Transcript Health Care Reform Developments in Tennessee: Your Options at

Lance T. Laurence, Ph.D.
Associate Professor, Dept of Psychology &
Director, Univ. of Tennessee-Knoxville Psychological Clinic
Director, Professional Affairs, Tenn. Psychological Association
TPA Convention 11/1/12
Health Care Reform in Tennessee:
Important Developments
 Patient Protection & Affordable Care Act (2010)
 Supreme Court rules on critical component of PPACA: that
is, CAN require individuals to buy health insurance (tax
authority interpretation)
 Tennessee now in the process of creating Health Exchanges
which will be run by Tennessee, not the federal
government (some states passing on state-run option and
looking to the Feds to do it)
 Commissioner McPeak’s state-wide solicitation of opinion
on which plan to use as “standard/benchmark” for the
Health Exchange
Health Care Reform Developments
 The 2012 Election in November: Will it affect PPACA?
 Answer: Probably Not. Neither candidate is going to win by a
substantial amount and the voting control of the House and
Senate not likely to change much. Hence, PPACA law that has
already been passed not likely to be overturned substantially.
 Also, private sector already moving in same direction as PPACA.
More blurring of distinctions between providers, hospital
systems, and insurance companies. More provider-insurance
company risk sharing, “global payments” (patient care paid with
fixed annual fees in “health homes”), more providers of different
disciplines owning health care companies. Efforts to maximize
prevention and disease management increasing.
PPACA: Intentionalities
 Reduce number of uninsured
 Reduce health care costs
 Curb unsustainable rise of health care costs in the public
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sector (Medicare and Medicaid)
Improve patient care
Eliminate waste and fraud (2007 OIG Report on 2003 MH
Audit: “47% of care did not meet program requirements;
spent 2.14 billion in 2003 so $1.01 billion ‘waste’”)
Incentivize organizations/providers who provide quality,
cost-effective care
Support prevention and disease management programs
Encourage integrated mind-physical health care
PPACA: Early Effects
 Has already eliminated pre-existing conditions
 Has extended coverage for dependents from age 24 to age
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#1 and #2 probably has contributed to drop in uninsured in
2011 to 15.7% (44% of the population) from 16.3% in 2010
(46%)
Health care costs increase declined from 5.6% increase in
2010 to 5.3% in 2011
Massive cuts in provider wages in public and private sector
being considered
Creation of new entities, particularly Accountable Care
Organizations (ACOs)
Why Do Health Care Reform?
 Three primary factors: increased costs of health care
relative to Gross Domestic Product, aging population,
increasing uninsured population (recession recently
increased these numbers)
 Simply has to happen. Costs in the public sector are
unsustainable and increasingly so in the private sector so
that more and more employers consider abandoning the
social contract of providing employees with health
insurance (i.e., “legacy costs” of General Motors major
reason for their bankruptcy).
 Simply must contain Medicare, Medicare and uninsured
costs of health care, yet alone those in the private sector
Health Care Costs
 1960s: 28 Billion
 1970s: 75 Billion, $326.00 per person, 7.2% of GDP
 1980s: 253 Billion
 1990s: 714 Billion (remember Clinton Reform Efforts?)
 2008: 2.3 Trillion, $7,681.00 per person, 16.2% GDP
 2009: 17% GDP
 2010: 20.3% GDP
 2018 Estimate: $13,000+ per person
Unsustainable Cost Increases &
Population Shifts
 Since 1980s, cost increases in health care greater than
increases in GDP rate and galloping gap continues to
widen; didn’t used to be that way
 In 2010 cost increases in health care 200% higher than
increases in GDP rate; by 2018 increases in health care are
350% more than increases in GDP rate
 We are aging, and fast:
- In 2010, those 60 and older make up 18% of the
population, 65+ 13% and 85+ 2%.
