North Texas Society of Gastroenterology Nurses and Associates

1
North Texas Society of
Gastroenterology Nurses and Associates The
Public Policy Impact on Health Care The Future
of Consolidation Quality Initiatives November
5, 2011 Bobby Hillert Congress Avenue Bridge
Strategies www.cabstrategies.com 512.542.9253
Bobby_at_cabstrategies.com
2
(No Transcript)
3
Overview

• REVIEW Hospital, surgery center, and
  freestanding ER industries.
• CONSOLIDATION QUALITY INIATIVIVES A review and
  analysis of policy and industry trends
• TEXAS HEALTH CARE MARKET a look at other health
  care policy trends in Texas
• OUTLOOK What to look for in the next few years

4
(No Transcript)
5
Texas POHs 90 facilities the largest in the
nation
Texas Leads in Economic Impact of Doctor-Owned
Hospitals January 14, 2009 Dallas Morning News By
Jason Roberson
Texas physician hospitals also will pay close to
86 million in property, payroll and income taxes
this year
Physician-owned hospitals in Texas will infuse
2.3 billion into the states economy this year
6
Overview The Texas Physician Hospital Industry
What Were Watching

• Impact of grandfathered status and no new
  expansion
• Industry consolidation
• Commercial insurance market
• Health insurance exchanges (2014)
• New ways to incorporate physician governance
• HAI reporting in Texas
• Hospital re-admissions (federal level)
• Medicaid restructuring Texas
• Provider taxes on facilities Texas (potential)

Industry Initiatives

• H.R. 1159 Doc Hastings Washington State
• H.R. 1186 Sam Johnson Texas

7
Physician-Owned Hospitals
2
7
10
6
1
8
Physician-Owned Hospital Overview Dallas-Fort
Worth POHs
9
Overview A Sample of ASCs in Each State
221
17
14
17
0 - VT
76
49
21 - NH
56
87
56 - MA
58
16
80
18
44 - CT
7 - RI
668
221
25
50
44
25 - DE
193
120
43
125
201 - NJ
11
101
4 - DC
48
97
63
35
357 - MD
69
28
148
150
51
63
62
36
253
64
72
358
406
10
Ambulatory Surgery Centers
23
9
44
35
3
lt 5 ASCs
5 10 ASCs
gt 10 ASCs
12
72
4
8
23
5
4
34
11
A Snapshot The Texas ASC Industry
2009 Texas ASC Industry Economic Impact Study
Texas ASCs had an estimated statewide economic
impact of nearly 1.7 billion in 2009.
?
?
An estimated 7,380 Texans are employed by Texas
ASCs.
Texas ASCs paid an estimated 424 million in
taxes in 2009.
?
12
Breakdown An Analysis of the Texas ASCs
Specialty ASCs with this specialty Percentage with this specialty Sole Specialty
Ophthalmology 163 43 42
Gastro 93 24 63
Plastics 158 41 15
Pain Mgmt 66 17 13
Foot 162 42 0
Oral 59 15 0
OB-GYN 122 32 2
Urological 24 6 1
Otolaryngology 82 21 1
Orthopaedic 72 19 1
Thoracic 11 3 0
Neurological 26 7 0
13
Overview Texas ASC Industry
Industry Trends Challenges

• Managed care (in-network out-of-network).
• Medicare rates.
• Limited window to prepare for quality reporting.
• State reporting mandates revenue code data
  collection.
• ACOs.
• 20 billion the amount added to the Medicare
  system if ASCs were eliminated.

Industry Initiatives

• Texas ASC Society industry studies.
• Industry grassroots and PR efforts.
• Usual customary definition.
• Data Reporting Texas ASC Societys
  benchmarking.
• State and federal advocacy.

