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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.
In recent years, CMS has been expanding the list of supplemental benefits. Some examples of services are certain counseling programs for mental health conditions; in-home safety assessment by qualified health providers; enhanced disease management; post discharge in-home medication reconciliation; readmission prevention services; telemonitoring services; and Web- and telephone-based technologies to help diagnose and treat some conditions.33

For CMS to approve each supplemental benefit, the benefit must meet certain requirements—telemedicine should supplement and not replace face-to-face visits, for example, and all allied health professionals involved in providing care must be licensed and certified. CMS reviews and approves each supplemental benefit annually as part of the plan bidding process.

Along with defining eligible supplemental benefits, CMS defines services that are ineligible. For example, stand-alone brain training/memory fitness is ineligible as a supplemental benefit because according to CMS, no conclusive evidence proves that any such services improve memory or brain function. Therefore, these services are not accepted clinical treatment modalities.34 

The criteria CMS uses to differentiate between eligible and ineligible supplemental benefits are not transparent. CMS “encourages plans to offer supplemental benefits to enrollees that are of value and based on sound medical practice,”35 and offers MA plans the opportunity to comment on changes to supplemental benefits. In the end, however, CMS retains the authority to determine what is considered an eligible new “health benefit.” Often, it provides limited documentation explaining its decision. While MA plans are paid on the basis of a broad bundle of services, they have limited flexibility to cover new services or modify existing coverage or benefit policies. CMS provides tight guidelines on what is eligible as a supplemental benefit, with minimal public discussion of its decisions.

Coverage and Benefits Under Original Medicare Payment Reform Initiatives

In contrast to the MA program in which Medicare benefits are provided through commercial insurance, the BPCI and MSSP Initiatives are part of Original Medicare. They are, therefore, directly insured by CMS. Under these initiatives, CMS plans to transfer a portion of the financial risk to PABs through shared savings and discount arrangements.

In the MSSP, CMS plans to eventually pay some participating providers a fully capitated payment similar to MA plans. In all cases, however, PABs remain bound to the established coverage requirements under Medicare Parts A and B.36,37

Under the BPCI initiative, in Model 1 (acute inpatient; retrospective), Model 2 (acute inpatient and post acute care; retrospective), and Model 3 (post acute care; retrospective), Medicare pays for all services, including waived services, using fee-for-service. In return, CMS generates savings based on prearranged discounted episode bundledpayment amounts. Under BPCI Model 4 (Acute inpatient; prospective), providers pay for the all services, including waived services, by drawing on their prospectively determined episode payment amount.

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