MedPAC Votes for New Medicare Benefit Design

The Medicare Payment Advisory Commission met late last week in Washington. The Commissioners voted unanimously on a new Medicare benefit design to be included in its June Report to Congress. The proposal would replace the current benefit design with one that includes:

  • An out-of-pocket maximum;
  • Combined deductibles for Part A and Part B services;
  • A replacement of coinsurance with copayments that vary by type of service and provider;
  • Secretarial authority to alter or eliminate cost-sharing based on evidence of the value of services, including cost-sharing after the beneficiary has reached an out-of-pocket maximum;
  • No change in the beneficiary’s aggregate cost-sharing liability;
  • An additional charge on supplemental insurance.

Click here for 4-page executive summary of the two-day meeting and the 7 issues on which MedPAC focused.  It includes links to all of MedPAC’s presentation slides.

Physician Groups Identify 45 Questionable Procedures, Tests, Treatments

Nine physician specialty societies have identified a total of 45 different procedures, tests and treatments that are routinely used but may not always be necessary. Click here to see the specialties and their lists. This list will receive a lot of media attention (click here for the USA Today story) as Consumer Reports and other media will be focusing on it. Premier healthcare alliance issued a statement saying its own analysis estimates the potential annual savings for an average hospital include $2.2 million for unnecessary lab tests, $1.52 million for unnecessary diagnostic imaging, $1.5 million for respiratory therapies and $1 million for blood utilization.

Costs for Preventive Exams Show Extreme Variations: New Study

A new report released last week shows costs vary as much as 700% for some preventive examinations, and as the federal health care law increases demand for those procedures, it can mean an increase in premiums if employees don’t pay attention to those costs. Click here for the USA Today story. Click here to see the detailed report.

CMS Issues FY13 Payment, Policy Updates for Medicare Advantage

Medicare Advantage plans got their FY2013 payment and policy updates from CMS last week. CMS said the guidance describes payment changes that reflect an estimated annual average growth rate of 3.07 percent, “which will sustain a stable Medicare Advantage landscape next year.” Click here for details.

Home Care Promotes New Study Showing Cost Effectiveness

A new study released last week says home health is more cost effective than other post acute settings. Across all DRGs, home care is the first care setting for nearly 40 percent of post-acute care episodes in which patients are sent to formal care settings following hospital stays, according to the report. But this care represents only 27.8 percent of post-acute care episode spending. The report was commissioned by the Alliance for Home Health Quality and Innovation. Click here for the 4-page executive summary.

Industry Report: Chemo Costs Less in Doc Offices

Treatment for privately insured patients receiving chemotherapy in a hospital outpatient setting costs on average 24 percent more than treatment received in a physician’s office, according to a report out last week from the Community Oncology Alliance (click here). From 2008 to 2010, the average cost of care for patients in these plans receiving chemotherapy in a hospital outpatient setting was approximately $35,000 versus $28,200 for those receiving treatment in a physician’s office. A second report (click here) released last week by the same group said that in the past four and half a years, nearly 400 community-based practices across the country have come under contract with or been purchased by a hospital. Another 241 practices have closed, while 132 practices merged or were acquired by a corporate entity. Click here for that report.

HHS Gives $72 Million to 10 States for Home Visit Program

To improve the health and development of children, 10 states last week received a total of $72 million in grants from HHS to provide early childhood supports and home visits to families who volunteer to receive these services. The funds will allow states to expand or establish their home visiting program. Click here for details.

Administration Rolls Out New Tools to Fight Health Care Fraud

In a high profile event in Chicago last week, the Obama Administration outlined its aggressive campaign against Medicare and Medicaid fraud.  Among provisions highlighted:

  • Tougher sentences: 20-50 percent longer for crimes that involve more than $1 million in losses;
  • Contractors that police Medicare for waste, fraud, and abuse will expand their work to Medicaid, Medicare Advantage, and Medicare Part D programs;
  • Government agencies have greater abilities to work together and share information so that CMS can use its authority to suspend payments to providers and suppliers engaged in suspected fraudulent activity.
  • To underscore their commitment to enforcement, Administration officials touted the following success:
  • In the early phase of revalidating the enrollment of providers in Medicare, 234 providers were removed from the program because they were deceased, debarred or excluded by other federal agencies, or were found to be in false storefronts or otherwise invalid business locations;
  • Last year, HHS revoked 4,850 Medicaid providers and suppliers and deactivated 56,733 Medicare providers and suppliers;
  • HHS saved $208 million through pre-payment edits in 2011;
  • The number of individuals charged with fraud increased from 797 in fiscal year 2008 to 1,430 in fiscal 2011 – nearly a 75 percent increase. Click here for more.


Skilled Nursing Facilities’ Bad Debt Payment Cuts Detailed

A new analysis from the Alliance for Quality Nursing Home Care detailing the negative impact on SNFs resulting from the bad debt provisions passed by Congress earlier this year finds facilities in Florida, Ohio, Illinois, Pennsylvania, North Carolina, Louisiana, Indiana, Tennessee, Georgia and New Jersey will absorb the largest Medicare funding cuts. Nationally, the provision will cut SNF payments by at least $3 billion over the FY 2012-21 budget window. Click here to see the report.

MLR Would Have Saved Consumers $2 Billion in 2010:  New Study

Consumers across the country would have received $2 billion in rebates if health care reform’s new medical loss ratio requirements had been in effect in 2010, according to a new report by the Commonwealth Fund (click here).

The MLR rule, which requires health insurers to pay back customers if the plan spends more than 20 to 25 percent of their premium dollars on administrative expenses, would have required about $1 billion in rebates to 5.3 million people in the individual market. Another $1 billion would have gone to 10 million people in the small- and large-group markets.

Emergency Patients Fare Better at Higher Spending Hospitals: New Study

Another study out last week says higher spending hospitals have better outcomes for their emergency patients. The analysis of ambulance and hospital Medicare data from 2002-2008, finds that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. Click here for the press release from Vanderbilt University. Click here for the National Bureau of Economic Research study.

AIDS Foundation Says FDA Chief Should Resign

The AIDS Healthcare Foundation in Los Angeles last week called for the resignation of the FDA commissioner over whether the agency should approve the first drug preventing HIV infection in gay men. The CDC estimates that about 50,000 people are newly infected with HIV each year, and more than half of those are men who have sex with men. Click here for the story from the Foundation.

Proposed TRICARE Changes Criticized by Both Parties

The Obama Administration’s FY13 budget effort to slow the growth of the military’s nearly $50 billion in annual health care costs is meeting growing resistance on Capitol Hill.  Democrats and Republicans alike are increasingly critical of the plan to have retirees pay more out of pocket costs for their health care. Former Navy Secretary under President Reagan and now U.S. Senator from Virginia Jim Webb summarizes the concerns expressed by members of Congress from both parties. Click here.