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This Week in Managed Care: August 17, 2018


This week, the top managed care stories included CMS outlining a plan to encourage Medicare accountable care organizations to take on more risk, faster; a study found substantial growth in Medicaid managed care enrollment; an analysis showed nearly 1 in 5 inpatient hospital stays includes a claim from an out-of-network provider.

CMS pushes Medicare accountable care organizations (ACOs) to take on more risk, a study finds substantial growth in Medicaid managed care, and using an in-network hospital doesn’t mean avoiding out-of-network costs.

Welcome to This Week in Managed Care, I’m Laura Joszt.

More Risk in MSSP

CMS this week proposed overhauling the Medicare Shared Savings Program, saying that doctors and health systems are moving too slowly to take on risk, and Medicare is not saving enough money.

Renaming the program Pathways to Success, CMS said it will phase out the current tracks and offer only 2, Basic and Enhanced, which would call for ACOs to move to 2-sided risk after just 2 years.

Said CMS Administrator Seema Verma: “Paying for value rather than volume is not a new concept … The program has not lived up to the accountability part of their name.”

The Medicare Shared Savings Program was created in 2012 under the Affordable Care Act. Verma wants providers to offer consumers tangible incentives to promote health, such as gift cards.

But a leader of the National Association of ACOs (NAACOS) said the proposal would upend the movement and cause many ACOs to leave the program. NAACOS President and CEO Clif Gaus, ScD, said:

“The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered healthcare industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.”

Growth of Medicaid Managed Care

A new report from the Congressional Budget Office (CBO) finds that managed care grew from about two-thirds of Medicaid’s enrollment in 1999 to nearly 9 in 10 enrollees by 2012.

Managed care pays a fixed rate per person to organizations to cover all care, and the CBO speculated there’s little room left for expansion.

The report also found:

  • Medicaid expansion under the Affordable Care Act accelerated the growth in managed care.
  • While most states expanded Medicaid managed care spending, 6 states did not.
  • Most states made enrollment in managed care mandatory for some large groups of beneficiaries.
  • Managed care expanded to some areas that were previously off limits, such as long-term and community-based services.

Out-of-Network Claims

Nearly 1 in 5 inpatient hospital stays includes a claim from an out-of-network provider, according to Kaiser Family Foundation.

An analysis of medical bills from large employer plans from 2016 found that 7.7% of outpatient service days also included a claim from an out-of-network provider. When the out-of-network facility was an emergency room, the share was slightly higher.

Out-of-network hospital bills have become a consumer issue in recent years, because sometimes they are a surprise. While some patients may prefer an out-of-network provider for a scheduled service, in emergency situations, the patient may not have a choice.

The authors wrote: “In many instances, it is doubtful that enrollees could reasonably anticipate or control their use of out-of-network providers.”

CVS Leans on Cost Effectiveness

A CVS Health white paper outlines how its pharmacy benefit manager, CVS Caremark, is using data from the Institute for Clinical and Economic Review (ICER) to hold down costs and lower cost-sharing for consumers.

Several steps are under way:

  • Helping patients during the deductible phase of their insurance.
  • Being more transparent with drug prices so patients and providers know what the out-of-pocket cost will be.
  • Offering a “zero-dollar” list for certain drugs that treat diabetes, hypertension, depression, chronic obstructive pulmonary disease, and other chronic conditions.
  • Allowing clients to refuse to cover drugs that ICER finds cost more than $100,000 per quality-adjusted life-year. FDA breakthrough therapies will be excluded.

Giving ICER a role in evaluating the value of therapies covered by Medicare is a proposal in the Trump administration blueprint for bringing down the cost of drugs.

Success With Choosing Wisely

Finally, the current issue of The American Journal of Managed Care® features a study from Cedars-Sinai Hospital System and Optum, that studied what happened when alerts based on ABIM’s Choosing Wisely program were built into electronic health record alerts.

The study found that when providers followed the alerts, both the health system and patients had better results:

  • Total costs rose 7.3% when providers ignored alerts, compared with following them.
  • Length of stay was 6.2% higher when providers ignored alerts.
  • Following Choosing Wisely alerts reduced complications and 30-day readmissions.

Read the full study.

For all of us at the Managed Markets News Network, I’m Laura Joszt. Thanks for joining us.

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