Transcript Novatis Oncology Template

Health Care Reform - The Challenges of
Implementation
Tracy Baroni Allmon
Executive Director, Health Policy
November 4, 2011
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Agenda
 Political Update
 Public Opinion Overview
 Key Issues Impacting Providers and Patients
 Implementation Challenges
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Targets in Debt Ceiling Discussions
Budget Control Act
Potential Deficit Reduction
Committee Provisions
3 | on
Presentation
Title | Act
Presenter
Name | 8/2/11
Date | Subject | Business Use Only
Based
Budget Control
2011, enacted
October 2011
3 | Q2 2011 IR Backup US | Confidential
Potential Sequestration
Provisions
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Potential Deficit Reduction Proposals
Proposal
Impact
Probability
Class Act Repeal
(ACA)
Fixing Medicare Physician
Payments
Cost/Savings
Likely
Cost
Likely
Increase Medicare Eligibility
Age to 67
Savings
On the Fence
Individual Mandate Repeal (ACA)
Savings
Unlikely
Alternative Medicaid Payments
Savings
Likely
Savings
On the Fence
Medigap Reform
Source: PolliticoPro, 9/6/11
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Potential Deficit Reduction Proposals, con’t
Proposal
Impact
Probability
Mandated Drug Rebates
for Dual Eligibles
Savings
On the Fence
Hospital Cuts
Savings
Unlikely
Cost Sharing for Nursing
Home & Home Health
Care
Savings
On the Fence
Changes to Physician
Part B Reimbursement
Savings
Likely
Repeal Some Prevention
Funds (ACA)
Savings
On the Fence
Source: PoliticoPro, 9/6/11
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Automatic Medicare Cuts Under Sequestration
Share of Total FY13-FY21 Cuts, by Medicare Service Area
14%
Hospital Inpatient Care
32%
8%
Skilled Nursing Facilities
Physician Fee Schedule
Hospital Outpatient Services
Group Plans (includes MA)
4%
Home Health Agencies
Non-exempt Part D
Other Services
15%
7%
8%
12%
Source: www.CMS.gov
**Avalere estimates do not take into account the exemption from sequestration of Medicare payments made to states
for Qualified Individual (QI) premiums.
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Health Reform Impact Timeline
Cost Control
Increase in Transparency
Transfer of Risk
Coverage Expansion
2010
xecuting Gradual
2011
2012
2013
2014
2015
System Changes Occur Prior to Influx of Newly Covered Patients
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The Economy Dominates
Thinking about the campaigns for the U.S. House and Senate this fall, what two
issues would you most like to hear your Congressional candidates talk about?
{open-ended}
AMONG REGISTERED VOTERS
Note: Asked of half sample. Other and Don’t know/Refused not shown. Size of words proportional to frequency of response.
Source: Kaiser Family Foundation Health Tracking Poll (conducted August 16-22, 2010)
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Public Opinion on ACA
Percent who say that each of the following describes their feelings about the health reform
law:
60%
CONFUSED
53%
55%
52%
53%
40%
42%
45%
47%
46%
43%
20%
0%
Apr MayJun Jul AugSep Oct NovDec Jan Feb Mar AprMayJun Jul
2010
2011
ENTHUSIASTIC
ANGRY
60%
40%
30%
60%
30%
40%
33%
27%
28%
20%
0%
30%
20%
Apr MayJun Jul AugSep Oct NovDec Jan Feb Mar AprMayJun Jul
2010
October 2011
2011
Source: Kaiser Family Foundation Health Tracking Polls
0%
31%
32% 32%
28%
34% 34%
34%
28%
Apr MayJun Jul AugSep Oct NovDec Jan Feb Mar AprMayJun Jul
2010
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Roughly Three in Ten Back Repeal
As you may know, a new health reform
bill was signed into law earlier this
year. Given what you know about the
new health reform law, do you have a
generally favorable or generally
unfavorable opinion of it?
Given that you have an unfavorable
view of the health reform law,
which comes closer to your view of
what should happen now:
18%
Very
favorable
29%
Very
unfavorable
24%
Somewhat
favorable
NET
UNFAVORABLE
44%
15%
15%
Don’t
know/
Refused
Somewhat
unfavorable
Law should be
repealed as soon as
possible
28%
Law should be given a
chance to work, with
Congress making necessary
changes along the way
Don’t know/Refused
13%
2%
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Source:
Kaiser Family Foundation Health Tracking Poll (conducted October 5-10, 2010)
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Healthcare Providers’ Top Priorities
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Coverage Expansion
2
Payment System Changes and Challenges
3
Status of Implementation
4
The Unknown and Undetermined
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1
Many Pieces to the Puzzle of Comprehensive
Reform
Low Income
Subsidies
Medicaid Expansion
Insurance
Exchanges
Individual mandates
Insurance
Reforms
Employer Mandate
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1
Status of the Population Post - 2014
Uninsured
Medicaid
Medicare
Employer Insurance
Non
Group/Exchanges
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Can Providers Meet Patient Demand?
