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Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Virginia Chapter, ACP March 1, 2013

Turbulence ahead! Fasten Your Seat Belts! What Physicians Can Expect from Health Reform Over the Next Five Years. Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Virginia Chapter, ACP March 1, 2013. Health reform: from here to there.

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Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Virginia Chapter, ACP March 1, 2013

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  1. Turbulence ahead!Fasten Your Seat Belts!What Physicians Can Expect from Health Reform Over the Next Five Years Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Virginia Chapter, ACP March 1, 2013

  2. Health reform: from here to there • Here: tens of millions uninsured, uneven quality, rising costs, intrusions on patient-physician relationship • There: near universal coverage--with better quality at a price we can afford? And fewer intrusions on patients and physicians? • How smooth or rough will the journey be?

  3. How we would like it to be . . .

  4. What we expect it will be. . .

  5. What we fear it will be . . .

  6. What we fear it will be . . .

  7. Turbulence • Affordable Care Act • Entitlements • Budget and sequestration • Payment/delivery system reform

  8. ACA: the political environment • No plausible scenario where the ACA will be repealed • State engagement/ resistance may determine the law’s effectiveness in expanding coverage

  9. The role of the states • Medicaid: Accept/reject federal dollars • Exchanges: Set up own exchange, partner with federal government, or turn it over to the feds • Benefits: Establish “benchmark” for plans to be offered through state-exchanges or let feds determine • Enrollment: help/encourage people to get coverage thru Medicaid or exchanges, or do nothing to help

  10. Expanding Medicaid is a good $ deal for the states

  11. Sarah Kliff, Wonkblog, Washington Post, July 3, 2012 http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/03/why-hospitals-heart-the-medicaid-expansion-in-one-chart

  12. More on Medicaid=Fewer Deaths, Better Health Medicaid expansions were associated with a significant reduction in adjusted all-cause mortality (by 19.6 deaths per 100,000 adults, for a relative reduction of 6.1%). Mortality reductions were greatest among older adults, nonwhites, and residents of poorer counties. Sommers and Baicker, Mortality and Access to Care after State Medicaid Expansions, NEJM, July 25, 2012, http://www.nejm.org/doi/full/10.1056/NEJMsa1202099

  13. ACP’s Medicaid Patient Advocacy Campaign • Cover letter from College leadership, seeking 100% U.S. chapter participation • Concise action plan with one-click links to all supporting materials, presentation slides, instructions and timetable • Customized state-specific reports (available now!)and press releasesto be issued by all chapters http://www.acponline.org/cln/medicaid_campaign.htm • Template and web interface to send the report to each state’s governor and legislators

  14. Half of States Opted for Federal Exchanges in 2012 Opted for federally run exchange Opted for state-run exchange Opted for partnership exchange State Exchange Second Most Popular Option WA ME MT ND VT OR MN NH ID WI NY MA SD RI MI WY CT PA IA NE NJ NV OH DE IN IL UT MD CA CO WV DC VA KS MO KY NC TN OK AZ AR SC NM MS GA AL Totals Federal: 25 Partnership: 19* State: 7 LA TX FL AK HI *18 states and D.C. Source: “Where the States Stand on Insurance Exchanges,” The Advisory Board Company, Dec. 14, 2012.

  15. Enrollment “States are rushing to decide whether to build their own health exchanges and the administration is readying final regulations, but a growing body of research suggests that most low-income Americans who will become eligible for subsidized insurance have no idea what is coming. Supporters of the health-care law say the plan will not be a success without a massive public relations campaign to build awareness.” Many Americans Unaware of Health-care Law Changes, Sarah Kliff, Washington Post, November 21, 2012, http://www.washingtonpost.com/business/economy/many-americans-unaware-of-health-care-law-changes/2012/11/20/ee02b0bc-3272-11e2-9cfa-e41bac906cc9_story.html?hpid=z2

  16. States That Chose State-Run ExchangesWill Face Participation Challenge • Analysis • Exchanges cannot work to cover uninsured state residents unless most residents participate and fund the exchange • States must spend big to publicize exchanges to coverage-resistant groups • Washington State hired GMMB as part of a $9.3M advertising plan, Nevada hired KPS3 Marketing for $6M, and Hawaii hired Millici Valenti Ng Pack for $1.2M, all in hopes of increasing insurance participation Source: “States Struggle With How to Sell Their Exchanges,” Paige Winfield Cunningham, Politico, Jan. 2013.

