Medicare Payment Advisory Commission Research Articles

Health care policy that relies on poor measurement is ineffective: Lessons from the hospital readmissions reduction program.

In 2009, Jencks and colleagues published their landmark New England Journal of Medicine paper on readmissions in the Medicare fee-for-service program. Their conclusion was simple: “Rehospitalizations among Medicare beneficiaries are prevalent and costly.”1 The next year, the Patient Protection and Affordable Care Act (ACA) was passed, including the Hospital Readmissions Reduction Program (HRRP) to improve healthcare quality by reducing hospital readmissions. As directed by law, since October 1, 2012, the U.S. Department of Health and Human Services Secretary has reduced payments to hospitals with excess 30-day readmissions following index inpatient stays for common target conditions.2 The seemly logical origin of the HRRP followed the teaching of Peter Drucker who stated, “If you can't measure it, you can't improve it”—a quote featured prominently on the Centers for Medicare & Medicaid Services (CMS) Measures Management website.3 But like any initiative intended to improve quality, evaluation, and iteration is key to assessing and improving delivery.4 More than a decade later, the question now must be flipped to ask “We have measured it, have we improved it?” Unfortunately, due to flaws in the measure itself, lessons learned about readmission drivers, and the rapidly changing landscape of healthcare in the United States, readmissions have not improved as hoped. A simple PubMed search for “Hospital Readmissions Reduction Program” since 2012 yields more than 1200 citations—a body of literature representing a decade of trying—that fail to demonstrate consistent measurable improvements in hospital ability to meaningfully impact readmissions.5 In this commentary, we argue that the HRRP is in need of reform, and efforts to improve the HRRP must address measure shortcomings, including a new approach to support populations adversely impacted by social determinants of health. The omission of observation hospitalizations from the HRRP “rehospitalization” metric is perhaps the most obvious shortcoming that has emerged.6-9 Although counterintuitive, hospitalization is not synonymous with inpatient admission. Policymakers and clinicians less familiar with the hospital setting often confuse observation care as that which is limited to emergency department-adjacent observation units. But observation stays commonly occur in hospital wards, indistinguishable from inpatient stays. One analysis determined that hospitalists provided the majority of observation care (59%), followed by traditional internal medicine and family medicine providers (21%), cardiology (10%), and emergency department providers (5%), with all other providers comprising the remainder (5%).10 To a patient, being hospitalized “under observation” means their stay is covered under Medicare Part B instead of Part A, and they lack post-acute skilled nursing facility (SNF) coverage should they need it. To illustrate what this means to the HRRP, if a patient hospitalized for an HRRP target condition requires rehospitalization within 30 days, this will count as a readmission only if the index and re-hospitalization are billed as an inpatient stay, but will be invisible under the HRRP if either hospitalization is billed as an outpatient observation stay. This is not just a theoretical problem: nearly one in five 30-day rehospitalizations for HRRP target conditions are not counted under the HRRP due to observation stay as index, 30-day rehospitalization, or both.8 The blurry line between observation and inpatient care has raised concerns about whether hospitals might strategically encourage physicians to categorize their patients as outpatient (observation) instead of inpatient (both of which are done by a physician order in the medical record) within 30 days of an index inpatient stay to improve their readmission rate. As part of the 21st Century Cures Act of 2016, Congress mandated the Medicare Payment Advisory Commission (MedPAC) study this question, with MedPAC concluding there was not “…a shifting of short-stay admissions into observation stays to avoid readmission penalties” in their 2010–2016 analysis.11 Similarly, analyzing the years 2007–2015, Zuckerman and colleagues concluded that although observation care increased over time, physicians were not systematically classifying patients as outpatient observation instead of inpatient to improve their hospitals' readmission rate.12 Although it is possible that individual hospital behavior could be hidden in these big data analyses, both studies provided reassurance that this was not broadly occurring. Both studies included only index inpatient stays, followed by observation or inpatient stays within 30 days of the index inpatient stay. Although key additions to the literature, many6, 7 called for studies with more comprehensive inclusion of observation stays in evaluations of HRRP performance—most specifically, including observation stays in both the index hospitalization and 30-day rehospitalization counts. Recently, Sabbatini and colleagues13 evaluated this question and found that including observation stays in both the index hospitalization and 30-day rehospitalization counts more than halved the perceived readmission improvements in targeted conditions. In this issue of Health Services Research, Wright and colleagues14 add key important findings to the observation question. They compare observation stay used as a proportion of total hospitalizations in target versus non-target conditions using a 20% Medicare fee-for-service sample. Over the study years 2009–2016, observation stays increased from 2.2% to 4.0% in the 3 targeted conditions compared to 4.2%–5.8% of non-target hospitalizations. For chronic obstructive pulmonary disease (COPD), observation stay use rose from 8.4% to 11.9% in the target group versus 5.3% to 6.6% in the control group. The authors found a small statistically significant but clinically insignificant (0.02% per month) greater increase in observation stays in the three-condition target group as compared to control but no statistically significant difference in the COPD group. Because the growth in observation stay use was similar in target and non-targeted groups, the authors conclude there was no deliberate and potentially inappropriate substitution of observation for inpatient stays to appear more favorable under the HRRP. Although counterintuitive, this study adds to the body of literature confirming the problem of observation stays in the HRRP actually relates to the appropriate use of observation stays based on CMS rules and regulations. Here is why: the HRRP only counts inpatient stays, but the proportion of hospital stays now classified as outpatient observation has grown for reasons that likely include improved hospital efficiency resulting in acute-care hospital stays shorter than two-midnights designated as observation, and changes in visit status rules, such as hospital-based procedures being removed from Medicare's “Inpatient-Only List.” Thus, the problem of the HRRP is not misuse of observation but rather shifts in CMS policy that increases observation hospitalizations, further exposing the flaw in HRRP itself that fails to account for hospitalizations not billed as inpatient stays. This distortion of the HRRP's rehospitalization metric has worsened over time as outpatient hospital care continues to grow. According to the MedPAC, from 2006 to 2016, outpatient services increased by 49.0% while inpatient discharges decreased by 21.8%.15 Although observation is only one type of outpatient service, observation hospital care is nonetheless a significant portion of hospital outpatient services. The impact of heterogeneous hospital visit types (inpatient, observation, or even emergency department visit) was illustrated by Wadhera and colleagues, who found that 30-day hospital revisits actually increased for HRRP-targeted conditions when both the emergency department and observation stays were counted alongside inpatient stays.16 The impact of increased observation stays is made even more complicated by variable observation use nationally, further distorting the HRRP's ability to measure quality.17 Could the HRRP be improved if observation stays were included? The most obvious and significant implication would be on the current Medicare hospital reimbursement model. Under CMS' Outpatient and Inpatient Prospective Payment Systems (OPPS and IPPS), observation stays can have dramatically different hospital payments than inpatient stays, even if the primary diagnosis and actual services proved are similar.18 As a result, including observation stays in the rehospitalization metric would essentially be considering them inpatient stays for the purpose of penalties, but not payment—something that would likely face opposition from hospitals and providers. Similarly, because Medicare beneficiary post-acute SNF Part A coverage requires a qualifying three-night inpatient stay, patients and advocates would also have concerns about counting stays as inpatient for the purpose of a quality metric but not for the benefit of their SNF coverage. Eliminating observation stays as a separate hospital visit status entirely—meaning all hospital stays would simply be considered hospital inpatient admissions—would be a significant improvement, but this degree of policy shift would have far-reaching implications and is unlikely to happen. Additionally, solving the observation issue fixes only one of the many visit-type or place of service issues under the HRRP. For example, ambulatory surgery center (ASC) use continues to grow, with one estimate projecting 25% growth between 2019 and 2029.19 These ASC encounters are also missing from readmission calculations because they do not serve as index stays, meaning the ASC has no financial consequences if a patient is subsequently admitted to a hospital as a complication of the procedure. Thus, even if including observation stays in the HHRP in some form is settled, as healthcare delivery continues to evolve, the HRRP may end up missing other patient categories and visit types. Many other challenges remain. Although CMS “…encourages hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable readmissions,”2 it is not clear this formula works, at least not for a full 30 days following discharge. This reality was illustrated by Graham and colleagues, who found that hospitals were the best location to influence early (0–7 days) readmissions, but less able to influence later (8–30 days) readmissions,20 when disease exacerbation unrelated to the hospitalization or other factors more directly related to under-resourced areas or insufficient clinical follow up may play a larger role. Hospitals also typically do not receive any notification when patients are readmitted to a different facility, limiting the ability to analyze data and improve performance. Hospitals should be accountable for factors they can control, but the HRRP is too broad in scope and time to reflect these factors. The growing proportion of Medicare Advantage (MA) enrollees also changes the readmission dynamic. When the HRRP began in 2012, 27% of Medicare beneficiaries were enrolled in an MA plan. In 2022, that number was 48%.21 While FFS Medicare will pay for a new readmission diagnosis-related group (DRG), most MA plans will not. With MA enrollment projected to soon exceed 50%, this is another reason the readmission landscape is significantly different for a hospital or health system than when the HRRP began.22 Most importantly, the HRRP has failed to adequately account for social determinants of health. Living in a disadvantaged neighborhood predicts readmissions to a degree similar to having a chronic medical condition, like peripheral vascular disease.23 The CMS acknowledges that under-resourced populations experience increased readmissions, and has issued related guidance and recommendations in their “Guide to Reducing Disparities in Readmissions”.24 Yet these recommendations require resources—resources that ironically may actually be taken away from hospitals serving under-resourced populations under the HRRP. In the words of Figueroa and colleagues “At best, the evidence to date suggests that the HRRP has had no meaningful effect on the rate at which patients return to the hospital within 30 days of discharge. At worst, the HRRP has unfairly penalized hospitals caring for the most vulnerable populations in our country and potentially resulted in patient harm.”25 Cram and colleagues concur, stating that “Persistent focus on readmissions…has had minimal demonstrable benefit. Moreover, the HRRP has distracted clinicians and health system leaders from other crucial quality concerns,”…and has not sufficiently addressed the “…critical contribution of disadvantage and adverse social determinants of health in driving hospital readmissions at both the individual and hospital level.”.26 The HRRP is begging for reform, yet what is the solution? In February 2023, the CMS signaled its intent to include all-cause readmissions in its Universal Foundation of aligned quality measures.27 Thus, eliminating the HRRP is an unlikely policy option, and efforts should be directed at improving the measurement to address program concerns. From a health disparities perspective, CMS could track readmissions but eliminate penalties for hospitals that invest resources to address elements identified in their Guide to Reducing Disparities in Readmissions.24 Indeed, the HRRP penalties themselves have failed to distinguish quality over the past decade, as the majority (93%) of hospitals have been penalized since the program started, with almost half (47%) penalized in 2022 alone.28, 29 Rather than penalize hospitals caring for the most under-resourced beneficiaries under the HRRP, CMS could prioritize their Guide recommendations with clear, actionable steps to help hospitals know where best to use resources and how to improve their community-based partnerships. Hospitals spend an average of $300–600 per patient to reduce 30-day readmissions30; re-investing these dollars and those currently used to pay HRRP penalties in these community-based partnerships and local efforts in the ways most beneficial to individuals could be a better and more impactful use of the Medicare Trust Fund. CMS should also continue to explore ways to provide additional resources to hospitals serving the most under-resourced beneficiaries through innovative models like the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH), where per beneficiary per month benchmark adjustments are made.31 CMS might also enhance their current inpatient payment system, which offers additional monies to hospitals taking care of under-resourced populations through its Disproportionate Share Hospital adjustment. Ultimately, moving away from a punitive HRRP system might alleviate some hospital and beneficiary concerns about an “all-rehospitalization” metric inclusive of observation stays, ASC visits, and perhaps emergency department visits. “If you can't measure it, you can't improve it”—applies to the performance of the HRRP itself. The HRRP has been measured for over a decade and the program is in dire need of a comprehensive overhaul. Legislators and regulators must engage in efforts to improve the HRRP on the policy level so it can truly deliver on its stated goal of improving hospital and healthcare quality. Dr. Powell receives support from the National Institute on Aging (R21AG079277) unrelated to this article. Dr. Sheehy receives support from the National Institute on Aging (3RO1AG070883-02) unrelated to this article. This material is the result of work supported by the resources and the use of facilities at the University of Wisconsin School of Medicine and Public Health Center for Health Disparities Research. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.

Quantifying days at home in patients with cirrhosis: A national cohort study.

Days at home (DAH) is a patient-centric metric developed by the Medicare Payment Advisory Commission, capturing annual health care use, including and beyond hospitalizations and mortality. We quantified DAH and assessed factors associated with DAH differences among patients with cirrhosis. Using a national claims database (Optum) between 2014 and 2018, we calculated DAH (365 minus mortality, inpatient, observation, postacute, and emergency department days). Among 20,776,597 patients, 63,477 had cirrhosis (median age, 66, 52% males, and 63% non-Hispanic White). Age-adjusted mean DAH for cirrhosis was 335.1 days (95% CI: 335.0 to 335.2) vs 360.1 (95% CI: 360.1 to 360.1) without cirrhosis. In mixed-effects linear regression, adjusted for demographic and clinical characteristics, patients with decompensated cirrhosis spent 15.2 days (95% CI: 14.4 to 15.8) in postacute, emergency, and observation settings and 13.8 days (95% CI: 13.5 to 14.0) hospitalized. Hepatic encephalopathy (-29.2d, 95% CI: -30.4 to -28.0), ascites (-34.6d, 95% CI: -35.3 to -33.9), and combined ascites and hepatic encephalopathy (-63.8d, 95% CI: -65.0 to -62.6) were associated with decreased DAH. Variceal bleeding was not associated with a change in DAH (-0.2d, 95% CI: -1.6 to +1.1). Among hospitalized patients, during the 365 days after index hospitalization, patients with cirrhosis had fewer age-adjusted DAH (272.8 d, 95% CI: 271.5 to 274.1) than congestive heart failure (288.0d, 95% CI: 287.7 to 288.3) and chronic obstructive pulmonary disease (296.6d, 95% CI: 296.3 to 297.0). In this national study, we found that patients with cirrhosis spend as many, if not more, cumulative days receiving postacute, emergency, and observational care, as hospitalized care. Ultimately, up to 2 months of DAH are lost annually with the onset of liver decompensation. DAH may be a useful metric for patients and health systems alike.

Paying for Nursing Home Quality: An Elusive But Important Goal.

