The next makeover

Re­form­ers want re­vamped role for man­aged care

Modern Healthcare - - Payers And Purchasers - Shawn Rhea

El­liot Health Sys­tem Pres­i­dent and CEO Doug Dean doesn’t tell a happy story about his hospi­tal’s foray into the world of man­aged care some 15 years ago. In 1994, the Manch­ester, N.H.-based fa­cil­ity merged with the only other area hospi­tal, Catholic Med­i­cal Cen­ter, to form the nowde­funct provider or­ga­ni­za­tion Op­tima Health­care. In 1997, St. Joseph Hospi­tal in Nashua, N.H., also joined the provider sys­tem, but by 1999 the part­ner­ship was dis­solv­ing and all three hos­pi­tals were suf­fer­ing mil­lions of dol­lars in losses thanks in large part to a payer agree­ment that barely cov­ered pa­tient-care costs, Dean says.

“We were knee-deep in a cap­i­ta­tion agree­ment” with Healthsource, Cigna Corp.’s pre­de­ces­sor, Dean says. Un­der the agree­ment, Op­tima was paid a set amount an­nu­ally per HMO en­rollee, and the provider was ex­pected to sup­ply ap­pro­pri­ate care re­gard­less of the ac­tual costs. The ar­range­ment, Dean says, was fraught with in­ad­e­qua­cies. “We were mas­sively un­der­re­im­bursed. We barely had enough to pay for physi­cians let alone hos­pi­tal­iza­tions. We found our­selves in lit­i­ga­tion with Healthsource over that re­im­burse­ment.”

In the years since Op­tima’s fail­ure, pay­ers’ man­aged-care poli­cies have only broad­ened to in­clude tac­tics like the use of in­sur­ance ad­min­is­tra­tors and med­i­cal ad­vis­ers to ap­prove or di­rect pa­tient-care de­ci­sions. Such prac­tices are sup­posed to help rein in sky­rock­et­ing costs while en­sur­ing ac­cess to ap­pro­pri­ate, high-qual­ity care. In­stead, many providers and pa­tients say that un­der cur­rent prac­tice, man­aged care has be­come noth­ing more than a means for in­sur­ers to max­i­mize their prof­its by shift­ing the cost of care to providers or deny­ing pa­tients ac­cess to med­i­cally nec­es­sary treat­ments.

Vexed by such un­der­pay­ments and claims de­nials, a grow­ing cho­rus of providers is say­ing health­care pol­i­cy­mak­ers must ad­dress cur­rent prob­lems with man­aged care as a part of health­care re­form. “We’ve been push­ing our mem­ber­ship at lo­cal, state and fed­eral lev­els to get in­volved and get re­lief,” says Dan Sisto, pres­i­dent of the Health­care As­so­ci­a­tion of New York State, a provider ad­vo­cacy group.

Among the ac­tiv­i­ties that his group has un­der­taken is the for­ma­tion of an 11-mem­ber coali­tion of state hospi­tal as­so­ci­a­tions that are shar­ing in­for­ma­tion and strate­gies for chang­ing man­aged-care pay­ment poli­cies in their re­gions. The coali­tion—which in ad­di­tion to New York in­cludes hospi­tal as­so­ci­a­tions in Con­necti­cut, Ge­or­gia, Florida, Penn­syl­va­nia, Rhode Is­land, Mas­sachusetts, New Hamp­shire, New Jer­sey, Maine and Ten­nessee—is ex­plor­ing ne­go­ti­at­ing tac­tics as well as state leg­isla­tive changes as a means for ad­dress­ing their beefs with pay­ers.

In Rhode Is­land, for ex­am­ple, providers have worked with Blue Cross and Blue Shield—the dom­i­nant payer in the mar­ket—to ad­dress some of the re­im­burse­ment rates and poli­cies that have been bones of con­tention, says Ed Quin­lan, pres­i­dent of the Hospi­tal As­so­ci­a­tion of Rhode Is­land. In New York, Gov. David Pater­son signed a law this past July re­quir­ing in­sur­ers to change some of their pay­ment poli­cies. “What we’ve done is win the right for providers to have out­side ap­peals” of claims de­nials, Sisto says. “What we’re find­ing is that providers are winning a lot of those cases.”

