Network kickoff highlights nationwide payment reform

President Obama, HHS Secretary Sylvia Burwell, and a host of other health care payers, providers, state representatives, and patient advocates launched the Health Care Payment Learning and Action Network (HCPLAN) on March 25, 2015, HHS announced. HCPLAN is an effort to spread the achievements and lesson s learned from the first five years of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) to lower costs and improve quality by using alternative payment models, which tie payment to value and health outcomes rather than the volume of services delivered.

Short-term goals

Secretary Burwell has set a goal for 30 percent of all Medicare payments to be based on alternative payment models by 2016 and 50 percent by 2018. At the kickoff gathering, she urged private sector payers to match or beat the Medicare goals.

ACA implementation

The ACA introduced several payment reforms that have already been effective at saving both lives and money, according to HHS. The efforts to reduce hospital-acquired conditions (HACs) and to prevent readmissions within 30 days of discharge from the hospital both have generated significant results. Between 2010 and 2013, HACs dropped 17 percent, resulting in 50,000 fewer patient deaths and avoiding $12 billion in health care costs. Similarly, the readmission rate dropped by about 8 percent in 2012 and 2013, resulting in 150,000 fewer readmissions. According to HHS, the accountable care organization programs have saved $417 million in Medicare spending.

Network activities

An HCPLAN contractor will serve as a “convener,” bringing network participants together in working groups, webinars, and large meetings to discuss best practices and whether variations among payment models can be harmonized. The HCPLAN also will provide support to a guiding committee and work groups, which will propose priorities and write summary papers.


As of the date of launch, more than 2,800 organizations and individuals have registered to participate in HCPLAN. MITRE has been chosen as the contractor for the Network. Active participants include the American College of Physicians, the American Cancer Society, Caesars Entertainment, Cigna, the State of Delaware, Dignity Health, and RiteAid. Caesars is testing a bundled payment model for hip and knee replacements, which will base payment on outcomes and could dramatically reduce patients’ cost sharing.

All participants are expected to subscribe to the goals and to work on a project to fulfil them. Most meetings will be held via webinar or teleconference. Additional information about the operation of the HCPLAN is available at

The Affordable Care Act at age five: a look back and a look ahead

Somewhere near their first birthdays, children learn to walk. At three years of age, they might start pedaling a tricycle, and at age five, they are poised to enter kindergarten. March 23, 2015, marks the fifth anniversary of the enactment of President Obama’s signature health reform law, the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Has the ACA, at five years of age, made the same amount of progress as a child?

Critics argue that the ACA has failed, but proponents say that it is moving closer to achieving its goal of quality, affordable health care for all Americans. As a law that seeks to expand health insurance coverage for Americans, improve the functioning of health insurance markets, and control the efficiency and quality of health care, the ACA has “had a major positive impact, and one that will continue to bring efficiencies over time,” said Keith Fontenot, the managing director of government relations and public policy at Hooper, Lundy & Bookman, P.C.

Regardless of whether it has met its milestones, it is clear that the ACA has already made an impact. It has had significant effects on the uninsured rate, the affordability of coverage via the provision of subsidies, the use of preventive services, and the actions of large employers and insurers. Many ACA provisions have gone into effect over the last five years; however, due to design or delay, a number of significant reforms have yet to be implemented or fully realized.

This White Paper looks at the ACA’s impact on Medicare and Medicaid issues and its impact on the private insurance market. It also looks at major ACA changes facing health care providers and employers in the coming months.

Read further, “The Affordable Care Act at age five: a look back and a look ahead.”

2015 Health IT certification criteria would enhance interoperability

The HHS Office of the National Coordinator for Health Information Technology (ONC) has issued an advance release of a Proposed rule introducing a 2015 Edition of Health Information Technology (IT) Certification Criteria (2015 Edition), proposing a new 2015 Edition Base Electronic Health Record (EHR) definition, and modifying the ONC’s Health IT Certification Program to make it accessible to more types of health IT and health IT supporting various care and practice settings.

The 2015 Edition Proposed rule would also establish the capabilities, standards, and implementation specifications that Certified Electronic Health Record Technology (CEHRT) would need to achieve meaningful use by eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) under the Medicare and Medicaid EHR Incentive Programs (EHR Incentive Programs).


The Health Information Technology for Economic and Clinical Health (HITECH) Act, Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (the Recovery Act) (P. L. 111–5), was enacted on February 17, 2009. The

HITECH Act amended the Public Health Service Act (PHSA) (42 U.S.C. 201 et. seq.) and created “Title XXX – Health Information Technology and Quality” to improve health care quality, safety, and efficiency through the promotion of Health IT and electronic health information exchange. Section 3001(c)(5) of the PHSA (42 U.S.C. sec. 300jj-11) provides the National Coordinator with the authority to establish a certification program or programs for the voluntary certification of health IT.

On July 28, 2010, HHS issued a Final rule adopting the initial set of standards, implementation specifications, and certification criteria and realigning them with the final objectives and measures established for the Medicare and Medicaid EHR Incentive Programs Stage 1 (75 FR 44590), referred to as the “2011 Edition Final rule.”

