Highlights from Reed Smith's Post-Acute Care Conference

In early April, Reed Smith hosted an enlightening, industry-leading conference on post-acute care in Washington, D.C. The conference, entitled “Reed Smith 2014 Washington Health Care Conference: Focus on Post-Acute Care," brought together a panel of experts to discuss episodic care, bundling models, and alternative payment and delivery systems. The conference also featured other speakers who presented from the perspective of investors and Capitol Hill, along with a keynote address from American Enterprise Institute resident scholar Dr. Norman Ornstein.

Policy Discussion on Payment Models

The conference started with a panel discussing bundling initiatives and other alternative payment models. The panel featured Barbara Gage, Ph.D., Fellow and Managing Director of Engelberg Center for Health Care Reform at the Brookings Institution; Judy Feder, Ph.D., Professor at Georgetown University; Vincent Mor, Ph.D., Professor at Brown University School of Medicine; and James Michel, Director for Medicare Research & Reimbursement at the American Health Care Association (“AHCA”). The panel brought with them decades of experience in health care policy and research, and a deep knowledge of post-acute care providers’ current reimbursement systems, in addition to models expected to reform payment for post-acute services in the future.

Dr. Gage spoke first, and introduced bundling by discussing the triple aim adopted by the Centers for Medicare & Medicaid Services (“CMS”): achieve better care for patients, better communities’ health, and lower costs by improving the health care system. She explained how new payment models—including bundled payment initiatives and accountable care organizations—strive to accomplish the above-mentioned triple aim. Gage discussed whether the post-acute setting in which a patient receives treatment distinguishes the patient’s outcome and the level of resources that different post-acute settings (e.g., home health, skilled nursing facilities (“SNF”), inpatient rehabilitation facilities (“IRF”), or long-term acute care hospitals (“LTCH”)) furnish to patients. Gage described in great detail the arguments in favor of bundled payments, emphasizing that one of the benefits of a bundled payment model is that it forces communication across all care settings.

Dr. Feder, on the other hand, urged caution as reimbursement moves to new models. She stressed that bundled payment models, for example, create powerful incentives to potentially reduce or limit the care furnished to patients, and therefore could result in reduced quality of care. Feder explained that bundling is not new, and that, e.g., payers have bundled in the inpatient hospital setting for 30 years. Feder pointed out that when Medicare implemented diagnosis-related groups in the inpatient hospital prospective payment system, hospital length of stay “dropp[ed] like a stone.” Feder underscored that the biggest challenges arise from patients whose health is deteriorating, and explained that the number of home health visits, for instance, are the lowest when patient acuity is the highest. In order to ensure adequate, appropriate, and high-quality care for patients, Feder suggested that policymakers thoughtfully develop and implement any new payment system over time, and incorporate quality mechanisms that serve to protect patients. Feder suggested that good patient data and strong accountability measures are essential to any bundled payment program.

After Feder spoke, Dr. Mor took the podium and analogized capitation versus fee-for-service as being “between the devil and the deep blue sea.” He further explained that fee-for-service reimbursement models have encouraged runaway costs and increased utilization, and that there is a lack of provider accountability and responsibility. In contrast, he explained that in capitation reimbursement models, there is an inherent incentive to deny care. Mor discussed how policymakers can ensure patients receive quality care from providers, and raised a number of thought-provoking questions, such as whether a SNF or other post-acute provider should be responsible for rehospitalization after the discharge of a patient, and whether low rehospitalization reflects overall high-quality care. Mor urged the development of a common assessment tool that includes hospital assessment data in order to more accurately measure post-acute quality and case-mix. He also recommended that CMS use the “Welcome to Medicare” assessment and other periodic beneficiary assessments to obtain risk profiles for patients. Mor ended his presentation by suggesting that while capitation models—such as bundling—are preferable to fee-for-service because one entity is responsible for patients’ care, capitation models face challenges as well, including how to properly measure case-mix and outcomes.

