CMS updates Medicaid managed care organization (MCO) rules

CMS updates Medicaid managed care organization rules

Link to Propose Rule (Federal Register)

First update since 2002 seeks better alignment with Medicare Advantage, CHIP, private insurance market

May 26, 2015 | By Brian Eastwood

The Centers for Medicare & Medicaid Services (CMS) has released its long-awaited proposed rule that updates its Medicaid managed care organization (MCO) regulations.

"A lot has changed in terms of best practices and the delivery of important health services in the managed care field over the last decade,"  Andy Slavitt, acting administrator of CMS, said in a statement. "This proposal will better align regulations and best practices to other health insurance programs, including the private market and Medicare Advantage plans, to strengthen federal and state efforts at providing quality, coordinated care to millions of Americans with Medicaid or [Children's Health Insurance Program] insurance coverage."

CMS last updated the MCO rules in 2002. As such, the proposed rule covers a lot of ground.

Consultant John Gorman told Bloomberg that the rule is "literally the biggest healthcare regulation in a dozen years"--adding that, since it also touches Medicare, it's really an "omnibus rule" and not just a "Medicaid rule."

Out of 70 million Medicaid beneficiaries in the United States, about 46 million Medicaid receive coverage through MCOs, according to Avalere Health. That's a 48 percent increase in just the last four years.

The rule will likely add fuel to the debate about the efficacy of Medicaid managed care. Some suggest that MCOs achieves cost savings because they primarily cover women and children--a model that may not translate to older or sicker patients with multiple chronic conditions.

The proposed rule will be posted in the Federal Register on June 1. The deadline to submit comments is July 27.

For more:
- here's the proposed rule (.pdf) and CMS statement
- here's the Bloomberg article
- read the Avalere Health analysis

2013 HIMSS Leadership Survey, Senior IT Executive Results | HIMSS.org

Health IT Leadership Survey | HIMSS.org
The HIMSS Leadership Survey has become the most widely referenced healthcare information technology (IT) survey. The results, which provide an indicator for current and future use of healthcare technology, are widely quoted in the media and well recognized throughout the healthcare IT industry. Issues addressed on a yearly basis include IT priorities, implementation barriers, budgeting and staffing.
Full Report: 2013 HIMSS Leadership Survey, Senior IT Executive Results
Full infographic:

3 ways to make readmission policies fair for hospitals

3 ways to make readmission policies fair for hospitals:

Tweaking the Centers for Medicare & Medicaid Services' new policy penalizing hospitals for excessive readmissions can avoid unfairly punishing hospitals for factors outside their control, two Harvard research physicians argue in a commentary published Wednesday in the New England Journal of Medicine.

In their article, Karen E. Joynt and Ashish K. Jha note that two-thirds of U.S. hospitals will receive penalties--far more than had been expected--and that safety-net and large teaching hospitals disproportionately care for patients with complex medical problems.

"Left unchecked, the HRRP [Hospital Readmissions Reduction Program] has the potential to exacerbate disparities in care and create disincentives to providing care for patients who are particularly ill or who have complex health needs, particularly if the penalties are larger than hospitals' margins for caring for these patients," they write.

The commentary includes several suggestions to account for those disparities:

• Adjust readmission rates for socioeconomic status by, for example, adding patients' eligibility for Supplemental Security Income to risk-adjustment models. Such an adjustment would show whether safety-net hospitals are achieving readmission rates for poor patients comparable to non-safety-net facilities, they say.
• Weight penalties according to the timing of readmissions, counting readmissions within a few days more heavily than those occurring four weeks later, which are more likely to be attributable to disease severity than lack of care coordination.
• Give hospitals credit for low mortality rates, since they often have higher readmission rates despite being high-performing facilities. Hospitals with high mortality rates but low readmission rates do better under the CMS payment scheme than low-mortality hospitals with high admission rates, the authors note. They suggest CMS could combine the two outcomes by assessing patients' 30-day "days alive and out of hospital."