On September 4, 2012, a Final rule was issued to adopt the 2014 Edition set of standards, implementation specifications, and certification criteria and realign them with the final objectives and measures established for the EHR Incentive Programs Stage 2 as well as Stage 1 revisions (77 FR 54163), referred to as the “2014 Edition Final rule.”

Then, on September 11, 2014, another Final rule was published which revised the 2014 Edition EHR certification criteria to provide flexibility, clarity, and enhance health information exchange (79 FR 54430), referred to as the “2014 Edition Release 2 Final rule.”

2015 Edition certification criteria

HHS’ 2015 Edition Proposed rule builds on this prior rulemaking to facilitate greater interoperability and enable health information exchange through new and enhanced certification criteria, standards, and implementation specifications. HHS believes that these changes will spur innovation, open new market opportunities, and provide more choices to providers when it comes to electronic health information exchange. To achieve these goals, the 2015 Edition Proposed rule would:

  • improve interoperability for specific purposes by adopting new and updated vocabulary and content standards for the structured recording and exchange of health information, including a Common Clinical Data Set composed primarily of data expressed using adopted standards; and rigorously testing an identified content exchange standard (Consolidated Clinical Document Architecture (C-CDA));
  • facilitate the accessibility and exchange of data by including enhanced data portability, transitions of care, and application programming interface (API) capabilities in the 2015 Edition Base EHR definition;
  • establish a framework that makes the ONC Health IT Certification Program open and accessible to more types of health IT, health IT that supports a variety of care and practice settings, various HHS programs, and public and private interests;
  • support the Medicare and Medicaid EHR Incentive Programs through the adoption of a set of certification criteria that align with proposals for Stage 3;
  • address health disparities by providing certification standards for the collection of social, psychological, and behavioral data; for the exchange of sensitive health information; and for the accessibility of health IT;
  • ensure all health IT presented for certification possess the relevant privacy and security capabilities;
  • improve patient safety by applying enhanced user-center design principles to health IT, enhancing patient matching, requiring relevant patient information to be exchanged, improving the surveillance of certified health IT, and making more information about certified products publicly available and accessible;
  • increase the reliability and transparency of certified health IT through surveillance and disclosure requirements; and
  • provide health IT developers with more flexibility and opportunities for certification that support both interoperability and innovation.

The 2015 Edition Proposed rule will publish in the Federal Register on March 30, 2015. Comments on the Proposed rule may be submitted through May 29, 2015.

Tears over drug tiers as specialty medications drive up care costs

The prices of life saving medications are playing an increasing role in driving health care costs. Specialty drugs represent about 1 percent of all U.S. prescriptions but make up nearly 32 percent of all U.S. drug spending, according to a report from the pharmacy benefits manager, Express Scripts. The trend is alarming for drugs that are used to treat serious conditions like hepatitis C, cancer, multiple sclerosis, and HIV. According to a Washington Post, one specialty drug, Sovaldi®, a hepatitis C treatment, costs $84,000 for a typical 12-week course. Although the causes are varied, some are pointing to the increased use of drug tiers among health plans as a driving component of the price hike.


The debate about who or what is really responsible for the costs is not a clear contest. Some suggest that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) is responsible due to the increased number of insured individuals. Insurers blame the unchecked drug manufacturers and drug manufacturers point at insurer’s health plans, which have increasingly added complexity and cost to the acquisition of drugs. The Washington Post says that drug tiers sit at the center of the debate. Tiers separate drugs into distinct classifications based upon type and cost. Some plans have tiers for preferred generics and non-preferred generics as well as preferred and non-preferred brand medications. Specialty medications, like Sovaldi, typically fall into the highest tiers of a prescription drug plan. A Kaiser Family Foundation study indicates that the tier system has taken hold in Medicare and Medicare Advantage plans where, in 2014, nearly all seniors “were enrolled in plans that had a specialty tier for drugs that cost the insurers at least $600 per month.” Many of the plans with such tiers charge the highest coinsurance rates allowed by Medicare—33 percent—for drugs in those tiers.


An analysis conducted by Avalere Health revealed that the trend is affecting plans sold on the ACA’s Health Insurance Exchanges as well. Specifically, the review determined that “[E]xchanges are placing a significant out-of-pocket burden on patients with serious illnesses by requiring particularly high cost-sharing for all medicines used to treat certain conditions.” The analysis determined that plans usually have four or five tiers, with the lowest tier charging a low coinsurance amount ($15 for example) and the highest tier charging higher rates (40 percent or more of a drug’s cost). The classes of medicines used to treat serious illnesses like cancer, HIV/AIDS, autoimmune diseases such as rheumatoid arthritis and multiple sclerosis, and bipolar disorder often fell into the tier imposing the highest costs on consumers. The concern is that plans offered on the Exchanges are placing the highest cost burders on the most vulnerable patients.


The answer to the question of how to bring down costs of life saving drugs is elusive. However, California lawmakers are taking a stab at it with California Assembly Bill 339. According to Capital Public Radio, the law would prevent health plans from putting all medications used to treat a certain condition into the highest cost prescription drug tier. The theory behind the law is to prevent insurance companies from discriminating against certain patients by placing all of the drugs used to treat a particular condition, HIV for example, in the plan’s highest tier. Critics say that the bill will not do anything to lower costs and will merely shift the cost burden towards premiums and away from the drugs themselves.