Category Archives: Bundling

Challenges Remain in Physician Payment Reform

Following up on my post yesterday about shared savings, John O’Shea writes today in the Health Affairs blog, that challenges remain with regard to physician payment reform, now that President Obama has signed the Medicare Access and CHIP Reauthorization Act (MACRA) in April.

MACRA repeals the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS).

The SGR has been blamed for causing instability and uncertainty among physicians for over a decade, and that led to 17 overrides of scheduled fee cuts, at a cost of over $ 150 billion.

The passage of MACRA, O’Shea wrote, raises new questions about where the US health care system is headed in the post-SGR world of payment and delivery reform.

Yet, before MACRA was signed into law, HHS Secretary Burwell announced a major initiative calling for 30 % of Medicare payments to be value-based through the use of alternative payment models (APMs) by 2016, and 50% by 2018.

HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016, and 90% by 2018.

O’Shea reported there are reasons for caution. These policy changes, following calls to move from the current volume-based, fee-for-service (FFS) system to a value-based system that pays for patient outcomes, rather than for individual services, present major challenges to achieving the goal of value-based health care, the goal of any real health reform initiative.

One of the APMs O’Shea discussed is Value-based purchasing (VBP), which is the concept behind APMs, includes a broad set of performance-based payment strategies that attempt to use financial incentives to influence provider performance, such as the Shared Savings Program mentioned yesterday.

Another APMs is the Merit-Based Incentive Payment System (MIPS) [don’t you just love how the government comes up with these abbreviations?], a modified FFS system, which is basically a Pay-for-Performance (P4P) program.

The overall early results of these initiatives, as well as possible flaws, make the long term viability of these models uncertain.

With regard to P4P programs, a 2014 RAND report looked at 49 studies examining the effect of P4P on process and intermediate outcome measures, and found that the overall results were mixed, and that any identified effects were relatively small.

According to the lead author of the study, Cheryl Damberg, “The evidence from the past decade is that pay for performance had modest effects on closing the quality gap.” A basic flaw in the model is the reality that meaningful patient-centered outcome measures remain elusive.

ACOs, as I wrote about yesterday, are another APM; and O’Shea reported that their ability to generate savings to share with participants is so far not encouraging. He points to early results from the Pioneer ACO program that determined that of the 23 ACOs that participated in 2013, only 11 earned any shared savings, which totaled about $41 million. Six ACOs lost a total of $25 million. The results from a similar study in 2014 showed improvement, but the long-term outlook is still unclear.

What is the impact on the practice of medicine?

What O’Shea found was that physicians currently labor under an increasingly burdensome and often meaningless number of reporting requirements that take time away from patients, and fail to help them improve quality of care.

Accordingly, a commentary O’Shea cited from the New England Journal of Medicine said that, “the quality-measurement enterprise in US health care is troubled.”

A recent CMS report, O’Shea mentioned, said that 40% of Medicare providers will face 1.5% cuts for failing to submit data to the Physician Quality Reporting System.

Because of this, many public and private payers are tying larger amounts of provider payments to a growing number of largely meaningless measures.

O’Shea said that there are two areas of concern, given the plethora of payment and delivery reform initiatives: the administrative burden on physicians, and the push towards greater consolidation.

Nearly half, or 46% of doctors who reported said that they felt burned out in 2014. A main reason cited by the physicians was the increasing administrative burden.

What does the mean?

Well, having slogged through an online Health Care Quality course as part of my MHA degree program, the myriad abbreviations mentioned in Mr. O’Shea’s article does not surprise me. CMS and HHS has for years developed all kinds of initiatives and programs to influence and alter behavior of all stakeholders in our health care system.

As “Uncle” Walter Cronkite once said, “America’s health care system is neither healthy, caring, nor a system.” And that was before the passage of the ACA.

But for the purposes of this blog, and in keeping with the point of the last article where it was said that what happens in health care affects workers’ comp. then I think you can agree that these initiatives and programs, while well-meaning, may make things worse in the future, but not because the idea behind the ACA or the law itself is bad, but because we Americans cannot do anything right until we try everything else, a la Winston Churchill.

If that is the case, then believing that by doing the same things over and over again, that by following everyone else off the cliff of unregulated, employer-based, multi-payer health care, and by not opening the workers’ comp system to real alternatives, especially for surgery, then nothing will ever change.

We will continue to see more new initiatives and programs from CMS, and the results will be dismal, and the impact on workers’ comp will be felt eventually. That is, unless you open up your minds to new ways of thinking.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Employers Turn to Medical Travel for Healthcare Solutions

Note: The following is a re-post from Medical Travel Today’s Managing Editor, Megan Kennedy, who has posted several of my earlier articles on their newsletter. I am returning the favor, as her article spells out just how medical travel can be implemented into work comp, just as it is being done for group health.

