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

Highlight on South Carolina: Insurance, flu, vaccinations, and HIT all hot topics

Recent health developments and information from South Carolina span a variety of topics. From the count of new people signing up for health insurance on the Marketplaces, to a high death toll from the flu, and a new health IT platform, every demographic in the state is impacted by current health news.


According to HHS, over 210,000 South Carolinians registered with the Health Insurance Marketplace established by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). This number covers both first time buyers and those re-enrolling. As many as 58 percent of these consumers did not have Marketplace coverage as of last November.

Additionally, 88 percent of those selecting Marketplace plans qualified for tax credits averaging close to $300 per month, which left 69 percent paying $100 or less per month for coverage. These tax subsidies enable the act to live up to its name and provide affordable care. South Carolina is one of the states that did not establish its own Exchange under the ACA, instead relying on the federal Marketplace. The Supreme Court is currently considering the King v. Burwell case, in which a ruling could end subsidies for states that did not create their own Exchanges. In South Carolina, this means that arguably about 115,000 people could lose their subsidies, which would render coverage too expensive for many.

Flu death toll

Having insurance is important for many reasons, but preventing death from contracting the flu is not the one normally on people’s minds. However, South Carolina residents who feel flu symptoms need to exercise caution: 142 people have died from the flu since the season started in late September, compared to 78 people last season. Over 90 percent of this season’s flu deaths have occurred in people over age 50. Even though it is late in the flu season, 120 people tested positive for the flu in hospitals in the first week of March, which is an increase from the previous week.

Measles too?

Although South Carolina’s vaccination rate for kindergarteners at 98.1 percent is better than the national rate of 91.9 percent, measles is still popping up as a discussion point in South Carolina, just like most other states. Part of the reason for the discussion is South Carolina’s ranking at 41 in the nation for children vaccinated between 19 and 35 months. Dr. Eric Brenner, a medical epidemiologist who consults with the University of South Carolina, pointed out that parents seem to forget about vaccinations until their child’s school will not let them in without immunization records. A spokesman from the South Carolina Department of Health and Environmental Control stated that the high rate of vaccinations keeps South Carolinians healthy.

 Rally Health

BlueCross BlueShield of South Carolina group accounts will have access to a new web and mobile platform this month. Rally Health offers tools to promote health and well-being. It begins with an online survey. This platform is HIPAA-compliant, so users can safely input their health information into the survey. Then, users will be able to connect with health coaches for tips on dealing with chronic conditions or even overall wellness, such as weight loss. The platform promotes a personalized experience that includes connection with an online community. BlueCross will also incorporate data into employer reports that will promote the importance of maintaining a healthy workforce, but stresses that the new platform is intended to engage individuals. It hopes that users will be increasingly motivated to make wellness decisions and track their progress toward health goals.

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.”

Subcommittee gives agencies a dose of questions on 340B program

An evaluation of the functionality of the 340B drug pricing program was conducted at a March 24, 2015, hearing titled “Examining the 340B Drug Pricing Program.” The hearing was held by the U.S. House of Representatives Committee on Energy and Commerce, Subcommittee on Health. Through witness testimony, the hearing established the background of the 340B program, recent changes made to the program by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), Health Resource and Services Administration (HRSA) oversight efforts, and the findings of the HHS Office of Inspector General (OIG) regarding the integrity of the program.


The 340B program was created by section 340B of the Public Health Service Act (PHSA) (42 U.S.C. § 256b). Under the program, pharmaceutical drug manufacturers wishing to participate in Medicaid must enter into pharmaceutical pricing agreements in order to receive Medicaid reimbursement. The agreements require manufacturers to provide discounts on certain covered outpatient drugs when those drugs are purchased by certain public health facilities, which the program calls “covered entities.” Participation for public health facilities is voluntary. However, the program encourages participation by discounting the drugs from participating manufacturers.


Health Subcommittee Chairman Joseph Pitts (R-Pa) called the program “critically important” referring to the manner in which it helps low-income patients receive drugs that would otherwise be “out of reach.” While some testimony praised the program and the manner in which it allows covered entities to use savings derived from the program to provide greater care to patients, opponents of the program criticized the manner in which the HRSA has conducted oversight on the program. For example, Rep. Renee Ellmers (R-NC) criticized the fact that the federal government runs the program but does not account for how facilities utilize savings derived from the program. Ellmers also testified that there is a need for greater transparency and better understanding as to how the program is utilized in light of a recent explosion in the program’s growth, due in part to Medicaid expansion under the ACA. The general tenor of the hearing was that the mission of the program was sound, but that greater oversight of HRSA was necessary to ensure the longevity and success of the program. Other criticisms focused on the lag in time between recommendations made by the Government Accountability Office (GAO) and OIG and HRSA actions to enhance oversight.


Debbie Draper, Director of Health Care for the GAO, addressed HRSA’s oversight inadequacies and the recommendations that the GAO made to resolve such inadequacies. Draper’s testimony also considered how HRSA adopted GOA recommendations to improve the program. In terms of oversight efforts, the GAO discovered oversight failures due to a policy where HRSA “primarily relied on covered entities and manufacturers to police themselves and ensure their own compliance with 340B Program requirements.” Draper testified that part of the oversight shortcomings related to a failure of HRSA to offer clear guidance on issues like patient definition and the criteria hospitals must meet in order to qualify for the program. Draper also fielded questions regarding how the metrics used by the 340B programs might be inadequate to determine which hospitals are actually serving a disproportionate share of patients. The testimony acknowledged that hospital burdens and eligibility have been impacted by increased Medicaid coverage in states with expanded Medicaid programs under the ACA. Draper commented that questions about program eligibility would be best resolved through a currently lacking analysis regarding the essential purpose of the 340B program.


In addition to discussing the use of funding to conduct oversight, Diana Espinosa, Deputy Administrator of HRSA, testified about forthcoming omnibus proposed guidance regarding covered entity and manufacturer oversight. HRSA expects that the guidance will offer the agency’s positon on the three areas over which HRSA has explicit regulatory authority: “calculation of 340B ceiling prices, imposition of manufacturer civil monetary penalties, and implementation of a dispute resolution process.” Espinosa testified in response to questions regarding the specifics of the forthcoming guidance and affirmed that HRSA plans to include definitions of “patient” for the 340B program in the forthcoming guidance. Other areas that the forthcoming guidance will address included guidelines for contract pharmacies and eligibility for hospitals. Espinosa’s testimony also explained the manner in which HRSA conducts risk-based assessments to determine which entities to audit.


Ann Maxwell, Assistant Inspector General for Evaluation and Inspections of the HHS OIG, testified as to some specific recommendations that the OIG has made to improve HRSA oversight. A key recommendation of the OIG was to make 340B ceiling prices transparent to 340B providers and to state Medicaid agencies so that those entities would be able to determine that they have or have not paid appropriate prices for 340B drugs.