James Michel from AHCA noted the operational challenges associated with bundled payments. For example, it is difficult for post-acute providers to assume the responsibility for patients after the post-acute provider discharges a given beneficiary. Michel also stated that the Center for Medicare & Medicaid Innovation Bundled Payments for Care Improvement initiative’s models incentivize low-cost providers to participate, but providers who recognize they have higher costs than the community average will not participate because of the risk that they will miss the spending target, resulting in a payment to the government. Michel noted that AHCA has developed its own bundled payment proposal, in part to preserve a process in which patients and their families can decide where the patient should be treated after an acute stay. The AHCA bundled payment proposal includes four proposed episodes (e.g., major respiratory condition and septicemia) that would account for approximately 60 percent of all SNF care and more than 50 percent of all post-acute care.

Wall Street Perspective

Jay Barnes, a Senior Vice President for Healthcare Investment Banking at Jefferies, LLC, spoke from the Wall Street perspective, addressing the current appetite for deals in the post-acute space. He described a tepid outlook for post-acute investment stemming from the uncertainty of the future payment models and the changing regulatory landscape, particularly with regard to LTCHs. He informed attendees that the private equity market has been non-existent in the post-acute space because it is challenging to create projection models when future reimbursement for post-acute care remains murky. He explained that the post-acute transactions occurring are largely driven by real estate. For example, Barnes described the recently announced Emeritus Senior Living and Brookdale Senior Living merger as driven by real estate.

Congressional Activity

Cate McCanless, Senior Policy Analyst at Brownstein Hyatt Farber Schreck, provided an insightful overview of Medicare activity on Capitol Hill. She explained that Congress has focused on post-acute care because of the perceived “comfortable” margins achieved by post-acute providers (according to the Medicare Payment Advisory Commission). McCanless also described the outlook for the discussion draft of the Improving Medicare Post-Acute Care Transformation (“IMPACT”) Act of 2014, released by the House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Ranking Member Sandy Levin (D-Mich.), along with Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Orrin Hatch (R-Utah), March 18, 2014. The IMPACT Act draft includes one measure discussed by Mor during the bundling panel: the reporting of common data across post-acute providers, and the required reporting by acute-care hospitals of patient assessment data gathered in advance of discharge. McCanless also explained that while there has been some Congressional momentum in eliminating Medicare's sustainable growth-rate (“SGR”) formula in order to move to an alternative payment model, such momentum may lose steam this year now that a temporary patch has been enacted, because eliminating the SGR would be expensive, and it is an election year. McCanless pointed out certain post-acute policy proposals that would result in cost savings, such as reducing the SNF payment update by 1.1 percent, which would save an estimated $12 billion, and equalizing certain payments for SNFs and IRFs, which would save an estimated $1 billion; these provisions could be targets for offsets for future Medicare reforms.

Impact of Political Polarization on Health Policy

Dr. Norman Ornstein, noted observer of Congress and politics, and keynote speaker at Reed Smith’s inaugural Health Care Conference, closed the session with a thoughtful discussion regarding the current state of American politics. He described not just the polarization, but also the tribalism, of American politics today, depicting a broken American political system where opposing parties have adopted a mantra of, “if you support it, I am against it.” Despite Ornstein’s bleak description of the current state of politics, he offered some suggestions for reform, including incentivizing citizens to vote. He argued that if more of the American public is engaged, politicians must meet in the middle on at least some policy debates.

In all, the inaugural Reed Smith Health Care Conference led to provocative discussions and a deeper understanding of the political climate and policy recommendations likely to impact—or even transform—post-acute care in the not-so-distant future. We look forward to next year’s conference.

CMS Call: Applying for the 2015 Medicare Shared Savings Program (April 8)

 On April 8, 2014, CMS is hosting a call on how to prepare for the Medicare Shared Savings Program application process for the January 1, 2015 start date. Among other things, the call will cover accountable care organization (ACO) structure and governance, application key dates, and the Notice of Intent to Apply submission process.

