JustCare

Tag: ACO

  • Traditional Medicare’s fee for service payment system contains costs better than other payment models

    Traditional Medicare’s fee for service payment system contains costs better than other payment models

    Since establishment through the Affordable Care Act, the Center for Medicare & Medicaid Innovation (CMMI) has been testing new ways to deliver and pay for care in Medicare, Medicaid and the Children’s Health Insurance Program, with the goal of reducing spending and improving care quality. A new report from the Congressional Budget Office (CBO) indicates that, over the last ten years, CMMI’s pilot programs cost more than Traditional Medicare with a fee for service payment system.

    CBO looked at evaluations of 49 CMMI delivery and payment models, alternatives to Traditional Medicare’s fee-for-service payment system, and found that Medicare spending is up $5.4 billion between 2011 and 2020. At the time Congress created CMMI, lawmakers believed that CMMI would save the government money in its first decade. They believed a $7.5 billion investment in new models would result in $10.3 billion less spending.

    In this next decade, CBO projects $1.3 billion in net additional spending as a result of CMMI’s pilot programs rather than the $77.5 billion in net savings originally projected. Based on this information and, even more so, what we know about some of the models CMMI is testing, it’s not clear that CMMI is offering the value people hoped it would.

    It’s no surprise that CMMI’s alternative payment models are costing more than Traditional Medicare’s fee for service payment system. The big models all rely on multiple third-party intermediaries to oversee care. These intermediaries drive up administrative costs and are often profit-making entities, such as private equity firms, or large non-profit systems.

    What’s worrisome is that some of the CMMI payment models, such as the ACO REACH model, incentivize companies to withhold needed care in order to maximize profits. That’s a recipe both for driving up Medicare spending and for endangering the health and well-being of older adults and people with disabilities.

    Here’s more from Just Care:

  • Government agencies undeterred by fraud in their efforts to turn Medicare over to Wall Street

    Government agencies undeterred by fraud in their efforts to turn Medicare over to Wall Street

    On January 17, the Center for Medicare and Medicaid Innovation (CMMI) announced 48 new model participants in a controversial pilot program called Accountable Care Organization: Realizing Equity, Access, and Community Health, better known as ACO REACH. CMMI, created by the Affordable Care Act, is supposed to test alternative payment models for Traditional Medicare to lower costs and improve, or at least not worsen, the care of 30 million seniors and people with disabilities.

    The program, launched in the waning days of the Trump Administration as Direct Contracting, was greenlighted by the Biden Administration in 2021 and renamed ACO REACH in 2022. The model, which started with 53 contracting entities under Trump has grown to 132 participants with 131,772 health care practitioners and organizations providing care to over 2 million beneficiaries on Traditional Medicare under President Biden. Startling research found many of the ACO REACH participants have a history of Medicare fraud. Nevertheless, Medicare continues to sign contracts with them.

    ACO REACH is a program designed to privatize what is left of public Medicare. Half of Medicare has been privatized through Medicare Advantage plans, which receive up-front “capitated” payments for Medicare beneficiaries from the Center for Medicare and Medicaid Services (CMS) and have the power to decide whether and how much of those Medicare dollars to spend on the beneficiaries who signed up for their plan. The Affordable Care Act allows Medicare Advantage plans to keep up to 15% of these Medicare dollars for administrative fees and profit (although they have clever ways to get around this restriction). To make these profits, Medicare Advantage plans create narrow networks for their beneficiaries, deny and delay care, and get overpaid by CMS, cashing in on billions of Medicare dollars.

    What earthly reason would there be to exclude companies from ACO REACH but allow them to continue their plunder in Medicaid, Medicare Advantage, and subsidized on the ACA Exchanges?