Robert Zirkel­bach, spokesman for the lobby group Amer­ica’s Health In­sur­ance Plans, says his mem­ber­ship is work­ing to ad­dress many of the con­cerns providers and other groups have over man­aged-care re­im­burse­ment prac­tices. “There is a lot of col­lab­o­ra­tion be­ing done be­tween health­care plans and the physi­cian com­mu­nity to de­velop uni­form qual­ity mea­sures and pay­ment struc­tures, so it’s not just pay­ers im­pos­ing a rate on providers,” he says.

Still, it’s not enough, ac­cord­ing to many providers. “There is more man­aged care out there un­der the for­mat of de­nial than un­der the model of im­proved care,” says Ted Ep­perly, pres­i­dent of the Amer­i­can Academy of Fam­ily Physi­cians. “We rec­og­nize that for bet­ter health­care to hap­pen in this coun­try we must have a fo­cus on pri­mary care and pa­tient care.” Ep­perly and other stake­hold­ers ar­gue that pay­ers have been too slow to make changes and that in­stead of fo­cus­ing on im­proved pa­tient out­comes as a means of low­er­ing cost, many have a pol­icy of sim­ply avoid­ing claims pay­ments.

As a re­sult, many of the same provider groups that in the early ’90s re­sisted the Clin­ton ad­min­is­tra­tion’s at­tempt to re­struc­ture man­aged care into a vi­able de­liv­ery and pay­ment sys­tem are now en­cour­ag­ing such ac­tiv­i­ties. Ac­cord­ing to Sisto, in­stead of elim­i­nat­ing such pay­ment prac­tices, the in­ter­ven­ing years be­tween health­care re­form ef­forts have sim­ply af­forded pay­ers lee­way to con­tinue in­sti­tut­ing man­aged-care poli­cies that have no checks and bal­ances. “We had an is­sue here last year where a pa­tient picked an out-of-net­work physi­cian who worked at an in-net­work hospi­tal, but since the doc­tor was out-of-net­work the payer treated the en­tire treat­ment episode like it was out of net­work.” That, Sisto says, left the hospi­tal to pur­sue col­lec­tion on a claim that typ­i­cally would have been cov­ered by the payer.

Many providers now be­lieve that fed­eral health­care re­form will have to ad­dress man­aged-care pay­ment poli­cies if they are go­ing to feel sig­nif­i­cant re­lief from the prac­tices.

On the fed­eral level, Sisto says he sees health­care-re­form leg­is­la­tors mak­ing ef­forts to im­prove man­aged-care poli­cies by cre­at­ing laws that would ban in­sur­ers from deny­ing pa­tients’ claims based on pre-ex­ist­ing con­di­tions and re­quire them to pro­vide a min­i­mum stan­dard of cov­er­age.

To be cer­tain, some stake­hold­ers would like noth­ing more than to do away with man­aged care. Most, how­ever, ac­knowl­edge that with phrases like “med­i­cal homes” and “bun­dled pay­ments” be­ing bandied about in law­mak­ers’ cur­rent dis­cus­sion of health­care re­form, it’s clear some model of man­aged care is likely to be im­ple­mented to help over­haul the U.S. health­care sys­tem. Whether that model can help to re­duce costs, ap­pro­pri­ately re­im­burse providers and im­prove the qual­ity of pa­tient care will largely de­pend on the pro­vi­sions law­mak­ers build into the sys­tem, re­form watch­ers say.

“We all think that fee-for-ser­vice is a mis­er­able sys­tem,” ac­knowl­edges Stephen Weiner, a lawyer with the health­care prac­tice divi­sion of Mintz Levin Cohn Fer­ris Glovsky and Popeo. “The ques­tion is: What do we re­place it with?”

There are some pri­vate pay­ers and state leg­is­la­tors who are at­tempt­ing to an­swer that ques-

tion. Many are fo­cused on poli­cies that use in­for­ma­tion tech­nol­ogy such as elec­tronic health records and claims data along with ev­i­dence-based medicine as a means to lower health­care costs and im­prove pa­tient out­comes.

