5/8/2013

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

Alaska Chapter

May 17, 2013

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?

How we would like it to be . . .

5/8/2013

2

What we expect it will be. . .

What we fear it will be . . .

What we fear it will be . . .

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3

Turbulence

Affordable Care Act

Entitlements

Budget and sequestration

Payment/delivery system reform

ACA: the political environment

1. No plausible scenario where the

ACA will be repealed, but the law

still doesn’t command broad

public support

2. State engagement/ resistance may

determine the law’s effectiveness

in expanding coverage

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

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4

States Split on Participation in Medicaid Expansion

Source: “Where Each State Stands on Medicaid Expansion,” The Advisory Board Company, March 4, 2013.

WA

OR

ID

CA

NV

UT

AZ NM

CO

WY

MT ND

SD

NE

KS

OK

TX

AR

LA

MO

IA

MN

WI

IL

AK

IN OH

MI

PA

KY

TN

MS AL GA

FL

SC

NC

VA WV

NY

ME VT

NH MA RI

CT

NJ DE

MD DC

HI

Undecided/No Comment (6)

Participating (26)

Leaning toward participating (2)

Leaning toward not participating (3)

Will not participate (14)

Analysis

•The Supreme Court’s ruling on the Affordable Care Act allows states to opt out of the law’s Medicaid expansion,

leaving this decision with state governors and leaders

•Governors of states participating in Medicaid expansion cited support for increased coverage for residents as reason

for opting in; governors of non-participating states cited high cost of expansion as reason for opting out; governors of

undecided states weighing costs of expansion before opting in or out

5/9/13: Update: FL, MO

legislatures turned

down expansion

despite governor’s

support

Source: Kaiser Health Tracking Poll. 11

Expand Medicaid to cover more

low-income people

Keep Medicaid as it is today

Percentage Responding to Survey Question: As you may know, the health care law expands

Medicaid to provide health insurance to more low-income uninsured adults…The Supreme Court

ruled that states may choose whether or not to participate in this expansion. What do you think

your state should do?

* Respondents who answered “Don’t know/Refused” not shown.

Public Opinion on Medicaid Expansion*

(March 2013)

Most Support Medicaid Expansion; Split on Party Lines

Expanding Medicaid is a good $ deal for the states

5/8/2013

5

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

Impact of Medicaid Expansion on Patients

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

Impact of Medicaid Expansion on Patients

• After two years:

– Protection from financial catastrophe

– Reductions in rates of depression

– Better access to preventive services

– But no improvement in other health outcomes

“This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.”

Backer, et al, The Oregon Experiment — Effects of Medicaid on Clinical Outcomes, NEJM, May 2, 2013 http://www.nejm.org/doi/pdf/10.1056/NEJMsa1212321

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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

releases to 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

THANK YOU to the ACP Governors for your participation

in the campaign!

Half of States Opted for Federal Exchanges in 2012

State Exchange Second Most Popular Option

4 Source: “Where the States Stand on Insurance Exchanges,” The Advisory Board Company, Dec. 14, 2012.

Opted for partnership exchange Opted for federally run exchange Opted for state-run exchange

WA

OR

ID

CA

NV

UT

AZ NM

CO

WY

MT ND

SD

NE

KS

OK

TX

AR

LA

MO

IA

MN

WI

IL

AK

IN OH

MI

PA

KY

TN

MS AL GA

FL

SC

NC

VA WV

NY

ME VT

NH MA RI

CT

NJ

DE

MD DC

HI

Totals

Federal: 25

Partnership: 19*

State: 7

*18 states and D.C.

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

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7

100

88

77

66

47

29

14

Medicaid

73

64

55

39

24

12

Medicaid

100 100

53

46

40

28

18

8

Medicaid

100

37

32

28

20

12

6

Medicaid

Source: The Henry J. Kaiser Family Foundation.

Percentage of premium paid by family Percentage of premium covered by subsidy

*For families of four purchasing coverage in the exchange, not through an employer; numbers reflect standard plan for coverage

ACA: A Closer Look

Family Health Insurance Premium Obligations Vary

by Age, Income

Percentage of Premium Paid by Family of Four vs. Covered by Subsidy

Policyholder Age

450%

400%

350%

300%

250%

200%

150%

100%

20 40 60 50 30

100

97

85

73

52

32

15

Medicaid

Family

Income as %

of Poverty

Level

Analysis

• A family of four is eligible for Medicaid at 133%, the same percentage below the poverty level as an individual

• A family of four buying coverage in new state-based health insurance exchanges will be eligible for federal

subsidies if their joint income is below 400% of the poverty level; above 400%, families pay full cost

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

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?

5/8/2013

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$60,000

$170,000

$60,000

$357,000

$119,000

$357,000

$0

$50,000

$100,000

$150,000

$200,000

$300,000 $250,000

$350,000

A Beneficiary Lifetime Perspective: Payroll Contributions < Expected Benefits $400,000

Average Average Wages

Medicare Expected Benefits, Lifetime Medicare Payroll Taxes, Lifetime

$188,000 Female

Male

Source: Steuerle CE and Rennane S. "Social Security and Medicare Taxes and Benefits Over a Lifetime.” Washington, DC: The Urban Institute. June 2011.