    ACO REACH uses similar tactics to those found in Medicare Advantage to profit from Medicare by overcharging Medicare, financially incentivizing providers to control healthcare costs for beneficiaries, and increasing the number of beneficiaries in their plans. But while some seniors “choose” to participate in Medicare Advantage, seniors and people with disabilities are auto-enrolled into an ACO REACH through their primary care physicians (PCPs). Thus, it is physicians and physician practices which are being lured into or forced to join the ACO REACH (Many physician practices are being swooped up by private equity or created whole-cloth). Physician practices, or their controllers, are enticed by the “shared savings” they will collect if they save money on their patients, shredding the trust between doctors and patients.

    Once the PCP joins, their patients are automatically enrolled into the ACO REACH, without their informed knowledge or consent. While Medicare Advantage plans are allowed to keep 15% of the capitated fee for profits and administration, ACO REACH organizations, which include private equity and venture capital firms, as well as Medicare Advantage plans and insurance companies, can keep up to 40% of the capitated, up-front fees from Medicare as profit, guaranteeing themselves excessive payouts as they play out the eventual demise of the Medicare Trust Fund.

    We were assured by CMMI that the new vetting process for all applicants was supposed to “ensure participants’ interests align with CMS’s vision.” They promised to protect beneficiaries and the model with “more participant vetting, monitoring, and greater transparency.” They pledged to employ “increased up-front screening… monitoring… and stronger protections against inappropriate coding and risk score growth.”

    Yet, in a letter sent by Senator Elizabeth Warren (D-Mass.) and Congresswoman Pramila Jayapal (D-Wash.) to CMS Administrator Chiquita Brooks-LaSure in December 2022, they called on CMS to investigate nine organizations that had signed contracts to become an ACO REACH: Centene, Sutter Health, Clover Health, Adventist Health System/AdventHealth, Humana, Vively Health, Cigna/CareAllies, Bright Health/NeueHealth, and Nivano Physicians. The letter pointed out that all these organizations have been accused, investigated, settled claims, and/or sanctioned by governmental agencies for Medicare fraud and abuse.

    Recently, CMMI Director Liz Fowler—a poster child for the revolving door in D.C.—was a guest speaker at the ACO REACH educational forum held by the California Public Employees Retirement System, the largest public pension fund in the country. When asked about private equity in ACO REACH, Fowler responded, “My personal opinion, you can’t say that private equity is inherently bad or good, but the way we viewed it, we want to make sure that the organizations in our program are in it for the right reasons.” And the right reasons for Fowler might very well be profit, given that six of the nine organizations identified by Warren and Jayapal are publicly traded in the stock market.

    The entire apple cart needs to be overturned and replaced with a national, non-profit, single-payer healthcare system that covers everyone from birth to death…

    Given Director Fowler’s personal opinion of private equity firms, it comes as no surprise that most of the Medicare fraudsters—including: Cigna/CareAllies, accused by the Justice Department of using a primary care program to defraud Medicare; Bright Health/NeueHealth, fined $1 million by the Colorado Division of Insurance for complaints from consumers and providers; Clover Health, which failed to let investors know it was under investigation by the DOJ as it was going public and even fined by CMS in 2016 for engaging in marketing activities that misled their beneficiaries; AdventHealth (formerly Adventist Health System), that paid $115 million to settle allegations of improper financial arrangements with referring physicians and for miscoding claims; Humana that overcharged Medicare by $200 million according to a federal audit; and Nivano Physicians, previously under a corrective action plan with the Department of Managed Health Care for lacking financial solvency—all made it through and became approved as ACO REACH.

    Only three of the original nine identified in the Warren-Jayapal letter failed to get a contract with CMS: Centene, Sutter Health, and Vively Health. Fowler refuses to say whether these corporations pulled out on their own, or were rejected.

    The Centene Corporation, with Medicaid contracts in 29 states, settled potential fraud claims in a dozen states to resolve Medicaid fraud claims for an estimated $1.25 billion. Sutter Health, a major California-based healthcare system, agreed to pay $90 million to settle allegations of knowingly submitting inaccurate information about the health of beneficiaries in the Sutter Medicare Advantage plans. DaVita HealthCare Partners Inc., one of the largest for-profit kidney dialysis providers and parent company of Vively Health, paid $450 million in 2015 to settle a whistleblower lawsuit, which accused DaVita of “intentionally wasting medications in order to overbill Medicare.”