As healthcare costs in the U.S. continue to surge, employers are looking for ways to maximize value. Today, approximately 15 percent of the nation’s 50 largest employers are turning to a medical travel benefit – also known as “travel for treatment programs” — as a way to provide high-quality, cost-effective care for their employees. Today, an increasing number of plan members are communicating a positive receptivity around the concept of traveling for care as a way to offset the astronomical co-pays, deductibles and other forms of cost-sharing that they are now responsible for as a result of healthcare reform.

In the past, large employers have taken to the idea of a medical travel offering, but recently more mid-size and smaller employers have begun to note the many benefits of traveling for care.

As the medical travel industry continues to develop, employers and their employees are accessing care at the country’s top hospitals, also known as Centers of Excellence (COEs), and doctors-at a predetermined cost.

In fact, some of the top hospitals in the U.S. are now offering bundled payments – “a single payment for all services related to an episode of care,” according to the American Academy of Orthopedic Surgeons.

Benefits of bundled pricing include:

  • Transparent and “up front” cost of care and treatment
  • Coordination among providers
  • Optimal continuum of care
  • Decrease in unnecessary procedures
  • Reduced re-admissions

According to Laura Carabello, executive editor and publisher, Medical Travel Today, “Employers of all sizes build in incentive programs to prompt workforce uptake of the benefit, including waiving co-pays and deductibles, and covering both patient and companion/caregiver travel expenses. One of the drivers is the documented track record of a COE to achieve better results for specific procedures, mitigating complications, repeat procedures, and readmissions-which can be very expensive in terms of hard costs, time lost from work and the health of employees.  Care that is delivered with bundled pricing at predictable costs is generating wide receptivity.”

by Megan Kennedy, Managing Editor, Medical Travel Today

Full article can be found at:

http://www.medicaltraveltoday.com/newsletter/v8-17-full.html#story10

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

CMS to Require Bundling of Reimbursements for Hip and Knee Surgery

The Centers for Medicare & Medicaid Services (CMS) announced last week that they will soon require the bundling of reimbursements for hip and knee surgeries, according to an article yesterday on Health Leaders Media.com.

The article, by Gregory A. Freeman, stated that hospitals and health systems will respond quickly and ruthlessly to the CMS announcement.

According to a former CMS official cited in the article, mandatory bundled payments for hip and knee surgeries would shutter one in four skilled nursing facilities and trigger “demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions.”

The move by CMS is not surprising, says Mark Bogen senior vice president of finance and CFO at South Nassau Communities Hospital on New York’s Long Island.

Bogen referenced the initial demonstration project set up through CMS whereby many providers selected the DRG’s (Diagnostic Related Groups) 469 and470 (major joint replacement or reattachment of lower extremities, with or without major complications or comorbities), as a way to test moving forward to a value-based payment system.

CMS demonstrated through this project that more than half of the cost of providing care for joint replacement occurred post-surgery, Bogen stated, and that the bulk of the cost occurred in either the acute inpatient rehab units or sub-acute rehab units of skilled nursing facilities (SNF’s).

Deidre Baggot, former lead of CMS’s Acute Care Episode Demonstration (ACE) Bundled Payment Pilot, said the evidence to support bundled payments as a more cost-effective alternative to traditional fee-for-service is clear.

Baggot also said that on the hospital side, we can expect to see demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions, which she says is a good thing.

“Post-acute providers will see a significant hit to inpatient rehab and skilled nursing facility utilization as providers search for lower cost alternatives such as home health services.

David Friend, consulting managing director with the Center for Healthcare Excellence and Innovation at BDO Consulting, said that hospitals are likely going to cut their one- and two-star SNFs to mitigate the risk of penalties during the post-discharge period.

Twenty-five percent of the SNFs are expected to close soon, Friend noted, while medically advanced SNFs will flourish.

Another way the bundling of reimbursements will be disruptive is that rather than having a “blank check for services”, reimbursements will be based on a fixed amount of money, says Mike Lessila, director of business development with Vestica Healthcare.

Lessila said that if hospital systems successfully complete the episode of care for less than the contracted cost, they gain financial profit, but if problems arise due to poor episode management, a preventable hospital readmission, or another complication such as a hospital-acquired infection, the provider will bear the cost of fixing them as well as penalties from CMS.

Finally, bundled payments introduce several complexities to care that hospital systems must deal with, said Lessila. One complexity is that hospital systems must think through its care coordination for these procedures, or the likelihood of failure is high.

Additional resources will be required to ensure the patients’ experiences are good and they follow all of the recommended steps to ensure a successful episode. Bundling will also motivate providers and facilities performing the services to streamline and improve communication.

Lessila said that “financial administration of the bundle becomes far more difficult since a single bundle procedure will involve payments to one or many physicians, medical devices and hospital facility charges. The hospital system must understand who gets paid how much and in what form, and be able to track all of the details to determine whether the bundle is profitable or not in the end.”

What does this mean to you?

The closing of skilled nursing facilities, even one- or two-star facilities will back up the rehab process, not only for general health care, but for workers’ comp, since hip and knee surgeries are common procedures in workers’ comp claims.