On a given day, almost 1.3 million individuals receive care from approximately 15,000 nursing homes nationwide (Kaiser Family Foundation, 2020). Nursing home residents have high levels of medical complexity, have physical and cognitive impairments, and often lack financial resources. As such, these are among the frailest and most vulnerable individuals in our health-care system. In 2020, the United States spent $196.8 billion on nursing home care, the majority of which came from public sources (Hartman et al., 2022). Yet, questions persist about the effectiveness of this investment (Halifax and Harrington, 2022). Nursing home quality of care continues to be an important public policy issue (Ouslander and Grabowski, 2020), despite prolonged public outcry (Institute of Medicine, 1986, Institute of Medicine, 2001; Mendleson, 1974; Vladeck and Twentieth Century Fund, 1980) and government reports (Office of Inspector General, 2014; U.S. Government Accountability Office, 2018; U.S. Senate, 1974). Often, the number of nurses per resident is low, with 75% of nursing homes failing to meet Centers for Medicare & Medicaid Services' (CMS’) expected registered nurse staffing levels based on residents' acuity (Geng et al., 2019). Staffing is also highly variable from day to day (Geng et al., 2019; Mukamel et al., 2022), and the average annual staff turnover rate exceeds 120% (Gandhi et al., 2021). Residents may develop new health problems after nursing home admission due to unsafe care practices. Amenities that are common within a nursing home—including the food, activities, and public spaces—are too often substandard (Miller et al., 2014). Feelings of isolation and loneliness are consistently reported in the states that collect information on quality of life and care experiences (Roberts and Ishler, 2018; Shippee et al., 2015). These quality issues predate the COVID-19 pandemic, but all have been magnified since March 2020 (Levere et al., 2021; McGarry and Grabowski, 2021; Montgomery et al., 2020). Although Medicaid and Medicare pay for most nursing home care in the United States, very little of this public payment is linked to quality, either through bonuses or penalties. In other parts of the health-care system, an increasing number of payers has implemented value-based payment models that hold participating providers accountable for overall spending and quality (Barnett, Wilcock, et al., 2019; Joynt Maddox et al., 2018; McWilliams et al., 2016). A key question for policy-makers is whether and how to increase the accountability of nursing homes for the quality of care they provide under Medicaid and Medicare. Although Medicaid and Medicare pay for most nursing home care in the United States, very little of this public payment is linked to quality, either through bonuses or penalties. In 2022, a National Academies of Science, Engineering, and Medicine (NASEM) report concluded that quality is substandard in many U.S. nursing homes. The report offered a series of recommendations to transform how the United States delivers, regulates, finances, and pays for nursing home services. One of the payment recommendations focused directly on testing expanded value-based payments for nursing home care. Specifically, recommendation 4E states: This paper first reviews the U.S. experience with value-based payments for nursing home services. Unfortunately, most of the models tested to date have not shown improvements in the quality of nursing home care. The paper then considers how policy-makers can implement the NASEM recommendation to ensure a greater likelihood of success relative to prior efforts. The first documented attempt to improve nursing home quality through incentive payments was a randomized experiment conducted in 36 San Diego–area nursing homes over the period of 1981 to 1983 (Weissert et al., 1983). The experimental group received three separate bonus Medicaid payments for admitting heavy-care patients, meeting outcome goals on some patients, and discharging and maintaining some patients in the community. The treatment group was found to have better outcomes at a lower cost, admit more residents with functional disabilities, and shorten lengths of stay (Norton, 1992). Despite these promising early results, over two decades passed until there was a major federal effort to test value-based payments in nursing homes. This delay could have been due to the government's focus on using prospective payment approaches to control expenditures, CMS prioritization of public quality reports that aimed to provide market-based quality incentives by influencing consumer choice, industry's resistance to such models, or public focus on auditing and enforcement of care standards. Nevertheless, CMS introduced the three-year, three-state Nursing Home Value Based Payment demonstration in 2009. Nursing homes in New York State that agreed to participate were randomized into intervention (n = 72) and control (n = 78) groups, while propensity-score matching identified comparator facilities for participating facilities in Arizona (n = 38) and Wisconsin (n = 61). The model assigned nursing homes a quality score for a combination of nurse staffing, Minimum Data Set–based quality measures, survey citations, and hospitalization rates. The design required budget neutrality. If the treatment group collectively saved money relative to the control group, only the participating nursing homes with the highest-quality scores received a payout. Little quality difference was found across the three years of the demonstration, and limited savings were found during some years in Arizona and Wisconsin (Grabowski et al., 2017). However, a mixed-methods evaluation found that these savings were likely due to regression to the mean. Ultimately, the demonstration was not found to be successful at improving quality or reducing Medicare spending, partially attributable to a series of design issues. As authorized in the 2014 Protecting Access to Medicare Act, the federal government next introduced the Skilled Nursing Facility Value Based Payment (SNF VBP) model in 2018. Unlike the earlier demonstration, this model focused on short-stay residents and only examined a single outcome measure, hospital readmissions. Program payment represented uniform 2% withholding that could be paid back to nursing homes based on their performance on the readmissions measure. Research on the SNF VBP found that facilities serving vulnerable groups were less likely to receive bonus payments and more likely to be penalized in Year 1 of the model (Hefele et al., 2019; Qi et al., 2020). Moreover, the program did not improve readmission rates for the lowest-performing facilities (Burke et al., 2022). The Medicare Payment Advisory Commission (2021) detailed a series of shortcomings to improve the model, some of which are potentially addressed in changes incorporated by CMS in 2021. Nevertheless, this value-based payment program has also largely been unsuccessful to date. Several states have introduced value-based payments through their state Medicaid programs. Between 2001 and 2009, eight state Medicaid agencies adopted pay for performance (P4P) programs in nursing homes. Considerable variability exists in the size of the incentive payments and the quality measures included in the payment models (Werner et al., 2010). Overall, these Medicaid value-based payment models were not found to result in consistent improvements in nursing home quality (Werner et al., 2013). One successful state model was the state of Minnesota's value-based payment model, which was individualized to specific groups of nursing homes. The Performance-Based Incentive Payment Program allowed nursing homes to propose a specific quality improvement program to the state. The models focused on a range of different quality measures, including fall prevention, readmissions, and quality of life. Nursing homes received 85% of expected payments upfront and were at risk for the remaining 15%. An evaluation of the Performance-Based Incentive Payment Program model found improvement in a composite measure of quality that combined the very specific quality programs among participating nursing homes (Arling et al., 2013). The NASEM report adopted the CMS definition of an alternative model. The report states that the APM, “according to the Centers for Medicare & Medicaid Services, is a ‘specific subcategory of value-based purchasing initiatives that require providers to make fundamental changes in the way they provide care’ and that ‘shift financial incentives further away from volume by linking provider payments to both quality and total cost of care results’” (Centers for Medicare and Medicaid Services (CMS), 2015, p. 5). Thus, providers take on substantial financial risks to deliver high-quality care at lower costs, typically across health-care providers and settings. APMs can apply to a specific medical condition, an episode of care, or a patient population (Centers for Medicare and Medicaid Services (CMS), 2015, p. 367). Nursing homes have been affected by several newer APMs, such as bundled payments that link the hospital, the provider, and post-acute care payments to an episode of care (Barnett, Wilcock, et al., 2019), and accountable care organizations, in which provider organizations share incentives for controlling health-care costs and meeting benchmarks for a population of Medicare enrollees (McWilliams et al., 2017). Although these models have not focused specifically on nursing home care, the elimination of post-acute nursing home services has been the major source of savings within these demonstrations, with a recent commentary terming nursing homes “the piggy bank” for these APM payment models (Barnett, Mehrotra, and Grabowski, 2019). Similarly, Medicare Advantage (MA) plans have also targeted post-acute care as a source of savings. Some of this lower utilization might be due to favorable health and socioeconomic selection, but several studies have found that lower post-acute care utilization within MA plans is not associated with any change in claims-based outcomes, such as mortality or readmissions (Huckfeldt et al., 2017; Kumar et al., 2018). Moreover, enrollees in MA plans typically use lower-quality nursing homes (Meyers et al., 2018). One Medicare Advantage model that was specifically designed for long-stay nursing home residents is the Intuitional Special Needs Plan (or I-SNP) model. The I-SNP takes on the financial risks for Medicare expenditures for nursing homes and typically increase on-site clinical care to manage this risk. One recent study suggested that beneficiaries in the I-SNP have fewer hospitalizations and emergency department visits and more skilled nursing facility use relative to traditional Medicare beneficiaries (McGarry and Grabowski, 2019). Few, if any, of these models have focused on improving quality in nursing homes to date. Indeed, these concurrent payment initiatives, co-occurring with shifts in post-acute populations, regulations, and available community alternatives, make isolating the individual effects of a particular payment program difficult. Additionally, none of these models have addressed the NASEM report's recommendations to expand future demonstrations to consider advanced illness care models and the influence of patient social drivers of health on outcomes. A series of important lessons have emerged from the existing value-based payment models that should be considered in the implementation of the NASEM recommendation. First, NASEM recommendation 6A called for the inclusion of a robust measure of resident and family experience on the Care Compare website. In the home health-care setting, results from patient surveys to understand patient care and care issues, communication between providers and care recipients, and overall quality of care have been publicly posted and utilized in the home health star rating calculation for years (Schwartz et al., 2021). These measures should also be incorporated into future nursing home value-based models to ensure these new payment approaches are consistent with the wants and needs of residents and their families. Similarly, the outcomes included in the model should be concordant with the goals of the specific resident. These goals and preferences will differ across residents (Roberts et al., 2018). Further, given the high proportion of residents with Alzheimer's disease and related dementias who receive care in nursing homes, it is important to also capture the caregiver experience to ensure that the experiences of residents with cognitive impairments are incorporated into the model. Moreover, the social drivers of health and available caregiver support will influence the resources needed to obtain important outcomes across facilities. Second, many of the prior models rewarded nursing homes based on a very limited set of quality measures. In many respects, it has been a “Goldilocks problem,” in that some models include too many measures (e.g., Nursing Home Value-Based Payment) and others include too few (e.g., SNF VBP). Another concern is that these models may lead to “teaching to the test,” as providers target measures that are rewarded by the model (e.g., hospital readmissions), at the expense of resources and attention diverted from measures that are not rewarded (Feng et al., 2005; Kash et al., 2007). Recent improvements to ensure accurate data reporting, such as the use of the Payroll-Based Journal system to capture staff hours paid, instead of hours reported, provide improved consistency and reliability (Geng et al., 2019). The IMPACT Act of 2014 tasked CMS with identifying and implementing standardized data elements for inclusion across post-acute care assessments, including nursing homes, to allow valid comparisons of the value of services being provided across the broader long-term care financing and delivering system (Chen et al., 2022). However, further efforts are needed to ensure the integrity of provider-reported assessments and administrative data and to translate these improvements in data integrity into improvements in the quality of care received. Because there are many measurable and actionable components that comprise nursing home quality, determining the “right” set of measures is key. Indeed, evidence from the state Medicaid P4P models suggests a larger weighting of clinical outcomes in the payment formula leads to larger improvements, with small weights leading to no improvement or even a worsening of some clinical outcomes (Konetzka et al., 2018). As a result, it is important to get the “right” set of measures and then determine the appropriate weights to optimize improvements in nursing home quality of care. Third, policy-makers will need to incentivize the growth of successful models. An old line suggests P4P often stands for “pennies for performance” in many models, offering weak incentives to motivate providers to improve quality. Meaningful payouts for quality improvement and performance need to be ensured. Moreover, many voluntary APM models, such as bundled payments, and accountable care organizations have suffered from low enrollment and face potential issues of selection, as the most primed providers volunteer to participate. Although there are obvious political trade-offs with mandatory enrollment, mandatory enrollment is not only essential to guard against differential selection but is also easier to implement, as most nursing homes receive Medicare and/or Medicaid funding, so program participation could be made a condition for receiving federal funding. The existing SNF VBP is limited in many ways, but the mandatory enrollment approach to enrollment provides a stronger foundation for future nursing home payment models. Most importantly, any value-based payment system should encourage health equity and carefully monitor for disparate effects on historically marginalized populations. Once again, results from the existing SNF VBP model have reinforced concerns that these models exacerbate existing disparities. Nursing homes that serve vulnerable populations are less likely to receive bonus payments and more likely to be penalized, thereby punishing facilities that care for a greater share of Medicaid residents and historically marginalized communities, as dual eligibility, racial minority, and ethnic minority statuses are significant predictors of admission to the lowest-rated facilities in Medicare's star rating system (Zuckerman et al., 2019). Such programs create payment deficits for nursing homes serving high-risk populations, which reduce the resources that may be allocated toward patient care and quality improvement. The growth in the use of assisted living facilities as a substitute for traditional nursing home care for those with greater financial resources and lower acuity (Grabowski et al., 2012), alongside the growth in the use of non-institutional care settings, including the push towards home- and community-based services by state Medicaid programs (Siconolfi et al., 2019; Siconolfi et al., 2021), has signaled that any payment changes must be considered within the context of the larger post-acute and long-term care health system to ensure equitable access and delivery of care. Moving forward, CMS should closely monitor the highest and lowest performers of these value-based models—and support any additional expenditures needed to achieve the desired quality goal (Damberg and Elliot, 2021)—to encourage a more equitable payout across providers. The concept of value-based payments for nursing homes is one that has existed for decades. Lessons from prior efforts provide important insights that should be taken into consideration, alongside the recent 2022 NASEM recommendation, as the development of a value-based payment model moves forward and continues to focus on aligning nursing home payments with quality of care. The right payment model will require incorporating elements of the resident experience, getting the mix of quality measures included in the incentive payment correct, incentivizing participation and program retention, and promoting health equity across nursing homes nationwide. The right payment model will require incorporating elements of the resident experience, getting the mix of quality measures included in the incentive payment correct, incentivizing participation and program retention, and promoting health equity across nursing homes nationwide. This supplement is sponsored by the John A. Hartford Foundation. Dr. Saliba is a part time employee of the Veterans Health Administration. In addition, over the past three years, Dr. Saliba has received research support from the Borun Center for Gerontological Research, the National Institutes of Health, Veterans Administration (VA) Health Services Research and Development, the Centers for Medicare & Medicaid Services and the University of Toronto Centre for Aging and Brain Health Innovation, Baycrest. Over the past three years, Dr. Grabowski has received research support from: AARP, Agency for Healthcare Research & Quality, Commonwealth Fund, Donaghue Foundation, GRAIL, John and Laura Arnold Foundation, National Institutes of Health, the Robert Wood Johnson Foundation, and the Warren Alpert Foundation. He has also received payments from the Medicare Payment Advisory Commission, the Analysis Group, Bluestone Physician Services, and Health Care Lawyer PLC. None.