14
Overview Commercial Insurance Challenges
Dr. David Shapiro Says Lagging Reimbursements
Could Make ASC Business "Impossible - January
28, 2011 Beckers ASC Review Headline
Insurers' out-of-network pay changes likely mean
they will pay less for care - February 14, 2011
American Medical News
15
Washington, DC Medicare Congress

• 2012 Medicare Payment Rule January 1, 2012
• Quality reporting
• Small payment increase
• No new surgeries/procedures
• 2011-2012 Congress
• ASC Quality and Access Act
• Super Committee debt ceiling

16
Medicare Payment Policy Our Biggest Hurdle
17
ASC HOPD
Update 2.3 2.8
Productivity 1.4 1.2
Other adjustment -- 0.1
Effective Update 0.9 1.5
Conversion Factor 42.329 69.420
18
ASCs Medicare The Future Payment Methodology
Foundation 2003 Medicare Modernization Act
Outlier Productivity Adjustment
Outlier Quality Reporting
Outlier Inflation Update
The Future? Value-Based Purchasing
The Future? Acquired Conditions Policy for ASCs
The Future? Cost Reporting
19
H.R. 2108/S. 1173 Medicare Congress

• ASC Quality and Access Act (H.R. 2108/S. 1173)
• Previous bills tied ASC pay to X of HOPD
• New bill dictates update factor
• Require CMS to implement quality reporting
• Authorize value-based purchasing, dictate method
  for bonus pool, criteria for distribution
• Adds ASC representative to APC panel
• Turns back current CfC prohibiting same-day
  surgery

20
Overview The Texas Independent ER Industry
Industry Trends Challenges

• Growth
• Washington State Restrictions

Austin Legislative Priorities

• SB 1206 Industry Bill
• Telling Our Story to the Health Care Industry
  

21
Freestanding ERs
22
2012 Medicare Payment Rule January 1, 2012

• Quality Reporting begins January 1, 2012
• Penalties CY 2014
• No New Procedures
• CPI-U vs. HOPD
• Productivity Adjustment

23
Quality Initiatives Washington Austin

• HCAHPS Inpatient Outpatient Coming
• CGCAHPS
• SCIP Data
• Value-Based Purchasing (VBP)
• Hospital Readmission Penalties
• HAI Reporting (Texas)
• Medicaid Quality Initiatives (Texas)

24
Satisfaction, Quality, Readmission Reporting
From Voluntary to Mandatory
HCAHPS Voluntary implementation
HCAHPS Linked to payment first public report
(2006-2007 discharges)
HCAHPS Continued reporting
HCAHPS First public reporting for hospitals that
joined in 2007.
2009 - 2010
2006 - 2007
2008
2011 - Future
MedPAC Analysis of Readmission Rates - 2007
Started out as voluntary, now mandatory
20 of Medicare patients re-admitted within 30
days.
DRG reduction will pay for the incentive payment.
Quality Reporting (no P4P) Reporting Hospital
Quality Data Annual Payment Update (RHQDAPU)
2003 MMA 2005 Deficit Reduction Act.
First VBP Congress did not act on CMSs VBP
report 2007.
VBP Passed in ACA
http//www.healthreformgps.org/resources/hospital-
value-based-purchasing-program/
25
Quality Pay for Reporting vs. Pay for Performance

• Medicare Quality Reporting (2012)
• 2006 legislative gave CMS the authority to
  require ASC quality reporting and penalize for
  not reporting.
• - Expected in 2012.
• 2011 Medicare rule asked for comments.
• CMS asked for comments on the following
  objectives
• Patient falls
• Patient burns
• Hospital transfer
• Wrong site
• Prophylactic IV antibiotic
• Surgical-site infection
• Medication administration variance
• Medication reconciliation
• VTE measures

• Value-Based Purchasing (VBP)
• PPACA calls for a VBP report for ASCs and
  hospitals. No authority to implement VBP.
• Report due by January 2011 for ASCs.
• Industry Comments
• Should be incremental, beginning with voluntary.
• Quality indicators should include efficiency,
  outcomes, patient experience.
• CMS October 2010 forum asked for
• The development of measures of quality and
  efficiency.
• The reporting, collection, and validity of
  quality data.
• The structure of VBP payment adjustments.
• Methods for public disclosure.

26
VBP for Inpatient Hospitals What You Could
GainOr Lose
Everyone Will Lose 1 in FY 2013 1.25 in FY
2014 1.5 in FY 2015 1.75 in FY 2016 2 in FY
2017
What You Could Gain in FY 2013 As high as
1.8 As low as 0.2
27
Medicare Hospitals Value-Based Purchasing
Overview
http//www.beckershospitalreview.com/hospital-fina
ncial-and-business-news/what-value-based-purchasin
g-will-mean-for-hospitals-other-providers.html
July 1, 2009 March 31, 2010 Baseline
Calculation Period
October 1, 2012 1st Inpatient VBP Payments
July 1, 2011 March 31, 2012 Comparison Period

• Highlights
• VBP is scored on both achievement and progress.
• Incentive payments funded by 1 DRG decrease in
  FY 2013
• One bad score can cost a lot of money.
• Having one bad SCIP score can be a a huge
  problem and cost a lot of .