Baseline Projected Supply and Demand of Oncologists, 2005 to 20202
1Levit,
L, et al. Ensuring Quality Cancer Care through the Oncology Workforce. J Oncol Pract. 2010;. 6(1):7-11.
C. et al. Future Supply and Demand for Oncologists. J Oncol Pract. 2007; 3(2):79-86.
2Erikson,
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2
Impact of ACA on Insurers
Payment Changes:
Medicare Advantage (MA) plans face drastic
payment cuts starting in 2012
Taxes:
Taxes on insurers
and on high-cost
health plans will
further pressure
margins
Health Plan Margins
Benefit Mandates:
Plans will have to
cover essential
health benefits
package in the
exchanges in
addition to wellness
and prevention
services
Insurance Market Reforms:
Reforms such as MLR, rate review, and
guaranteed issue likely will shrink health
plan margins in commercial sector
MLR = Medical Loss Ratio
Source: Health Care and Education Reconciliation Act of 2010
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Providers to Take on Risk for Patient Outcomes
Traditional: Plans Assume Risk
Risk
Risk
Health Plan
$
Reformed: Providers Assume Risk
$
Health Plan
$
Fee-for-Service
Fee-for-Service
Payment Tied to
Episodes
Hospitals
Providers
Hospitals
$
Payment Tied to
Outcomes
Risk
Providers
Source: Health Care and Education Reconciliation Act of 2010
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ACO Goal : Increased Quality and
Decreased Costs
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ACOs can have different configurations connected
either contractually or wholly owned systems
ACO Model
 Individual Practices
 Physician-Hospital
Primary
Care
Practices
Associations
 Integrated Health systems
 Regional Collaborations
Payers
Specialty
Practices
Pharmacy
LTC
Providers
Hospitals
Ancillary
Providers
Home
Care
Hospice
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ACO Structure and Function
ACO Provider Composition Can Vary . . .
But Must Possess Basic Capabilities
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Transparency Requirements in ACA
Issue
Disclosure Requirements
Hospital
Ownership
 Physician-owned hospitals must report the identity of
each physician owner and investor in the hospital
 Physicians who are owners or investors in a hospital must
disclose their relationship with the hospital
Drug Samples
 Prescription drug manufacturers and distributors must
report information on drug samples requested and
distributed in the previous year (begins 2012)
Transfers of Value
to Physicians
 Drug and device manufacturers will be required to submit
Pharmacy Benefit
Managers (PBMs)
 Requires PBMs to share information about rebates with
annual reports describing payments and other transfers of
value to providers (begins March 31, 2013)
the HHS Secretary, Part D plans, and plans in the
exchanges
Source: Health Care and Education Reconciliation Act of 2010
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Expanded Coverage Continuum for Individuals
< 400 % FPL
1
3
In 2014, four “State Health Subsidy Options” will be available
to individuals with incomes below 400% FPL in 2014.
133%
400%
200%
FPL
0%
1
100%
200%
300%
400%
Medicaid
2
CHIP (up to state eligibility level)
3
BHP
4 Premium Tax Credits &Cost Sharing Reductions
for Qualified Health Plans
Source: Health Care and Education Reconciliation
Act of 2010
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Medicaid Expansion Will Increase Enrollment by
More than 40 Percent in Some States
WA
3
2
ME
MT
ND
VT
MN
OR
WI
ID
NY
SD
MI
WY
PA
IA
NE
NV
IL
UT
CA
CO
KS
IN
OH
WV
VA
MO
NH
MA
CT
RI
NJ
DE
MD
D.C.
KY
NC
AZ
OK
NM
TN
SC
AR
MS
TX
AK
AL
GA
LA
FL
Percent Change from 2019
Baseline Medicaid Enrollment
≤ 10%
HI
Source: Urban Institute. This is the projected gross enrollment increase estimated according to the Senate Finance
Committee Chairman’s Mark of America’s Healthy Future Act 2009 (as Amended Oct. 7). It includes increased
enrollment due to the proposed Medicaid expansion and individual mandate.
