Medicare Watch

Medicare Moves Forward on Additional Accountable Care Organizations

This week, the Centers for Medicare & Medicaid Services (CMS) announced the official launch of the Medicare Shared Savings Program, under which physicians, hospitals and certain other health care providers may form Accountable Care Organizations (ACOs). Under the ACO model, participating providers share responsibility for the management of a patient’s care, ideally improving care while lowering costs. ACOs that perform well on identified care quality measures and achieve savings for the Medicare program can then share in those savings.

The Medicare Shared Savings program tests the philosophy that by changing Medicare payment methodology, from reimbursing providers only on a per service basis to rewarding them for meeting certain quality marks and outcomes—such as fewer unnecessary hospitalizations—Medicare providers will better coordinate care for their patients across different care settings. The ultimate goal is to encourage better communication among a patient’s health care providers and thereby provide better care to the patient that will reduce expenses for the overall Medicare program.

CMS identified 27 ACOs in 18 different states across the country, including New York, Florida and Texas, that will participate in the Medicare Shared Savings Program. The agency continues to review applications and may add more ACOs to the program over time. These 27 ACOs will serve approximately 375,000 beneficiaries.  CMS’ announcement builds on the pioneer ACO program launched January 1 of this year, under which CMS identified 32 ACOs with advanced experience and development that, in many cases, already operated as functioning ACOs.

Importantly, participation in ACOs is voluntary for both providers and Medicare beneficiaries. Providers choose to enroll in an ACO. Beneficiaries who see doctors who are part of an ACO are not limited to only seeing providers in the ACO. If they are enrolled in Original Medicare, they are free to go to any doctor that accepts Medicare, as is currently the case. The Medicare Shared Savings Programs is part of several delivery system initiatives included in the Affordable Care Act that aim to increase health care quality while reducing costs.

Read CMS’ press release on the launch of the Medicare Shared Savings Program.

Read CMS’ fact sheet on the launch of the Medicare Shared Savings Program.

Read Kaiser Health News’ “ACOs Multiply as Medicare Announces 27 New Ones.”

Read Kaiser Health News’ “FAQ On ACOs: Accountable Care Organizations, Explained.”

New Reports Demonstrate Costs of the House Budget to States and Consumers

The 2013 budget approved by the U.S. House of Representatives would result in large cuts to Medicare and Medicaid, increasing out-of-pocket costs for beneficiaries and states alike, according to two new reports released by Families USA. The reports state that the budget would affect current Medicare beneficiaries, though supporters of the budget have claimed otherwise. For example, it would re-open the Medicare prescription drug coverage gap, or doughnut hole, which the Affordable Care Act (ACA) began to close beginning in 2010. As a result of the ACA, the coverage gap will completely close by 2020. In 2011 alone, affected Medicare beneficiaries saved over $2 billion in prescription drug costs. Future Medicare beneficiaries with high drug costs would be affected even more by the House budget’s repeal of the ACA and re-opening of the coverage gap.

The House budget converts Medicare into a voucher program, under which beneficiaries would receive a defined contribution from the government to buy coverage. However, Families USA reports, the value of the voucher would not keep pace with the costs of health insurance. As a result, people would have to pay significantly more in out-of-pocket costs for coverage as good as that which is currently provided by Medicare. According to the reports, the Congressional Budget Office (CBO) estimates that by 2030, the House budget voucher would be worth only 77 percent of current Medicare coverage, and would continue to decrease in value over time. The House budget would also provide inadequate coverage for low-income Medicare beneficiaries, as it would cut existing Medicaid programs by over $800 billion. About twenty percent of Medicare beneficiaries also receive coverage from their state Medicaid programs.

According to Families USA, the budget assumes that if the amount of the voucher is inadequate to cover costs, Medicaid would provide additional coverage. However, Families USA finds that given the steep cuts to Medicaid, remaining funding for Medicaid would likely be insufficient to cover extra out-of-pocket costs. According to Families USA’s state-by-state analysis, if the House budget were to take effect, individual states stand, in some cases, to lose over $90 million in funding for existing Medicaid programs over the next 10 years. Specifically, New York would lose over $93 million in Medicaid funding, while Pennsylvania would lose over $37 million, Wisconsin would lose over $14 million and California would lose over $77 million.

Read Families USA’s report on the House budget and Medicare.

Read Families USA’s report on the House budget and Medicaid and other health programs.

Medicare Reminder

How Medicare may help pay for care in a Medicare-certified skilled nursing facility (SNF) if:

• You need skilled nursing care seven days a week or skilled therapy services at least five days a week;
• You were formally admitted as an inpatient to a hospital for at least three consecutive days in the 30 days prior to admission in the SNF; and
• You had Medicare Part A before you were discharged from the hospital.

If you were admitted to a hospital under observation status or only received emergency room services, this time does not count toward meeting the three-day qualifying stay requirement for SNF coverage.

Every benefit period, Medicare will pay the full cost of the first 20 days you stay in the SNF and part of the cost of another 80 days, as long as your stay is medically necessary. A benefit period begins the day you begin to receive inpatient care and ends when you have been out of the hospital or SNF for 60 consecutive days.

If you need more than 100 days of care in a SNF within one benefit period, you will need to pay for this additional care yourself. If you have long-term care insurance, your policy may cover this care, or if you qualify for Medicaid, Medicaid may cover your stay.

Learn more about SNF coverage at www.medicareinteractive.org

Spotlight

The Center for Medicare and Medicaid Innovation has launched a new initiative to reduce the number of avoidable hospital admissions among people living in nursing facilities. The initiative, made possible by the Affordable Care Act, aims to improve quality of care for nursing facility residents. Through this initiative, CMS will support organizations partnering with nursing facilities to implement evidence-based interventions that reduce avoidable hospitalizations. Applications to participate in this initiative are due by April 30, 2012, at 3 pm.

Learn more about the Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents.

Participate in CMS’ webinar on April 17, which will discuss examples of successful evidence-based interventions.

Apply to participate in the Initiative.