HHS Praises ACA, Donut Hole Shrinks, and Preventive Care Use Rises

Over 9 million Medicare beneficiaries have saved over $15 billion on prescription drugs since the passage of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). According to an HHS press release, beneficiaries have saved an average of $1,598 since the passage of the health care law. In the announcement, HHS Secretary Sylvia M. Burwell said that “by providing access to affordable prescription drugs and preventive services with no cost sharing, the Affordable Care Act is working for seniors to help keep them healthier.”

Prescription Drugs

According to HHS, in 2014 alone, 5.1 million seniors and people with disabilities saved a total of $4.8 billion on prescription drugs. The savings to the average beneficiary in 2014 amounted to $941. The figures are higher than they were in 2013, when 4.3 million beneficiaries saved a total of $3.9 billion at an average savings of $911 per beneficiary. The savings are a result of the ACA’s gradual closing of the coverage gap—known as the donut hole—where beneficiaries are forced to pay the full cost of prescriptions out of pocket before catastrophic coverage takes effect. HHS indicates that the donut hole is projected to be closed in 2020, marking 2015 as the halfway point. Under the ACA, in 2015, people with Medicare Part D who are in the donut hole will “receive discounts and savings of 55 percent on the cost of brand name drugs and 35 percent on the cost of generic drugs.”

Preventive Care

The HHS release also celebrated the success of preventive services under the ACA, with 39 million Medicare beneficiaries taking advantage of at least one preventative service with no cost sharing in 2014. Additionally in 2014, almost 4.8 million Medicare beneficiaries took advantage of the Annual Wellness Exam. These numbers represent considerable increases from 2013, when 37.2 million Medicare beneficiaries took advantage of at least one preventative service with no cost sharing and just over 4 million took the Annual Wellness Exam.

Kusserow on Compliance: Recovery Audit Program Update

On virtually the last day of 2014, CMS announced new recovery audit contracts and changes to the Recovery Audit Program. It awarded the Region 5 Recovery Audit contract to Connolly, LLC, for identification and correction of improper payments related to durable medical equipment, prosthetics, orthotics and supplies (DMEPOS); and home health and hospice claims submitted to CMS (national contract). However, CMS has suspended work under the contract due to a post-award protest filed with the Government Accountability Office (GAO). New Recovery Auditor contracts for Regions 1, 2, and 4 remain under “a pre-award protest,” which is expected to continue into the summer. Additionally, the procurement process will continue for Region 3.

The changes to the Recovery Audit Program include improvements to reduce provider burden and increase transparency in the program. The changes will be effective with each new contract award and include, but are not limited to:

  1. The look-back period for patient status reviews is restricted to six months after the date of service, if the hospital has submitted its claim within three months of the date of service;
  2. Additional documentation requests (ADR) limits will correspond with providers’ compliance with Medicare rules; providers with lower denial rates will have lower ADR limits and providers with higher denial rates will have higher ADR limits;
  3. ADR limits will be diversified across all claim types of a facility (i.e., inpatient, outpatient) to ensure that a provider with multiple claim types is not disproportionately affected by a recovery audit review in one claim type;
  4. Recovery Auditors will not receive a contingency fee until after the second level of appeal is exhausted;
  5. Recovery Auditors must wait 30 days to allow for a discussion request before sending the claim to the Medicare Administrative Contractor for adjustment; and
  6. Recovery Auditors will be required to maintain an overturn rate of less than 10 percent at the first level of appeal, or be subject to a corrective action plan.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.

Proposed MA, Part D Policy and Payment Updates Focus on Quality, Access

Newly released proposed changes to the Medicare Advantage (MA) and Part D Prescription Drug programs reflect a commitment to better care and smarter spending. The proposed payment and policy changes, which would take effect in 2016, would provide fair payments to plans, reward high-quality care, and encourage wiser spending of health care dollars to minimize disruption and “create a stable and consistent policy environment,” according to an announcement by CMS.

Health Reform Spurs Improvements

Since the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), MA and Part D have experienced growth and improvement, with MA seeing record high enrollment every year since 2010—a more than 40 percent increase since the ACA was passed—and premiums have fallen by almost 6 percent. Almost all Medicare beneficiaries (90 percent) now have access to a $0 premium MA plan. The announcement notes that the increased enrollment shows that the improvements spurred by the ACA have made the programs more attractive to health plans and beneficiaries. Thus, the proposed changes “will continue this trend.”

Proposed Changes

In its proposed changes, CMS detailed its plan to continue refining the star rating system used by enrollees to select MA plans, with the goal of encouraging improved quality. The proposal also seeks to enhance the value of in-home assessments to support care planning and coordination and improve outcomes. Changes to payment rates vary among plans depending on certain factors. However, the announcement estimates that the expected revenue change would be positive growth of 1.05 percent, with additional growth for plans showing improvement and a focus on customer satisfaction. CMS also proposed working with part D sponsors to ensure access to affordable drug coverage.

Additionally, the proposal seeks to provide enrollees with more information to aid in decision making about care and coverage. Specifically, steps are proposed for ensuring the maintenance of accurate provider directories such that enrollees can better understand what providers are available to them.

“Biggest Loser” and Similar Employer Wellness Programs Harm More Than Help

Employer wellness programs targeting employees’ weight control have resulted in no demonstrated positive effect, according to a paper published in the American Journal of Managed Care. Even with the use of financial incentives and penalties, the paper noted that there is no published evidence of savings resulting from long-term weight loss, nor a reduction in inpatient admissions associated with obesity and suggested that employers should abandon their weight control programs.

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has spurred an influx of wellness programs in larger organizations, as the health reform law gives corporations the opportunity to make up to 30 percent of health insurance premiums dependent on participation in a corporate wellness program and/or on achievement of positive health outcomes. The paper notes that smoking and overweight status are the most common targets of corporate wellness programs.

Lack of results

Despite the expected correlation between obesity reduction savings and wellness savings, corporations have with wellness programs are not reaping any benefits. No studies of such programs have documented savings, according to the paper in one case, even in one particular case that experienced a significant reduction in hospital admissions for reasons such as heart attacks. In addition to a lack of financial results, companies with wellness programs also saw a lack of results in weight loss itself. The paper highlighted that the only major population cohort that showed a reduction in obesity was young children. Comparatively, Medicare and Medicaid populations, who often do not have access to wellness programs, are benefitting from declines in wellness-sensitive medical events requiring hospitalization.

More harmful than helpful results

The paper stresses that corporate wellness programs for weight loss should be discontinued, as these and other programs harm morale and corporate culture through surveys, weigh-ins, and screens, which tend to encourage “employee revolts.” Obesity programs also cause health hazards due to overdiagnosis and overtreatment, and “biggest loser” contests can humiliate employees and spur unhealthy crash dieting. As an alternative to wellness programs such as these, the paper suggests that employers subsidize healthy food options in workplace cafeterias, reimburse fitness memberships, and allow extra breaks for exercise.