  17. New essential benefits rule • Defines benefits that all new individual and small groups must provide • States must select “benchmark” for plans offered through exchanges • About half the states have already selected the plan they will use as a model, meaning that insurers there can now start designing plans for sale • States that do not choose a “benchmark” plan will default to one selected by the federal government

  18. Entitlement reform • Having campaigned against Medicare premium support and Medicaid block grants, no prospect that President Obama will agree to them, or that the Senate majority would enact them • But something has to be done: Grand Bargain tied to tax reform/revenue deal? Incremental adjustments?

  19. ABeneficiaryLifetimePerspective: Payroll Contributions < Expected Benefits $400,000 $357,000 $357,000 MedicareExpectedBenefits, Lifetime MedicarePayrollTaxes, Lifetime $350,000 $300,000 $250,000 $188,000 Female $200,000 Male $170,000 $150,000 $119,000 $100,000 $60,000 $60,000 $50,000 $0 Single,AverageWage Single,AverageWage One-EarnerCouple, One-EarnerWageCouple,AverageWage Two-EarnerCouple, Two-EarnerCouple, AverageWage Average AverageWages Source:SteuerleCEandRennaneS."SocialSecurityandMedicareTaxesandBenefitsOveraLifetime.”Washington,DC:TheUrban Institute.June2011.

  20. But there is good news on health care costs! The last time health care costs went up this slowly Was making hit records!

  21. Good news on health care costs! • “Fourth consecutive year of record-low growth compared to all previous years in the 50-plus years of official health spending data.” • Health care prices had the smallest increase in 14 years, rising in December 2012, “by 1.7 percent compared to December 2011, the lowest year-over-year growth since February 1998.” Altarum Institute. Health Spending Growth Near 4 percent for Fourth Year Price Growth at 14-Year Low. 7 February 2013. Accessed at www.altarum.org/health-systems-research-news-releases/7Feb13-health-spending-growth-4-percent-price-14year-low

  22. Good news on health care costs! • Medicare per capita costs went up by only a fraction of a percent in 2012 (0.4 percent), much less than the rate of growth in the economy (3.4 percent growth per capita). Over the three year period from 2010-2012, Medicare spending per beneficiary grew an average of 1.9 percent annually, or more than 1 percentage point slower than the average annual growth of 3.2 percent in per capita GDP (that is, at GDP-1.3). Kronick R, Po R. Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows. Office of The Assistant Secretary for Planning and Evaluation, U.S. Department of Health & Human Services. 7 January 2013. Accessed at http://aspe.hhs.gov/health/reports/2013/medicarespendinggrowth/ib.cfm

  23. Budget and sequestration • Fiscal cliff averted (for now) • But cuts, effective March 1, will endanger public health, medical research, workforce, and access

  24. Updated Feb. 5, 2013 Key Terms Sequestration Measures meant to reduce federal spending; primarily consists of deficit reduction sequester,mandating automatic, across-the-board spending cuts for federally funded programs in order to meet national budget goals, and discretionary caps,limiting future federal spending Budget Control Act of 2011 (BCA) Mandated sequestration starting Jan. 2, 2013 if Congress could not reduce deficit by $1.2T–$1.5T over a 10-year period Mandates modified sequestration starting March 1, 2013 if Congress cannot negotiate a way to avoid it American Taxpayer Relief Act (ATRA) of 2012 Source: Congressional Research Service.

