Portland-area competitors try working together to cut costs for Oregon Health Plan

Published: Wednesday, April 04, 2012, 4:24 PM     Updated: Wednesday, April 04, 2012, 6:47 PM

By Nick Budnick, The Oregonian

A new push to reshape health care in greater Portland is reminiscent, its biggest booster says, of the race to land a man on the moon.

Erstwhile health care competitors hope to set aside their differences to care for the region’s 200,000 Oregon Health Plan members, says Legacy Health CEO George Brown. The task is happening in a timeline — Brown snaps his fingers — “that’s like that long. It’s a moon shot for sure. What we’re trying to do, to my knowledge, has not been attempted any place in the country.”

While the space analogy might seem a stretch, it’s no exaggeration to say Brown’s effort faces steep challenges. He leads a loose group of medical and mental health providers from Clackamas, Washington and Multnomah counties that earlier this week notified the state of plans to join efforts to better manage Medicaid spending.

The group aims to have a more detailed application in to the state by the end of the month. However, several members of the group, such as Tuality and Providence, have also sent their own letters to the state, saying they will set up their own care organizations if this group does not come together as planned. In all, 68 private companies and nonprofits have notified the state of their desire to qualify under Oregon’s reforms.

The obstacles are many. In Portland, the goal of operating by August is a tight one. Other care organizations formed under the state law won’t have as many competitors joining up. Federal funding has not materialized either locally or statewide. And the goal – to use new concepts to save money and improve health for low-income people in the region – has not been applied on so grand a scale.

One obstacle the new coordinated care organization won’t have to face is the U.S. Supreme Court. While headlines lately have focused on a challenge to the new federal law focused on Medicare and commercial insurance, Oregon’s law is different, pushing providers into better coordinated care for state Medicaid recipients.

The carrot? A cut of whatever savings the new Oregon health provider groups can find by moving away from traditional fee-for-service care. There’s possible federal funding as well as access to a potentially lucrative market in the future: public employees. Over time, Gov. John Kitzhaber envisions the new coordinated care organizations as serving teachers and state workers.

Though managed care groups already operate in Oregon, the new ones may be larger. The Portland area group calls itself the TriCounty Medicaid Collaborative and includes Providence Health & Services, Oregon Health & Science University, Tuality Healthcare, Kaiser Permanente, Adventist Health, federally funded community health clinics and health departments of Clackamas, Multnomah and Washington counties.

The region’s largest Medicaid provider group, CareOregon, hopes to join the new group, though it won’t cast a final vote until later this month. “It’s an unproven area, and it’s scary,” says CareOregon CEO Dave Ford. “But it’s exciting. It’s going to be an unfolding drama”

In contrast, a competing provider network of 1,500 doctors and nurse practitioners that has participated in discussions expects to go its own way. “The darn thing is so nebulous you really don’t know what they’re doing,” says Jeff Hetherington of FamilyCare.

The would-be collaborative expects to hear any day on a $34-million grant it requested in federal startup funds. The grant application promises focused efforts on those eligible for both Medicare and Medicaid, meaning they are not only poor but elderly or otherwise disabled, about 16,000 in all. The group will encourage healthy lifestyles among all Oregon Health Plan members, not just those most in need of care.

Other money could become available, too. Oregon hopes to hear by August whether it will receive $2.5 billion in federal funds to support its reforms.

Brown says the ongoing discussions, conducted in private, could lead to a federally sanctioned nonprofit.

The new group is dominated by health plans. In theory, their hospitals have the most to lose fiscally from a healthier population. Does it make sense to put them in charge of the new reforms?

“I know that cynical view,” Ford says. “This is more than rhetoric. These guys are activating their organizations in ways I haven’t seen before.”

Brown, for his part, says serving Medicaid patients is not a profit center for hospitals, moreover, participants are setting aside self-interest. “It just absolutely is surprising to me. The greater good has been held out as the right thing to do and the path to follow.”

Nick Budnick

Two (Very Different) Miami Hospitals Prepare For Health Law’s Medicaid Expansion

By Sammy Mack, WLRN & HealthyState.org

Mar 20, 2012

This story is part of a reporting partnership that includes WLRN, HealthyState.org,  and Kaiser Health News.