Single, Average Wage Single, Average Wage One-Earner Couple, One-Earner Wage Couple, Average Wage

Two-Earner Couple, Two-Earner Couple, Average Wage

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9

But there is good news on health care

costs!

The last time health care costs went up this slowly

Was making hit records!

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

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

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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

“New” approaches

ACOs

Episode-of-care bundles (new rule

expected soon)

Risk-adjusted global capitation

PCMH and PCMH-N practices

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

5/8/2013

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Source: Congressional Research Service. 3

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

American Taxpayer Relief Act

(ATRA) of 2012

Mandates modified sequestration starting March 1, 2013 if

Congress cannot negotiate a way to avoid it

The Federal Budget and Health Care

In 2013, Sequestration Delayed (Without Deficit Deal)

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.

32

Jan. 17, 2013 BCA start date for

discretionary caps

March 1, 2013 ATRA delayed start date for deficit

reduction sequester

March 27, 2013 ATRA delayed start date for

discretionary caps

Impact on deficit reduction sequester: Two-month delay

prorates 2013 spending cuts by total of $24B

Impact on discretionary caps: ATRA lowers cap for 2013 by $4B and 2014

by $8B to offset cost of delay

Jan. 2, 2013 BCA start date for deficit

reduction sequester

American Taxpayer Relief Act (ATRA) Pushes Sequester to March

Most Believe Sequestration Will Have No Impact on Families

Source: Steven Thomma,“Poll: Sequester Has Not Hit Home,” McClatchy Newspapers, March 10, 2013.

What Kind of Impact Will Sequestration Have on You and Your Family?

Negativ

e

Impact

Positive

Impact

No Impact

Analysis

49% of registered voters believe federal spending cuts will have no effect on them or their families

5/8/2013

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Sequester Cuts to Public Health Threat Response Programs

Source: The Washington Post 2013.

Analysis

• Most states will lose less than $1M in federal funding for public health threat response programs due to sequester

• D.C. will sustain the lowest cuts ($57,000); Delaware and Montana also face less than $100,000 in cuts

• The more populous states of California and Texas will suffer the highest cuts ($2.6M and $2.4M, respectively)

OH

WV VA

PA

NY

ME

NC

SC

GA

TN

KY

IN

MI

WI

MN

IL

LA TX

OK

ID

NV

OR

WA

CA

AZ NM

CO

WY

MT ND

SD

IA

UT

FL

AR

MO

MS AL

NE

KS

VT

NH

MA

RI CT

NJ

DE

MD

DC

AK

HI

Cuts to Public Health Threat

Response Programs

$0 - $0.5M

$0.5M -

$1M $1M -

$1.5M Above

$1.5M

Department of Justice, National Institutes of Health

to Incur Major Cuts due to Sequestration

Source: “Flight Delays, Furloughs and Military Cuts, Oh My!,” Matt Vasilogambros, National Journal, Feb. 21, 2013. 35

* List is non-exhaustive

Cuts to Key Government Programs and

Agencies*

(Cuts in Billions)

Note

Several mandatory spending programs are exempt from cuts, including Social Security, Medicaid, food stamps,

veteran’s benefits and the Children’s Health Insurance Program

Federal

Aviation

Administration

National

Park

Service CDC

National

Institutes

of Health

Federal

funding

for health

centers

Global

humanitarian

assistance

Global

health

funding

Global

conflict

prevention

Military

assistance

to foreign

nations USAID FEMA

Head

Start

programs Department

of Justice

National

Science

Foundation NASA

Medicare sequestration:

2% cut in payments to physicians, hospitals,

GME, other providers, estimated to result in

nearly 500,000 job losses

Became effective April 1

Two percent cut will remain in effect for ten

years (unless Congress replaces it)

For more information:

http://www.acponline.org/running_practice/payment_coding/medicare/s

equestration_rules_medicare.htm

36

5/8/2013

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Return of the Grand Bargain?

Obama FY 2013 budget

IME cuts

Part D drugs

Single Medicare deductible

More means-testing

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

www.acponline.org/pressroom/snhc_release13.htm?hp

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SNHC 2013: improving the system

1. Effectively implement the coverage

expansions and related policies under the ACA

2. Replace across-the-board sequestration cuts.

3. Eliminate Medicare’s SGR formula and

transition to new payment models.

4. Implement policies to recruit and retain

primary care physicians.

5. Reduce firearms-related injuries and deaths

SNHC 2013: reducing barriers to

patient-physician relationship

1. Payment reforms must allow physicians to

spend more appropriate clinical time with

patients.

2. Payment reforms to hold physicians

accountable for outcomes of care should

eliminate second-guessing of clinical

decisions leading to those outcomes.