- By 2030, 60+ are 25% of population, 65+ 20% and 85+
3%
- By 2050, 60+ are 25% of population, 20% for 65+, and
5% for 85+
PPACA: How It Includes People
 Keeps employer-based systems
 Expands Medicaid in order to try to cover poor, low-income
uninsured people or uninsured working poor. Opens door
to introduce managed care to this population (in
Tennessee, “Tenncare”)
 Begins the process of introducing managed care into
Medicare population which is critical for aging population
 If you don’t “fit” into any category above, you buy an
insurance product through the exchange rather than be
uninsured
 Combination of the above “captures” most people
PPARC: What It Does/Attempts
 It is NOT a single payer system (like Canada). Some believe
it is an incremental step toward an eventual single payer
system; others deny such an intentionality
 With the requirement of everyone having to purchase
insurance, you either purchase it through your employer or
if you can’t get it there, you buy it through a state-approved
exchange which provides the “basic” plan available to all in
the insurance exchange. State approves what a “basic plan”
is, which includes all PPARC mandated benchmarks
(mental health and substance use disorders included), and
you purchase it from the exchange
Most Visible Development:
Creation of Accountable Care
Organizations
 Two already in Upper East Tennessee: Mountain States and
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Highlands
154 ACO’s already approved by CMS, covering 2.4 million
people with more ACOs on their way
Largely “provider” (i.e, independent practice associations)
or “hospital controlled”. Thinking is that it is preferable to
have these organizations more “physician-controlled”
organizations promote “more patient engagement and
better quality care” than traditional managed care plans
run by largerly for profit managed care firms
ACO’s? What are they? Think “Modernized HMO”
ACO’s are “carve-in”, not “carve out” benefits like managed
mental health plans: integrated care emphasis
ACOs: 33 Standards
 Prescribed quality standards all ACOs must meet. 26
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physician determined, 3 hospital-based, 4 hospitalphysician based
Attempts to keep patients healthy and out of more
high cost settings while providing quality care
How save? 1) Decreased avoidable hospital
readmissions and readmissions (2) avoid unnecessary
procedures (3) promote healthy lifestyle
PCP key in this operation: “quarterbacks” the care
These 33 quality standards not always present in
today’s managed cost marketplace
Another Entity: Patient-Care
Homes
 What is that? Think “Modernized Nursing Homes”
 Multidisciplinary care in care center s to improve
patient care and reduce costs
 Goal is bona fide integrated care versus fragmented
care offer in one facility
 Will include many different providers and types of
services
 Eventually payment will come to bundled fashion to
providers and then distributed amongst them; initially
retains fee-for-service with spending targets
Payment in ACO’s and Patient Care
Homes
 Once actualized, payments to move away from
traditional fee-f0r-service and towards bundled
payments and payments per episode of care
 “Bundled” and “Per Episode” Payments: (1) Sounds a
lot like capitation, doesn’t it (2) risk of financial
incentive to “emotionally strip-mine” care (ACO’s 33
Standards work against that dynamic) and (3) likely to
push care for these populations towards time-limited,
protocol-driven treatment packages
Ok, How Exactly Does It Work
 ACOs likely to start their operations by initiating the
program with the traditional, non-managed Medicare
populations (not Medicare Advantage Plans). The
non-managed plans are the most costly and where the
most savings can occur
 After Medicare application and expansion of the
Medicaid program, start the program with the
Medicaid population (already managed in Tennessee)
ACO/PCC Calculus
 Commercial plans likely to watch what happens with
health care reform in public sector before they decide
whether or not to play; will cherry-pick those things
that work and pass on others
 Those private employers who cannot sustain rising
health care costs will abandon providing insurance for
their employees, pay the fine, and encourage their
employees to purchase insurance through the State
Approved Health Exchange
 These exchanges will also run either as free-standing
ACO’s or increasingly connect with existing ACO’s
ACOs and Medicare
 Office of the Actuary from the Center for Medicare
and Medicare Services “assigns” the average Medicare
cost figure per patient per geographical area
 Audience Question: What is the amount allowed per
patient for a non-traditional Medicare patient in the
Upper East Tennessee geographical area?