HOME HEALTHCARE ACCESS AND UTILIZATION AMONG VULNERABLE POPULATIONS IN THE US AND PUERTO RICO

Abstract Home health (HH) care utilization among Medicare beneficiaries has exploded, serving over 3.3 million users (The Medicare Payment Advisory Commission, 2021). With the aging of the population and the preference for Home- and Community-Based Services and/or person-centered care delivered in the home, HH care use is expected to continue increasing. Prior research has highlighted inequitable access and use of HH rooted in structural and social determinants of health (Fashaw-Walters et al., 2022). However, more research is needed about disparities in timely access to quality of care and outcomes among racial and ethnic and rural populations. Furthermore, the literature regarding post-acute care has often excluded Puerto Rico HH beneficiaries (Rivera-Hernandez et al., 2020). Given the need to ensure equity of care post-pandemic, there is a pressing need to understand disparities in care and outcomes, specifically using representative data. This symposium will feature four presentations that provide novel insight regarding HH care utilization and outcomes among vulnerable populations. Individual presentations will describe 1) Home health care services utilization among Medicare beneficiaries in Puerto Rico; 2) Public reporting role in exacerbating disparities in access; 3) Differences in home healthcare latency following hospitalization for ADRD patients by race/ethnicity and rural and urban locations; 4) Racial disparity in the start of home healthcare in high-risk ADRD patients by the quality of home health and impact on rehospitalization. In addition, studies in this panel will discuss policy and clinical implications, as well as directions for future research regarding equitable access and health outcomes among HH users.

Germany's Use Of Reference Pricing For Biologics: Lessons For The US.

A redesign of consumer cost sharing in the United States is important to accelerate the adoption of biosimilars and price reductions for biologics. This article analyzes therapeutic reference pricing for anti-inflammatory biosimilars in Germany and its implications for the United States. The German experience demonstrates that a redesign of consumer cost sharing can achieve savings for payers without creating onerous financial barriers for patients. In contrast, the dominant coinsurance structure of cost sharing in the US creates strong incentives for patients to abandon treatment, especially for serious illnesses treated by complex biologics, and only weak incentives to compare prices among therapeutically equivalent products. The Medicare Payment Advisory Commission (MedPAC) has advocated that the Centers for Medicare and Medicaid Services adopt a variant of reference prices for biologics, their related biosimilars, and therapeutically similar branded alternatives by assigning them the same billing code or by paying a similar rate for all the products. The German experience demonstrates that the proposed MedPAC approach is technically feasible and would generate savings for payers without imposing access obstacles on patients.

The Explosive Growth of Telehealth Throughout the COVID-19 Pandemic and Beyond

View Large Image Figure ViewerDownload Hi-res image Download (PPT) Telehealth use in the United States has increased by over 6,000% since the onset of the COVID-19 pandemic. Medicare telehealth visits alone have increased by 63-fold, from 840,000 in 2019, to 52.7 million in 2020 alone, as discussed by a Department of Health and Human Services (DHHS) report issued in December 2021 (https://bit.ly/3N2t6dJ). Of the multiple health care waivers implemented throughout the public health emergency (PHE) both federally and in individual states, many believe that telehealth’s rapid expansion has been beneficial to many Americans. Telehealth has been particularly useful within the nursing home space, helping to protect some of the most vulnerable, immunocompromised older patients and decreasing expenditures for ancillary services like transportation. In addition, the use of virtual visits in long-term care facilities has simplified specialty consults and can decrease unnecessary hospitalizations for residents while also reducing burdens on residents, family members, and staff. Timely diagnoses and treatment by specialty physicians and other providers for nursing home residents can enhance the overall quality of care and life for residents. Telehealth provides a cost-effective option for residents who are limited by immobility, illness, or injury, or those who live extended distances from the needed medical care providers. The telehealth waivers that surfaced at the start of the pandemic have provided residents with a more convenient and flexible modality of care. In March 2022, President Joseph R. Biden signed the Consolidated Appropriations Act (CAA) (available from https://bit.ly/3xC47rZ). This legislation extends Medicare telehealth waivers for an additional five months after the end of the PHE. The law prolongs waivers that eliminate facility and geographic restrictions for behavioral health services, and it permanently authorizes coverage of telehealth services from speech language pathologists, physical therapists, and occupational therapists. This permits telehealth to continue to be available for a myriad of services without limitations on where the service occurs. Under the CAA, the Medicare Payment Advisory Commission (MedPAC) is required to conduct a study on the telehealth expansion for Medicare beneficiaries as a result of the ongoing public health emergency. MedPAC’s study must analyze:•The utilization of telehealth services under the Medicare program;•Medicare program expenditures on telehealth services;•Medicare payment policy for telehealth services and alternative approaches to this payment policy; and•The implications of expanded Medicare coverage of telehealth services on beneficiary access to care and quality of care (Consolidated Appropriations Act, Pub. L. No. 117-103 [2022]). The CAA also requires the DHHS Office of Inspector General (OIG) to issue a report by June 2023 regarding the program integrity and risks associated with Medicare telehealth services. The OIG’s report must include recommendations to prevent fraud, waste, and abuse. The CAA also requires the Centers for Medicare & Medicaid Services to begin publishing data to its website on July 1 and quarterly thereafter related to telemedicine services. This upcoming OIG report should provide information for the provider, regulatory, and legal communities to identify areas in the requirements where improvements are needed to prevent telehealth fraud or abuse. As with all emerging and changing health care areas, filing of malpractice actions and other litigation is often delayed after the time of service. Before the pandemic, telehealth malpractice claims were limited because of the limited scope of services that were allowed, which meant few claims were being presented to payors, both governmental and private. We should expect an increase in telehealth litigation in the next few years. Missed or misdiagnosis is a frequent type of medical malpractice claim, and it would be expected that the telehealth claims will be no different as litigation increases in the upcoming years. Variations in the types of missed or misdiagnoses often depend on the type of medical care being rendered. A JAMA Internal Medicine article (2013;173:418–425) cited the most common conditions with a missed or misdiagnosis for primary care were pneumonia, decompensated congestive heart failure, and acute renal failure. The types and frequency of malpractice actions being filed and significance of the settlements and jury verdicts related to telehealth visits will play out as more actions are filed and time passes as the litigation makes its way through the court systems. Insurance companies will be carefully watching when a significant wave of malpractice actions hit their radar. In February 2022, the Telehealth Extension and Evaluation Act (Senate Bill 3593) was introduced in the U.S. Senate. This bipartisan legislation as drafted would extend Medicare coverage for telehealth services for two additional years after the PHE ends, allowing Congress to establish a study on the efficacy of telehealth and whether broad access should be permanent. Other bills or potential future legislation concerning telehealth will likely include safeguards to prevent misuse and to ensure that patients are receiving adequate and appropriate care based on their needs throughout the country. Currently, all 50 states and the District of Columbia reimburse for live video services provided to beneficiaries enrolled in their Medicaid program (National Conference of State Legislatures, State Telehealth Policies, April 2022, https://bit.ly/3xwINEe). The services, provider types, and locations eligible for reimbursement vary within state Medicaid programs. The states individually continue to refine their telehealth reimbursement policies as well as private payer laws on an ongoing basis. Many states plan to continue all or some of these expanded telehealth policies after the pandemic, especially insofar as they have impacted behavioral health visits. At its peak throughout the pandemic, telehealth represented 40% of all mental health and substance abuse outpatient visits in the United States (Justin Lo et al., “Telehealth Has Played an Outsized Role Meeting Mental Health Needs During the COVID-19 Pandemic,” Kaiser Family Foundation, March 15, 2022; https://bit.ly/3tFMcPU). Telehealth has changed the health care landscape, providing individuals with access to behavioral health services that would have otherwise required offsite transportation. According to the Census Bureau, currently 24% of the U.S. population is over 60 years old, and one in every five Americans will be 65 or older by 2030. Aging Americans often experience more complex diagnoses and multiple comorbidities. Telehealth provides aging individuals and family members a versatile way to take control of their own multidisciplinary care, resulting in a higher quality of life both in a nursing facility setting or when residing at home. Studies by Telehealth.org in 2021 illustrated that the implementation of a telehealth program in nursing homes can address roughly 80% of all resident issues after hours and can decrease the rate of hospital readmissions by up to 70%. Telehealth throughout the pandemic has changed the health care landscape for the better and facilitates more positive outcomes for some of the most vulnerable patient populations. According to McKnight’s Long Term-Care News, occupancy in skilled nursing facilities (SNF) is growing (Danielle Brown, “SNF Occupancy Growing — and So Is Level of Patient Needs,” June 6, 2022, https://bit.ly/3tInChb). SNF occupancy in March 2022 reached 77.2%, the highest level in almost two years. With occupancy slowly increasing, staffing shortages continuing, and some facilities struggling to have adequate physician and advanced practice provider coverage, telehealth can help to fill the gaps and meet some of the needs for nursing home residents. Using reliable and reputable telehealth providers can allow nursing homes to supplement their on-site physician and advanced practice provider services to meet many of the medical and diagnostic needs of residents on an ongoing basis. Ms. Feldkamp is a partner at Benesch, Friedlander, Coplan & Aronoff LLP. She frequently assists post-acute and acute care providers with regulatory, survey and compliance issues. Her extensive health care experience includes licenses as a registered nurse and nursing home administrator with experience as a state regulator and provider. She is also a member of the Editorial Advisory Board for Caring for the Ages. Ms. Pokryfky is a registered nurse, a former army officer, and a graduate of the Case Western Reserve University School of Law. She is currently a law clerk in the Healthcare+ Practice Group at Benesch Friedlander Coplan & Aronoff in the Cleveland Office.

Surveying Knowledge Gaps for a Post-Acute Care (PAC) Curriculum Taught by Geriatrics-trained Core Internal Medicine Program Faculty for Internal Medicine and Family Medicine Residents Learners

Preventable errors in care transitions for the elderly are responsible for up to one third of costly hospital readmissions. The 2009 Institute of Medicine sentinel report outlined a critical need to expand geriatrics competencies in residencies caring for the vulnerable elders. While the 2010 published set of core competencies for geriatrics aligns with the Medicare Payment Advisory Commission directives, training in geriatrics competencies during residency is still lacking. We surveyed our IM/FM residents (Internal Medicine/Family Medicine residents) to help formulate a customized geriatrics curriculum with dedicated clinical exposure and emphasis on teaching communication across care transitions, health care systems, discharge destinations, and their level of care for the hospitalized elderly.

Current Controversies in Radiology on Cost, Reimbursement, and Price Transparency: AJR Expert Panel Narrative Review.

Many believe that fundamental reform of the U.S. health care system is overdue and necessary given rising national health care expenditures, poor performance on key population health metrics, meaningful health disparities, concerns about potential financial toxicity of care, inadequate price transparency, pending insolvency of Medicare Part A, increasing commercial insurance premiums, and large uninsured and underinsured populations. The Medicare Payment Advisory Commission, an independent congressional agency, believes that part of this reform includes redistribution of reimbursements away from specialties such as radiology. Thus, despite an increase in the Medicare population and spending, Medicare payments for medical imaging have been decreasing for years. Further, the No Surprises Act, a federal law intended to curb the problem of surprise medical billing, was repurposed in federal rulemaking to reduce reimbursement from commercial payers to certain specialties, including radiology. In this article, we examine challenges facing the U.S. health care system, focusing on cost, reimbursement, and price transparency and the role of radiology in addressing such challenges. Medical imaging is a minor contributor to national health care expenditures but has an outsized impact on patient care. The radiology community should work together to reinforce the value of medical imaging and reduce inappropriate utilization of low-value care.

Effects of an out-of-pocket maximum in Medicare Part D.

Three different out-of-pocket (OOP) maximums in Medicare Part D have been proposed: $2000 by the House of Representatives, $3100 by the Senate Finance Committee, and the beginning of catastrophic coverage by the Medicare Payment Advisory Commission. However, little is known about how beneficiaries would be affected. We estimated multivariate linear regression models to determine which beneficiary characteristics were associated with the greatest savings under each proposed OOP maximum and simulated a potential behavioral response by beneficiaries. Using Part D 2017 claims data for beneficiaries in stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription drug (MA-PD) plans, we estimated the number of beneficiaries affected, their demographic characteristics, and their drug utilization patterns. We then simulated a potential behavioral response by beneficiaries. Under the $2000 OOP proposed threshold, only 7% of PDP and 4% of MA-PD plan beneficiaries would have spending high enough to reach the OOP maximum. Annual mean (SD) savings would be $1301 ($1849) for PDP beneficiaries and $1363 ($1888) for MA-PD plan beneficiaries, concentrated among beneficiaries taking specialty drugs. As the threshold increases, fewer beneficiaries would accrue savings, but savings would increase. For the highest proposed OOP maximum, mean (SD) savings would be $2720 ($3465) and $2473 ($2805) for PDP and MA-PD plan beneficiaries, respectively. In our simulations, we estimated that the number of beneficiaries affected by an OOP maximum could increase by 2% to 11%, depending on the magnitude of response, but changes in savings would be minimal. As currently drafted, proposed OOP maximums would reduce OOP spending for a small population of Part D beneficiaries, with savings concentrated among beneficiaries with the very highest costs who are taking specialty medications.

Pioneering a Value-Based Purchasing Initiative for Ambulatory Surgery Centers in TRICARE West.