    What earthly reason would there be to exclude companies from ACO REACH but allow them to continue their plunder in Medicaid, Medicare Advantage, and subsidized on the ACA Exchanges?

    The hypocrisy of CMS and CMMI is on full display. As is their collusion with the profiteers. Sadly, getting the fraudsters out of ACO REACH will not improve a program designed to enrich corporations and harm patients. The entire apple cart needs to be overturned and replaced with a national, non-profit, single-payer healthcare system that covers everyone from birth to death with all necessary medical services including long-term care, hearing, vision, dental, and prescription drugs. Only then can we stop worrying about the fraudsters.

    [This post was first published on Common Dreams on February 1, 2023. Kay Tillow is the co-author. She is the coordinator of the All Unions Committee for Single Payer Health Care, which builds union support for national single payer health care.]

  • Traditional Medicare at risk with ACO REACH

    This month, the Biden administration is launching ACO REACH, a program that pits the financial interests of corporate health insurers, private equity firms, and the primary care doctors they employ against the health and well-being of their patients in Traditional Medicare. Is there any chance that REACH will deliver better quality care at lower cost, or even just lower costs without harming quality? More than two million people in Traditional Medicare are at risk.

    How does REACH work? The Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, is contracting with middlemen–insurers, private equity and other companies–which assume the risk of keeping health care costs down for people with Medicare. These companies engage primary care doctors (PCPs) to oversee patient care, with the goal of keeping them out of the hospital and away from costly specialty care. If they succeed, the companies can keep 25 percent or more of the savings.

    How do REACH entities keep costs down? They incentivize their primary care doctors financially to keep their patients from getting specialty care and other costly health care services. Best case scenario, they keep people from unnecessary hospitalizations and duplicate tests. Worst case scenario, they keep people from getting critical care they desperately need.

    How do people enroll in REACH? Generally, they do not. Rather, the Centers for Medicare and Medicaid Services involuntarily enrolls them in the program if their primary care doctors are employed by a REACH entity. If you are enrolled, you should receive a letter letting you know.

    How many people are enrolled in REACH? All told, the Biden administration is contracting with 132 health insurers, private equity firms and other entities to “coordinate” care for some 2.1 million people enrolled in Traditional Medicare.

    What do these REACH entities know about health care? The Medicare Innovation Center (CMMI), an arm of CMS, claims that it has vetted all the REACH entities to ensure that they understand health care and are invested in the initiative from a quality and cost perspective. At the same time, the Innovation Center’s director, under questioning about how the government protects enrollees from bad actors, said that CMMI could “not draw lines between good guys and bad guys.” Perhaps she misspoke. I hope it does not mean that entities that inappropriately keep people from getting needed care will be able to do so.

    What’s the worst case scenario? Primary care doctors keep people from getting the care they need in order to help the REACH entity maximize its profits as well as to maximize their own income. We know from Medicare Advantage that insurers engage in all sorts of fraudulent and wasteful behaviors to maximize their profits. There’s every reason to believe that the REACH entities, including private equity firms and insurers, will engage in the same acts. They know that CMS does not have the resources or the tools or the political will to hold them accountable in a meaningful way for their bad acts.

    What can you do to protect yourself if you’re in traditional Medicare? CMS suggests that all the entities with which it has contracted to “coordinate” care will do their  jobs well. It also suggests that it will oversee them to make sure that “they don’t stint on care.” Don’t believe that. Question your primary care doctor. Make sure he or she is not part of a REACH entity. If so, make sure your PCP is ensuring you get the care you need. If you’re not sure, you have the right to opt out by leaving your primary care physician and moving to another one. Also, remember that you are still in traditional Medicare, and your care is covered from any doctor or hospital that takes Medicare.

    Make your voice heard: Go to protectmedicare.net and sign the petition to President Biden. He can end  REACH.