Per the Office of the Actuary
 Answer: $8200.00 per patient
 ACO is created. Membership assigned by Medicare:
one primary care physician. PCP can belong to only
one ACO. Specialists can join as many as they want
 Initially you join the ACO, care is referred to you by
PCP, you see the patient, you are still paid directly by
CMS in the initial stages
ACO Calculus
 Likely to be a participation fee based on revenue collected
to help fund the ACO management
 ACO will have “target” savings goals the ACO will attempt
to meet, set by CMS. If savings achieved, ACOs and their
providers receive their share of savings per directives of the
ACO Board
 Eventually payment from CMS will move from fee-forservice to bundled payments (any kind of health care) or
payment per episode of care (so much money for this
exacerbation of the patient’s chronic bipolar condition). By
this time ACO is expected to be “good enough” at
integrated care that they can treat the patient with this
prescribed amount of money for this event
ACOs and the Private Sector
 Inevitable that if successful, these systems of care for
the public sector will begin sprouting up in the private
sector
 At present time, so much unknown about how well
these ACOs will work that the next few years will be a
time of much uncertainty and constant change
 Lot like the early beginnings of managed care but will
two CRITICAL differences: (1) carve-in of mental
health and substance disorders, not carve-out and (2)
financial incentives change with new payment
structures. In short, MUCH more difficult to execute
Ok, What is TPA Doing? What Do
you do?
 TPA actively engaging in shaping future directions of
health care in Tennessee
 TPA provided input on the Value and Cost-Offset Effects of
Mental Health Care to the Commissioner of Insurance and
provided testimony to Commissioner McPeak on these
matters.
 TPA trying to secure a Psychologist representative on the
State Insurance Committee governing any and all ACO
operations
 TPA engaged in national efforts with APAPO to prevent
massive cuts in provider reimbursement
Cost-Offset & Testimony to
Commissioner McPeak
 Contact Michelle, Lance ([email protected]) or TPA
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website if you want that powerpoint
Contains good information to take to your emerging ACOs
and other new health care systems
Golden opportunity to secure “full-seat” at the table and to
finally get mental health care an important place in the
treatment of the whole person, mind and body
Key is the carve-in factor: these new systems have to have
good mental health care coverage or they will lose money –
do you remember Hawaii? Irony is that the money will
finally drive mental health care to a good seat at the table
Note in the recommendations the importance of getting
Psychologists as full-partners in decision-making
What For You to Do Personally
 Rethink how you are going to practice every year for the
next ten years: the nature of it. Stay the same? Join an
integrated care practice? Better networking? Need to
conduct this type of professional due diligence
 For professional psychology, the task of how to proceed in
the future more difficult than in the past. HIPAA,
managed care –those developments generally affected
practitioners in generally similar ways. Not the case with
PPACA and as such more difficult to advise colleagues on
what to do
 Future options f(x) early, middle or late career stage and
whether you are going to participate or not in the emerging
new developments. See Milbank Memorial Fund handout
which we will discuss as a group
What to Do Personally
 Don’t panic
 Don’t worry about not understanding what is happening;
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nobody has all the answers to this new way of being
Find out where you are on the “Milbank grid”
Changes will start with Medicare; you’ll have time
Begin to move toward using outcome measures in your
practice
Hook up with medical offices and reaffirm your
relationships with them. Some will stay in independent
offices with strong connections to PCPs; others will join
together in more integrated, side-by-side office
arrangements
Diversify your practice
What to do Personally
 Stay connected to TPA and help us
 You can’t talk about certain fee structure issues due to
anti-trust issues so be careful BUT you can actively
participate in shaping what is happening with
Medicare. Respond to those TPA alerts to stop
Medicare cuts (3% cut coming in January, again), to
expand definition of “physician” in Medicare law.
What happens there WILL substantially affect your
reimbursement rate in any system as well as your scope
of practice
Goodbye –Thank You
 A Brief Look at the Value and Cost-Offset Powerpoint
if you want it: Note savings in ERs, chronic medical
conditions !! That is where huge savings can occur