Provider Payments & Healthcare Costs
Issue: The Patient Protection and Affordable Care Act (PPACA) included a number of policy changes aimed at rewarding positive patient outcomes and cost-efficient care, and moving away from payments based on the volume of services provided. However, the PPACA also reduced Medicare provider payments by $500 billion over 10 years to help pay for the law’s $1 trillion price tag. The PPACA also created the controversial Independent Payment Advisory Board to make binding recommendations to reduce Medicare spending. In 2013, further automatic across-the-board Medicare payment reductions will be implemented if Congress fails to pass consensus legislation by the end of 2011 to reduce the deficit by $1.2 trillion. There is broad consensus that continuing to reduce provider payments will threaten access to quality care services. Broad, long-term structural reforms to entitlement programs must be considered in order to address Medicare’s fiscal sustainability. Additionally, savings to the healthcare system, better quality, and more efficient care can be achieved by addressing the nation’s flawed medical liability system. The current medical liability system not only reduces accessibility to vital health services and contributes to rising costs, but also stifles medical innovation and the sharing of information that is critical to an evidence-based healthcare system.
HLC Position: HLC believes provider payments should be structured to encourage care coordination, reward quality care and positive outcomes in both the public and private sectors. Payments should appropriately reflect the quality of care delivered and pay for value. HLC is concerned that cuts to provider payments, to maintain program solvency, without long-term structural reforms, will further deteriorate patient access to quality health services. Modernizing Medicare into a quality-driven, more competitive model based on choice is one way Congress and the administration could help address the impending fiscal crisis faced by the program. Additionally, HLC is committed to addressing the nation’s liability lawsuit crisis to foster an environment that encourages learning organizations and reduces the practice of defensive medicine. By building on such initiatives, systems can be better engineered to curb excessive cost growth while also improving patient care.
HLC Key Recent Activity on Provider Payments and Healthcare Costs:
- In December, HLC sent a letter in support of Marilyn Tavenner’s nomination as CMS Administrator.
- In September, HLC released an expanded edition of the HLC Value Compendium. The second edition includes additional examples from member companies that highlight private-sector initiatives promoting value and will be used to promote value-oriented efforts taking place in the private sector.
- In January, HLC presented the first edition of the HLC Value Compendium to former CMS Administrator Don Berwick.
- HLC joined the Coalition to Transform Advanced Care (C-TAC) to contribute to its efforts to promote policies that improve quality of life for individuals and caregivers during advanced stages of illness.
- The HLC Policy Committee hosted Paul Ginsburg, President of the Center for Studying Health System Change, to discuss the premium support model for Medicare proposed by Bipartisan Policy Center’s Debt Reduction Task Force.
- HLC member CEOs were invited to attend the October Value Incentives Learning Collaborative meeting of the IOM to share their insight on scaling up and spreading value incentives and related pilots.
- HLC President Mary R. Grealy testified at the July 13 Energy and Commerce hearing on the Independent Payment Advisory Board (IPAB) she emphasized how IPAB will severely limit access to quality healthcare for seniors due to likely, across-the-board payment rate cuts.
- In advance of the Energy and Commerce hearing, HLC organized and sent a letter to all House members urging repeal of the IPAB provision. The letter was signed by more than 275 providers, patient groups, and other healthcare organizations.
- HLC continues to work with associations that have concerns regarding the IPAB to press for repeal.
- HLC has established a Private Sector Value Workgroup to explore possible coordination with the Institute of Medicine (IOM) on private-sector value initiatives.
- HLC participated at the June 15 meeting of the IOM’s Value Incentives Learning Collaboration.
- HLC submitted comments on the proposed regulations governing accountable care organizations participating in the Medicare Shared Savings Program.
- HLC hosted Alice Rivlin, Ph.D., at the May Executive Committee meeting to discuss Medicare payment reform including premium support. HLC anticipates working with Dr. Rivlin in the future to encourage bipartisan support of Medicare payment reform.
- HLC has embarked upon its Healthcare 2020 Consensus Project in which the organization will address policy issues regarding affordability and quality that were not sufficiently addressed by the Affordable Care Act.
- HLC hosted staff from Aetna and Ascension Health at a recent HLC Policy Committee meeting to discuss palliative care and how to manage advanced illness to improve quality of life.
- The HLC Policy Committee hosted Paul Ginsburg to discuss the premium support model for Medicare proposed by Bipartisan Policy Center’s Debt Reduction Task Force.
- HLC is working with associations that have concerns regarding the Independent Payment Advisory Board (IPAB) to identify concerns and determine next steps.
- HLC participated in CMS’s Open Door Forum on the sunshine provisions in ACA and subsequently submitted written comments.
- HLC is playing a leading role in the HIT Liability Coalition, joining with organizations from a variety of sectors in meeting with Democratic and Republican members of Congress as well as the White House domestic policy staff. The coalition is advocating a legislative approach that would provide liability safe harbors to healthcare providers that utilize health information technology and evidence-based medicine.
- Increasingly, HLC looks to link the liability issue with the desire to elevate healthcare quality and patient safety, while still working with the Health Coalition on Liability and Access to support legislation, such as H.R. 5, that would cap noneconomic damages in liability cases.
- HLC has tracked the work of the National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center’s Debt Reduction Task Force and their recommendations specific to healthcare.
- HLC is monitoring the work of the IOM Committee on Geographic Adjustment Factors in Medicare Payment.
- HLC has worked with House and Senate offices to ensure that Medicare payment changes focus on value, rather than arbitrary, across-the-board payment cuts or price controls.
- HLC advocated for adequate provider payments in all in-district and Hill meetings.