    Here’s more from Just Care:

  • Requiring primary care coordination could cause patients needless harm

    Requiring primary care coordination could cause patients needless harm

    There is a government move afoot to have primary care doctors “manage” care for everyone with Medicare. The benefits of primary care coordination can be tremendous but must be balanced against the risks.  Given the shortage of primary care doctors, requiring primary care coordination could cause patients–particularly vulnerable patients needing urgent care–needless harm.

    The shortage of primary care doctors could mean dangerous delays for people who need care urgently and are required to see a primary care doctor before seeing a specialist. It could also mean additional copays and trips to the doctor, which could impede access to care. When primary care doctors work for insurers or private equity firms, as they increasingly do, financial incentives also could pose risks to patients who need specialty care.

    The Centers for Medicare and Medicaid Services, CMS, is on a mission to have everyone with Medicare in what it calls an “Accountable Care Organization” or “ACO” by 2030. With ACOs, the government pays entities–sometimes hospitals and sometimes private equity firms or insurers–an upfront fixed fee to treat patients. It’s up to the entity to decide what care to cover and when. They maximize profits when they provide less care.

    What could be wrong with an ACO? For now, ACOs are accountable in name only. They are largely unaccountable for the care they provide. The limited oversight of their performance coupled with their large financial incentive to withhold care–they profit more–suggests huge cause for concern, especially when Wall Street entities, private equity firms and insurers are calling the shots.

    Accountable Care Organizations, like Medicare Advantage HMOs, can leave patients waiting a very long time to see a primary care doctor. If people need to see a primary care physician in order to get specialty treatment, their conditions can worsen when care is delayed. Stories abound about that happening to people in Medicare Advantage HMOs.

    Pre-pandemic, Kevin MD reports that fewer than one in five physicians were taking new patients. More than eight in ten had no ability to see new patients. We are likely to be short 48,000 primary care physicians in the near future.

    Of course, the shortage of PCPs would not be as pronounced if doctors spent less time on administrative functions. One study found that about half of a physician’s time is spent on administrative work. Less administrative work would make it far easier for doctors to see more patients. Right now, the US fares poorly relative to other countries in ensuring people see primary care doctors in a timely fashion.

    We need to invest more in primary care before insurers and ACOs are allowed to require people–particularly vulnerable older adults and people with disabilities–to see a primary care doctor in order to see a specialist. Kevin MD reports that a lot of unnecessary medical treatment stems from the fact that primary care physicians do not have the time to oversee patient care. A lot of inappropriate delays and denials of care also result from a weak primary care infrastructure and financial disincentives for insurers to provide appropriate care.

    Here’s more from Just Care:

  • Biden administration bent on privatizing traditional Medicare

    Biden administration bent on privatizing traditional Medicare

    There appears to be little light any more between corporate health care and government health care or even between government health care-speak and corporate health care-speak. In the latest government push to privatize traditional Medicare–“ACO REACH”–insurer and investor middlemen will responsible for assuming risk and paying claims. The Biden administration claims its goal is “value-based care,” though decades of evidence show that corporate middlemen drive up costs and do not deliver value for patients.

    What’s happening? The Biden administration is continuing a Trump administration experiment to pay middlemen–often entities with no meaningful medical expertise–a flat fee per patient to “manage care” for people in traditional Medicare. The administration just renamed the “Global Professional Direct Contracting” experiment–which works like Medicare Advantage–ACO REACH. It will privatize traditional Medicare by turning over “care management” read “money management,” to investors and insurers.

    Who will be in the experiment? People with Medicare whose primary care physicians are working for a middleman that contracts with the Centers for Medicare and Medicaid Services as part of “ACO REACH.”

    What’s the value to patients? If you look at the role insurer middlemen play in Medicare Advantage, it is hard to see that ACO REACH offers any possibility of value to patients and easy to see huge risk. Given the scant data available in Medicare Advantage, no one can demonstrate value in the care patients receive. MedPAC, the government’s Medicare oversight agency, has never been able to assess care quality in Medicare Advantage plans because the plans have never given it complete and accurate information that would permit MedPAC to assess value. At the same time, government agencies have found widespread and persistent inappropriate delays and denials of care and coverage putting patients at serious health risk.