The health law’s expansion of Medicaid will cover some 16 million more Americans in the government program for the poor – if that part of the law survives the legal challenge it faces in the Supreme Court beginning next week.

Florida is leading 25 other states in that challenge, but that hasn’t stopped two of Miami’s best-known hospitals from preparing for the Medicaid expansion expected in 2014.

The University of Miami Hospital and Jackson Memorial anchor two separate health systems that are across the street from each other. They share a campus, and they share a lot of doctors. But they are quite different institutions.

The University of Miami’s hospital is owned by a well-endowed private university. Jackson is the massive public safety net hospital that provides the most charity care in town—more than $450 million in uncompensated care last year, fifteen times as much as the university hospital.

To get a sense of how the UM hospital is preparing for Medicaid expansion, it helps to visit the Sabal Palm Supermarket in Little Haiti, where the university health system is at work.

Valentine Cesar is a community health worker who is trying to get women at the grocery store to enroll in a cervical cancer screening program funded through a University of Miami program.

She speaks to the customers in Kreyol and the conversation frequently leads to Medicaid.

“Most of the women I meet that’s the first thing she tell me:  she says, ‘I don’t have Medicaid, I don’t have health insurance,'” says Cesar. “Everybody wants, wants health care.”

But not everybody in this community gets it.

“The reality is there’s no one to pay for their healthcare services,” says Dr. Laurence Gardner, the policy dean for the University of Miami’s medical school and hospital.

Medicaid reimbursements to hospitals are notoriously low.

Even so, Gardner says Medicaid money spent preventing chronic illness and keeping patients out of the ER is efficient in the long run, which is why the University of Miami’s preparation has included beefing up a network of satellite clinics and hiring community health workers like Cesar.

Gardner uses a sports metaphor to say his hospital is just about ready for Medicaid expansion: “I’d say we’re probably at the five yard line.”

It’s a different story for Jackson, the safety net hospital across the street from the university hospital.

“We’re probably right after kickoff on the 20 yard line with 80 yards to go,” says Carlos Migoya, who has been CEO of Jackson Health System for less than a year. “We’ve inherited a place where basically, we’ve had consistent losses for the past several years.”

Jackson has lost about $420 million in the past three years through a combination of uncompensated care and mismanagement.

Migoya just announced layoffs and cuts of about 1,100 hospital positions.

That means Jackson has a lot to gain if the health law stands in court.

“The Medicaid expansion will have a dramatic improvement to our finances,” Migoya says.

This is the big difference between how the two hospitals see Medicaid expansion.

For the public safety net hospital, Medicaid expansion—which will eventually cover about 2 million more Floridians than it does now—is an answer to relentless financial problems.

For the university-backed health system, Medicaid patients are now a growth market to pursue.

As UM’s Gardner puts it: “Is it a new market? No. But is it possibly the only growing market in this geography for the next five to ten years? Yes.”

That means the two hospitals will begin to compete for newly insured patients.

“A rising tide won’t lift all boats if the boats aren’t gussied up for the patients,” notes Gardner.

Even now, it’s not unheard of for uninsured Jackson patients to transfer to the university hospital if they get insurance.

UM’s facilities are newer. The waiting rooms are less chaotic than Jackson’s.

And that is why the public hospital is gussying up. Administrator Dr. Daniel Armstrong gives a tour of the labor and delivery wing in Jackson’s Holtz Children’s Hospital.

“Some of this flooring hasn’t been replaced since the building was constructed in 1981,” Armstrong points out. The harsh fluorescent lighting does no favors for the layer of perma-grit around the baseboards.

But in the refurbished rooms down the hall there is light blue paint and stylish sconces on the walls.

Armstrong’s boss at the safety net hospital, Migoya, knows the cosmetic fixes won’t work on all the new Medicaid patients. “We believe that some of those patients will choose to go to other hospitals, but that’s ok, too.”

Because, Migoya says, the worst case scenario for Jackson would be status quo.