In supporting the right care at the right place at the right time, all value-based purchasing initiatives (VBPIs) are intended to ensure the appropriateness of care, improve clinical outcomes, enhance the patient experience, and generate cost efficiencies for healthcare providers. A successful VBPI launch requires four preparative steps (Mandal et al., 2017): Understand the beneficiary population. Analyze healthcare economic data. Identify risk-ready external partners. Consider administrative costs and burdens. By applying this four-step strategy, described here in detail, Health Net Federal Services (HNFS) has proposed an alternative payment model (APM) for freestanding ambulatory surgery centers (ASCs). UNDERSTAND THE BENEFICIARY POPULATION The Defense Health Agency (DHA) oversees the TRICARE Health Plan, the civilian plan for U.S. Armed Forces military personnel, military retirees, and their families. Through a competitive bidding process, private health plans (i.e., managed care support contractors) are offered a regional administrative services–only contract, agree to provide comprehensive healthcare support, and reimburse downstream providers through a fee-for-service (FFS) schedule. The National Defense Authorization Act of 2017 mandates value-based reimbursement methods that transfer financial risk to healthcare providers and managed care support contractors. With this federal mandate and as the managed care support contractor for the 21 states in the western United States (TRICARE West), HNFS must become a healthcare “integrator” (Berwick et al., 2008). The Centers for Medicare & Medicaid Services (CMS) promotes multiple APMs. Consequently, the DHA tasks its managed care support contractors to model their VBPIs on CMS’s APMs. However, such mimicry may not suit TRICARE beneficiaries because targeting post-acute care spending, an approach taken frequently by providers in bundled payment arrangements with Medicare, may be less rewarding in working-age populations (Wynn-Jones et al., 2019). For example, in CMS’s Comprehensive Care for Joint Replacement (CJR) model, an inpatient admission for lower extremity joint replacement triggers a bundled care payment initiative (BCPI). In 2016, a TRICARE East demonstration project modeled after CJR showed that its costs for lower extremity joint replacement surgeries were 11% higher than those at comparison hospitals during a 2-year period (U.S. Government Accountability Office, 2020). Because TRICARE beneficiaries have reduced disease burdens and shorter lengths of postoperative stays as compared to Medicare beneficiaries, a CJR-like APM would not generate cost efficiencies. Instead, any CJR-like provisions for bonus payments could increase per capita costs. Indeed, episode volumes, population demographics, and issues with implementation also contributed to the shortcomings of this TRICARE East pilot (Department of Defense, 2020). The pilot outcome led HNFS to conclude that continued FFS reimbursement with network steerage to an ASC would be more cost-effective than any BCPI for hospital-based care in TRICARE West. Unfortunately, such network steerage with FFS reimbursement does not satisfy the National Defense Authorization Act’s VBPI requirements. As Figure 1 illustrates, both BCPIs and ASCs reduce variability, lower costs, improve quality, and increase patient satisfaction scores, albeit through different mechanisms. Adapting a BCPI to emerging healthcare delivery innovations that ASCs offer should yield an additive, if not synergistic, effect.Figure 1: Adding Bundled Payments to Ambulatory Surgery SettingsAnalyze Healthcare Economic Data The DHA permits HNFS to launch VBPI pilots in a specific medical service area in Colorado, which provides an opportunity to fully understand the needs of a well-circumscribed beneficiary population and its drivers of healthcare (Health Net Federal Services, 2021). A 3-year claims analysis in this medical service area identified spine surgery as one of the top five drivers of costs among inpatient surgical procedures, with high per capita variability for facility and professional charges. Nationally, spine surgeries also have increased threefold and have the largest rate of variation among all surgical procedures. A BCPI for spinal surgery thus should be quite appealing to any healthcare organization. HNFS’s claims analysis demonstrated that overutilization of hospital-based spine surgery is a major factor for high per capita expenditures in TRICARE West, with most cases, both inpatient and outpatient, performed in the acute care hospital setting. Of the spine surgery cases that triggered a Medical Severity Diagnosis Related Group because of inpatient admission, 91% of cervical and 55% of lumbar inpatient surgeries were discharged within CMS’s Two-Midnight Rule and could have been candidates for outpatient surgery. Moreover, no TRICARE West beneficiaries had major complications during the first 90 days after surgery. While spine surgery has been routinely performed in ASCs for working-age adults as well as Medicare-eligible patients for several years and is widely regarded as the standard of care, only 8.1% of all spine surgeries in the TRICARE West medical service area occurred in an ASC. Figure 1 summarizes how developing BCPI for specialized surgery in an ASC can reduce variability, lower cost, improve quality, and improve the patient experience. IDENTIFY RISK-READY EXTERNAL PARTNERS HNFS has a long-standing relationship with an ASC management company with experience in value-based contracting. Moreover, because uncomplicated surgeries remain the most cost-effective, this pilot includes a freestanding ASC that focuses on spine surgery, has received high-quality scores from accreditation groups, and works with surgeons who have achieved excellent outcomes on spine surgery performed in ASCs. Furthermore, the VBPI is structured so that the ASC, under the aegis of the management company, acts as a true convener by negotiating pricing with and subsequently reimbursing all individual providers and vendors. In this manner, the integrator contracts with a convener to transfer fiduciary risk away from the payer and to all providers reimbursed through the BCPI. When pricing BCPIs, most administrators identify the average cost of care and then decrease that amount by 1%–2%. Although that practice can reduce variability, it does not generate appreciable cost efficiencies. Here, historical disbursement amounts first are grouped into terciles, and the negotiated pricing for spine procedures is then aimed at the bottom tercile. So, the negotiated price for each surgery should be lower than that previously paid in two thirds of historical cases. Only high-value providers who willingly could take on such fiduciary risk can agree to such pricing. CONSIDER ADMINISTRATIVE COSTS AND BURDENS As noted earlier, HNFS is responsible for system integration. Because most of the DHA’s regulations are based on CMS statutes even if the population health requirements of TRICARE beneficiaries are dissimilar to Medicare beneficiaries, many of the spine surgery cases proposed for this pilot do not appear on the DHA’s ASC group payment rate list and cannot be reimbursed if performed in an ASC. Therefore, HNFS has had to present evidence-based medicine criteria in support of adding these procedures to that payment rate list. The next task in this pilot is to develop internal processes for this novel bundling of provider remuneration while remaining compliant with claims payment regulations. There are three administrative requirements for these processes. First, consistent with the Triple Aim (Berwick et al., 2008) and pending DHA approval of this proposal, HNFS—as the healthcare integrator—must implement a new beneficiary navigation system to coordinate preoperative care and postoperative recovery. Thus, a new beneficiary navigation system to coordinate perioperative care and postoperative recovery has been established. Second, the surgeon referral and authorization process must comply with the DHA mandate that TRICARE beneficiaries may choose providers in the civilian healthcare network. Third, HNFS has subcontracted the development of a claims-processing interface with the DHA to an information technology vendor. Working with the claims processor, HNFS has implemented a unique process to pay a single payment for claims negotiated in the BCPI fee schedule, validate beneficiary eligibility, and safeguard against duplicate claims submissions from downstream providers. HNFS factored the costs for these administrative requirements into this VPBI proposal to verify its financial sustainability. CONCLUSION By adhering to these four steps in formulating VBPIs, HNFS identified the most appropriate APM for a specific beneficiary population requiring a specific set of surgeries in the most appropriate venue. Ten years ago, CMS proposed a bonus payment arrangement for high-quality ASCs (Department of Health and Human Services, 2011) that remains in administrative stasis as the federal debate on quality measures continues (Medicare Payment Advisory Commission, 2021). Any bonus would still depend on FFS reimbursement; thus, such payments would remain based mostly on volume, not value. On the other hand, the BCPI for ASCs described here transfers significant fiduciary risk to the integrator and the convener-provider, as both work together to provide the best care. Even as this BCPI proposal navigates HNFS and DHA bureaucracies, the transfer of care to ASCs is widely accelerating. Hence, this description of a pioneering VBPI is preemptively reported here to spur discussions on an emerging topic of interest among healthcare leaders—and thereby promulgate much-needed advances in healthcare delivery. ACKNOWLEDGMENTS The authors thank the HNFS legal department for its review of the manuscript and Dr. Joyce R. Grissom, CMO of HNFS, for her support.

