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What the Government Should Do

Expand value-based payment in Medicare

The fee-for-service (FFS) Medicare program effectively rewards providers when they deliver more services, regardless of quality or value. While the Affordable Care Act includes a number of pilots and demonstrations to expand the use of value-based payment in federal programs, the government must move more aggressively to implement fundamental payment reforms to shape a higher quality healthcare system. It is important to assure adequate overall payments to providers under these revised systems to avoid merely shifting costs from one program or payer to another.

  • The government should link a portion of payment to quality for all Medicare provider types. Although a phased approach may be necessary while quality measures are under development, Medicare must move away from the disconnected FFS payment models, shifting to quality-based bundled payments and more patient-centered models like “medical homes” and Accountable Care Organizations, where primary care providers and patients engage to comprehensively coordinate the patient’s healthcare needs.
  • The government must continue to encourage collaborative development and widespread adoption of consensus-based quality measures for all provider types. Measures used for purposes of payment should be widely agreed upon and focus on health outcomes as well as processes of care.

 

Make care coordination available to all Medicare Beneficiaries

The Medicare Advantage (MA) program offers seamless access to traditional Medicare benefits and prescription drugs with a focus on care coordination. Reports have shown improvements in healthcare outcomes for MA enrollees.

  • The government should assure continued access to a wide range of MA options for Medicare beneficiaries, with payment rates sufficient to sustain valuable features like comprehensive care coordination and disease management.
  • The government should explore new initiatives to encourage coordination of care for Medicare beneficiaries in the FFS program. To ensure appropriate, high-quality, coordinated care, beneficiaries should be encouraged to seek support, such as one-on-one nurse health coaching and hospital pre-admission or post-discharge counseling. Additional outreach should be directed at beneficiaries with chronic conditions to assist them in better managing their health to decrease the use of emergency rooms and inpatient services.

 

Encourage Medicare beneficiaries to use high-quality providers

Federal programs should make it easier for consumers and their loved ones to identify high-quality providers.

  • Consumers should have access to cost information for common procedures available to them on Medicare’s “Compare” websites for hospitals and physicians in addition to the currently available quality scores. For example, prior to scheduling an operation, beneficiaries and their family members should be able to analyze facilities’ typical costs from admission to discharge or for an entire outpatient stay. Information regarding the “price” of high volume or routine physician procedures should be displayed to show the beneficiary’s likely out-of-pocket costs and the amount Medicare would pay. Cost information by service area also should be included for a particular service or procedure.
  • Medicare should test the impact of financial incentives, such as a modified fee-for-service cost-sharing structure, to encourage beneficiaries and others to seek care from providers who score well on key quality measures, as reported on Medicare’s “Compare” websites.
  • In the Medicare Advantage program, the government should allow differential networks and tiered cost-sharing for medical benefits to give beneficiaries options to seek higher quality care at lower costs.

 

Support the use of evidence-based medicine

The government must bolster the use of evidence-based medicine by developing research on what works, sharing best practices and actively managing services and technologies at high risk for misuse in federal programs.

  • The government should continue to prioritize funding for the evaluation of clinical effectiveness of different procedures, drugs, devices and biologics, including the Food and Drug Administration, the Agency for Healthcare Research and Quality and the Patient-Centered Outcomes Research Institute (PCORI).
  • The government should work with PCORI and others to analyze best practices for disseminating comparative effectiveness research (CER). Federal agencies should make CER findings widely available in varying formats and channels to reach as many populations as possible.
  • The government should play a leadership role by using the federal Meaningful Use Program to accelerate the adoption of clinical decision support tools that help increase provider awareness and usage of evidence-based guidelines.
  • Medicare should actively manage potentially harmful and costly technologies with a high risk of overuse or misuse, such as advanced imaging services. Prior authorization and beneficiary education relating to safety concerns and alternative diagnostic options should be considered. Private Radiology Benefit Managers have demonstrated success in the private sector and could make a substantial impact in public healthcare programs as well.

 

Enact malpractice reform

Rising malpractice premiums fuel “defensive medicine,” which increases utilization of unnecessary and potentially harmful healthcare services. This raises costs for everyone. The federal government should follow the example set by many states and enact comprehensive medical liability reform legislation to not only address rising costs, but also help assure access to necessary services. As a further incentive for adoption of evidence-based practice guidelines, providers who reasonably rely on such guidelines should be given safe harbors for noneconomic (e.g., pain and suffering) and punitive damages. Similar protections should apply to insurers in adjudicating claims.

 

Increase use of generics

Taking medications regularly is one key to getting and staying healthy. The government should encourage wider use of safe, effective and affordable medications by consumers - both inside and outside of federal programs - by:

  • Adopting quality measures that evaluate generic prescribing practices.
  • Looking at the implications of drug assistance programs that promote brand-name drugs rather than the lower-cost generics.
  • Shortening the exclusivity period brand-name manufacturers have for biological products to seven years so generic biologics can be brought to market quicker.
  • Providing specific funding for the FDA to enhance the timely approval of generics.
  • Reviewing and encouraging changes to state laws that limit consumers’ ability to receive lower-cost, clinically effective generics.


Attack healthcare fraud and abuse

The government should continue to bolster healthcare fraud prevention and recovery efforts by:

  • Upgrading federal data systems to assure fraud trends can be monitored across provider types and geographic regions.
  • Collaborating with private sector anti-fraud programs, through greater information-sharing and by reinstituting local multi-payer fraud task forces.
  • Taking an active role in ensuring all providers are ready to convert to ICD-10 on time and are fully prepared to utilize the new system accurately to help support fraud detection efforts.

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