28
70 of VBP Clinical Process of Care
of heart attack patients given fibrinolytic medication within 30 minutes of arrival. of heart attack patients given PCI within 90 minutes of arrival. of heart failure patients given discharge instructions. of pneumonia patients whose initial ED blood culture was performed prior to administration of 1st hospital dose of antibiotics.
Initial antibiotic selection for CAP in immunocompetent patient. Prophylactic antibiotic received within one hour prior to surgical incision. Prophylactic antibiotic selection for surgical patients. Prophylactic antibiotics discontinued within 24 hours after surgery end.
Cardiac surgery patients with controlled 6AM postoperative serum glucose. Surgery patients on a beta blocker prior to arrival that received a beta blocker during the perioperative period. Surgery patients with recommended venous thromboembolism prophylaxis ordered. Surgery patients who received appropriate venous thromboembolism prophylaxis within 24 hours prior to surgery to 24 after.
Under the proposed rule, a points system will be
utilized to determine the Total Performance
Score for each hospital. Hospitals can earn 0-10
points for the performance of each clinical
measure and 0-9 points based on performance
improvement during the baseline period. For the
FY2013 hospital VBP, CMS proposes using the
following clinical measures Seventeen
clinical process-of-care measures
o Three quality measures each for acute
myocardial infarction, heart failure, and
surgical care improvement categories o
Four quality measures each for the
healthcare-associated infections and pneumonia
categories Eight measures from the Hospital
Consumer Assessment of Healthcare Providers
A systems survey documenting the patients
experience of care CMS is expected to add three
mortality outcome measures, eight
hospital-acquired conditions measures, and nine
of the Patient Safety Indicators (PSIs),
Inpatient Quality Indicators (IQIs), and
Composite Measures in FY 2014.
29
30 of VBP Patient Experience of Care
Source CMS HCAHPS patients who had overnight
stays from July 2009 June 2010 updated April
11, 2011.
30
CMSs SCIP Data DFW Physician-Owned Hospitals

• 16 DFW POHs had an adequate sample
• 14 gt average
• 5 100

Newest Measure Patients whose urinary catheters
were removed on the 1st or 2nd day after
surgery National Avg 90 Texas Avg 89
Source CMS Surgical Care Improvement Project
Process of Care Measures 7/1/2009 6/30/2010.
31
Hospital Preparation VBP Industry Studies

• VHA, Inc.s 2010 Study
• National Median Score 53.
• Estimated that scores need to be above 70 for
  the top decile.
• Patient satisfaction scores (HCAHPS) dragged
  down these scores.
• Hospitals face an average VBP revenue risk of
  888,812 in 2012 and 6.67 million over five
  years.