Generics and Biosimilars: Barriers and Opportunities

The affordability of prescription drugs continues to occupy a significant position in health policy debate, with most Americans believing that lowering their cost is a top health care priority.1Kirzinger A. DiJulio B. Sugarman E. Brodie M. Kaiser health tracking poll – late April 2017: the future of the ACA and health care & the budget. Kaiser Family Foundation website.http://www.kff.org/health-reform/report/kaiser-health-tracking-poll-late-april-2017-the-future-of-the-aca-and-health-care-the-budget/Google Scholar,2Kirzinger A. Wu B. Brodie M. Kaiser health tracking poll: September 2016. Kaiser Family Foundation website.http://www.kff.org/health-costs/report/kaiser-health-tracking-poll-september-2016/Google Scholar Prescription drugs account for 10% of overall health spending in the United States, with prescription sales in 2016 exceeding $448 billion.3Martin A.B. Hartman M. Washington B. Catlin A. National Health Expenditure Accounts TeamNational health spending: faster growth in 2015 as coverage expands and utilization increases.Health Aff (Millwood). 2017; 36: 166-176Crossref PubMed Scopus (89) Google Scholar The annual increase in pharmaceutical costs consistently outpaces inflation, and in this context, much attention has been devoted to various strategies to rein in pharmaceutical expenditures. New prescription drugs are relatively immune to free market competition on price because prolonged patent protections offered to them pose a significant barrier to the entry of competitors. Although this monopoly protection rewards innovation, when unduly prolonged it has a detrimental effect by allowing high unchecked prices to continue. One of the ways to bring prescription drugs into alignment with conventional free market principles is to encourage the entry of generics and biosimilars than can compete with the original innovator compound on price, once a reasonable period of protected status has elapsed. In this article, we explore the history and value of generics and biosimilars, barriers to full utilization, and the potential solutions that would help lower the cost of prescription drugs. The US patent system promotes the research and development of new pharmaceuticals by allowing patent holders (drug manufacturers) a period of market exclusivity during which they will ideally recoup their investment and enjoy profits that will fund future research.4Kewanee Oil Co v Bicron Corp, 416 US 470. 1974: 480Google Scholar,5US Const, art I, §8, cl 8.Google Scholar Generic drugs are the therapeutic equivalents of their brand-name counterparts. They are identical with regard to active ingredients, indication and use, dosage, route of administration, safety, and quality. The Drug Price Competition and Patent Term Restoration Act (commonly referred to as Hatch-Waxman) was signed into law in 1984 and substantially expanded the generic pharmaceutical industry.6Drug Price Competition and Patent Term Restoration Act, Pub L No. 98-417, §101, 98 Stat 1585. 1984Google Scholar Under Hatch-Waxman, a generic drug maker may use an abbreviated new drug application (ANDA) instead of the more complicated new drug application to gain US Food and Drug Administration (FDA) approval. With an ANDA, the generic drug maker must verify both the bioavailability and bioequivalence of their product in comparison to the brand-name agent but is not required to reproduce the stringent and expensive safety and clinical efficacy studies that yielded the original product approval. Biosimilars are nonoriginal biological medicines with an active ingredient that mirrors the reference biological and have no clinically meaningful difference in safety, potency, or efficacy. The Biologics Price Competition and Innovation Act of 2009, a part of the Affordable Care Act, paved the pathway for FDA approval of biosimilars.7The Patient Protection and Affordable Care Act, Pub L No. 111-148, Title VII, 124 Stat 199. 2010: 804-821Google Scholar Similar to generics, biosimilars are not required to reproduce the original clinical data and can instead file an abbreviated biologics license application. The abbreviated approval process and lower up-front costs of biosimilars entice the entry of additional drug manufacturers to the market after the loss of patent protection and ultimately should lower prices for consumers. Generic medicines have become an integral part of the pharmaceutical system, representing 9 out of every 10 US prescriptions,8IQVIA Institute for Human Data ScienceMedicine spending and affordability in the United States: understanding patients’ costs for medicines.https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/medicine-spending-and-affordability-in-the-united-states.pdf?_=1614710909057Google Scholar yet they only account for 20% of pharmaceutical spending. As generics are approved, they sell at lower prices than the brand-name drug, and the price of the generic typically declines as more generic manufacturers for the same drug enter the market. An FDA analysis of prescription drug invoice-based wholesale prices revealed that for drugs with initial generic competition entering the market between 2015 and 2017, invoice prices dropped on average by 31% with 1 generic competitor, 44% with 2 generic competitors, and 73% with 4 generic competitors.8IQVIA Institute for Human Data ScienceMedicine spending and affordability in the United States: understanding patients’ costs for medicines.https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/medicine-spending-and-affordability-in-the-united-states.pdf?_=1614710909057Google Scholar Another analysis found that within a year of the loss of brand exclusivity, generic drugs cost less than half as much as the brand-name drug, and within 3 years, generics are a third of the brand-name drug’s price.9Conrad R. Lutter R. Generic competition and drug prices: new evidence linking greater generic competition and lower generic drug prices. US Food and Drug Administration website.https://www.fda.gov/media/133509/downloadGoogle Scholar In 2019, generics saved American patients $313 billion, and they have resulted in almost $2.2 trillion in savings over the past decade.102020 Generic drug & biosimilars access & savings in the U.S. report. Association for Accessible Medicines website.https://accessiblemeds.org/sites/default/files/2020-09/AAM-2020-Generics-Biosimilars-Access-Savings-Report-US-Web.pdfDate accessed: March 17, 2021Google Scholar Biologicals represent a growing segment of the pharmaceutical market in the United States, representing $211 billion or 43% of invoice-level spending in 2019.11IQVIA Institute for Human Data ScienceBiosimilars in the United States 2020-2024: competition, savings, and sustainability.https://www.iqvia.com/insights/the-iqvia-institute/reports/biosimilars-in-the-united-states-2020-2024Date accessed: March 16, 2021Google Scholar As of June 2020, there have been 33 biosimilar approvals across 13 molecules; however, biosimilars for only 11 molecules are currently marketed. These 11 molecules account for approximately $40 billion or 19% of the overall biological market that is now open to biosimilar competition. Biosimilars that are FDA-approved but have not been launched (2 molecules) represent an additional 17% of biological spending that will be exposed to biosimilar competition when they are launched. Currently, $67 billion or 32% of the biological market has biosimilars in development. The percentage of the market share penetration following biosimilar launch has been variable. For example, as of June 2020, the infliximab biosimilar had the lowest uptake at 6% since its launch in 2016, whereas bevacizumab had the highest biosimilar uptake with 2 competitors achieving 42% of the market within 1 year. The price decline between original and biosimilar average sales price has been variable, with savings ranging from 8.1% to 48.3%. From 2015, when the first biosimilar was launched, through the end of 2018, biosimilars saved the US health system $882 million.102020 Generic drug & biosimilars access & savings in the U.S. report. Association for Accessible Medicines website.https://accessiblemeds.org/sites/default/files/2020-09/AAM-2020-Generics-Biosimilars-Access-Savings-Report-US-Web.pdfDate accessed: March 17, 2021Google Scholar Next we explore the practices of 2 key stakeholders, payers and manufacturers, that may undermine the role of generics and biosimilars in achieving prescription drug savings and some potential solutions. Insurance companies negotiate prices with health care providers and drug companies, provide partial coverage or reimbursement for medical expenses, and collect premiums from plan members to fund these activities. Many insurers are private companies and seek to make a profit by having policy premiums exceed the costs of providing benefits. Tier switching and delays in generic/biosimilar switching are barriers to optimal market savings. Medicare beneficiaries have access to prescription drug benefits when enrolled in Part D. This insurance can be purchased either as a stand-alone plan or in conjunction with medical benefits through a Medicare Advantage plan. Prescription drug coverage and cost sharing were categorized through the placement of pharmaceuticals on 4 to 5 tiers, with lower cost sharing burden for drugs on lower tiers (tiers 1 and 2) and more cost sharing for those on higher tiers (tiers 3 through 5). Most recently, formularies have used 2 generic tiers (preferred and nonpreferred), 2 brand tiers (preferred and nonpreferred), and a specialty tier.12A study for the Medicare Payment Advisory Committee (MedPAC)Medicare Part D Formularies, 2006-2010: A Chartbook.2010http://67.59.137.244/documents/Oct10_PartDFormulariesChartBook_CONTRACTOR_RS.pdfDate accessed: March 17, 2021Google Scholar,13Hoadley J. Cubanski J. Neuman T. Medicare Part D in 2016 and trends over time. Kaiser Family Foundation website.https://www.kff.org/medicare/report/medicare-part-d-in-2016-and-trends-over-time/Google Scholar Prior to 2017, the Centers for Medicare and Medicaid Services (CMS) allowed plans flexibility in creation of their formularies as long as they met certain requirements: (1) tier labels (brand or generic) must correspond to the majority of drugs placed within the tier and (2) cost sharing for each tier could not exceed certain maximums. However, in 2017 the CMS issued a rule change that allowed plans the option of using either a nonpreferred drug or nonpreferred brand tier and flexibility in the proportion of brand-name drugs and generics that could go into this tier.14Centers for Medicare and Medicaid ServicesAdvance notice of methodological changes for calendar year (CY) 2017 for Medicare Advantage (MA) capitation rates, Part C and D payment policies and 2017 call letter.https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2017.pdfGoogle Scholar Adoption was swift, with 99% of stand-alone prescription drug plans and 89% of Medicare Advantage plans using the nonpreferred drug tier by 2019.15Brantley K. Donthi S. Sloan C. Young J. Effect of potential policy change to Part D generic tiering on patient cost sharing and Part D plan costs. Avalere Health website.https://avalere.com/insights/effect-of-potential-policy-change-to-part-d-generic-tiering-on-patient-cost-sharing-and-part-d-plan-costsGoogle Scholar In 2016 (prior to the rule change), plans placed generics in generic tiers 65% of the time (14% in tier 1 and 51% in tier 2). Generic distribution among brand-name drug tiers was 33% (15% in tier 3 and 18% in tier 4), and the remaining went into the specialty tier. In 2019, 53% of generics were in generic tiers (14% in tier 1 and 39% in tier 2) and generic placement in preferred brand, and the newly renamed nonpreferred drug tiers grew to 18% and 25%, respectively.16Alliance for Affordable MedicinesMedicare Part D generic drug tiering request for comment: implications for patient out-of-pocket spending and Part D plan costs.https://accessiblemeds.org/resources/reports/medicare-part-d-generic-tieringGoogle Scholar The movement of generics into higher tiers results in more cost sharing for patients, represented as higher copays or a higher percentage of the drug cost (coinsurance). Analysis by Avalere Health revealed that from 2016 to 2019, if generic drugs had only been placed on generic tiers, patient cost sharing would have been $15.7 billion lower.15Brantley K. Donthi S. Sloan C. Young J. Effect of potential policy change to Part D generic tiering on patient cost sharing and Part D plan costs. Avalere Health website.https://avalere.com/insights/effect-of-potential-policy-change-to-part-d-generic-tiering-on-patient-cost-sharing-and-part-d-plan-costsGoogle Scholar The implications of switching generics to higher tiers are real, as prior studies have documented that lower cost sharing results in increased medication initiation and adherence.17Bao Y. Ryan A.M. Shao H. Pincus H.A. Donohue J.M. Generic initiation and antidepressant therapy adherence under Medicare Part D.Am J Manag Care. 2013; 19: 989-998PubMed Google Scholar,18Hoadley J.F. Merrell K. Hargrave E. Summer L. In Medicare Part D plans, low or zero copays and other features to encourage the use of generic statins work, could save billions.Health Aff (Millwood). 2012; 31: 2266-2275Crossref PubMed Scopus (22) Google Scholar In response to concerns voiced about the evolution of generic allocation in tiers, the CMS has considered restricting generics being placed in brand tiers.19Centers for Medicare and Medicaid Services2020 Medicare Advantage and Part D advance notice Part II and 2020 draft call letter.https://www.cms.gov/newsroom/fact-sheets/2020-medicare-advantage-and-part-d-advance-notice-part-ii-and-draft-call-letter/Google Scholar Generics should be placed only in tiers designated for generics and not in tiers for branded or specialty drugs. Generic specialty drugs and biosimilars should have their own tier as a means of incentivizing beneficiaries to use them. In an effort to maintain stable insurance premiums, a plan may place generics in higher tiers, thus decreasing plan liability for drug costs by increasing patient cost sharing. This annual balance between preserving consistent access to benefits while keeping competitive premiums in relationship to other insurance plans is known as actuarial equivalence. Of note, the same analysis by Avalere Health revealed that plan liabilities for prescription drugs would have been 4.5% higher in 2019 if generics were included only in generic tiers.15Brantley K. Donthi S. Sloan C. Young J. Effect of potential policy change to Part D generic tiering on patient cost sharing and Part D plan costs. Avalere Health website.https://avalere.com/insights/effect-of-potential-policy-change-to-part-d-generic-tiering-on-patient-cost-sharing-and-part-d-plan-costsGoogle Scholar The magnitude of the downstream effects of higher out-of-pocket expenses due to tier switching, including prescription abandonment and nonadherence, are unknown. However, because cost sharing impacts medication compliance, we would recommend against the use of tier switching to preserve actuarial equivalence. Understanding that tier switching helps mitigate premium increases, other cost control strategies would be necessary to keep premiums stable if the aforementioned changes were implemented. As generics become available for specific drugs, the assumption is that plans would quickly include them in their formularies and substitute them for brand-name drugs to promote access to a lower cost alternative for their beneficiaries. Indeed, some plans incentivize their members to switch to generics by differing the out-of-pocket cost to consumer if they choose generic vs brand-name drugs. However, this substitution does not always happen. A 2018 study by the US Department of Health and Human Services found that Medicare Part D spent $9 billion on brand-name drugs for which generics were available.20US Department of Health and Human ServicesOffice of the Assistant Secretary for Planning and Evaluation. Savings available under full generic substitution of multiple source brand drugs in Medicare Part D.https://aspe.hhs.gov/system/files/pdf/259326/DP-Multisource-Brands-in-Part-D.pdfGoogle Scholar It is estimated that $3 billion could have been saved if those generics had been substituted. A 2020 study by Avalere Health revealed that in 2017, generic substitution rates among non–low-income subsidy Medicare Part D plans was 75% or less in 48% of plans.21Fix A. Sloan C. Young J. Donthi S. Meltzer R. Variation in generic substitution rates among Part D plans. Avalere Health website.https://avalere.com/insights/avalere-analysis-finds-variation-in-generic-substitution-rates-among-part-d-plansGoogle Scholar Because Medicare Part D beneficiaries are unevenly distributed across plans and substitution rates vary by plan operator, the weighted average of generic substitution in 2017 was 85%. This proportion contrasts with the average generic substitution rate of 98% in commercial plans.22US Office of Personnel Management, Healthcare and InsuranceFEHB program carrier letter.www.opm.gov/healthcare-insurance/healthcare/carriers/2019/2019-01.pdfGoogle Scholar,23Utilization Review Accreditation CommissionURAC pharmacy benefit management performance measurement: aggregate summary performance report.https://www.urac.org/wp-content/uploads/2020/12/URAC_PBM_Aggregate-Summary-Report_2018_FINAL_WebVersion_20190123.pdfGoogle Scholar Generic substitution rates also vary by the price of the brand-name drug. Avalere Health found that 91% of plans will substitute a generic for a brand-name drug at least 75% of the time when the brand-name drug costs less than $100. However, only 22% of plans do this when the price of the brand-name drug exceeds $10,000.21Fix A. Sloan C. Young J. Donthi S. Meltzer R. Variation in generic substitution rates among Part D plans. Avalere Health website.https://avalere.com/insights/avalere-analysis-finds-variation-in-generic-substitution-rates-among-part-d-plansGoogle Scholar Delays in generic substitution are especially pronounced when the first generic for a brand-name drug becomes available. Research by the Association for Accessible Medications revealed that in up to half of Part D plans, it takes 3 years before a first generic becomes available in the formulary.24Association for Accessible MedicationsAccess denied: why new generics are not reaching America’s seniors.https://accessiblemeds.org/sites/default/files/2019-09/AAM-White-Paper-Access-Denied-First-Generics-web_0.pdfGoogle Scholar These deficiencies in generic substitution can in part be attributed to the Medicare Coverage Gap Discount Program and how brand-name drug rebates work in the catastrophic phase of Part D coverage. Medicare Part D coverage and the cost sharing between patients, manufacturers, plans, and Medicare vary depending on which phase patients are in. The dollar thresholds for these limits change annually. After a patient meets their deductible, they are in the initial coverage phase in which beneficiaries pay 25% and the plan pays 75%. In the coverage gap phase, cost sharing differs between brand-name and generic drugs. For brand-name drugs, patients pay 25%, plans pay 5%, and the drug manufacturer must provide a 70% discount. The manufacturer discount is counted toward the patient’s catastrophic out-of-pocket spending threshold. For generics, patients pay 25% and plans pay 75%. Once in the catastrophic coverage phase, patients pay 5%, plans pay 15%, and Medicare pays 80%25Kaiser Family FoundationAn overview of the Medicare Part D prescription drug benefit.https://www.kff.org/medicare/fact-sheet/an-overview-of-the-medicare-part-d-prescription-drug-benefit/Google Scholar (Figure 1). Because of the difference in plan liability for brand-name vs generic drugs in the coverage cap (5% vs 75%), plans pay more for generics in the coverage gap even though the price of the generic is cheaper. Dusetzina et al26Dusetzina S.B. Jazowski S. Cole A. Nguyen J. Sending the wrong price signal: why do some brand-name drugs cost Medicare beneficiaries less than generics?.Health Aff (Millwood). 2019; 38: 1188-1194Crossref PubMed Scopus (15) Google Scholar found that patients may pay higher prices for generics vs brand-name drugs during the coverage gap. The preference for brand-name drugs during the coverage gap may exert negative market forces on generic competition, a necessity to bring down prices. When the more expensive brand-name drug is preferred, plan liability may be lower but patients move quickly into catastrophic coverage, in which Medicare takes on the bulk of financial liability and manufacturer rebate sharing between the plan and Medicare significantly favors the plan. These differences in rebate sharing may allow a plan to make money on a brand-name drug and incentivizes plan preference for the brand-name drug, even though the out-of-pocket cost for patients and the total cost to Medicare is higher. This is one example of the “rebate trap.” Figure 2 (part A) illustrates a simplistic example of a rebate trap for commercial plans. On entry of a biosimilar or generic, some brand-name drug manufacturers have threatened to remove rebates they provide to payors unless the competitor is effectively excluded from the formulary. Because prescribing patterns may be slow to change and adoption of a generic or biosimilar may take time, the adoption of the less expensive alternative and potential loss of the rebate may result in a higher cost to the plan. An insurer is thus incentivized to keep the lower-priced competitor off its formulary. Adapted from the Medicare Payment Advisory Commission 2017 Report to Congress, Figure 2 (part B) illustrates the more complex interplay between the sharing of drug rebate and Medicare coinsurance in determining plan liability.27Medicare Payment Advisory CommissionReport to Congress: Medicare payment policy.http://medpac.gov/docs/default-source/reports/mar17_entirereport.pdfGoogle Scholar At the coinsurance rate of 80%, plans are incentivized to keep the more expensive agent in formulary and beneficiaries carry a larger financial burden. A sample adjustment of the coinsurance rate to 20% realigns plan liability with the overall cost of the therapy. Require the adoption of generics and biosimilars into formularies on FDA approval. Proposals by the Trump administration to not allow manufacturer rebates to apply toward total beneficiary spending in the Coverage Gap Discount Program would discourage the preference for brand-name drugs, slow the progression into catastrophic coverage, and thus reduce Medicare liabilities.28Department of Health and Human ServicesPutting America’s health first: FY 2020 President’s budget for HHS.https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdfDate accessed: March 17, 2021Google Scholar However, this step would also substantially increase patient out-of-pocket spending because patients are now in the coverage gap longer. Restructuring plan and Medicare liability in the catastrophic coverage phase such that plans have a greater degree of cost sharing would eliminate financial incentives for plans to quickly move patients into catastrophic coverage. Indeed, these were the recommendations by the Medicare Payment Advisory Commission in 2016 and were reaffirmed in 2020.29Medicare Payment Advisory CommissionImproving Medicare Part D. In: Report to the Congress: Medicare and the Health Care Delivery System. Chapter 6.http://www.medpac.gov/docs/default-source/reports/chapter-6-improving-medicare-part-d-june-2016-report-.pdfGoogle Scholar,30Medicare Payment Advisory CommissionRealigning incentives in Medicare Part D. In: Report to the Congress: Medicare and the Health Care Delivery System. Chapter 5. Published June 2020.http://www.medpac.gov/docs/default-source/reports/jun20_ch5_reporttocongress_sec.pdf?sfvrsn=0Date accessed: March 17, 2021Google Scholar Lastly, changing the calculation of rebate sharing and coinsurance rate between plan sponsor and Medicare would challenge incentives for using high–list price, high-rebate drugs when generics or biosimilars are available. Because it is unknown the degree to which rebates are used by plan sponsors to lower premiums vs increasing profit, such a change may result in higher premiums for beneficiaries. Drug manufacturers are private companies that either bring new index products to market or produce bioequivalent versions of established drugs. The board of directors and CEO of drug manufacturers have a fiduciary responsibility to maximize profits for shareholders. Executive compensation is dictated by the board of directors and is often tied directly to company profits, share price performance, and effective corporate governance. Pharmaceutical pricing, be it brand-name or generic, reflects these corporate interests. When a generic drug manufacturer files an ANDA, it includes a paragraph IV certification that states that the generic drug manufacturer believes the patent on the brand-name drug is invalid, not infringed, or unenforceable. Under Hatch-Waxman, the filing of a paragraph IV certification is treated as an act of patent infringement and requires that the generic drug maker provide notice to the owner of the patented drug the legal basis for its patent challenge. The brand-name drug owner then has the option of suing the generic manufacturer sponsor with 45 days. If the brand-name drug owner brings a suit within this 45-day period, then the FDA can’t approve the ANDA for 30 months or until a court determines that the patents at issue are invalid or not infringed by the generic manufacturer.6Drug Price Competition and Patent Term Restoration Act, Pub L No. 98-417, §101, 98 Stat 1585. 1984Google Scholar To incentivize initial entrants into the generic market for a compound, the Hatch-Waxman Act grants a 180-day period of exclusivity to the first generic company that successfully challenges the patent of a brand-name drug. This step provides a means by which generic companies can be the sole provider of a generic drug, charge a price premium, and recoup the financial burden required to contest patents. After the 180 days lapses, other generics filers are able to enter the market. Although the 180-day exclusivity is intended as an incentive, some manufacturers have undermined this process through generic “parking.” Under Hatch-Waxman, the 180-day exclusivity period begins once the generic manufacturer is granted final marketing authorization for their generic. This means the first applicant whose ANDA is otherwise approvable could deliberately delay seeking final approval of their drug and prevent the FDA from triggering the 180-day exclusivity. Other interested generic manufacturers would have their ANDAs blocked from moving forward because of a first applicant’s continuing eligibility for the exclusivity period. Why would a generic drug manufacturer delay entering into their exclusivity period? For some manufacturers, the promise of exclusivity and the control over when to exercise it can have strategic value. Former FDA commissioner Scott Gottlieb likens this to “a call option that the generic sponsor can hold onto.”31Gottlieb S. The HELP Committee’s fix for 180-day generic marketing exclusivity: does it solve the problem? Health Affairs blog.https://doi.org/10.1377/hblog20190529.223594Google Scholar Generic manufacturers may also reach business agreements with the brand-name drug manufacturer to not launch their generic competitor and split some of the profits from the brand-name drug. This ploy effectively extends the patent of the brand-name drug. Although these agreements are decreasing in frequency following the Supreme Court’s Fed Trade Comm’n vs Actavis, Inc decision, they still occur.32Fed Trade Comm’n vs Actavis, Inc, 570 US 136. 2013: 143-144Google Scholar In the past year, several pieces of legislation have been introduced to address this issue.33BLOCKING Act of 2019. HR 938, 116th Cong, 1st Sess. 2019Google Scholar, 34Expanding Access to Low-Cost Generics Act of 2019. S 3092, 116th Cong, 1st Sess. 2019Google Scholar, 35Lower Health Care Costs Act. S 1895, 116th Cong, 1st Sess. 2019Google Scholar These proposals offer differing solutions, including loss of exclusivity if the generic manufacturer does not move through the approval process quickly enough, awarding exclusivity to the first manufacturer to successfully challenge the brand-name patents regardless of which manufacturer filed their ANDA first, and triggering the exclusivity period when a subsequent filer receives tentative approval if the original applicant hasn’t received final approval within 30 months of submission. Legislative actions to address generic parking must address the abuse while not cheapening the exclusivity period. The latter 2 solutions are more likely to promote competition among generic manufacturers and reward those actively trying to bring a generic to market. Another consideration is extending the exclusivity period. Generic manufacturers may be “parking” their drugs because of a lack of perceived value of the exclusivity period in contrast to other financial incentives. By extending the duration of the exclusivity period and potential financial gain, this step may deter generic manufacturers from accepting alternative agreements that delay access. Patents on pharmaceuticals include far more than just the active ingredient (sometimes called “primary patents”). These “secondary patents” may include drug formulations (forms or dosage), methods of use, methods of manufacturing including manufacturing technologies, unique administration technologies, and other chemicals related to the active ingredient. In addition, if a person invents an improvement on any of these technologies, they have the option of fili