“The one thing we learned is that 10% of the peo­ple in your health­care sys­tem ac­count for 70% of the costs, and they tend to be peo­ple with con­di­tions like di­a­betes and asthma,” says Jack Fried­man, CEO of Prov­i­dence Health Plans. “We learned that you have to have a so­phis­ti­cated claims-data sys­tem that will help you iden­tify the high-risk pa­tients and also strat­ify that risk across the health­care sys­tem.”

Based in Beaver­ton, Ore., Prov­i­dence Health Plans is the not-for-profit payer divi­sion of the provider sys­tem Prov­i­dence Health & Ser­vices. The in­surer cov­ers roughly 285,000 ben­e­fi­cia­ries in Ore­gon and South­west Wash­ing­ton, and since many of those ben­e­fi­cia­ries ac­cess care through Prov­i­dence’s provider sys­tem and hos­pi­tals, Fried­man be­lieves the com­pany has learned a few valu­able lessons about mak­ing man­aged care work for pay­ers, providers and pa­tients. For one thing, he says, pay­ers need to get out of the busi­ness of di­rect­ing pa­tient care and into the busi­ness of putting in place sys­tems that sup­port providers in keep­ing pa­tients healthy.

“What they should do is work with pri­ma­rycare doc­tors to cre­ate things like asthma and di­a­betes-care pro­grams,” Fried­man says. “The key in this busi­ness is to find the 10% to 15% of pa­tients who re­ally need help and work to keep them out of the emer­gency room.”

Joe Kirk­patrick, se­nior vice pres­i­dent of health­care fi­nance for the Mas­sachusetts Hospi­tal As­so­ci­a­tion, says one of the chal­lenges fed­eral law­mak­ers will have to meet in im­ple­ment­ing any model of man­aged care is en­sur­ing that cost risks don’t fall heav­ily onto the shoul­ders of any par­tic­u­lar stake­holder.

This past June, the state’s Spe­cial Com­mis­sion on the Health Care Pay­ment Sys­tem set out an am­bi­tious five-year agenda for pay­ment re­form that in­cludes do­ing away with fee-forser­vice pay­ments. The com­mit­tee’s rec­om­men­da­tions in­clude adop­tion of a global pay­ment model that would com­pen­sate providers based on an es­ti­mate of the amount and type of care they are likely to give a par­tic­u­lar pa­tient over a spec­i­fied pe­riod of time. “The ad­vi­sory com­mit­tee rec­og­nized that so­cio-eco­nomics also play a role, and pay­ers may need to pro­vide more money to care for” high-risk, low-in­come pa­tients, Kirk­patrick says.

Ac­cord­ing to the com­mis­sion’s re­port, global pay­ments would be based on a pa­tient’s med­i­cal his­tory and would be risk-ad­justed to ac­count for high-cost treat­ment episodes. The sys­tem would re­quire providers to be­come mem­bers of ac­count­able-care or­ga­ni­za­tions, which would re­ceive in­sur­ers’ re­im­burse­ments and be re­spon­si­ble for pay­ing in­di­vid­ual providers.

Each ben­e­fi­ciary would be re­quired to choose a pri­mary-care physi­cian and that per­son’s in­surer’s global pay­ment would be di­rected to that physi­cian’s ac­count­able-care or­ga­ni­za­tion. Pa­tients could be made to pay ad­di­tional costs if they choose to see physi­cians or spe­cial­ists out­side of their or­ga­ni­za­tion.

While Kirk­patrick says Mas­sachusetts providers are en­cour­aged by the steps state pol­i­cy­mak­ers are tak­ing to over­haul the man­aged­care sys­tem, he ac­knowl­edges that hos­pi­tals and other providers are wary of the model’s po­ten­tial pit­falls. “Part of the things providers are wor­ried about is go­ing back to cap­i­ta­tion,” which they would do un­der a global pay­ment sys­tem, he says. “We agree that we need re­form, but we want to make sure it’s ap­pro­pri­ate.”

The par­ent sys­tem of Prov­i­dence Port­land (Ore.) Med­i­cal Cen­ter, above, op­er­ates a not-for-profit payer divi­sion.

Fried­man: Health plans need to work with physi­cians to keep pa­tients healthy.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.