    ACO REACH will offer “care coordination,” but what does that mean?  The Center for Medicare and Medicaid Innovation (CMMI) claims the ACO REACH model is somehow going to ensure people in traditional Medicare have their care coordinated in ways that improve health outcomes. But, there is no evidence that people in managed care plans have better health outcomes than people in traditional Medicare. In fact, “care coordination” is often a euphemism for delayed care, less care, and referrals to low-cost providers, none of which is by definition a good thing. Primary care doctors will have financial incentives to minimize costs.

    Will ACO REACH promote health equity? CMMI also says it is promoting health equity through ACO REACH, but there’s no evidence to support that claim. Participants will need to have health equity plans. But health equity plans are far different from results and, so long as cost is a barrier to care, it’s hard to see how participants can reduce health disparities. It’s also hard to imagine how CMS will ensure compliance by participants with model requirements.

    Here’s more from Just Care:

  • How should Medicare innovate to improve quality and reduce spending?

    How should Medicare innovate to improve quality and reduce spending?

    Donald Berwick, MD, former head of the Centers for Medicare and Medicaid Services and Richard Gilfillan, MD, former head of the Center for Medicare and Medicaid Innovation (CMMI) write in JAMA Network about the value of CMMI, a creation of the Affordable Care Act that has just reached its tenth year of operation.

    Before CMMI, there was no governmental agency charged with looking scientifically into how best to reshape our nation’s health care financing and delivery systems. Specifically, CMMI is supposed to test new ways of delivering and paying for care that bring down spending while maintaining or improving quality or improve quality while either not increasing spending or reducing it.

    CMMI has significant resources to work with. It has $20 billion to test new models of delivering and paying for care over 20 years, or $1 billion a year. The Secretary of Health and Human Services (HHS) has authority to bring CMMI models to national scale that fit within the parameters of its work, without requiring legislation.

    Between 2010 and 2020, CMMI tested 54 models. Some of these models focused on better care for individuals and better population health, while spending less. Some tested new models of delivering primary care, including medical homes and accountable care organizations. And, some models tested new ways of paying for care, through bundled payments for a group of services over a period of time, instead of through a payment for each service delivered.

    One independent review found that fewer than ten percent of the models tested led to significant reductions in spending. CMMI reports on its website that nearly 10 percent of models tested improved quality and/or reduced costs.

    Beyond that, the tests showed where the savings could be found and where not, as well as where and how the system could be gamed. As of now, CMS has certified four models to be scaled nationally, including a national diabetes prevention program.

    Berwick and Gilfillan recommend that CMMI model tests should be aligned with an HHS and CMS strategic plan for improving health and health care value and promoting equity. They also recommend that, over time, the ACO model should apply to all clinicians and hospitals, which would be paid a capitated rate for the total cost of care. They recommend CMMI test models that focus on social determinants of health, in partnership with other executive branch departments, such as the Department of Transportation and the Department of Housing and Urban Development. They recommend that CMMI test new models of care delivery. And, they recommend increased public-private partnerships to promote better health care and the public health. The entire evaluation process should be public.

    Here’s more from Just Care:

  • Medicare Advantage costs taxpayers more than traditional Medicare

    Medicare Advantage costs taxpayers more than traditional Medicare

    If you look at the data, the private health insurance industry has not succeeded at innovating to rein in Medicare spending through the Medicare Advantage program. A new paper on the Health Affairs blog finds that accountable care organizations (ACO’s), which operate in traditional Medicare’s Shared Savings Program deliver good care at lower cost than the Medicare Advantage program.

    The authors find that the federal government reins in costs by one to two percent through ACOs in the Medicare Shared Savings Program (MSSP) initiative. More than 10 million people with Medicare are enrolled in the MSSP. The ACOs do a better job at reining in costs than Medicare Advantage plans.