32
ASC Hospital Medicare Quality
Initiatives Value-Based Purchasing
INPATIENT Baseline period
INPATIENT Performance period
INPATIENT Penalties begin FY 2013
According to the Centers for Medicare Medicaid
Services (CMS), in 2009, more than seven million
Medicare beneficiaries experienced over 12.4
million inpatient hospitalizations. One in seven
Medicare patients will experience some adverse
event such as a preventable illness or injury
while in the hospital. One in three Medicare
beneficiaries who leave the hospital today will
be readmitted within a month.
2005
2011
2012
2012 - 2013
2009
2010
2011
2012 - 2014
CMS estimates the distributive impact of this
proposed rule to be 850 million for FY 2013. CMS
also estimates that among the 3,092 hospitals
participating in the hospital VBP program,
percent increases in payments resulting from the
proposed rule will range from 0.0236 for the
lowest-scoring hospital to 1.817 for the
highest-scoring hospital.
ASCs 2011 HHS ASC VBP report to Congress.
ASCs Affordable Care Act directs a study on VBP
for ASCs CMS does not have authority to
implement this.
ASCs VBPs future for ASCs is unclear.
33
Medicare Hospitals Readmissions
CMS has been collecting quality and patient
experience information from acute care hospitals
on a voluntary basis since2004, the initial year
of the Hospital Inpatient Quality Reporting (IQR)
Program. The IQR program was authorized by
section 501(b) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, and
amended by Section 5001(b) of the Deficit
Reduction Act of 2005. In recent years, a vast
majority of hospitals chose to participate in the
program in order to be eligible for the full
annual percentage increase each year, as a result
of legislation requiring Medicare to reduce the
annual percentage increase for hospitals that did
not participate in the reporting program. More
than 95 percent of eligible hospitals have
participated successfully in this Hospital
Inpatient Quality Reporting program, formerly
called Reporting Hospital Quality Data for Annual
Payment Update (RHQDAPU), receiving their full
annual percentage increase each year since the
program went into effect.
http//www.cms.gov/apps/media/press/release.asp?Co
unter3893intNumPerPage10checkDatecheckKeys
rchType1numDays3500srchOpt0srchDatakeyword
TypeAllchkNewsType12C22C32C42C5intPage
showAllpYearyeardesccboOrderdate
http//www.pressganey.com/newsLanding/10-04-20/A_T
imeline_of_Health_System_Change.aspx
34
Medicare Physicians Quality Satisfaction
Ratings
2015 CMS to adopt VBP by this date VBP for
some pay for reporting for all (EHR, not ACA).
January 2012 CMS to announced VBP measures
reports to physicians regarding comparisons.
2010 Affordable Care Act VBP for physicians
2011 Physician Compare launched
2013 2015 VBP payments will be based on 2013
data
2017 All physicians will participate in VBP.
http//www.pressganey.com/researchresources/govern
mentInitiatives/CGCAHPS.aspx
35
Timeline ASC Industry Quality Reporting
2004
2011 - 2012
2003
2007
2009
MedPAC Recommends Cost Quality Reporting for
ASCs
Quality Reporting, Value-Based Purchasing,
Acquired Conditions (for ASCs?)
MMA
Updated Medicare Conditions for Coverage
MedPACs Intense Focus on ASCs
Infection Control Standards
Quality Reporting Expected for 2012
New Payment Rules for Medicare ASCs
New Era for ASCs/More Scrutiny
CMS rejects cost reporting House accepts
Strong Emphasis on Infection Control by CMS
Latter Two from PPACA
State HAI Reporting October 1, 2011
Medicare Quality Reporting January 1, 2012
36
  MEASURES DATA COLLECTION REPORTING PERIOD HOW REPORTED PAYMENT YEAR
QDC (Quality Data Codes) (1) Burns (2) Falls (3) Wrong site, side, etc. (4) Hospital transfer (5) Prophylactic IV antibiotic timing (6) Hair removal (7) Selection prophylactic antibiotic January 1, 2012 December 31, 2012 CY 2012 Medicare claims data CY 2014
National Healthcare Safety Network (1) Surgical site infection rate January 1, 2013 June 30, 2013 CY 2013 Self reported CDC NHSN CY 2014
Structural Measures (1) Safe surgical checklist use (2) ASC facility volume data on selected ASC surgical procedures January 1, 2012 December 31, 2012 July 1, 2013 August 15, 2013 Self reported QualityNet CY 2015
Structural Measures (1) Influenza vaccination coverage among healthcare personnel October 1, 2013 March 31, 2014 Not specified Self reported CDC NHSN CY 2016
37
VBP Quality Reporting Whats the Difference??
The hospital value-based purchasing program goes
further than the IQR program by offering
incentives to hospitals not just for reporting
data, but also based on positive quality
performance as demonstrated by the data.
According to Berwick, Value-based purchasing
repositions Medicare from an observer of
nationwide hospital quality to a formidable force
in shaping quality going forward. - January
2011 White House Statement
38
Changing the Face of Medicaid New Policy
Initiatives

• SB 7 Quality Provisions
• SB 7, which was one of the Senates major
  initiatives, will create require HHSC to develop
  quality-based outcome and process measures to
  implement quality-based payment systems. These
  could include
• Medicaid HMO premiums based on outcomes.
• Health homes.
• Pay-for-performance for nursing homes.
• The creation of the Medicaid and CHIP
  Quality-Based Payment Advisory Committee.
• A quality-based reimbursement system for
  Medicaid.
• Non-emergent care use of emergency departments
• An incentive program to keep Medicaid patients
  out of hospitals will be studied. HB 2245 by
  Representative Zerwas and Senator Nelson. It
  would create physician incentive programs to
  reduce hospital emergency room use for
  non-emergent conditions by Medicaid patients
• HB 1983 would direct HHSC to implement
  evidence-based, tested quality and cost-savings
  measures to reduce the incidence of C-sections.
  It also directs HHSC to study the impact on
  infant health, the frequency of infant admissions
  to neonatal intensive care units, and readmission
  rates.

