CMS cost-shar­ing test viewed as model

Modern Healthcare - - NEWS - By Bob Her­man

“Clin­i­cians are now be­ing bench­marked on the qual­ity of care. They’d be much hap­pier to have their pa­tients pay less out of pocket to have those ser­vices done.”

Dr. Mark Fen­drick Di­rec­tor and co-founder Univer­sity of Michigan Cen­ter for Value-Based In­sur­ance De­sign

A new test within the Medi­care Ad­van­tage pro­gram will lower out-of­pocket costs for chron­i­cally ill pa­tients who seek high-value ser­vices and providers. Sup­port­ers hope the pro­ject will lead to changes in fed­eral law and be­come a tem­plate for all health plans with siz­able cost-shar­ing, which have be­come the stan­dard plan of­fer­ing from em­ploy­ers and in­sur­ers.

But ex­perts say the fed­eral pro­ject needs to have both car­rots and sticks to lower un­nec­es­sary spend­ing and im­prove peo­ple’s health. Lower outof-pocket costs for care deemed to be high qual­ity and clin­i­cally ef­fec­tive must be paired with in­creased cost­shar­ing for ser­vices that are viewed as waste­ful or not as valu­able.

Last week, the CMS raised the cur­tain on its latest vol­un­tary demon­stra­tion pro­gram, called the Medi­care Ad­van­tage Value-Based In­sur­ance De­sign Model. The five-year pro­ject will start Jan. 1, 2017. Ad­van­tage plans in Ari­zona, In­di­ana, Iowa, Mas­sachusetts, Ore­gon, Penn­syl­va­nia and Ten­nessee can par­tic­i­pate.

The point of value-based in­sur­ance de­sign, com­monly called VBID, is to steer chron­i­cally ill pa­tients to­ward cost-ef­fec­tive healthcare ser­vices that have proven clin­i­cal ben­e­fits, as well as to­ward doc­tors and hos­pi­tals that con­sis­tently pro­vide those ser­vices at a lower cost. Em­ploy­ers and in­sur­ers in­cen­tivize em­ploy­ees and mem­bers by waiv­ing or re­duc­ing co­pay­ments, coin­sur­ance and other out-of-pocket costs for cer­tain pro­ce­dures, ser­vices, pre­scrip­tion drugs and net­works.

A pop­u­lar VBID is for di­a­betic pa­tients. In­stead of pa­tients pay­ing for a doc­tor-rec­om­mended eye exam com­pletely out of pocket, the health in­surer can lower or elim­i­nate pa­tients’ cost-shar­ing through a tai­lored ben­e­fit plan. Pa­tients are more likely to get the exam if it’s af­ford­able or free. And re­search sug­gests pa­tients with chronic con­di­tions may avoid costly in­ter­ven­tions, such as hos­pi­tal ad­mis­sions, if they ad­here to their care plans.

Only Medi­care Ad­van­tage mem­bers who have di­a­betes, con­ges­tive heart fail­ure, chronic ob­struc­tive pul­monary dis­ease, a history of stroke, hy­per­ten- sion, coro­nary artery dis­ease or mood dis­or­ders are el­i­gi­ble for the model.

VBID ad­vo­cates say the strat­egy builds “clin­i­cal nu­ance” into health plans. It also bet­ter aligns pa­tients with their physi­cians, who are in­creas­ingly paid based on how well they take care of peo­ple.

“Clin­i­cians are now be­ing bench­marked on the qual­ity of care,” said Dr. Mark Fen­drick, di­rec­tor and co­founder of the Univer­sity of Michigan’s Cen­ter for Value-Based In­sur­ance De­sign, the group that led the push for the new CMS experiment. “They’d be much hap­pier to have their pa­tients pay less out of pocket to have those ser­vices done. ... This is a no-brainer to me.”

Paul Gins­burg, a pro­fes­sor of health pol­icy and man­age­ment at the Univer­sity of South­ern Cal­i­for­nia, said there is al­ready some cost-shar­ing in Medi­care Ad­van­tage plans that could pro­vide sav­ings for ben­e­fi­cia­ries. But there “may not be as big of an op­por­tu­nity as com­mer­cial high-de­ductible plans,” he said.

Com­mer­cial plans are Fen­drick’s next tar­get. Fed­eral reg­u­la­tions re­quire all en­rollees in high-de­ductible health plans and health sav­ings ac­counts to fully pay for their pre­scrip­tions and treat­ments un­til they meet their de­ductible. The ex­cep­tion is pre­ven­tive screen­ings, which now re­ceive first-dol­lar cov­er­age un­der the Af­ford­able Care Act. How­ever, ser­vices that treat “an ex­ist­ing ill­ness, in­jury or con­di­tion,” in­clud­ing chronic dis­eases, have to be paid by pa­tients.

Fen­drick hopes the gov­ern­ment will per­mit more test­ing of “clin­i­cally nu­anced” cost-shar­ing in high­d­e­ductible plans and even­tu­ally ex­pand fed­eral rules. “While pa­tients in those plans are in­sured, they of­ten don’t have ad­e­quate cov­er­age for these high-value ser­vices be­cause of the high de­ductibles and other out-of-pocket costs,” Fen­drick said.

An im­por­tant de­tail in the fed­eral VBID model is that Ad­van­tage mem­bers will not lose any ben­e­fits or pay higher cost-shar­ing for any ser­vices. In­sur­ers can only add ben­e­fits or re­duce out-of-pocket costs.

That means pa­tients can still ac­cess po­ten­tially overused or waste­ful ser­vices for the same prices. Ex­perts be­lieve suc­cess­ful VBID plans need to en­cour­age the use of clin­i­cally pre­ferred drugs, tests and treat­ments, but also dis­cour­age overused ser­vices that may be un­nec­es­sary or harm­ful.

But in Medi­care, rais­ing ben­e­fi­ciary costs for any ser­vice is a po­lit­i­cal hot potato. “I think, in an ideal world, you’d have the flex­i­bil­ity to do both,” said Amanda Starc, a health economist at the Univer­sity of Penn­syl­va­nia.

The coun­try’s largest Medi­care Ad­van­tage in­surer has sig­naled its in­ter­est in the new fed­eral pi­lot pro­gram. Unit­edHealth­care op­er­ates Medi­care plans in each of the seven demon­stra­tion states and has 3.5 mil­lion Ad­van­tage mem­bers na­tion­ally. Dr. Sam Ho, chief med­i­cal of­fi­cer at Unit­edHealth­care, said the com­pany is “def­i­nitely ex­cited about pur­su­ing this op­por­tu­nity.” The com­pany is re­view­ing its op­tions.

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