Medicare Payment from MACRO and MICRO Perspectives

Payment & Practice Management| August 2021 Medicare Payment from MACRO and MICRO Perspectives Sharon K. Merrick, MS, CCS-P Sharon K. Merrick, MS, CCS-P Search for other works by this author on: This Site PubMed Google Scholar ASA Monitor August 2021, Vol. 85, 39. https://doi.org/10.1097/01.ASM.0000768852.72231.06 Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Share Icon Share Twitter LinkedIn Cite Icon Cite Get Permissions Search Site Citation Sharon K. Merrick; Medicare Payment from MACRO and MICRO Perspectives. ASA Monitor 2021; 85:39 doi: https://doi.org/10.1097/01.ASM.0000768852.72231.06 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu nav search search input Search input auto suggest search filter All ContentAll PublicationsASA Monitor Search Advanced Search Topics: medicare, microbiology procedures When looking at Medicare payment rates, one needs to consider two perspectives. The first is the conversion factor (CF) or the dollar-per-unit rate. This might be considered the MACRO point of view. The second is the base units or relative value units (RVUs) assigned at the individual CPT® code level – the MICRO point of view. This month's column describes how each of these contribute to Medicare payments and provides suggestions on how you can help at both levels. One challenge for all of medicine – and anesthesia in particular – is that Medicare payment rates do not even keep pace with inflation. This fact can be clearly demonstrated by a review of information found in reports that the Medicare Payment Advisory Commission (MedPAC) submits to Congress. MedPAC issues reports to Congress in March and June of each year. The two reports serve as the main means by which... You do not currently have access to this content.

Estimating Rebates and Other Discounts Received by Medicare Part D.

Spending in Medicare Part D continues to increase. Yet, studies of Medicare Part D are plagued by a common limitation: none can fully account for confidential rebates and other discounts that drug manufacturers and pharmacies pay to Medicare Part D plans. To review existing methods and to propose an approach for estimating rebates and other discounts received by Medicare Part D. Publicly available data from the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, the Centers for Medicare & Medicaid Services, the Medicare Payment Advisory Commission, the Congressional Budget Office, the Government Accountability Office, and the Office of Inspector General. Existing methods for estimating rebates and other discounts in Medicare Part D have several limitations. This analysis used an approach that aims to improve on those methods. Based on this approach, estimated discounts on brand-name drugs increased in Medicare Part D from 25.4% of gross brand-name spending in 2014 to 37.3% in 2018. There was substantial variation between classes, with estimated 2016 discounts surpassing 50% for some drugs (eg, ophthalmologic and gastrointestinal tract agents) while remaining below 10% for others (eg, antineoplastic and immunologic agents). Between 2014 and 2018, estimated net Medicare Part D spending on prescription drugs increased by 21% from $99 billion to $119 billion. With increasing enrollment, estimated annual net spending per beneficiary remained stable, increasing by just 3% from $2622 to $2694, which was below the 6% rate of inflation during the same period. Models that fail to properly account for increasing rebates and other discounts will overestimate Medicare Part D expenditures. Rigorous and transparent methods for estimating discounts are critical for understanding patterns in spending and developing new cost-containment strategies.

Appropriateness of Long-Term Acute Care Hospital Transfer: A Multicenter Study of Medicare ACO Beneficiaries

ObjectivesThere is wide variation in long-term acute care hospital (LTACH) use nationwide, the most intensive and expensive post-acute care setting, although appropriateness of use is uncertain. Therefore, we examined the appropriateness and reasons for transfer in a high-use region, and how Medicare criteria for LTACH payment identifies appropriate transfers. DesignMulticenter retrospective observational cohort. Setting and ParticipantsConsecutive hospitalized Medicare beneficiaries transferred to an LTACH from 2017 to 2018 from an accountable care organization in Texas. MethodsThe primary outcome was clinical appropriateness of transfer ascertained by 2 physician reviewers. We abstracted patients’ characteristics and primary reasons for transfer. We examined the positive predictive value (PPV) of meeting Medicare criteria for full LTACH payment [preceding intensive care unit (ICU) stay ≥3 days or prolonged mechanical ventilation] for identifying appropriate transfers, and how this differed if Medicare adopted an 8-day minimum ICU stay criterion recommended by the Medicare Payment Advisory Commission (MedPAC). ResultsOf 105 LTACH transfers, 33 (31.4%) were clinically appropriate. The most common reason among appropriate transfers was respiratory care (58%), but 42% had other indications. Inappropriate transfers most commonly were for wound care (28%), intravenous medication infusions (28%), or patient (17%) and physician preference (26%). The PPV for meeting Medicare LTACH payment criteria was 55%. The PPV improved to 77% if Medicare adopted the 8-day minimum ICU stay criterion, with only a modest absolute increase in appropriate transfers not meeting the more stringent criteria (12% to 17%). Conclusions and ImplicationsTwo-thirds of LTACH transfers in a high-LTACH-use region are clinically inappropriate, and are most commonly transferred for wound care, intravenous infusions, or patient and physician preference. Medicare payment criteria modestly distinguished between appropriate and inappropriate transfers. Adoption of MedPAC's recommended 8-day minimum ICU stay criterion could safely reduce inappropriate transfers, although generalizability to low LTACH-use regions is uncertain.

Distance From Freestanding Emergency Departments to Nearby Emergency Care

The number of freestanding emergency departments (EDs) has increased rapidly in the United States, and there is concern that such entities are located near existing EDs rather than in areas lacking emergency care. In 2018, the Medicare Payment Advisory Commission recommended a reduction in Medicare reimbursement rates to freestanding EDs located within 6 miles of the nearest hospital-based ED. We aim to assess the potential effect of this proposal. Using the 2016 National Emergency Department Inventory-USA database, we identified the locations and visit volumes of all US freestanding EDs. Using QGIS, we mapped the distances from all freestanding EDs to both the nearest hospital-based ED and to the nearest ED (either hospital-based or freestanding ED). We collected location information for all 5,375 EDs open in 2016. Of these EDs, 609 (11%) were freestanding. Few freestanding EDs (1.4%) were located in rural areas and only 11% were located in areas with a median household income of less than $43,000. Overall, 460 freestanding EDs (76%) were within 6 miles of the nearest hospital-based ED, and these had 5.3 million total patient visits, whereas those greater than 6 miles away had 2.6 million visits. We found that most freestanding EDs (76%) are within 6 miles of the nearest hospital-based ED, and most visits (67%) to freestanding EDs are to those within that proximity, indicating that many freestanding EDs would be affected by this Medicare Payment Advisory Commission proposal, if implemented.