"Simple changes to the program could ensure that incentives were provided to hospitals to improve coordination of care without hurting the institutions that care for the most vulnerable patients," the commentary concludes.

Another article, published online recently in Population Health Management, looked at three statewide readmission-prevention programs to identify successes and failures.

They identified three obstacles: challenges in developing collaborations across care settings, gaps in evidence of effective interventions, and limited quality-improvement capabilities in some organizations. The findings "suggest that immediate improvement in readmission rates through a change in reimbursement may be unlikely unless these other obstacles are addressed expeditiously," the authors write.

Productive collaboration, in particular, is crucial because the relationships are not common or "naturally occurring," the article notes.

Meanwhile, Medicare Director Jonathan Blum says the readmission reduction program already has produced results. The rate of 30-day readmissions dropped to 17.8 percent in the fourth quarter of 2012, down from between 18.5 percent and 19.5 percent during the past five years, he told the Senate Finance Committee last week.

To learn more:
- here's the NEJM commentary
- read the Population Health Management article

CMS overpaid Medicare Advantage plans by $5.1B

CMS overpaid Medicare Advantage plans by $5.1B:
Insurers that sell Medicare Advantage plans received as much as $5.1 billion in overpayments between 2010 and 2012, according to a new report from the Government Accountability Office.
read more

Here's the GAO report (.pdf)

Risk adjustment overlooks regional differences in doctor visits, research finds

Risk adjustment overlooks regional differences in doctor visits, research finds:
A flawed risk-adjustment model is causing Medicare to overpay some health plans and providers and underpay others, according to a new study published by BMJ.

The problem is that people in some parts of the country visit healthcare providers more frequently than in others, according to the findings. Based on diagnoses, though, it turns out more visits don't necessarily equate to sicker patients, suggesting Medicare has been overpaying in those regions.

"Adjusting without correction for regional variation in visit rates tends to make regions with high rates of visits seem to have lower mortality and lower costs and vice versa," the researchers conclude. "Visit-corrected comorbidity measures better explain variation in age, sex, and race mortality than observed measures, and reduce observational intensity bias."

read more

To learn more:
-here's the BMJ study-read Rau's blog post

HHS releases essential health benefits final rule

HHS releases essential health benefits final rule:
The U.S. Department of Health & Human Services released a final rule outlining the specific essential health benefits that insurers must cover regardless of whether they're selling plans through health insurance exchanges.
read more

The law ensures that health plans offer a core package of items and services, known as “essential health benefits (EHB).” Under the statute, EHB must include items and services within at least the following 10 categories:

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

- read the HHS statement and fact sheet

- here's the final rule (.pdf)

HIPAA Omnibus Final Rule – What’s in it for Patients?

From David Harlow's Health Care Law Blog

After years of delay, the federales finally finalized the HIPAA Privacy, Security, Breach Notification and Enforcement Rules.  HIPAA Omnibus Final Rule – What’s in it for Patients?

Patients at risk for readmission during 'transient period' after discharge

Patients at risk for readmission during 'transient period' after discharge:
New research from the Yale School of Medicine adds to the evidence that the "transient period" after leaving the hospital puts patients at high risk for readmissions.
read more
JAMA Article

Take community approach to reduce readmissions

Take community approach to reduce readmissions:
Quality improvement activities that engage whole communities lead to a drop in hospitalizations and rehospitalizations among Medicare patients, according to a study in the Journal of the American Medical Association.
read more

JAMA Study Evaluates Rehospitalizations and Hospitalizations For Medicare Beneficiaries Following Implementation of Quality Improvement Intervention for Care Transition.

Biggest losers of readmission penalty: Big hospitals, safety nets

Biggest losers of readmission penalty: Big hospitals, safety nets:
A new research letter in the Journal of the American Medical Association confirms that large, academic and safety-net hospitals will receive the biggest penalties for readmissions.
read more

JAMA Study Characteristics of Hospitals Receiving Penalties Under the Hospital Readmissions Reduction Program