SOURCE:

http://www.kaiserhealthnews.org/Stories/2012/March/20/Miami-hospitals.aspx

Rules For New Insurance Marketplaces Give Insurers Clout

By Julie Appleby

KHN Staff Writer

Mar 12, 2012

Insurers and other industry representatives will get to fill as many as half the seats on the governing boards for state health insurance exchanges, under final rules for the marketplaces issued today by the Department of Health and Human Services.  At least one seat must be reserved for a consumer representative.

The long-awaited rules are likely to disappoint consumer advocates who would have preferred the governing boards “be dominated by consumers,” said Timothy Jost, who speaks as a consumer advocate before the National Association of Insurance Commissioners and is a professor at the Washington and Lee University School of Law.  But Jost said he is pleased the final rules require at least one consumer representative. “It at least gives a toe-hold,” he said.

But they may also frustrate insurers who had sought to prevent the governing boards from imposing requirements on plans beyond what is included in the 2010 health care law. HHS left that possibility in place, however, writing, “We continue to believe that states are best equipped to adapt the minimum exchange functions to their local markets and the unique needs of their residents.”

The exchanges are seen as a key element in the health law, offering one-stop shops for individuals and small businesses looking to purchase health insurance. They will also help determine applicants’ eligibility for programs such as Medicaid, and for federal subsidies to help them purchase insurance. An expected 21 million people will purchase coverage through the exchanges by 2017, according to Congressional Budget Office projections.

The Obama administration touted the 644-page rules as granting states great flexibility in how they design their exchanges, the types of organizations – nonprofit or public agency – that will oversee them and whether to partner with the federal government to operate parts of it. The rules were published as some states are working to set up exchanges and their governing boards – while others have balked at moving forward until after the Supreme Court rules on the constitutionality of the federal health law, which is expected in June.

Additionally, Monday’s announcement included some “interim” rules, meaning they could be tweaked following a 45-day public-comment period. Those interim rules cover issues such as how quickly states must determine if an applicant is eligible for Medicaid or the Children’s Health Insurance Program, and the role insurance brokers will play in helping low- and middle-income people apply for federal subsidies to buy coverage.

Administration officials said the new rules differ from preliminary regulations in several ways. Earlier guidance had proposed that each exchange be responsible for determining which applicants are eligible for insurance subsidies.  The final rule gives states the option to allow HHS to conduct eligibility review. To determine who is eligible for Medicaid or the Children’s Health Insurance Plan, states can choose their own Medicaid agencies.  It also says states cannot allow insurance agents to determine an applicant’s eligibility for subsidies or Medicaid, which remain government functions. But agents, including those who work for web-based private exchanges, can assist those applicants in sorting through their health plan options.

The rules appear to strike a balance between responding to thousands of comments about earlier proposals and providing more details “so states can move forward,” says Patti Boozang, managing director at Manatt Health Solutions, a law and consulting firm based in New York.

The rules do not explain how the federal government would set up exchanges in states that are unable or unwilling to develop their own marketplaces, with those details promised in future rules. In January, the Obama administration released a report saying about 28 states are “on their way” toward establishing exchanges.  “There’s no new information on how that would work, what the partnership model would look like or what states would have to pay – and that’s all information many states have anxiously awaited,” says Boozang.

Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), a trade group, said her organization would be reviewing the rule and offering feedback.

“Exchanges will work best if they are true marketplaces that maximize choice and competition so that individuals, families, and small businesses can purchase plans that are right for them,” she said in a prepared statement. “Consumers will be best served if a state exchange adopts an efficient, cost-effective approach that leverages existing health plan resources, utilizes federal resources or guidance where sensible, and relies on the exchange itself to administer key functions.”

The law says the exchanges will start taking applications in Oct. 1,  2013 – and policies purchased through them would take effect Jan. 1, 2014.  States that are allowed to operate their own exchanges must have approval or conditional approval from HHS by Jan 1, 2013, according to the rules.

In a nod to the fact that some states won’t be able to meet that deadline, the final rules say HHS can grant conditional approval to states that show they are likely to be fully operational by October 2013. Details on what it will take to prove that are expected in future rules.

