The bipartisan attempt to work out an agreement to fix the Centers for Medicare & Medicaid Services physician payment schedule has fallen apart. This means that physician payments will be cut 10.6 percent on July 1 and probably another 5 percent or more on Jan. 1, 2009.

“This would be the second time that Congress failed to step in to freeze the payment schedule,” says Julius W. Hobson Jr., a senior policy adviser at Powell Goldstein and a former director of the American Medical Association’s division of congressional affairs. The first time Congress did not step in was right after 9/11.

Understandably, Congress’s focus was not on CMS cuts back then. And since many third-party payers peg their payments to what CMS pays, a physician “would have ended up with a 30 percent reduction in payments across the board,” says Hobson.

Finance Coommittee Chairman Sen. Max Baucus, Democrat from Montana, and Sen. Chuck Grassley, Republican from Iowa, have publicly committed to passing a fix, including retroactive compensation. However, it probably won’t be in time for the June 30 deadline, putting most physicians in an administrative bind if they try to go back and collect.

Many primary care physicians would then stop accepting new Medicare patients, says Hobson. “I think we’re going to see the start of access problems for seniors because the payment rates are too low.”

They will end up in hospital emergency departments, which is what always happens, says Hobson. “That will put a strain on the system, and for managed care it means an increase in costs. It’s more expensive to receive treatment in the emergency department than in a physician’s office.”

Source: Adapted from the 2008 American Medical Association Medicare Physician Payment Action Kit. Medicare Economic Index. Physician payment updates are from the 2007 Medicare Trustees report with 2008 adjustments to reflect Sen. 101 of P.L. 110–173.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.