Diagnostic testing, hospital stays and avoidable readmissions will also impact the claims process for workers’ comp, and may add more costs to the total hospital bill that employers and insurers will pay.

The confusion that may result from basing the reimbursement on a fixed amount rather than a blank check will force the hospital systems taking a greater financial risk and guaranteeing the outcome of the surgery.

Lastly, the complexities of bundling will impact the financial administration of hospital systems, with most legacy billing systems unable to administer these contracts and aggregate the data, according to Lessila.

What does this mean for medical travel?

The disruptive effects of bundled payments may make it possible to implement medical travel into workers’ comp since there is a clear beginning, middle and end to the episode that can be better managed by facilities not covered by CMS rules that will bottleneck the process of adjudicating and settling claims.

But this will only happen when the medical travel industry convinces the workers’ comp industry and employers that they can provide the required procedures at a lower cost than even bundled payments can offer, and with a better guarantee of positive outcomes.

In my article, “What Role Can Medical Tourism Play in Physical Therapy and Rehabilitation for Workers’ Compensation?”, I said that medical tourism can package rehabilitation and physical therapy services the same way the other medical services are packaged, along with the cost of treatment, airfare and accommodations.

Medical travel facilities can take up the slack from the shuttered skilled nursing facilities that may result from the implementation of bundled payments. The medical travel industry and their destination partners should consider offering their services as a better alternative.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Complications Insurance for Medical Tourism: Coverage for Implementing Medical Tourism into Workers’ Comp

Once again, I am turning to the medical tourism facilitator, Trip4Care for a brilliant blog piece on medical travel that should be of keen interest to those in the workers’ comp world who pooh-pooh my idea for medical travel and workers’ comp. You can connect with Trip4Care by email.

There are many companies that provide medical travel insurance, and by bundling it together with monoline work comp coverage, an employer can reap savings on expensive surgeries abroad, and provide their employees with the best care possible, at the lowest cost, and can get them back to work faster by having them recover in pleasant surroundings, instead of at home on a couch in front of the TV.

Here is the article:

http://trip4care.com/understanding-the-importance-of-complications-insurance-in-medical-tourism/

To deny this option to injured workers, while group health and private pay patients can go abroad, smacks of discrimination, class bias, racism, short-sightedness, and ignorance about the quality of medical care in other nations that is rapidly changing and catching up to that in the US and the rest of the Western world.

Imagine what this would do for peaceful understanding and cooperation, if the most common of us could see how the other half lives. I am not advocating going to war-torn countries, but to those that cater to medical travel patients, and that are relatively free of strife. This will help cement peace and respect for all nations.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Betting the Farm

David Dias, Founder and Chairman of Insurance Thought Leadership.com posted the following article to his site this afternoon:

http://insurancethoughtleadership.com/move-workers-comp-silo/?sthash.IZT1sXHd.mjjo#sthash.IZT1sXHd.v7TnXKZz.dpbs

The author, John Connell, is the President of the Western Region of EPIC Insurance Brokers and Consultants, and is responsible for Employee Benefits. Mr. Connell’s article brings to light something I have thought of when trying to explain implementing medical tourism into workers’ comp.

Imagine visiting a farm, and after being shown around the parts where the animals are kept, the farmer shows you his silos. There are two of them; one very big, and one very small.

Curious, you ask the farmer what is in the first silo, and he replies that that is where he stores his grain. Then you ask, what is in the second silo, and he replies, that that is where he stores his other grain.

Totally confused, you ask another dumb question of the farmer. “Why do you have two silos if you are just storing grain? What is different about the grain in the second silo that requires a separate silo?”, you ask.

He shakes his head, laughing at the city slicker, and replies that the grain in the first silo is from that field over there, and he points to a large wheat field. Then he tells you that the grain in the second silo is in a field in another direction, and informs you that there are certain rules, regulations and laws that apply to not only growing the wheat that is stored in that silo, but also how it is stored in the silo as well.

At this point, you are dazed and confused, because it’s just wheat, no matter how you slice it in the end, but you are so incredulous that you shake your head in disbelief.

That is the point Mr. Connell is making, that it makes no sense to have two silos for the same thing, namely the medical care that is covered by group health plans and by workers’ compensation. And as he points out so well, there are companies that are combining the two, much like our farmer should with his wheat, and never mind the rules, regulations, laws and statutes about how to grow or store the grain from that second field. It is these rules and regulations, etc., that hinder improvements in how workers receive benefits from on the job injuries.

And somewhere in the new silos these companies are creating, there should be room to include medical travel as an option for injured workers to receive better care, and for their employers to realize lower cost for surgeries common to workers’ comp. I’d call that betting the farm on real change that will save money and provide workers with the best care possible.

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I am willing to work with any broker, carrier, or employer who is sick and tired of being bled by the Wall Street vulture capitalists and the entire medico-legal system known as workers’ comp, to save money, and to provide the best care for their injured workers or their client’s employees, while at the same time, helping to break the monopoly of the American health care cartel.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.