolled

 

Avalere Health has released a new analysis of exchange enrollment, emphasizing that states with the federal Obamacare exchange (healthcare.gov) retained more 2014 Obamacare beneficiaries than states with their own exchanges:

Federally-facilitated exchange states reenrolled 78 percent of their 2014 enrollees in 2015, on average. In state-run exchange states , that percentage drops to 69 percent of 2014 enrollees. California, the state with the highest enrollment in 2014, only retained 65 percent of their 2014 enrollees.Avalere