Value-Based Care: An Executive Briefing

In today’s challenging health care environment, the paradigm shift from volume to value requires nurse leaders to develop enhanced skills to transform health care in 2020. Key drivers for success include: igniting innovation and change; embracing data and analytics; and launching new care delivery models that soar beyond organizational boundaries. Value-based care is here to stay, and nursing must be the catalyst for change. Equipped with new skills and the knowledge of CMS Pay for Performance programs, nurse leaders will design the future health care landscape. In today’s challenging health care environment, the paradigm shift from volume to value requires nurse leaders to develop enhanced skills to transform health care in 2020. Key drivers for success include: igniting innovation and change; embracing data and analytics; and launching new care delivery models that soar beyond organizational boundaries. Value-based care is here to stay, and nursing must be the catalyst for change. Equipped with new skills and the knowledge of CMS Pay for Performance programs, nurse leaders will design the future health care landscape. Key Points•As the value movement pushes forward; nursing has the unique opportunity to align with the tenets of healthcare reform and to lead this clinical transformation.•Nurses, from leadership to the frontline staff, must embrace innovations in care that support the Triple Aim, and must cultivate a vision that spans interdepartmental boundaries, extending beyond the bricks and mortar of acute care.•The journey to value has been set; nursing must take a seat at the design table as the blueprint for the future of healthcare is drawn. •As the value movement pushes forward; nursing has the unique opportunity to align with the tenets of healthcare reform and to lead this clinical transformation.•Nurses, from leadership to the frontline staff, must embrace innovations in care that support the Triple Aim, and must cultivate a vision that spans interdepartmental boundaries, extending beyond the bricks and mortar of acute care.•The journey to value has been set; nursing must take a seat at the design table as the blueprint for the future of healthcare is drawn. As part of the spotlight on value-based care (VBC) and as mandated by the Affordable Care Act (ACA) of 2010, the Centers for Medicare & Medicaid Services (CMS) introduced 3 programs that reimburse acute care hospitals based on value. These 3 pay for performance programs or value-based care programs include Hospital Value-Based Purchasing (HVBP), Hospital Readmissions Reduction Program (HRRP), and Hospital-Acquired Conditions Reduction Program (HACRP).1Brooks J.A. Reducing hospital readmissions.Am J Nurs. 2015; 115: 62-65Crossref PubMed Scopus (1) Google Scholar,2Brooks J.A. The hospital-acquired condition reduction program.Am J Nurs. 2017; 117: 63-66Crossref PubMed Scopus (1) Google Scholar These programs focus on the value or the quality of services rendered rather than the volume of services provided. Value-based care was developed in response to the unsustainable escalation in health care costs, poor quality outcomes, and shifting demographics. VBC is the underlying strategy in Healthcare Reform, also known as the Affordable Care Act (ACA) of 2010.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar The ACA was designed to create a framework that embraces the Institute for Healthcare Improvement’s (IHI) Triple Aim of enhanced patient experience and outcomes, improved population health, and reduced health care expenditures.4Institute for Healthcare ImprovementIHI triple aim initiative.http://www.ihi.org/Engage/Initiatives/TripleAim/Pages/default.aspxDate: 2015Date accessed: February 26, 2020Google Scholar This fundamental reform legislation created a paradigm shift from a volume focus, where providers were rewarded for the number of tests or procedures performed to a value-based structure that incentivizes providers to deliver quality at a reduced cost.5Aroh D. Colella J. Douglas C. Eddings A. An example of translating value-based purchasing into value-based care.J Urol Nurs. 2015; 35: 61-74Crossref Google Scholar This paradigm shift from volume to value is a call to action for nursing. Salmond and Echevarria3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar highlight the importance of nursing as a critical player in this health care transformation. Nurses are prepared to move into roles to improve health and influence clinical outcomes. The Institute of Medicine6The Institute of MedicineThe Future of Nursing: Leading Change, Advancing Health. Academies Press, Washington, DC2010Google Scholar report on The Future of Nursing also emphasizes the significant impact and contribution of nursing in this paradigm shift, known as health care reform. Nurses at all levels must understand the vital transformation required for success in health care reform and must be committed to delivering safe, cost-effective care. This active engagement of nurses and nurse leaders is crucial to the success of health care reform, not only to affect reimbursement dollars but to transform care and affect patient care outcomes across the continuum.7Brooks J.A. Understanding hospital value-based purchasing.Am J Nurs. 2016; 116: 63-66Crossref PubMed Scopus (2) Google Scholar As leaders plan for this transformation, implementation of new care delivery models that focus on care coordination beyond the 4 walls of an acute care setting will drive success. This novel approach will present a challenge for most organizations and will require a new skill set for nurse leaders.8Jacquin L. A strategic approach to healthcare transformation.HFM. 2014; 68: 74-79Google Scholar This new skill set will include understanding the principles of population health, developing financial acumen, and acquiring data analytic skills.9Randazzo G. Challenges and opportunities facing nurse executives in the era of value-based care.Nurse Leader. 2018; 16: 96-100Abstract Full Text Full Text PDF Scopus (2) Google Scholar The purpose of this manuscript is to present a summary of the VBC programs for acute care hospitals, highlighting key points that are vital to the nurse leader's success as a transformational leader. This article describes the current VBC landscape with a glimpse into the future changes in the reimbursement models. Specific implications for nursing will also be explored to equip the nurse leader with the skills to thrive in this new era of value-based care. In response to the ACA, the CMS introduced 3 pay for performance or VBC programs that reimburse acute care hospitals based on value, not volume. These value-based care programs include HVBP, HRRP, and HACRP.1Brooks J.A. Reducing hospital readmissions.Am J Nurs. 2015; 115: 62-65Crossref PubMed Scopus (1) Google Scholar Value, as defined by the CMS, is a ratio of quality and outcomes divided by cost.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar This value is measured differently in each CMS program. HVBP was created to link the Medicare payment system to inpatient quality through an incentive payment based on a total performance score (TPS). That TPS is calculated based on performance in the 4 domains of clinical care, safety, efficiency, and patient experience. Throughout the history of the program, the measures and the weighting of each domain has changed, as the movement from a process focus to an outcome and efficiency approach has evolved.7Brooks J.A. Understanding hospital value-based purchasing.Am J Nurs. 2016; 116: 63-66Crossref PubMed Scopus (2) Google Scholar The HRRP imposes a maximum penalty of 3% for 30 days all-cause readmissions in several cohorts, including acute myocardial infarction, chronic obstructive pulmonary disease, pneumonia, total joints, and coronary artery bypass graft surgery. The CMS compares an actual readmission rate to an expected rate for 3 years. These values are then risk-adjusted to provide a more fair comparison among facilities.1Brooks J.A. Reducing hospital readmissions.Am J Nurs. 2015; 115: 62-65Crossref PubMed Scopus (1) Google Scholar The HACRP imposes a 1% reduction in Medicare reimbursement to those facilities in the worst-performing quartile. This program focuses on 5 hospital-acquired infections (HAI): catheter-associated urinary tract infections (CAUTI), central-line–associated bloodstream infections (CLABSI), surgical site infections (SSI), Clostridium difficile infections (CDI), and methicillin-resistant Staphylococcus aureus (MRSA) in 1 domain of HACRP. In the second domain of HACRP, a composite score for the Agency for Healthcare Research and Quality (AHRQ) patient safety indicators, known as PSI-90, is assessed.2Brooks J.A. The hospital-acquired condition reduction program.Am J Nurs. 2017; 117: 63-66Crossref PubMed Scopus (1) Google Scholar As the drive to value has continued to evolve, clinical integration across the care continuum is paramount for success in these programs. Nursing has a unique opportunity to align with the tenets of health care reform and lead this health care transformation.5Aroh D. Colella J. Douglas C. Eddings A. An example of translating value-based purchasing into value-based care.J Urol Nurs. 2015; 35: 61-74Crossref Google Scholar To ignite these changes, nurses from leadership to frontline staff must embrace innovations to deliver care that supports the Triple Aim.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar Nursing is a critical player that can directly or indirectly influence hospital performance in the 3 CMS value-based care programs. In HVBP, the patent experience domain score is driven by results from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). HCAHPS is a patient experience survey that includes questions about topics such as discharge planning, communication, and responsiveness of the staff. The most significant impact on these HCAHPS scores is nursing care.10Wolosin R. Ayala L. Fulton B. Nursing care, inpatient satisfaction, and value-based purchasing: vital connections.J Nurs Adm. 2012; 42: 321-325Crossref PubMed Scopus (41) Google Scholar Another HVBP domain, safety, includes an assessment of hospital-acquired infections impacted by evidence-based care nursing interventions or basic hand-washing.7Brooks J.A. Understanding hospital value-based purchasing.Am J Nurs. 2016; 116: 63-66Crossref PubMed Scopus (2) Google Scholar The same nursing interventions that can reduce or eliminate hospital-acquired infections for HVBP affect the HACRP as well. The HACRP focuses on reducing the same 5 hospital-acquired infections: CLABSI, CAUTI, MRSA, CDI, and SSIs. CMS has stressed the importance of preventing HAIs by including them in 2 separate programs, HVBP and HACRP, and penalizing hospitals twice for insufficient scores in these areas. Nursing’s role in readmission reduction or HRRP extends beyond acute care and must include a pre-discharge and post-discharge focus.1Brooks J.A. Reducing hospital readmissions.Am J Nurs. 2015; 115: 62-65Crossref PubMed Scopus (1) Google Scholar Nurses are at the heart of coordinated, evidence-based care, and they must seize the opportunity, not only to manage the patient in the acute care arena, but also to transcend boundaries across the continuum. Nursing has a pivotal role in the success of health care reform, as nurses impact clinical quality outcomes in many locations across the care continuum.6The Institute of MedicineThe Future of Nursing: Leading Change, Advancing Health. Academies Press, Washington, DC2010Google Scholar This enhanced focus beyond acute care will require a new set of skills, as the shift from episodic care to patient-centric care guides the value-based care transformation forward.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar Ensuring safe transitions of care and forging new collaborative professional partnerships are an essential skill in the latest value-based care framework.11Salmond S.W. Forrester D.A. Nurses leading change: the time is now.in: Forrester D.A. Nursing's Greatest Leaders: A History of Activism. Springer Publishing Company, New York, NY2016: 270-284Crossref Google Scholar Nurses are well poised to bridge the gap in fragmented services and to reduce adverse patient outcomes through care coordination. Key strategies to facilitate this enhanced coordination of care include a focus on patient and family engagement, self-management skills, interdisciplinary collaboration, and effective communication.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar These nursing interventions are the first step on the journey to reduce readmissions, improve patient outcomes, and reduce cost. Managing care across the continuum also demands a novel approach to the care delivery model that aligns patient priorities with provider services. This alignment supports a VBC strategy that serves as a foundation for optimizing patient results. As organizations move to this integrated, team-based delivery model, nurses, as the coordinators of care, will lead this transformation.8Jacquin L. A strategic approach to healthcare transformation.HFM. 2014; 68: 74-79Google Scholar Nurses are the crucial hub that links individuals with the disparate spokes of the health system. They have the clinical knowledge, leadership, and skill set to assume critical roles in care coordination.3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar This care coordination supports the drive to value; however, a much broader nursing focus is an essential part of the blueprint for VBC success. Salmond and Echevarria3Salmond S. Echevarria M. Healthcare transformation and changing roles for nursing.Orthop Nurs. 2017; 36: 12-25Crossref PubMed Scopus (107) Google Scholar highlight a framework that concentrates on patient's needs and impacts outcomes, not only across the care continuum, but also through the trajectory of life. Addressing chronic care issues across the entire population will support the drive to safe, cost-effective care. Individuals with 3 or more chronic conditions, known as polychronic, however, present a new challenge for health care reform. Projections show that this polychronic population will grow drastically over the next 15 years.12Waters H. Graf M. The Cost of Chronic Disease in the U.S. Milken Institute, Santa Monica, CA2018Google Scholar Mihailoff et al.13Mihailoff M. Shreyasi D. Lee J. Lynn J. The effects of multiple chronic conditions on adult patient readmissions and hospital finances: a management case study.Inquiry. 2017; 5446958017729597PubMed Google Scholar demonstrated the severe financial impact that this population has on the health care system with increased lengths of stays and high readmission rates. Innovations in nursing are needed to navigate uncharted waters and to rise to meet these population management challenges. One such innovation is the concept of a flipped discharge, where critical elements of the discharge process are moved beyond the 4 walls of the hospital to the home environment. The first step in this process is a geriatric inpatient assessment to identify patients that may benefit from this approach. An individualized plan is created that focuses on a holistic, comprehensive approach with intensive, timely services. Other tenets of a flipped discharge include thorough handoff communications and in-home assessments of functional capacity. Penn Medicine has seen promising results in reduced readmissions and increased patient satisfaction.14Cheney C. Flip Your Discharge Model to Decrease Length of Stay. 2018. Health Leaders website.https://www.healthleadersmedia.com/welcome-ad?toURL=/clinical-care/flip-your-discharge-model-decrease-length-stayGoogle Scholar In addition to the flipped discharge model, technology enhancements help to complement chronic care management by extending the provider’s reach into the home. Wearable devices, such as heart rate monitors or glucose monitors, can transmit data to patient portals or other sites. Other innovative tactics include remote patient monitoring that drives positive lifestyle changes.15Fields R. New strategies for condition management within value-based care.Generations. 2019; Suppl: 24-27Google Scholar The Hypertension Digital Medicine Program offered at Oschner Health Systems in New Orleans is one such program that establishes this remote connection. Patients are given a digital device that can transmit blood pressure readings directly into the electronic health record. Collaboration among the health care team members leads to an individualized treatment plan based on this clinical data and insight gained from lifestyle risk surveys.16Tai-Seale M. Downing N.L. Jones V.G. Milani R.V. Technology-enabled consumer engagement: Promising practices at four healthcare delivery organizations.Health Aff (Millwood). 2019; 38: 383A-390ACrossref PubMed Scopus (19) Google Scholar This collaboration is a hallmark of nursing and a pillar of success for the transition to value. Key focal areas in this transition to value include a population management strategy that embraces the legacy of nursing practice, which is the coordination, advocacy, and collaboration.17Storfjell J.L. Winslow B.W. Saunders J.S.D. Catalysts for Change: Harnessing the Power of Nurses to Build Population Health in the 21st Century. The Robert Wood Johnson Foundation, Princeton, NJ2017Google Scholar This population management strategy must be supported by care delivery models that span the care continuum and incorporate team-based care as the norm. As polychronic patients increase in number and complexity, further draining health care resources, innovative approaches, and technology enhancements will provide the tools for nursing to revolutionize health care. In addition to a population management strategy that drives positive patient outcomes, nursing leaders must look to the future, with a new vision that incorporates an expanded knowledge of the value conundrum. Equipped with skills to thrive in this new, exciting era, nurse leaders will chart the course to transform health care. These essential leadership skills include embracing technology and big data, igniting change and innovation, soaring beyond organizational boundaries, and launching new care delivery models.9Randazzo G. Challenges and opportunities facing nurse executives in the era of value-based care.Nurse Leader. 2018; 16: 96-100Abstract Full Text Full Text PDF Scopus (2) Google Scholar,18Larson L. The rapidly evolving role of nurse execs.H&HN. 2017; 91: 28-31Google Scholar Nurse leaders must rise to the challenges of the big data revolution, as the futurists who help design meaningful information from a great deal of data. Big data, the foundation of population management, provides insight into needed strategies to accomplish the Triple Aim. Nurse leaders must be able to extract key findings from data analyses and convert them into operational tactics aimed at safe, cost-effective care. These data competencies are a vital link to success in a value-based care world.19Englebright J. Caspers B. The role of the chief nurse executive in the big data revolution.Nurse Leader. 2016; 14: 280-284Abstract Full Text Full Text PDF Scopus (4) Google Scholar In addition, nurse leaders must develop a culture of innovation, where piloting fresh ideas is encouraged. The status quo can no longer be accepted. Cultivating a vision that spans internal departmental boundaries, and extends beyond bricks and mortar of acute care is vital. Value-based care crosses the care continuum, and nursing care must also span these horizons.18Larson L. The rapidly evolving role of nurse execs.H&HN. 2017; 91: 28-31Google Scholar Partnering with post-acute care providers to establish preferred networks is only an initial step in the process. Nurse leaders must sit side by side with key stakeholders and develop a collaborative approach to manage complex cases, across multiple settings. Effective outcomes and cost savings will not be realized if clinical strategies do not encompass a 360° view. As the value movement pushes forward, the future direction is clear. The journey to value has been set; only the specific directions have become obscure with disparate political agendas and mixed reviews on the effectiveness of the various CMS programs. These VBC programs are evaluated annually by the Medicare Payment Advisory Commission (MedPAC) and summarized in a report to Congress. Quality of care and Medicare payments are 2 significant components in the annual MedPAC review. Recent reports have shown that mortality and readmission rates have improved slowly, whereas improvement in HCAHPS patient experience scores has inched along. Medicare spending continues to increase but at a more sustained rate than in prior timeframes.20Medicare Payment Advisory CommissionReport to the Congress: Medicare Payment Policy. Medicare Payment Advisory Commission, Washington, DC2019Google Scholar Although MedPAC has realized the success of the VBC programs, there is growing concern that the design methodology of these programs is too complicated, too repetitive, and a burden on providers. To correct these design flaws, the Commission has proposed an impressive solution, known as the Hospital Value Incentive Program (HVIP). HVIP will replace the current, fragmented CMS programs with one seamless payment program for acute care hospitals. It will include the elimination of the current Inpatient Quality Reporting Program (IQRP) and the merging of the 3 traditional CMS VBC programs, HRRP, HVBP, and HACRP, into 1 payment model. This new model will include 5 domains that are composed of 1 all-condition readmission measure, 1 all-condition mortality measure, a hospital-acquired infections composite, the Medicare Spend per Beneficiary ratio, and a patient perception composite. The recommendation to implement HVIP was sent to Congress in March 2019 and is awaiting further legislative action.20Medicare Payment Advisory CommissionReport to the Congress: Medicare Payment Policy. Medicare Payment Advisory Commission, Washington, DC2019Google Scholar In addition to the recognition that the CMS P4P programs need to be streamlined, CMS has also realized the disparities between social groups and the impact on clinical outcomes. The 21st Century Cures Act of 2016 mandated that CMS change the methodology in the HRRP FY2019 program to reflect differences in sociodemographic profiles, based on dual eligibility. Dual eligibility refers to patients that have Medicare fee-for-service coverage but also qualify for Medicaid. Hospitals are grouped into 5 peer groups based on this dual-eligible proportion and are evaluated for the readmission penalty, with other facilities that have a similar sociodemographic footprint.21Centers for Medicare & Medicaid ServicesNew Stratified Methodology Hospital-Level Impact File User Guide. Centers for Medicare & Medicaid Services, Baltimore, MD2017Google Scholar This change has improved the HRRP methodology with a decrease in penalties for facilities that have high-risk populations. Dual eligibility also laid the foundation for further analyses and insight into the vital impact that social risk factors have on a patient’s health status. Social determinants of health (SDoH) date back to 2005 when the World Health Organization created a Commission on SDoH, but it was not until recently that the concept of SDoH has been embraced by professional organizations.22World Health OrganizationSocial Determinants of Health.https://www.who.int/social_determinants/strategic-meeting/en/Date: 2019Date accessed: March 3, 2020Google Scholar SDoH includes social conditions such as housing, food, transportation, employment, and education. SDoH are now included as Z-codes in the ICD 10 coding classification, offer a robust method to capture this crucial data in the patient's record, and guide clinical care. Despite the availability of these codes, however, very few hospitals have adopted their use.23American Hospital AssociationICD-10-CM Coding for Social Determinants of Health.https://www.aha.org/system/files/2018-04/value-initiative-icd-10-code-social-determinants-of-health.pdfDate: 2019Date accessed: March 1, 2020Google Scholar Nurses are educated to assess patients holistically, in the context of this SDoH framework, and are the likely profession to adopt this agenda. Nursing leadership has the opportunity to realize the significance of these valuable data and push for their implementation throughout the organization. Value-based care is here to stay, because payment for volume is no longer sustainable.24Remarks by Administrator Seema Verna at America's Health Insurance Plan's (AHIP) 2019 National Conference on Medicare [press release]. Centers for Medicare & Medicaid Services, Baltimore, MD2019Google Scholar Our national health care system is in a state of flux, demanding quality at a reduced cost. The time is now for nursing to move front and center to lead this transformation. The Institute of Medicine6The Institute of MedicineThe Future of Nursing: Leading Change, Advancing Health. Academies Press, Washington, DC2010Google Scholar report is complete with evidence of nursing’s influence on safe, patient-centered, cost-effective care. Nursing is pivotal to the success of value-based care. This paradigm shift demands that nursing develops enhanced skills and demonstrates courage, wisdom, and passion for navigating unchartered waters. Nursing must demand full partnership and take a seat at the design table as the blueprint for the future of health care is drawn.