  25. Updated Feb. 5, 2013 In 2011, Sequestration Mandated if No Deficit Deal Struck Budget Control Act of 2011 (BCA) Raised U.S. debt limit for short term to prevent default Established 12-member Joint Select Committee (“Super Committee”) charged with reducing deficit by $1.2T – $1.5T over 10-year period Mandated long-term deficit reduction through sequestration threat if Super Committee failed to reach goals Super Committee failed to meet objectives; Congress faced sequestration threat in 2013 Source: Budget Control Act of 2011.

  26. Updated Feb. 5, 2013 In 2013, Sequestration Delayed (Without Deficit Deal) American Taxpayer Relief Act (ATRA) Pushes Sequester to March Impact on discretionary caps: ATRA lowers cap for 2013 by $4B and 2014 by $8B to offset cost of delay Jan. 17, 2013 BCA start date for discretionary caps March 27, 2013 ATRA delayed start date for discretionary caps Jan. 2, 2013 BCA start date for deficit reduction sequester March 1, 2013 ATRA delayed start date for deficit reduction sequester Impact on deficit reduction sequester: Two-month delay prorates 2013 spending cuts by total of $24B Source: U.S. House of Representatives Committee on the Budget Democrats, “Sequestration: An Update for 2013,” Jan. 17, 2013; Congressional Research Service, “The ‘Fiscal Cliff’ and the American Taxpayer Relief Act of 2012,” Jan. 4, 2013.

  27. ATRA: impact on physicians • No 27% Medicare pay cut (through 2013) • Does not advance permanent SGR reform • Paid for by cuts in disproportionate share payments to hospitals, Medicare Advantage, ambulance services, other non-physician providers • Reduces physician practice expense payments for advanced imaging

  28. ATRA: impact on physicians • Does NOT cancel Medicaid primary care increases to offset cost of blocking SGR cut • Directs HHS to improve advanced clinical data registries for Medicare reporting proposals • Sequestration, postponed only until March, could result in cuts in critically important health programs

  29. Non-Defense Cuts: Health Care Non-Defense Cuts Focus Heavily on Medicare, Medicaid Substance Abuse and Mental Health Services Administration Centers for Medicare and Medicaid Services Health Resources and Services Administration Administration for Children and Families Office of the Inspector General Program Support Center Departmental Mgmt. Administration On Aging NIH CDC FDA Estimated Department of Health and Human Services Cuts from Sequestration for FY2013 Total cuts: 54.6B ($11,855M) ($2,529M) ($1,532M) ($605M) ($490M) ($319M) ($275M) ($168M) ($122M) ($5M) ($5M) Source: OMB Report Pursuant to the Sequestration Transparency Act of 2012.

  30. Payment reform • Policymakers across the spectrum want to get rid of the SGR (but can’t agree on how to pay for it) • And move away from “volume” to “value” • But FFS will be a component of value-based payments, even as FFS itself will change

  31. “New” approaches • ACOs • Episode-of-care bundles (new rule expected soon) • Risk-adjusted global capitation • PCMH and PCMH-N practices

  32. Light at the end of the SGR tunnel? • House GOP committee chairs offer plan to eliminate SGR, seeking bipartisan support—August vote (?) • Bipartisan Medicare Physician Payment Innovation Act re-introduced, supported by ACP (no cuts for five years, higher updates for E/M, transition to new models) • Medicine unified: 133 physician organizations, including AMA and ACP, offer principles for reform, commitment to new approaches

  33. ACP advocacy • Build upon and ensure coverage gains from the Affordable Care Act • Reduce intrusions on Patient-Physician relationship • Improve fee-for-service AND influence new models of payment

  34. SNHC 2013: improving the system • Renew commitment at both the national and state levels to effectively implement the coverage expansions and related policies under the ACA, with particular attention to ensuring the poorest and most vulnerable patients have access to affordable coverage. • Replace across-the-board sequestration cuts, prevent future disruptions and instead enact fiscally-and socially-responsible alternatives.

