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Wednesday, December 31, 2014

Reviewing Centers for Medicare and Medicaid Incentive Programs

As 2014 fades from view, I am barely making my monthly deadline for the Straight Talk column. but I would like to leave you with a couple of thoughts for the new year. There have been more than a few articles detailing the Centers for Medicare and Medicaid (CMS)grant awards as well as enforcement efforts impacting your health care. First, let's start with the positive, CMS provides grant awards for government agencies as well as multi-agency initiatives to study ideas for improvement of health care. In 2014, these states received grant awards for initiatives to better resource care for Medicare, Medicaid, and the Children's Health program: Arizona, California, Colorado, Connecticut, Georgia, Florida, Illinois, Iowa, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, Mexico, Ohio, Pennsylvania , South Dakota, Texas, Virginia, Washington, and Wisconsin. Washington State has received a 65 million dollar grant, starting February 2015, to work with government and private sector health care providers across the state to look at methods to reduce administrative redundancies, eliminate unnecessary costs, and strive to improve health care. So, congratulations to Washington for going after the grant, which is a multi-year laborious effort, and for winning it! The venerable Washington Health Care Authority will be in charge of the project, which is the same agency which has run the State Employees Health Plan for decades and also implemented the Health Insurance Exchange. For more information on the type and amount of the award follow this link to the CMS site:

Scale of these Government Funded Health Care Programs
To give you an idea of the scale of Medicare, it represents 12% of the entire federal budget. Medicaid and the Children's Health Program represent 8% of the nation's budget, but remember these programs are also funded by the states. According to the Center on Policy and Budget Priorities, the 2013 budget allocated 22% for these three programs, which is a significant increase over 2010, when the total was 20% for these three programs. For more information on this you can follow this link:  Just to keep this in perspective, defense spending was 19% during the same time frame. CMS is the primary government authority charged with administering these programs, as well as performing investigations into health care innovations. And finally, a huge aspect of CMS's role is to police the payment system and stop abusive practices.

Accountable Care Organizations
Under the Affordable Care Act, the Centers for Medicare and Medicaid are charged with implementing the Accountable Care Act, which specifies performance indicators linked to government payments for health services. In a recent report, 2, 225 hospitals, which represent about one fourth of the nation's hospitals, are going to experience reductions in CMS payments because they didn't meet the standards. Now, in the private sector, this is referred to as a performance agreement and if a contractor doesn't hit his target, he gets dinged with a penalty. However, this is a new aspect of publicly funded health care. A 2% penalty is also huge, because as you have already observed, CMS provides anywhere from 20% to half of some of these hospital budgets. For example, trauma center and public hospitals, like Harborview Medical Center, in Seattle or Bellevue Hospital, in New York, serve a much greater population of low-income patients, so government funding provides most of their budgets. Though hospitals are concerned about the penalty assessments, the program appears to be working, because penalties are down nationally by 4% overall for 2013, compared to the previous year. And let's give credit where it is due because 1,154 hospitals, which represent about 10% of the nation's facilities, did not get fined. This means they met all of the Accountable Care Organization targets, including reducing re-admission rates. For more information on this program go to Kaiser Health at:

Concerns About Cost Punish Clinicians
One of the consequences of the cost reduction efforts, which are certainly needed, is that clinicians who treat these patients are not getting paid enough, especially for Medicaid. This worrisome trend has continued in a downward trajectory for years. Presently, only 46% of doctors will accept Medicaid patients nationwide. Further, by punishing safety-net hospitals, like Harborview, we are making it even harder for low-income folks to access health care. It seems to me if CMS decided to pay even a modest $10 more per patient visit for Medicaid, this would help offset the dearth of providers for Medicaid patients. At the end of the day, it doesn't matter how fantastic your grant program is if the people who are supposed to benefit are unable to see a doctor. Access to health care is really the issue. Meanwhile, the medical device companies are lobbying their way through Congress trying to get out of their lousy 3% assessment to fund their part of the Affordable Care Act, while they charge Americans 40% more for their equipment than they do other nations. Here's a thought, let's use all of that 3% to provide money for primary care clinicians to serve Medicaid patients. In fact, I suggest you contact your Congressman or Congresswoman and lobby for this provision.

This is the healthpolicymaven signing off, wishing you a healthy new year. For more information on my work, you can also follow me on TUMBLR or Twitter. In 2015, I will be offering some new services as well.

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