39
(No Transcript)
40
Consolidation Specific Trends in Texas
Medicaid
Hospital Systems

• Increased participation and managed care.

• Acquiring facilities and building networks.
• Rural hospital employment.
• 501a model.
• Facility joint ventures.
• Hospital mergers.

Commercial Insurance
Medicare

• Out-of-network attacks.
• Tying in-network rates to Medicare.
• Hospitals creating their own plans.

• SGR.
• Ancillary reimbursements (imaging).

NEED OF EMPLOYED DOCS
41
Medical Practices Physician Ownership Trends
80 60 40 20 0
Physician-Owned
Hospital/Corporate Owned
02 04 06 08
Changing Practice Medical Practice Ownership
Rates in the U.S. Source MGMA Physician
Compensation and Production Survey Report WSJ May
14, 2010
42
Consolidation Is Quality Impacted?

• Difficult to measure.

43

• 2011 Texas Legislature

44
Medicaid Cuts An Overview
Hospitals (other than childrens and rural) 8 cuts Numerous other policy changes and indirect cuts (next slide)
Rural and Childrens Hospitals No cuts
Dialysis 4 to 5 cuts Could have been worse
Physicians No cuts Could be impacted by costs shifted to 2013
Nursing Homes No cuts
ASCs 5 cuts
45
Medicaid Cuts Tip of the Iceberg
46
Hospitals Facilities New Laws/Regulations
Medicaid Cuts 8, SDA, etc. See previous slide
Medicaid Quality overhaul SB 7 could have a major impact on Medicaid in hospitals see next slide. It will be a lengthy rule process.
Health Care Collaboratives/ACOs SB 8 was part of the special session see next slide. It will be a lengthy rule process.
Trauma TX Emergency Trauma Care Partnership Program A result of the Special Session

Hospital Liens Hospitals will be required to notify patients of a possible lien. SB 328
Physician Employment Rural Counties See next slide.
HAI Reporting Regulatory October 1, 2011

47
Hospitals Facilities Initiatives that Failed
Provider Assurance Fee Briefly discussed. Will make an appearance in the interim.
Out-of-Network Discounting Penalties Did not leave the House see next slide. HB 705

Advance Directives HB 3250 would have changed the states current rules. Did not pass.
Reporting of Infection Deaths HB 1657 would have required facilities to report if an infection led to a death. Did not make it out of the House.
Additional patient safety reports. HB 2515. Did not make it out of the House.


48
Physicians Other Issues Initiatives that Passed
Physician Employment Rural hospitals see next slide.
Medicaid Cuts Avoided
PA/Physician Partnership HB 2098 would allow the two to form partnerships. Signed into law.
Texas Medical Board Reform Major battle see next slide.
49
Physicians Other Issues Initiatives that Failed
Physician Employment Rural hospitals see next slide.
Imaging Restrictions HB 1809 and several amendments would have added registration and accreditation measures. The bill and amendments failed next slide.


50
Texas Medical Board Liability Reform
FAILED SB 190
vs
FAILED HB 1013 SB 906
51
Imaging Issues

• HB 1809 Similar bill failed in 2009
• Create an accreditation and registration
  system.
• Create a study comparing the rates of
  physician-owned imaging compared to rates of
  those without ownership.
• Require physicians to disclose physician
  ownership to patients.
• SB 401 HB 1621 Imaging and pain management
  centers

2007s Budget Deficit Act - First large cuts to
in-office imaging

• 2009s Medicare Bill
• Additional cuts to in-office
• In-office credentialing (2012)