  35. SNHC 2013: improving the system • Eliminate Medicare’s SGR formula and support the medical profession’s commitment to transition to new payment models. • Implement policies to recruit and retain primary care physicians. • Reduce firearms-related injuries and deaths by improving access to mental health services, supporting research, and enacting reasonable controls over access to firearms

  36. SNHC 2013: reducing barriers to patient-physician relationship • Ensure that any payment reforms have, as an explicit goal, allowing physicians to spend more appropriate clinical time with their patients. • Reforms to hold physicians accountable for the outcomes of care (measurable performance on quality, cost, satisfaction and experience with care) should concurrently eliminate the layers of review and second-guessing of their clinical decisions.

  37. SNHC 2013: reducing barriers to patient-physician relationship • Harmonize (and reduce to the extent possible) the measures used in the different reporting programs, work toward overall composite outcomes measures rather than a laundry-list of process measures. • Provide more clinically relevant ways to satisfy the requirement that physicians must transition to using ICD-10 codes.

  38. SNHC 2013: reducing barriers to patient-physician relationship • CMS must reduce administrative barriers, improve bonuses to incentivize ongoing quality improvements, and broaden hardship exemptions. If necessary, Congress and CMS should consider delaying the penalties for not successfully participating in quality reporting programs, if it appears that the vast majority of physicians will be subject to penalties because of limitations in the programs themselves.

  39. SNHC 2013: reducing barriers to patient-physician relationship • Improve the functional capabilities of EHR systems, the ability of those systems to report on quality measures and ensure that those systems improve rather than add to workflow inefficiency. • Payers should standardize claims administration requirements, pre-authorization, and other administrative requirements even in advance of, and in addition to, the ACA’s simplification rules.

  40. SNHC 2013: reducing barriers to patient-physician relationship • Congress should enact meaningful medical liability reforms including health courts, early disclosure of errors, and caps on non-economic damages. • State and federal authorities should avoid enactment of mandates that interfere with physician free speech and the patient-physician relationship.

  41. ACP advocacy on payment reform It’s not just about new payment models—ACP advocacy has resulted in big wins for internists on improving Medicare and Medicaid fee-for-service

  42. New CMS rules: big wins for IM! • New CPT codes 99495-99496: Medicare will pay physicians for transitional care management services, the non-face-to-face time they and their clinical staff spend on patient cases. Until now, only the face-to-face reimbursed • National pay of $164-$231, depending on whether a patient is seen within 7 or 14 days of discharge, prior to geographic adjustment • Combined with other changes in the Medicare fee schedule, total 2013 gain for IM of 4-5% in total Medicare payments • These gains are on top of ACA’s 10% Medicare primary care bonus (Average of $8000 more each year for qualified internists, 2011-15)

  43. New CMS rules: big wins for IM! • Medicaid pay parity rule, effective 2013-2014: increases payments for evaluation and management and vaccine services to no less than Medicare rates, paid fully by federal government • CMS agreed with ACP that increases should apply to both primary care internists and IM subspecialists • Applies to E&M codes 99201 through 99499 to the extent that those codes are covered by the approved Medicaid state plan or included in a managed care contract • Also, applies to services not covered by Medicare: New and Established Patient Preventive Medicine; Counseling Risk Factor Reduction and Behavior Change Intervention; and Consultations

  44. Medicare to Medicaid fee ratios, by state <.60 (8 states . 61 ‐.75 (14 states .76‐.85 (16 states and DC) .86‐1.00 (8 states) >1.00(3 states) How Much Will Medicaid Physician Fees for Primary Care Rise in 2013? Evidence from a 2012 Survey of Medicaid Physician Fees, Kaiser Family Foundation, December 2012 ORG

  45. ACP: “go to” resource for members to prepare for changes • Practical guides • Social media • Policy summaries • Advocate newsletter • Coming soon: timeline of pending changes (regulation, payment, MOC) and promotion of resources from ACP

  46. NEWLY UPDATED!

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