SOURCE:
http://www.kaiserhealthnews.org/Stories/2012/March/12/insurance-exchange-rules-hhs-states.aspx

Backup plans if mandate struck down

By: Brett Norman
March 11, 2012 10:07 PM EDT

If the U.S. Supreme Court strikes down health reform’s individual mandate and leaves the rest of the law in place — what happens next?

The backup plan could be automatic enrollment in your employer’s health insurance, a lot like the way you get signed up for the 401(k) plan.

If Congress decides to act to repair that hole in the Affordable Care Act — and that’s a big if — an auto-enrollment requirement is the option that’s getting the most attention from health policy experts. It’s a more low-key way to reach at least some of the uninsured people who would be covered by the individual mandate.

It’s an idea that could even appeal to Rep. Paul Ryan (R-Wis.) — because it’s straight out of the health reform alternative he sponsored in 2009.

“Compared to the relatively weak tax penalties with the mandate, aggressive auto-enrollment like what was talked about in 2009 could work pretty well,” said Don Taylor, a health policy professor at Duke University who has written extensively about Ryan’s 2009 bill, the Patients’ Choice Act, at The Incidental Economist blog. “In policy terms, there are things that can be done. Of course, politically, it’s a very different story.”

The Patients’ Choice Act proposed setting up auto-enrollment procedures at emergency rooms and state departments of motor vehicles and through state tax returns and workplaces. People would have been enrolled in private plans being sold on state exchanges.

Although the bill allowed individuals to opt out, research has shown that auto-enrollment, particularly in the case of individual retirement accounts, has successfully boosted participation from people who wouldn’t take the initiative on their own. And Congress will need high participation from healthy people if they want to keep one of the most popular parts of the health reform law: the guaranteed coverage for people with pre-existing conditions.

The individual mandate would require nearly all Americans to purchase health insurance or pay a tax penalty, starting in 2014. It’s one way to get more healthy young people and others on insurance rolls to help pay for expanded coverage of the sicker population.

It’s also the most politically unpopular element of the law.

A Supreme Court decision to strike the mandate could bring back other ideas like auto-enrollment, which enjoyed some conservative support — as did the individual mandate — before the Affordable Care Act passed, some health policy experts say. And Congress would come under considerable pressure to act.

Health care economists disagree on how effective the mandate would be, but they are united on at least one point: If the mandate goes and insurance companies still have to cover everyone with pre-existing conditions, a tidal wave of uncertainty — that great fear of actuaries — will crash down on the insurance industry and people’s premiums could shoot up to frightening levels.

That’s only a hypothetical, since the court could rule that the pre-existing condition coverage — along with a provision that bans insurers from basing premiums on people’s health status — has to go away if the mandate is unconstitutional. But if it gets rid of only the mandate, calls for action will echo through the halls of Congress.

“If it’s as bad as I think it’s going to be — and I think the uncertainty it adds would be very, very bad — then we’ll need to try something else,” said Jon Gruber, an architect of the Massachusetts health reform law that is a model for the Affordable Care Act. “It would become a self-fulfilling prophecy. The actuaries would imagine the worst case and start projecting high premiums across the board.”

Gruber believes the individual mandate is the tried-and-true way to move people onto insurance rolls, but he would choose auto-enrollment as the second best option. He warns, however, that a loss of the mandate would be a major shock to a load-bearing piece of the health reform law.

Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush, said she thinks a combination of carrot-and-stick policies could do a better job of moving free riders into the insurance market than the mandate — “a terrible piece of policy,” she said.

Auto-enrollment could do a better job, Wilensky said, as could another option: strict late-enrollment penalties, in which people pay higher premiums if they don’t enroll in coverage as soon as they’re eligible. That’s an approach similar to those that have shown results in Medicare Part B and Part D.

Another alternative comes from Princeton sociologist Paul Starr, who was a senior health care adviser to President Bill Clinton. Under his proposal, people would have three options, not including the poor, who would be covered under health reform’s Medicaid expansion.

They could buy insurance, with subsidies if they qualify. They could pay an annual tax penalty for going uninsured. Or they could opt out with no penalty — but they couldn’t opt back in for five years. And those who opt out wouldn’t have the protections under the health reform law, meaning any insurance — if they could get it at all — could be prohibitively expensive.

SOURCE:

http://www.politico.com/news/stories/0312/73855_Page2.html

American Medical News story about Ohio Medicaid Plan

Ohio governor proposes Medicaid shared savings

Gov. John Kasich also wants a single care manager and benefits access point for people eligible for both Medicare and Medicaid.

By Doug Trapp, amednews staff. Posted Jan. 20, 2012.

Ohio Gov. John Kasich has begun a dual effort to transform the state’s Medicaid program to pay based on the quality and coordination of care provided to enrollees.

In early January, the Ohio Governor’s Office of Health Transformation announced that it was seeking public and stakeholder input on a proposal to create a single point of benefits administration for Ohioans who are eligible for both Medicare and Medicaid. The state also is rebidding its Medicaid managed care contracts to emphasize quality beginning in 2013. The Ohio Legislature endorsed these and other goals in a budget bill adopted in 2011.

“In Ohio and across the country, we must do a better job of meeting the health needs of individuals and creating a healthy and productive work force at a price that is affordable for businesses, governments, individuals, and other payers,” said Greg Moody, director of the governor’s health transformation office.

Kasich proposed creating a single point for benefits administration for the 190,000 Ohioans eligible for Medicare and Medicaid. Typically, Medicare pays for doctor and hospital visits and prescription drugs for these dual-eligible beneficiaries. Medicaid mostly pays for their long-term care, including nursing home stays.

The Kasich administration’s draft dual-eligible proposal — called an Integrated Care Delivery System — would assign each beneficiary to a care manager to ensure seamless care transitions. The program also would include periodic home visits with enrollees, aggressive reviews of hospital admissions and nursing home placements, and a centralized record for each beneficiary.

Ohio’s proposal is based on its application for one of 15 federal grants of up to $1 million to design dual-eligible care programs. In April 2011, the federal Centers for Medicare & Medicaid Services awarded the grants, which were made available through the national health system reform law. Ohio was not an awardee.

The Ohio dual-eligible proposal would solicit bids from outside organizations to provide care to the beneficiaries. It requires federal approval, but CMS has outlined two paths states can take regarding such programs, according to Ohio Medicaid director John McCarthy A dual-eligible managed care program — Ohio’s choice — would allow state and federal health officials to set program capitation rates in advance to achieve a savings target. A fee-for-service program would not include a maximum budget but would share savings generated in the previous year through care coordination and other efforts, he said.

McCarthy said physician- or hospital-directed accountable care organizations could bid to care for dual eligibles, but that the work will not be easy. “Setting capitation rates and measuring risk isn’t going to be straightforward in this population,” he said.

McCarthy said the state does not want to achieve savings by reducing Medicaid physician fees, but wants physicians to benefit from gains in quality and efficiency by sharing in the savings.

The governor’s office has listened to physicians while crafting the proposals, said Tim Maglione, senior director for government relations for the Ohio State Medical Assn. “We feel that we have the opportunity for meaningful input on the development of this program.” The state began two months of public input meetings on Jan. 12, McCarthy said.

Nationwide, 9 million people are eligible for both Medicare and Medicaid, according to CMS. These beneficiaries account for a disproportionate share of the $300 billion in annual Medicare and Medicaid spending. More than 2.1 million people are enrolled in Ohio’s Medicaid program. Seven managed care plans serve more than 1.6 million Medicaid enrollees, including 125,000 aged, blind and disabled people, and 37,000 children with special needs, according to Kasich’s office.

The Ohio State Medical Assn. has not adopted formal positions on either proposal, but the state’s emphasis on quality and administrative simplification are good goals, Maglione said, adding, “I do think they’re on the right track.” Maglione also said he believes the state will hold managed care plans accountable for their quality performance.

Many Ohio physicians continue to see Medicaid patients even though state fees sometimes do not cover physicians’ costs, Maglione said. Ohio Medicaid physician fees are between 65% and 70% of Medicare rates, although some Medicaid managed care plans pay more to ensure adequate networks.

More information about the Ohio reform plans are available online from the governor’s Office of Health Transformation (healthtransformation.ohio.gov/). Information also is available from the Catalyst for Payment Reform website (www.catalyzepaymentreform.org/).

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