It does not take into account (a) reduction in optional coverage > 133% FPL; (b) shifting of CHIP to the exchange.
11 – 25%
26 – 40%
≥ 41%
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State Exchanges and Qualified Health
Plans
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 The Exchange must make “Qualified Health Plans” (QHPs) available to
individuals and small employers
 The Exchange sets standards and certifies participating plans
 Every level must cover “Essential Benefits Package” (EBP)
 Every QHP must offer at least bronze and silver level
Bronze – covers 60% of actuarial value of benefits
Silver – covers 70% of actuarial value of benefits
Gold – covers 80% of actuarial value of benefits
Platinum – covers 90% of actuarial value of benefits
!
Catastrophic – high-deductible plan for individuals up to age 30 or
individuals exempted from the mandate to purchase coverage.
Source: Health Care and Education Reconciliation Act of 2010
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IOM Releases Essential Benefits Package
 IOM Mission – to recommend a process that would help HHS:
• Defined the benefits that should be in the EHB
• Update the benefits to take into account advances in science, gaps in access,
and the cost impact of any benefit changes
•The IOM was specifically NOT charged with deciding what is covered
in the EHB, but rather to propose a set of criteria and methods to be
used in deciding the benefits that are most important for coverage
• Need to balance affordability with the availability of a wide range of
coverage for varying health needs
 Recommendations:
• Updated annually after 2016
• Should be based on credible effectiveness evidence
• State flexibility will allow state innovation – current mandates not automatically included
• HHS should work with private sector to develop strategy to being health care spending
growth within the rate of growth of the economy
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Source: Institute of Medicine Report on Essential Benefits, ,Report Brief October 2011
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Current State Exchange Activity
WA
WA
MT
MT
ME
ME
ND
ND
MN
OR
OR
VT
VT
NH
ID
WI
SD
SD
NY
NY
RI
CT
IA
IA
PA
PA
OH
NE
NE
NV
NV
UT
UT
DE
IN
IN
CO
MD
WV
WV
KS
MO
MO
VA
VA
KY
KY
NC
NC
TN
TN
AZ
NJ
OH
IL
IL
CA
CA
MA
MI
MI
WY
WY
OK
OK
NM
NM
AR
SC
SC
MS
AL
AL
GA
LA
LA
AK
TX
TX
Enacted Legislation
FL
Pending Legislation
Failed, Expired, Withdrawn
Legislation
Adopting Workarounds
No Activity
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340B Expansion
 In order to qualify for 340B, these hospitals must be government or not-for-profit
and have an indigent care contract with the state, in addition to meeting specific
DSH thresholds:1
• Children’s hospitals (DSH >11.75%).
- Children’s hospitals were previously included under DRA; new law clarifies
eligibility
• Freestanding cancer hospitals (DSH >11.75%)
• Sole community hospitals (DSH >8%)
• Rural referral centers (DSH >8%)
• Critical access hospitals (No DSH requirement)
 In the summer of 2010, HRSA began enrolling newly eligible entities on a rolling
basis. As of September 30, 2010, entities will be enrolled on a quarterly basis
Insured patients can legally utilize 340B covered entities and
340B discounted drugs.
Source: Health Care and Education Reconciliation Act of
1Excludes orphan drugs from required discounts
2010
for new 340B entities
ACA= Affordable Care Act
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Market Dynamics and 340B
Hospitals are Increasingly Acquiring Physician Practices
 Research suggests that hospitals are increasingly acquiring physician practices
 In some instances, the physician practice, once acquired, may quality for 340B
discounts
Data from a Survey by the Medical Group Management Association
(MGMA) Suggest Half of all Practices are Hospital-Owned1:
Physicians
Medical Practices
Hospital Owned
Not Hospital
Owned
Hospital Owned
Not Hospital
Owned
48.1%
51.9%
57.9%
42.1%
All Specialties 37.4%
62.6%
49.5%
50.5%
Oncology
Source:
Medical Group Management Association, Physician Compensation and Production
Survey, 2009 report based on 2008 data
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Guide to the Rulings
3-0
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Policy Resources for ACA Information
 Kaiser Family Foundation: www.kff.org
 KidsWell Campaign: www.kidswellcampaign.org
 Center for Medicare and Medicaid Services: www.cms.gov
 Institute of Medicine: www.iom.edu
 Brookings Institution: www.brookings.edu
 Brookings-Dartmouth ACO Learning Network:
www.xteam.brookings.edu
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Questions?
Thank you for your time.
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