2010s Reform Law - Cuts to in-office MRI, PET,
CT
52
Physician Employment
HB 1700 is signed into law by the governor and
allows rural hospital physician employment. This
includes counties with a population of 50,000 or
less sole community hospitals and critical
access hospitals.
Other new laws allow employment at county
hospitals in Harris, El Paso, and Bexar counties.
Texas Scottish Rite wins approval, too.
2009 2011 2013 2015
Physician employment should be a quiet issue in
2013.
Legislation signed into law allows Parkland
(Dallas) to employ physicians. Rural hospital
legislation is vetoed by the governor.
Could all Texas hospitals ask for employment in
2015?
53
Ambulatory Surgery Centers
54
New Ownership Models
SB 848 The bill would allow a surgeon in an ASC
to assume temporary control of the license in
order to collect the facility fee.
Traditional Ownership Model
License Sharing/Under Arrangement
Facility Fee Facility
Technical Fee Surgeon
Facility Fee Facility
Technical Fee Surgeon
55
Usual Customary
Texas Association of Health Plans policy paper
regarding recommendations for the 2008-2009 TDI
Sunset Review Additionally, a lack of
oversight of ambulatory surgical centers (ASCs)
combined with the absence of any national
standard for usual and customary payments to an
ASC has been exacerbated by physicians who are
referring patients to facilities in which they
have a financial interest.
Fair Market Value UC
Tied to Medicare
HB 2697
56
Commercial Insurance Narrow Networks
57
Managed Care Issues
Balance Billing HB 3087 would have created an arbitration system for facility-based physicians. Did not leave the House.
Network Adequacy Standards Regulatory next slide. Final rule published in May 2011.
TDI Sunset Process Could have had major implications minor in the end. Signed into law.
State Health Insurance Exchange As a result of PPACA next slide. Did not leave the Legislature.
Out-of-Network UC HB 2697 would have defined UC next slide. Did not leave the Legislature.
Out-of-Network Penalties HB 705 Did not leave the House.
Assignment of Benefits Industry activity. Not addressed.
Transparency Vicki Truitt Did not leave the House.
EPO HB 1772 Signed into law.
Silent PPOs HB 1534 would have regulated these.
58
Accountable Care Organizations The Emperors New
Clothes?

• Medicare Part C might be the only ACOs in the
  beginning.
• They need you a lot more than you need them.
  
• You can purchase hospital services Kaiser
  Colorado example.
• Independent facilities could sell equity,
  services, or contract with an ACO.
• What is a primary care physician? Oncologists.
• What happens to orthopedic surgeons?
• Youll need 50,000 patients, not 5,000. Is
  it worth the costs?
• Huge problem!!! Patients can opt out due to
  privacy concerns.
• ASCs are well-positioned because they offer
  efficient and low-cost care. However, ASCs are
  not always part of primary care networks.

59
SB 8 Health Care Collaboratives ACOs

• Austin SB 8 and SB 7
• Introduced on February 16, 2011.
• Would create the Texas Institute for Health
  Care Quality and Efficiency.
• Focus on state programs TRS, ERS, Medicaid,
  and CHIP.
• Create infrastructure for health care
  collaboratives.
• Quality initiatives (mostly for hospitals).

60

• Affordable Care Act
• ACOs
• State Health Insurance Exchanges
• Medicaid Expansion

61
Insurance Choices Forecast of Insurance Coverage
SOURCE The Joint Committee on
Taxation/Congressional Budget Office
2019
2016
2014
2010
Medicaid 42M
Medicaid 50M
Medicaid 40M
Medicaid 49M
Employer 150M
Employer 172M
Employer 169M
Employer 168M
Uninsured 50M
Uninsured 18M
Uninsured 18M
Uninsured 23M
Medicare 55M
Medicare 60M
Medicare 47M
Medicare 52M
Ind 27M
Ind 24M
Ind 23M
Ind 24M
62

• Health Insurance Exchanges
• New Avenues for Obtaining Insurance Subsidies
• State Insurance Exchange
• Subsidies
• Medicaid
• Small Employer Credits

63
State Health Insurance Exchanges Analysis of the
Subsidies

• Steps to determine eligibility
• Must have an income between 133 and 400 of FPL.
• Employees who are offered coverage by an employer
  are not eligible for premium credits unless a)
  the employer plan does not have an actuarial
  value of at least 60 or b) if the employee share
  of the premium exceeds 9.5 of income.
• If you meet the top two requirements, a premium
  is available on a sliding scale. (The credit is
  directly to the insurance company.
• You must purchase a Silver plan in order to be
  eligible. The premium credit is the lesser of the
  following amounts a) Total monthly premium for
  qualifying health plan or b) The excess of
  adjusted monthly premium for the applicable
  second-lowest-cost Silver plan.