Healthy Days at home: A novel population-based outcome measure

BackgroundHealthy Days at Home (HDAH) is a novel population-based outcome measure developed in conjunction with the Medicare Payment Advisory Commission. MethodsWe identified beneficiary age, sex, race, and Medicaid eligibility, death date, chronic conditions and healthcare utilization among a 20% sample of Medicare beneficiaries in 2016. For each beneficiary we calculated HDAH for the year by subtracting the following measure components from 365 days: mortality days, the total number of days spent in inpatient, observation, skilled nursing facilities (SNF), inpatient psychiatry, inpatient rehabilitation and long-term hospital settings as well as the number of outpatient emergency department and home health visits. We examined how HDAH and its components varied by beneficiary demographic characteristics and chronic condition burden as well as by healthcare market (Hospital Referral Region). We specified a patient-level linear regression adjustment model with HDAH as the outcome and incorporated market fixed effects as well as beneficiary age, sex, and Chronic Conditions Warehouse categories as covariates. We examined the impact of including home health visits in the measure, as well as the association between market demographics and health system characteristics and mean market HDAH. We examined how HDAH changed from 2013 to 2016. ResultsThe 6,637,568 beneficiaries age 65 and older in our sample had a mean of 347.2 HDAH, those 80 and older had a mean of 325.3 while those with three or more chronic conditions had a mean of 333.7. The components that led to the largest reduction in HDAH were mortality (7.4 days), home health (2.7 visits), SNF utilization (2.4 days) and inpatient care (1.5 days). The worst performing market had 5.8 fewer adjusted HDAH on average compared to the national mean, while beneficiaries in the best-performing market had 5.0 more HDAH on average compared to the national mean, among all beneficiaries age 65 and older. ConclusionsHDAH is a population-based quality measure with substantial market-level variation. ImplicationsHDAH recognizes the multidimensional nature of healthcare and may afford providers greater flexibility to tailor quality-improvement initiatives to the unique needs of their patients. Level of evidenceLevel II.

6 Distance From Freestanding Emergency Departments to Nearby Emergency Care

Almost every week, new freestanding emergency departments (FSEDs) open in the U.S., but many open near existing EDs rather than in areas where emergency care may be lacking. In response, in 2018 the Medicare Payment Advisory Commission (MedPAC) recommended a reduction in Medicare reimbursement rates to FSEDs ≤6 miles of the nearest hospital-based ED. Furthermore, to increase access to emergency care in rural areas, they proposed a new payment model which would allow FSEDs in isolated areas (defined as >35 miles from the nearest ED) to receive reimbursement from Medicare for emergency services.

Is health-care data the new blood?

Last year, an article published in The Economist declared that the world's most valuable resource was no longer oil but data.1LeadersRegulating the internet giants: the world's most valuable resource is no longer oil, but data. The Economist, LondonMay 6, 2017https://www.economist.com/leaders/2017/05/06/the-worlds-most-valuable-resource-is-no-longer-oil-but-dataDate accessed: November 18, 2018Google Scholar The piece describes the emergence of a highly lucrative data economy and warns that new antitrust legislation might be needed for greater governance of data. Although many have criticised the comparison of data to oil, specifically surrounding the finite availability of oil as a resource compared with data, the core issue of a highly profitable and under-regulated data economy is real, especially in health care. The health-care data economy is booming with hundreds of start-up companies looking to supposedly fix health care through innovative data, data tools, and technology products. In addition to these legitimate businesses, there is an equally booming shadow economy driven by conventional wisdom that estimates the value of a medical record to be ten times the value of a credit card.2Humer C Finkle J Your medical record is worth more to hackers than your credit card. Reuters, New YorkSept 24, 2014https://www.reuters.com/article/us-cybersecurity-hospitals/your-medical-record-is-worth-more-to-hackers-than-your-credit-card-idUSKCN0HJ21I20140924Date accessed: November 18, 2018Google Scholar So, in health care, is data equivalent to oil or would it be more accurate to describe it as blood? We propose that health-care data records are digital specimens and should be treated with the same rigour, care, and caution afforded to physical medical specimens. We advocate that the use of these digital samples be limited to validated and beneficial uses for the donor and that patient privacy be fully protected. Over the past 6 months, high-profile stories and events have highlighted the need to develop more detailed privacy protections and proper usage validations for connected or digital medical technologies. In one case, a continuous positive airway pressure (CPAP) device manufacturer was sharing patient compliance data from these machines with insurers, who were subsequently denying patient claims on the basis of supposed adherence gaps.3Allen M You snooze, you lose: how insurers dodge the cost of popular sleep apnea devices. National Public Radio, Washington, DCNov 21, 2018https://www.npr.org/sections/healthshots/2018/11/21/669751038/you-snoozeyou-lose-how-insurers-dodge-the-costs-of-popularsleep-apnea-devicesDate accessed: December 8, 2018Google Scholar In this case, a patient was denied coverage for accessories to the medical device because the device was transmitting usage data to the manufacturer without patient knowledge or consent. This event has raised several extremely important questions. How can patient privacy be defined and protected on connected medical equipment and what are the associated rights of that patient? Are manufacturers obligated to disclose all data being collected and its usage? Are the data collected adequate and properly validated for the intended uses? What consumer protections exist to protect patients in the event of potential discrimination or data misuse? The rapid pace of connected medical products has regulators and policy experts struggling to understand this extremely diverse and technically complex landscape.4Matwyshyn AM The ‘Internet of Bodies’ is here. Are courts and regulators ready?. Wall Street Journal, New YorkNov 12, 2018https://www.wsj.com/articles/the-internet-of-bodies-is-here-are-courts-and-regulators-ready-1542039566Date accessed: January 3, 2019Google Scholar Novel applications of technology such as real-time wearable sensors are creating new big data streams that can uniquely identify and physically locate users.5Perakslis ED Protecting patient privacy and security while exploiting the utility of next generation digital health wearables.BMJ Opinion. Jan 18, 2019; https://blogs.bmj.com/bmj/2019/01/18/protecting-patient-privacy-and-security-while-exploiting-the-utility-of-next-generation-digital-health-wearables/Date accessed: January 18, 2019Google Scholar Although these technologies pose important privacy and security concerns, in the premarket stages they are subject to the protections of biomedical products premarket regulations for patient protection, such as ethical informed consent and Institutional Review Board oversight as required by the US Food and Drug Administration and the Medical Device Directive in the EU. However, the basic protections of ethical research conduct do not necessarily apply to mature postmarket products. For example, with respect to internet-connected CPAP machines, the data being transmitted to the manufacturer might not be subject to the Healthcare Insurance Portability and Accountability Act (HIPAA) because the data might not contain the explicitly prohibited identifiers or because the manufacturer does not meet the covered entity definition. Under the General Data Protection Regulations (GDPR), the data might be protected as special categories of personal data, but this remains to be tested. Without appropriate oversight, data quality cannot be guaranteed for unintended uses, an issue that is compounded by the rise of health-care data brokers who have been partnering with the health insurance industry to collect digital specimens on hundreds of millions of Americans.6Allen M Pro Publica. Health Insurers are Vacuuming Up Details About You - And It Could Raise Your Rates.https://www.propublica.org/article/health-insurers-are-vacuuming-up-details-about-you-and-itcould-raise-your-ratesDate: July 17, 2018Date accessed: January 17, 2019Google Scholar Digital specimens can be medical records, sensor data, race, education level, posts on social media, bill payments, and Amazon orders.7Ravindranath M Does your doctor need to know what you buy on Amazon? Politico.https://www.politico.com/story/2018/10/30/the-doctor-will-see-through-you-now-893437Date: Oct 30, 2018Date accessed: November 18, 2018Google Scholar According to HIPAA, almost none of these are considered covered entities nor are they subject to the governance or principles of ethical research on humans. Technology companies rely on contracts such as end-user license agreements (EULAs) and privacy policies to govern the rights to monitor, analyse, and share user data. In instances where a company is not covered by HIPPA, the EULA and other consumer agreements become the primary privacy constraint from a legal perspective. These agreements form the basis of a new-age social contract for how a medical device company would handle a user's digital specimen. However, today most of the burden of consent resides with the consumer, who is expected to read and understand these privacy policies before using the product, although most people do not. One influential study showed that 97% of users agreed to the privacy policy of a fictitious social network and spent an average of about 70 s to skim the policy, which would normally take about 30 min to read.8Obar JA Oeldorf-Hirsch A The biggest lie on the internet: ignoring the privacy policies and terms of service policies of social networking services.Information Commun Soc. 2016; 2016: 1-20Google Scholar Today, the contracts are written more to protect companies from lawsuits rather than to establish a set of norms and values around how to handle patient data. This burden should shift more toward the technology company to develop an understandable social contract for the user that clearly outlines how their body-generated data would be used, aggregated, and shared. Furthermore, although substantial law already provides protections from discrimination caused by genetic data, no such law exists for all these new digital health data streams, and medical device use is far more prevalent in the US population than is genetic testing. The disparity in exposure and risk is extensive. Although the combined US genetic testing market—prenatal or neonate testing and digital genome—is expected to reach US$22 billion by 2024, the medical device industry, which was already $172 billion in 2013, is roughly eight times larger and estimated to account for 4–6% of all US health-care spending.9Global Market InsightsGenetic testing market worth over $22 billion by 2024. Global Market Insights, Selbyville, DEJune 5, 2018https://globenewswire.com/news-release/2018/06/05/1516735/0/en/Genetic-TestingMarket-worth-over-22-Billion-By-2024-Global-Market-Insights-Inc.htmlDate accessed: November 18, 2018Google Scholar, 10MedPacReport to congress: an overview of the medical device industry. Medicare Payment Advisory Commission, Washington, DCJune, 2017: 1-38http://www.medpac.gov/docs/default-source/reports/jun17_ch7.pdf?sfvrsn=0Date accessed: February 6, 2019Google Scholar Most importantly, a study has shown that consumers are poorly aware of the protections of genetic antidiscrimination law and highly concerned about the effects that optional medical testing might have on their insurability.11Parkman AA Foland J Anderson B et al.Public awareness of genetic nondiscrimination laws in four states and perceived importance of life insurance protection.J Genet Counsel. 2015; 24: 512-521Crossref PubMed Scopus (39) Google Scholar Clearly, the CPAP incident shows that their concerns are valid. As complex as these issues are, we propose a three-pronged strategy for avoiding harm and protecting the privacy of digital specimens. First, to enable regulation and protection, digital specimens must be properly categorised by at least three attributes: by data type or format; by level of permission such as consented, unconsented, informed but not consented; and by level of risk to the data donor. Practically, this could be implemented in a similar fashion to the special categories of data within GDPR. Implementation could help ensure that data is validated for quality and accuracy to avoid irresponsible, negligent, or methodologically invalid applications. Second, enabled by this categorisation, new and more practically usable methods of consumer notification must replace or enhance the currently failing End User License Agreement model (also known as the ”agree to all the terms listed or you can't use this product” model). Third, consumer protections must be put in place to inform and protect the public but also to enable adequate penalties for privacy violations. In truth, we believe that these steps are the bare minimum that must be accomplished to include, engage, and protect digital specimen donors. For provisions of data within GDPR see https://gdpr-info.eu/art-9-gdpr/ For provisions of data within GDPR see https://gdpr-info.eu/art-9-gdpr/ This online publication has been corrected. The corrected version first appeared at thelancet.com/digital-health on June 27, 2019 This online publication has been corrected. The corrected version first appeared at thelancet.com/digital-health on June 27, 2019 EP declares no competing interests. AC is a paid employee and shareholder of Elektra Labs. Correction to Lancet Digital Health 2019; 1: e8–9Perakslis E, Coravos A. Is health-care data the new blood? Lancet Digital Health 2019; 1: e8–9—The definition of CPAP has been corrected to “continuous positive airway pressure”. This correction has been made as of June 27, 2019. Full-Text PDF Open Access

Paying for Drugs After the Medicare Part D Beneficiary Reaches the Catastrophic Limit: Lessons on Cost Sharing from Other US Policy Partnerships Between Government and Commercial Industry.

In 2018, the Medicare Part D catastrophic threshold is $5000 in out-of-pocket total drug spending incurred by the beneficiary. Above this, Medicare pays 80%, prescription drug plans (PDPs) pay 15%, and beneficiaries pay a 5% copay. However, recent growth in catastrophic spending is caused by expensive specialty drugs. The 5% copay, on top of out-of-pocket spending, could result in beneficiaries not accessing specialty drugs. To assist beneficiaries, the Medicare Payment Advisory Commission (MedPAC) proposes to eliminate beneficiary catastrophic cost sharing, while PDPs pay 80% and Medicare pays 20%. Our objective was to assess other government cost-sharing approaches and consider how they would affect pharmaceutical access, PDP Part D incentives, and pharmaceutical innovation. We reviewed published literature and government reports on cost sharing between US government divisions or between government and private commercial entities. We discussed their cost-sharing applicability to Part D. We found that the US government has utilized numerous cost-sharing approaches to enhance public–private partnerships. We reviewed four cost-sharing arrangements and their applicability to Medicare: the Byrd-Bond Amendment to the Clean Air Act—Medicare bulk purchases drugs costing $8000 + ; North Atlantic Treaty Organization (NATO)—cost sharing based on high-risk markets; the Ryan White Ryan White Comprehensive AIDS Resources Emergency (CARE) Act—grants to PDPs in high-risk markets and grants to beneficiaries who cannot afford drugs; and the Department of Veterans Affairs—drug price negotiation for expensive drugs. In conclusion, a variety of federal cost-sharing approaches provide precedent for altering PDP cost sharing. The government tends to prefer options that have been tried elsewhere.