Affordable Care Act and The Medicare Access and CHIP Reauthorization Act of 2015

In this column, I have stressed repeatedly that what drives health insurance premiums is primarily health care costs! The ACA (Affordable Care Act aka Obamacare) attempted to address this issue by encouraging participation in ACO’s (Accountable Care Organization).

Medicare defines ACO as “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.” However the reality is that this approach to health care delivery has been around for some time and not just relative to Medicare patients. Health care systems such as Kaiser could easily fit this definition in terms of coordination of care.

Health care in the US is often fragmented at best. Once referred to a specialist for a particular diagnosis there is typically little communication between all of our doctors about our care. The idea behind the ACO is to 1) coordinate care with the goal of higher efficiency and better outcomes 2) measure results based on the actual performance of the provider group and 3) pay the provider accordingly.

In 2013 some of our local primary care providers began participating in an Anthem Blue Cross of CA “pay for performance” project. Insurance companies have the claims data that includes diagnosis and charges, but does not include patient clinical data. By agreeing to participate, a bridge between clinical and claims data was established. Assuring that their patients had standard preventive screenings such as mammograms and providing better management of high cost claimants such as diabetics could improve care, reduce costs as well as qualify the physician group for bonuses from the insurer.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) made modifications to how Medicare providers are paid, continuing in the spirit of QPP, (Quality Payment Program). In my view it is a continuation of a “pay for performance” model. Unlike the ACA this act had broad bipartisan support and is expected to continue. It uses both a carrot and stick by offering a range of payments from +/-4% in 2019 to as high +/- 9% in 2022. The first measurement period is the calendar year 2017.

Both of our local hospitals have formed organizations to help member physicians comply with and benefit from this new paradigm. The Dignity Health system helped to found North State Quality Care Network in Dec of 2015. It includes 180 participating providers, managing about 15,000 lives according to Rosa Soito RN, Executive Director of the Clinical Integration Program. Prime Healthcare Service ACO is affiliated with Shasta Regional Medical Center and has about 30 local physicians participating, according to Karen Hoyt, Director of Business Development & Marketing.

In an ideal world, this approach will result in better care at lower costs for Medicare beneficiaries.

Under MACRA there are two payment tracks and the majority of clinicians will fall into the MIPS (Merit Based Incentive Payment System) track according to Dignity’s playbook. This program will measure clinician quality on cost, improvement and “advancing care”.

Quality measures will include readmission after discharge, screening for risk of falls, preventive screenings, management of chronic conditions like congestive heart failure, diabetes, depression, and asthma using “evidence based protocols” to guide the treatment to the targeted results. There are subsets of evaluation criteria based on the physicians’ specialty.

To manage such a project requires a great deal of data integration. The push for Electronic Medical Records (EMR) was central to the ACA and we can see where it is so important in trying to monitor overall performance. No physician wants to be told how to practice medicine but as scientists, we can assume that they are interested in ways to improve the outcomes for their patients.

The solo practitioner may have had little way to analyze the data of their practice. They might be able to give an impression of their performance, but reality is that most humans tend to estimate results in their favor. Participating in an ACO allows them a way to track the data objectively.

In the late 1980’s Dartmouth University released a software analytic called Small Area Analysis. It tracked hospital discharge data based on the zip code of the residence of the patient. These reports were a starting point as they allowed comparisons between different geographic areas as well as the state average.

The numbers are age and gender adjusted, so we could not “explain away” variations by age. The state average was not a good or bad number, simply convenient. It allowed us to raise questions about what was going on in our local area. I will discuss that more in a future column.

In any endeavor it’s critical to measure and evaluate results in order to improve. In adding the financial incentive, there is another reason for provider buy-in, which hopefully will benefit us all. Time will tell.

Margaret R. Beck

Margaret Beck CLU, ChFC, CEBS started her insurance practice in Redding in 1978. She founded Affiliated Benefit Services.

1 Comment
Oldest Most Voted
Inline Feedbacks
View all comments