FPL (Family of 4) of Income Monthly Premium Actuarial Value
133 150 3 4 74 - 110 94
150 200 4 6.3 110 - 232 87
200 250 6.3 8.1 232 - 372 73
250 300 8.1 9.5 372 - 524 70
300 350 9.5 524 - 611 70
350 400 9.5 611 - 698 70
64
State Health Insurance Exchanges What It Looks
Like

• HIGHLIGHTS
• All plans must offer basic services.
• A plan with an actuarial value of 70 means
  that the insurance plan will pay 70 of typical
  medical costs while the beneficiary is
  responsible for 30 of the costs.
• Catastrophic coverage available for individuals
  under age 30.
• The Office of Personnel Management will
  contract with private insurers to offer at least
  two national or multi-state plans to be offered
  in each state.
• CONCERNS
• Will there be a limited number of plans in
  certain states due to state mandates?
• The insurance networks will be very tight.
  Providers will see decreased reimbursements.
• Will there be open enrollment periods?

• Catastrophic Plan
• Under age 30

• Bronze Plan
• 60 actuarial value

• Silver Plan
• 70 actuarial value

• Gold Plan
• 80 actuarial value

• Platinum Plan
• 90 actuarial value

65
ACOs Leaving Fee-for-Service
Progressive Payment Models
Current Fee for Service Model

• Care coordination across settings.
• Federal lawmakers wanted to make most payments
  coordinated/globalized did not believe that
  providers were ready.
• Still FFS models.

• Fragmentation.

66
ACOs New Payment Models Current Medicare
Examples
Medicare Physician Group Practice Demonstration
Project (Medicare) It includes 10 physician
groups (approximately 500 physicians and 22,000
beneficiaries). MedPAC cited increased quality.
However, it could not quantify cost savings at
this point in time. Gain Sharing for Hospitals
and Patients (Medicare) A Medicare pilot project
completed by five hospitals (San Antonio
Baptist). (More about this on another
slide.) Bundled Payments (Medicare) A Medicare
pilot project in the 1990s focused on heart
bypass surgery at seven hospitals.
67
ACOs The Emperors New Clothes?

• Medicare Part C might be the only ACOs in the
  beginning.
• They need you a lot more than you need them.
• You can purchase hospital services Kaiser
  Colorado example.
• Independent facilities could sell equity,
  services, or contract with an ACO.
• What is a primary care physician? Oncologists.
• What happens to orthopedic surgeons?
• Youll need 50,000 patients, not 5,000. Is it
  worth the costs?
• Patients can opt out due to privacy concerns.
• ASCs are well-positioned because they offer
  efficient and low-cost care. However, ASCs are
  not always part of primary care networks.

68
Affordable Care Act Other New Models Coming to
Medicare
Bundled Payments Program - HHS required to
develop a national, voluntary bundled payment
pilot program to provide incentives for providers
to coordinate care, effective 2013. Medical Home
The Independent Medicare Advisory Board will
test medical home models. Center for Medicare
Medicaid Innovation Center Tests, evaluates,
and expands different payment structures,
established in 2011.
69
Key Events to Watch
2012
2013

• Presidential election
• Medicare physician payment cuts?
• ACO/progressive payment models begin
• Medicaid managed care expands in Texas
• Greater Medicaid power for county hospitals in
  Texas

• Health insurance exchanges must be in place
• Texas Legislature meets
• A Texas facility provider tax?
• New Texas quality initiatives?

2014

• Health insurance exchanges begin
• Massive Medicaid expansion
• Employer insurance mandate
• Community rating
• Guaranteed issue
• Individual mandate

70
Texas Health Insurance Trends Direct contracting
with employers Hospital systems offering their
own plans Self-insure Wal-Mart example
(PPACA) Non-Medicare hospitals Device
management solutions (Access MediQuip) Physician-
owned device companies (PODs) Tighter insurance
networks (narrow panel) FQHCs (ACO
benefits) Insurers and providers
(Concentra/Travis County Health) Qliance
(Seattle)
71
North Texas Society of
Gastroenterology Nurses and Associates How
Public Policy Impacts Health Care
Delivery November 5, 2011 Bobby
Hillert Congress Avenue Bridge Strategies www.cabs
trategies.com 512.542.9253 Bobby_at_cabstrategies.c
om