SNHC 2013: reducing barriers to

patient-physician relationship

3. Harmonize and reduce numbers of measures.

4. Reduce administrative barriers in current

Medicare reporting programs, improve

bonuses, and broaden hardship exemptions; if

necessary, consider delaying penalties.

5. HHS should provide more clinically relevant

ways to satisfy ICD-10 requirement.

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SNHC 2013: reducing barriers to

patient-physician relationship

6. Improve the functional capabilities of

EHRs.

7. Standardize claims administration and

pre-authorization requirements.

8. Enact medical liability reforms.

9. Government should not interfere with

physician free speech and the patient-

physician relationship.

Resources for you:

Redesigned ACP advocacy/public

policy website

Practice Planner

Internists’ Guide to Health System

Reform

Social media

Search by topic!

Search

library by key

words

5/8/2013

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NEWLY UPDATED!

Practice planner

5/8/2013

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Follow me at@bobdohertyACP

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

Transition of Care Management

(TCM) Codes – Good News for IM

Could result in a 3-5% increase in overall payment to an Internist from Medicare alone, even with sequestration!

ACP was actively involved in designing, valuing, and getting CMS (and other payers) to pay for these codes…

And we’re not finished yet.

5/8/2013

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Transition Care Management (TCM)

Codes

CPT Code 99495

• Communication with the patient or caregiver within two business days of discharge.

• Via phone, e-mail, or in person.

• Involves medical decision making of at least moderate complexity

• A face-to-face visit within 14 days of discharge.

CPT Code 99496

• Communication with the patient or caregiver within two business days of discharge.

• Via phone, e-mail, or in person.

• Involves medical decision making of high complexity

• A face-to-face visit within 7 days of discharge.

More information on these can be found at:

http://www.acponline.org/running_practice/payment_coding/coding/tcm_codes.htm

And in the November/December 2012 issue of Internist

How much are the TCM services

worth?

CPT Code Payment (for a physician

office)

99495 $164

99496 $231

Using the 2012 conversion factor (and does not account for the overall 2% sequestration cut)

Will also vary by payer and geography

Is approximately $60 more than just billing an E&M office visit

Beyond the TCM Codes

Currently working on Complex Chronic Care Coordination codes – expected to involve the development/implementation of care plans

CMS is interested in continuing down this pathway:

• Specifically in services that “offer the promise of higher-quality care and lower overall health care costs”—leading to the medical home model…

5/8/2013

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Higher Medicaid pay (most states)

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

Medicaid primary care parity

Increases Medicaid payments in 2013 and

2014 to no less than Medicare

Average national gain of 73% in 2013 but

varies by state

But Alaska’s Medicaid payments already are

higher than Medicare, so no gain for your state

Kaiser Commission on Medicaid and the Uninsured, How Much Will Medicaid Physician Fees for

Primary Care Rise in 2013? Evidence from a 2012 Survey of Medicaid Physician Fees, December

2012, http://www.kff.org/medicaid/upload/8398.pdf

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)

http://kff.org/health-reform/issue-brief/how-much-will-medicaid-physician-fees-for/

ORG

5/8/2013

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Summary

2012 election: the ACA is here to stay, only

a minority of voters favor full repeal, but

electorate remains divided, and law

remains deeply unpopular in some states

States are the new battleground: decisions

on Medicaid and exchanges may determine

how effective the ACA is in covering

uninsured

Summary

Coming up: new battles on spending

and revenue, immediate cuts to

essential programs including 2%

Medicare pay cut

Entitlement reform will (must)

happen—but how and when? Cuts in

GME, other ACP priorities?

Summary

ACP advocacy: improve the system,

reduce barriers to patient-physician

relationships

ACP advocacy is paying off: big wins for

internists in Medicare and Medicaid pay

(in almost all states . . .)

5/8/2013

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The destination

“A nationwide program is needed to assure access to health care for all Americans, and we recommend that developing such a program be adopted as a policy goal for the nation. The College believes that health insurance coverage for all persons is needed to minimize financial barriers and assure access to appropriate health care services.”

Ginsburg, et al, American College of Physicians, Position Paper, Annals of Internal Medicine, May

1, 1990 www.annals.org/search?fulltext=ACP+universal+health+insurance&submit=yes&x=15&y=9

3

Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008

Why does it matter? Because being uninsured is a matter of life and death

Age

U.S.

populatio

n

(millions)

Percent

uninsured

within

age

group

Total deaths

Uninsured

excess

deaths ).

:

2000

2001

2002

2003

2004

2005

2006

Total:

21,000

23,00

Year Number of deaths due to uninsurance

2000 20,000

2001 21,000

2002 23,000

2003 24,000

2004 24,000

2005 25,000

2006 27,000

Total 165,000 Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008

Elaine Dickinson (flight

attendant): There's no

reason to become

alarmed, and we hope

you'll enjoy the rest of

your flight. By the way, is

there anyone on board

who knows how to fly a

plane?