    The government pays Medicare Advantage plans a benchmark 98 percent of what it spends in traditional Medicare and then some. That amount excludes overpayments for Medicare Advantage plan enrollees who are in better health than Medicare Advantage plans claim and bonus payments to Medicare Advantage plans. Bonus payments bring Medicare Advantage payments up to one percent above traditional Medicare. Overpayments to Medicare Advantage plans represent another two to five and a half percent in payments.

    In addition, a Kaiser study found that people who leave traditional Medicare to join a Medicare Advantage plan spend 13.4 percent less than the average person in traditional Medicare, adjusting for health risk. The study suggests that the federal government is likely overpaying Medicare Advantage plans because it assumes their enrollees have the same overall health care costs as people in traditional Medicare when the evidence suggests that they have lower health care costs.

    All in, the authors conclude that Medicare Advantage plans cost the federal government more on average than traditional Medicare. Medicare Advantage plans receive between two and five and a half percent more in payments per enrollee than traditional Medicare.

    Medicare Accountable Care Organizations saved traditional Medicare between one and two percent. The ACOs also have higher quality scores than traditional Medicare for people not enrolled in ACOs. They believe ACO successes on the quality front should improve medical practice patterns throughout the health care system.

    The authors suggest that Accountable Care Organizations are not appropriately rewarded relative to Medicare Advantage plans for their successes. They propose level competition between traditional Medicare and Medicare Advantage. They argue for better risk adjustment based on Medicare Advantage “encounter” data (data on services delivered to enrollees) so as not to unfairly reward Medicare Advantage plans and penalize traditional Medicare. Unfortunately, Medicare Advantage plans have yet to provide CMS with accurate and thorough data about the care they provide to their enrollees undermining the possibility of better risk adjustment.

    Here’s more from Just Care:

  • What are Accountable Care Organizations?

    What are Accountable Care Organizations?

    Medicare has been experimenting with new payment models to bring down health care costs, improve health care quality and promote healthy communities. One payment model launched in 2013 is a “shared-saving program” that involves “Accountable Care Organizations.” What are Accountable Care Organizations (ACOs)?

    ACOs are groups of doctors and/or hospitals, home health agencies and nursing homes that have contracted with  the Centers for Medicare and Medicaid Services (CMS) to coordinate patient care in ways that reduce health care spending and promote quality. If they succeed at lowering costs, they increase their revenues; they share in the savings. ACOs respond to the belief that hospitals and doctors need better incentives to keep patients healthy, improve care quality and reduce costs.

    People enrolled in traditional Medicare can also be enrolled in ACOs. According to the HHS Office of the Inspector General (OIG), those enrolled in an ACO tend to be older and have more health risk factors than the typical person with Medicare.

    If you are enrolled in traditional Medicare and see a doctor who participates in an ACO, you are automatically enrolled in an ACO. Your doctor will be coordinating your care with other doctors and health care providers in the ACO. But, you are also free to go outside the ACO for your care, like everyone with traditional Medicare.

    Unlike a Medicare HMO or other Medicare Advantage plan, in an ACO your care is coordinated, and you are covered for care from virtually any doctor or hospital in the U.S. For more information from CMS on ACOs, click here.

    There are 9.7 million people with Medicare currently enrolled in 428 ACOs around the country. In an attempt to determine whether they are getting better care at a lower cost, the HHS OIG studied databases between 2013 and 2015, the first three years of the ACO program. And, the OIG found that “most of them” reduced spending, with total net spending reduction of nearly $1 billion. The OIG also found that they improved quality of care based on CMS quality measures.

    To determine whether an ACO improves quality of care, CMS looks at how well the ACO coordinates care, the patient experience, the delivery of preventive care and treatment of at-risk populations. The OIG found that, among other things, the best-performing ACO’s reduced the number of hospital readmissions within 30 days and conducted patient screenings for future fall risks as well as depression screenings and follow-up plans.

    The highest-performing ACOs lowered spending by an average of $673 per individual compared to other ACOs, which show an increase in per-person Medicare spending.

    Here’s more from Just Care: