T-Minus 3 Weeks: All Eyes On Payment Reform Conference Committee. Here’s Some Of Our Priorities.

Can't Keep Paying For Poor Outcomes

Today marks three weeks until the final day of formal legislative sessions, July 31 of even-numbered years. On July 31, 2010, the legislature enacted a major health care bill. On July 31, 2008, the legislature enacted a major health reform bill (actually, that wasn’t passed until a few minutes after midnight on August 1). See the pattern?

So we expect that the House-Senate conference committee working on reconciling the health care payment and delivery reform bills (H. 4155 and S. 2270) to finish their work close to the end of the month, if not on July 31. Senator Richard Moore, co-chair of the conference, told the State House News last week that they were hoping to finish in the next couple weeks, but had no deadline other than July 31.

Both bills take a comprehensive approach to controlling health care costs and improving health care quality, so there are dozens of provisions at stake. Our Campaign for Better Care has focused on promoting prevention and patient-centered delivery system reforms, and HCFA has looked many other issues, including insurance regulations and changes to the employer responsibility sections of chapter 58.

There are many very strong provisions in both the House and Senate bills, and we support many proposals in each bill. Among our many concerns, these in particular stick out as conference priorities:

  1. Fund Community Prevention: Community-based prevention is vital to improve health outcomes and address preventable and chronic health conditions. Preventing people from getting sick in the first place is way less expensive that treating people for chronic disease. And many chronic illnesses, like asthma, heart disease and diabetes, can be prevented by community-based programs that keep people healthy. Both the House and Senate bills provide for a Public Health Trust that would give grants to the most effective local programs with proven results. But the House bill provides just $20 million of one-time funding, while the Senate bill provides for $100 million over 5 years. We urge the conference committee to fund the Public Health Trust at the $100 million level.
  2. Don’t Sunset Insurance Rebate Law: Massachusetts law requires insurers covering individuals and small businesses to devote at least 88% of their premium dollars to medical care. Insurers that spend too much of our premiums on administration, marketing and profit have to pay a rebate to their customers. This year, these rebates will total $57 million, from 5 insurers. About 50,000 individual policy holders and nearly 50,000 employers will receive rebates. The law makes sure consumers and small businesses realize the full value of their health insurance payments and makes health coverage more affordable. This law is scheduled to sunset this year, but the Senate version of payment reform extends this statute (called the “minimum loss ratio”) for another two years. We urge the conference committee to continue the insurance rebate law.
  3. Reward Better Health Outcomes: The Senate bill includes language supporting use of payment incentives to reduce avoidable hospitalizations, avoidable readmissions, adverse events and unnecessary emergency room visits. Rewarding providers who perform well on these outcome measures gives patients assurance that the system’s incentives promote better care. This is not new. Currently, MassHealth links hospital payments to risk-adjusted preventable readmissions. Maryland and New York also link payments to good outcomes, and Texas and several other states plan to implement similar policies. We urge the conference committee to include payment incentives for good outcomes in the final bill.
  4. Keep Employer Fair Share Contribution: Both House and Senate bills weaken the employer Fair Share Contribution law, a central pillar of Chapter 58. The Senate bill excludes some employees from the Fair Share calculation, while the House version includes provision to increase the minimum size of employers responsible for complying with the Fair Share requirement from 11 to 20 workers, as well as the Senate provision. The Fair Share law will need to be reexamined in light of the federal health reform law, but including these provisions in payment reform sidesteps an ongoing process involving all stakeholders who are working to reach a consensus on changes to the statute. We urge the conference committee to exclude provisions that arbitrarily impact the Fair Share Contribution law.
  5. Protect Vulnerable Patients: The Senate bill contains several key provisions that protect against the risks that capitation can bring for vulnerable patients. ACOs must ensure that alternative payment methodologies do not create any incentive to deny or limit necessary care, especially for patients with high risk factors or multiple health conditions. The bill also establishes safeguards against avoidance of high cost patients, and requires payment incentives for ACOs to reduce racial, ethnic and linguistic health disparities. These provisions, many of which were in the original House version released by the Health Care Financing Committee, should be included in the final bill to ensure that payment reform truly benefits consumers and promotes patient-centered care. We urge the conference committee to protect vulnerable patients from being denied care.

-Brian Rosman

(and be sure to click on the picture at top to go to the PaymentReformMadeMeme tumblr)

About HCFA

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This entry was posted in Health Care Quality, Healthcare Cost Control, Public Health. Bookmark the permalink.

2 Responses to T-Minus 3 Weeks: All Eyes On Payment Reform Conference Committee. Here’s Some Of Our Priorities.

  1. Pingback: T-Minus 1 Week: Payment Reform and Prescription Abuse Bills Waiting Action |

  2. Pingback: T-Minus 2 Weeks For Payment Reform |

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