CMS Requests Feedback on ACO Initiatives

CMS is inviting public input on “the evolution of Accountable Care Organization (ACO) initiatives” at CMS, including feedback on a second round of applications for the current Pioneer ACO Model along with new ACO models that encourage greater care integration and financial accountability. Responses should be submitted by March 1, 2014.

CMS Letter to States on Quality Considerations for Medicaid and CHIP Integrated Care Models

CMS has posted a November 22, 2013 letter to state health officials on “Quality Considerations for Medicaid and CHIP Programs,” the fourth in a series of guidance documents intended to assist states with designing and implementing integrated care models, such as medical/health homes, accountable care organizations, and managed care. The latest letter provides a framework for quality improvement and measurement as states develop care payment reforms ranging from risk-based shared savings methodologies to performance-based bonus payments to providers. Specifically, the letter describes: key components of state quality improvement strategies (goals, interventions, metrics, targets, transparency, and feedback); the impact of this framework on CMS policies for payment delivery models and accountability; a description of existing quality measurement and improvement efforts that impact Medicaid and CHIP; an example of a measurement matrix; and a description of alignment with existing quality initiatives and funding to support data infrastructure.

CMS Hosts Calls on Medicare Shared Savings Program Application Process

CMS has scheduled two calls to discuss the application process for the ACA’s Medicare Shared Savings Program for the January 1, 2014 start date. This initiative is designed to help providers participate in accountable care organizations to improve quality of care for Medicare patients. A June 20 call will feature an overview and updates to the Shared Savings Program application process, and a July 18 call will provide an opportunity to ask questions of CMS subject matter experts.

CMS Call on Medicare Shared Savings Program Application Process (April 9 & 23)

CMS is hosting two calls in April on the Medicare Shared Savings Program, which in intended to help providers participate in Accountable Care Organizations (ACOs) in order to improve quality of care for Medicare patients. First, an April 9, 2013 call will focus on preparing for the Shared Savings Program application process for the January 1, 2014 start date. Second, an April 23 call will cover tips for completing a successful ACO application.

Affordable Care Act and the Post-Election Implications for Radiology

On the Reed Smith Life Sciences Legal Update blog, Health Care team members Thomas Greeson and Paul Pitts have written about post-election implications for the radiology industry.  The report describes their assessments of the short and mid-term time horizon for a number of health policy developments such as integration (e.g., accountable care organizations), government enforcement, antitrust, and self-referrals.  For additional details, see our full post.

CMS Call to Focus on ACO Educational Opportunities (Aug. 27)

The CMS Center for Medicare and & Medicaid Innovation is holding an Open Door Forum on August 27, 2012 to receive input on designing educational opportunities for providers interested in participating in accountable care organizations (ACOs) or other coordinated care initiatives.

 

CMS Call: Medicare Shared Savings Program and Advance Payment Model Application Process (July 31)

On July 31, CMS is hosting a call on the Medicare Shared Savings Program application and Advance Payment Model application processes for the January 1, 2013 Shared Savings Program start date. These two initiatives are designed to help providers participate in Accountable Care Organizations (ACOs) to improve quality of care for Medicare patients. Registration is required.

CMS Guidance on Medicaid Integrated Care Models

On July 10, 2012, CMS released two letters to state Medicaid agencies on “Developing and Implementing Integrated Care Models in Medicaid Programs.” The first letter describes the concept of “Integrated Care Models,” which could include medical/health homes, accountable care organizations (ACOs), ACO-like models, and other arrangements that emphasize person-centered, continuous, coordinated, and comprehensive care. The second letter describes flexibility in the Medicaid statute that supports delivery system and payment reforms in fee-for-service systems. CMS expects future communications to states to address methodologies for shared savings arrangements, a quality and cost measures framework, achieving results through managed care contracts, and alignment with other federal initiatives.

CMS Call on Medicare Shared Savings Program and Advance Payment Model Application Process (July 16)

On July 16, 2012, CMS is hosting a National Provider Call on the Shared Savings Program application and Advance Payment Model application processes  for the January 1, 2013 Shared Savings Program start date. These two initiatives are designed to help providers participate in Accountable Care Organizations (ACOs) to improve quality of care for Medicare patients. Registration is required.

MedPAC Examines Medicare Benefit Redesign, Dual Eligible Policy Options

On June 15, 2012, MedPAC released its June 2012 Report to the Congress on “Medicare and the Health Care Delivery System.”  Unlike most MedPAC reports that focus on provider payments, this report examines the role of beneficiaries and their impact on the Medicare program. In particular, MedPAC recommends reforms to Medicare’s benefit design/cost-sharing structure to protect beneficiaries against high out-of-pocket spending while creating incentives for beneficiaries to make better decisions about discretionary care. The report also assesses different care coordination models, such as bundling and ACOs, and ways to reward outcomes resulting from coordinated care (or penalize fragmented care). In addition, MedPAC examines programs designed to integrate care for Medicare/Medicaid dual-eligible beneficiaries, including the Program of All-Inclusive Care for the Elderly and dual-eligible special needs plan. MedPAC also includes separate chapters on care for beneficiaries in rural areas and options for reforming Medicare coverage of home infusion service, as requested by Congress.

CMS Accepting New Applications for Advance Payment ACO Model

Through the Advance Payment Accountable Care Organization (ACO) initiative, CMS is testing the extent to which pre-paying a portion of future shared saving could increase participation in CMS’s Medicare Shared Savings Program (MSSP). While CMS previously announced that applications would only be accepted for April 1, 2012 and July 1, 2012 start dates, CMS now plans accept applications beginning August 1, 2012 for an additional round of Advance Payment ACOs that would begin on January 1, 2013. 

GAO Report on Impact of Fraud and Abuse Laws on Medicare Financial Incentive Programs

A recent GAO report focuses on how federal fraud and abuse laws affect the implementation of financial incentive programs intended to improve quality and efficiency, such as pay-for-performance programs that reward physicians for adherence to clinical protocols or shared savings programs that offer physicians a percentage of a hospital’s cost savings attributable to the physicians. The GAO finds that stakeholders’ compliance concerns may hinder implementation of financial incentive programs to improve quality and efficiency on a broad scale. The report notes that while properly structured financial incentive programs can potentially improve quality and reduce costs, however, improperly structured programs might disguise payments for referrals or adversely affect patient care. The GAO concludes that government agencies and health care providers are likely to “continue to have different perspectives about the optimal balance between innovative approaches to improve quality and lower costs and retaining appropriate patient safeguards.”

GAO Summarizes Stakeholder Views on Health Care Provider Antitrust Policy

The Government Accountability Office (GAO) has issued a report entitled “Federal Antitrust Policy: Stakeholders' Perspectives Differed on the Adequacy of Guidance for Collaboration among Health Care Providers.” In response to a Congressional request, the GAO examined the perspectives of health care industry groups and antitrust law experts on how federal antitrust guidance may affect the ability of health care providers to collaborate to improve health care quality, such as through accountable care organizations. In particular, stakeholders differed on the adequacy of guidance on clinical integration and the use of exclusive collaborative arrangements.

Medicare Shared Savings Program and Advance Payment Model Application Process National Provider Call (March 1)

On March 1, 2012, CMS is hosting a national provider call on the application process for the Medicare Shared Savings Program and the Advance Payment Model. Both initiatives are designed to encourage the development of accountable care organizations to improve quality of care for Medicare patients.  Registration is required. 

Medicare Shared Savings/ACO Program Webinar (Jan. 31)

The CMS Chicago Regional Office is hosting a webinar on the Medicare Shared Savings Program (MSSP) on January 31, 2012 to provide an overview of the MSSP and explain the application process.

