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The American Journal of Managed Care August 2014
Personalized Preventive Care Reduces Healthcare Expenditures Among Medicare Advantage Beneficiaries
Shirley Musich, PhD; Andrea Klemes, DO, FACE; Michael A. Kubica, MBA, MS; Sara Wang, PhD; and Kevin Hawkins, PhD
Impact of Hypertension on Healthcare Costs Among Children
Todd P. Gilmer, PhD; Patrick J. O'Connor, MD, MPH; Alan R. Sinaiko, MD; Elyse O. Kharbanda, MD, MPH; David J. Magid, MD, MPH; Nancy E. Sherwood, PhD; Kenneth F. Adams, PhD; Emily D. Parker, MD, PhD; and Karen L. Margolis, MD, MPH
Tracking Spending Among Commercially Insured Beneficiaries Using a Distributed Data Model
Carrie H. Colla, PhD; William L. Schpero, MPH; Daniel J. Gottlieb, MS; Asha B. McClurg, BA; Peter G. Albert, MS; Nancy Baum, PhD; Karl Finison, MA; Luisa Franzini, PhD; Gary Kitching, BS; Sue Knudson, MA; Rohan Parikh, MS; Rebecca Symes, BS; and Elliott S. Fisher, MD
Potential Role of Network Meta-Analysis in Value-Based Insurance Design
James D. Chambers, PhD, MPharm, MSc; Aaron Winn, MPP; Yue Zhong, MD, PhD; Natalia Olchanski, MS; and Michael J. Cangelosi, MA, MPH
Massachusetts Health Reform and Veterans Affairs Health System Enrollment
Edwin S. Wong, PhD; Matthew L. Maciejewski, PhD; Paul L. Hebert, PhD; Christopher L. Bryson, MD, MS; and Chuan-Fen Liu, PhD, MPH
Contemporary Use of Dual Antiplatelet Therapy for Preventing Cardiovascular Events
Andrew M. Goldsweig, MD; Kimberly J. Reid, MS; Kensey Gosch, MS; Fengming Tang, MS; Margaret C. Fang, MD, MPH; Thomas M. Maddox, MD, MSc; Paul S. Chan, MD, MSc; David J. Cohen, MD, MSc; and Jersey Chen, MD, MPH
Potential Benefits of Increased Access to Doula Support During Childbirth
Katy B. Kozhimannil, PhD, MPA; Laura B. Attanasio, BA; Judy Jou, MPH; Lauren K. Joarnt; Pamela J. Johnson, PhD; and Dwenda K. Gjerdingen, MD
Currently Reading
Synchronization of Coverage, Benefits, and Payment to Drive Innovation
Annemarie V. Wouters, PhD; and Nancy McGee, JD, DrPH
Economic Implications of Weight Change in Patients With Type 2 Diabetes Mellitus
Kelly Bell, MSPhr; Shreekant Parasuraman, PhD; Manan Shah, PhD; Aditya Raju, MS; John Graham, PharmD; Lois Lamerato, PhD; and Anna D'Souza, PhD
Optimizing Enrollment in Employer Health Programs: A Comparison of Enrollment Strategies in the Diabetes Health Plan
Lindsay B. Kimbro, MPP; Jinnan Li, MPH; Norman Turk, MS; Susan L. Ettner, PhD; Tannaz Moin, MD, MBA, MSHS; Carol M. Mangione, MD; and O. Kenrik Duru, MD, MSHS
Does CAC Testing Alter Downstream Treatment Patterns for Cardiovascular Disease?
Winnie Chia-hsuan Chi, MS; Gosia Sylwestrzak, MA; John Barron, PharmD; Barsam Kasravi, MD, MPH; Thomas Power, MD; and Rita Redberg MD, MSc
Effects of Multidisciplinary Team Care on Utilization of Emergency Care for Patients With Lung Cancer
Shun-Mu Wang, MHA; Pei-Tseng Kung, ScD; Yueh-Hsin Wang, MHA; Kuang-Hua Huang, PhD; and Wen-Chen Tsai, DrPH
Health Economic Analysis of Breast Cancer Index in Patients With ER+, LN- Breast Cancer
Gary Gustavsen, MS; Brock Schroeder, PhD; Patrick Kennedy, BE; Kristin Ciriello Pothier, MS; Mark G. Erlander, PhD; Catherine A. Schnabel, PhD; and Haythem Ali, MD

Synchronization of Coverage, Benefits, and Payment to Drive Innovation

Annemarie V. Wouters, PhD; and Nancy McGee, JD, DrPH
Implementation of payment reform, without a corresponding change to coverage, benefit, and other payment requirements, creates conflicting incentives that may nullify the intended aim of payment reform: to improve health outcomes, while saving costs.
A case in point is CMS’s recent negative response to public requests to convert coverage of innovative remote access technologies (eg, telemonitoring, Web-based technologies, nurse hotlines, and other similar services) from the status of supplemental benefit to a basic benefit because CMS does not have the authority “to define Part C basic benefits as being broader or different than the Parts A and B benefits provided under original Medicare.”12

CMS has experience modifying payment requirements and coverage policies to support more bundled methods of payment, but to date, the approach has been ad hoc. Some examples include developing customized waivers for each payment model, and reviewing each request for a new supplemental benefit in the MA program. With new payment reforms emerging, a one-by-one review approach will soon become unwieldy, and implementation of payment reforms will be delayed. What’s more, an unintended consequence of an ad hoc approach is that it often lacks transparency. For example, little is known about the waivers requested and offered under MSSP and BPCI.13 It is an opportune time for CMS to adopt a more systematic and transparent approach to modifying coverage and benefit constructs to support the goals of payment reform.

As we will see, most coverage, benefit, and payment policy decisions are currently made centrally by CMS or regionally by local Medicare Administrative contractors, while decisions on how to spend the “bundle” are made by the PABs. The failure to delegate decision making to PABs regarding policies that are core to medical managementm is understandable in these early stages of payment reform, since current bundled arrangements with either Medicare or commercial payers include only limited financial risk for most PABs.14,15 As payment reform moves ahead and PABs assume more financial risk, they will also want more authority to redesign all aspects of care; they will, for example, want to take on a greater role in designing all policies that impact medical management.15 

In our recommendations below about how we believe the path forward should develop, we note that sharing more authority with PABs does not mean abandoning all existing coverage, benefit, and payment policies, but rather allowing PABs to modify these policies when they meet the conditions designed to ensure beneficiary protections. Examples of such conditions might include: (i) requiring

PABs to meet baseline performance thresholds; (ii) having evidence-based decision-making processes in place, including a consensus-based approach by the PAB’s medical leadership team, accompanied by ongoing evaluation mechanisms; (iii) ensuring transparency of these processes and policy modifications to providers and patients; (iv) establishing opportunities for appeal; and (v) using patientcentric decision-making tools (eg, shared decision-making tools) to ensure that patients are empowered to make informed decisions. If the PAB meets these conditions, CMS would not necessarily be required to approve every policy modification, but could transition to a role of monitoring performance and enforcement of these conditions. In order to create a plan for synchronicity, it is helpful to review CMS’s past efforts to adapt coverage, benefit,  payment policies to payment innovation. The discussion begins with a review of Medicare coverage policies. We then provide an examination of CMS’s experience with MA, the BPCI, and the introduction of the inpatient rehabilitation facility prospective payment system. We conclude with recommendations to guide steps forward, illustrated with examples from private payers who are facing similar challenges.

Targets and Criteria for Medicare Coverage Policies

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