CMS Announces 32 Pioneer ACOs

CMS has announced the 32 “Pioneer Accountable Care Organizations” (ACOs) that will begin providing coordinated care services effective January 1, 2012. The Pioneer ACO model is a Medicare Shared Savings Program option designed for health care organizations that are experienced in coordinating patient care in different care settings and that are prepared to enter payment arrangements with financial accountability and performance incentives.

CMS Call on Advance Payment ACO Model (Jan. 5)

On January 5, 2012, CMS will host an Open Door Forum to review the Advance Payment ACO Model and a newly-released Advance Payment ACO application template. As previously reported, this initiative will test whether/how pre-paying a portion of future shared saving could increase participation in the Medicare Shared Savings Program. CMS also has announced that Advance Payment  Model applications will be accepted between January 3 and February 1, 2012 for the April 1, 2012 start date, and between March 1 and March 30, 2012 for the July 1, 2012 start date. 

CMS Open Door Forum on Final Medicare Shared Savings/ACO Rule (Dec. 7)

CMS is hosting an Open Door Forum on the final Medicare Shared Savings/ACO rule on December 7 from  2:00 P.M. – 3:00 EST.   To participate, call 800-837-1935 and reference Meeting ID 32084888.  Note that this CMS event follows a Reed Smith teleseminar on the ACO rule earlier in the day.

Older Entries

December 1, 2011 — Reed Smith Analysis and Overview of the Medicare Shared Savings Program for Accountable Care Organizations

November 7, 2011 — CMS Schedules Two Educational Events on Medicare Shared Savings Program/ACO Rule (Nov. 10 & Nov. 15).

October 20, 2011 — CMS Releases Final Medicare Shared Savings Program/ACO Rule

October 14, 2011 — MedPAC Endorses Medicare SGR Proposal, With Offsetting Medicare Cuts

October 13, 2011 — CMS Shared Savings/ACO Rule Entering Final Review Stage

September 29, 2011 — CMS ACO Learning Session in Baltimore (Nov. 17-18)

July 20, 2011 — CMS to Host ACO Learning Session in San Francisco (Sept. 15-16)

July 16, 2011 — CMS Hosts Webinar on Physician Culture Change for Improving ACO Cost and Quality Outcomes (July 19)

June 14, 2011 — Lawmakers Seek Investigation of Physician Owned Distributors (PODs) for Medical Devices

June 9, 2011 — CMS Extends Deadlines for "Pioneer ACO Model" Applications

June 2, 2011 — CMS is holding a Special Open Door Forum on ACO Advance Payment Initiative (June 14)

May 25, 2011 — CMS Call on Pioneer Accountable Care Organizations (ACOs) - June 7

May 18, 2011 — CMS Seeks Comments on Advance Payments to ACOs, Announces "Pioneer" ACO Model and ACO Training Sessions

May 17, 2011 — CMS Hosts Briefing on ACO Proposed Rule (May 24)

May 3, 2011 — FTC Workshop on ACO Policy Scheduled for May 9

April 21, 2011 — Summary and Analysis of Medicare's Shared Savings Program for Accountable Care Organizations

April 13, 2011 — Official Version of CMS Accountable Care Organization (ACO) Rule Now Available

April 12, 2011 — Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations

April 6, 2011 — CMS Call on Accountable Care Organization Rule (April 7)

April 1, 2011 — CMS Proposes Long-Awaited Accountable Care Organization (ACO) Regulations

December 29, 2010 — HHS Semiannual Regulatory Agenda for FY 2011

November 20, 2010 — CMS Forum on Health Care Delivery System Reform (Nov. 22)

November 15, 2010 — CMS Seeks Feedback on ACOs/Medicare Shared Saving Program

September 17, 2010 — FTC/CMS/OIG Workshop on Accountable Care Organizations (Oct. 5, 2010)

September 17, 2010 — MedPAC Policy Meeting

June 15, 2010 — CMS Call on the Medicare Shared Savings Program/Accountable Care Organizations (June 24)

June 8, 2010 — Q&As on ACA Medicare "Accountable Care Organization" Shared Savings Program