MHA Today | January 29, 2016

January 29, 2016
MHA Today: News for Healthcare Leaders

MHA Today is provided as a service to members of the Missouri Hospital Association. Additional information is available online at MHAnet.


Herb Kuhn, MHA President & CEOLast week, I talked about the failure of traditional Medicaid managed care to produce better quality results than fee-for-service. This week, I want to expand on the value discussion on why traditional managed care is an expensive proposition — for Missouri and the state’s providers.

In December 2014, Mercer Health & Benefits LLC delivered research commissioned by the MO HealthNet Division evaluating the value differences between the existing Medicaid managed care program and the state’s fee-for-service Medicaid program. The study found that traditional managed care would have resulted in an annual average cost savings of 1.7 percent or $27 million in combined general revenue and federal funds if “managed care like” fee-for-service beneficiaries had been covered by managed care.

To arrive at this conclusion, Mercer made several assumptions. First, it assumed the cost of care was 5 percent higher in urban areas than rural areas. Second, it doesn’t appear that Mercer severity-adjusted their assumptions, which matters because higher acuity cases are often treated in urban areas where specialists are prevalent. Finally, Mercer applied a 5 percent geographic inflation factor to account for differences in the rural-urban cost curves. The adjustment was applied to all fee-for-service costs and not managed care costs, implying that a dollar of managed care costs fee-for-service $1.05. Pretty straightforward, but there’s one catch — 24 percent of fee-for-service beneficiaries live in urban areas and 30 percent of managed care beneficiaries live in rural areas.

What really changed the conversation is when we applied Mercer’s 5 percent inflation factor according to these proportions. Guess what? The slant in the playing field was reversed. Mercer’s model estimated savings from the fee-for-service program to the tune of nearly $14 million. Eliminating this inflation factor altogether netted $56 million in favor of fee-for-service during the four years evaluated. That’s right, fee-for-service saves money.

There’s more bad news for traditional Medicaid managed care. Since managed care programs don’t have a provider tax, funding the program costs the state general revenue money that it doesn’t have. Moreover, tapping revenue from existing provider taxes — which is highly objectionable to begin with — only leads to a cost spiral, reducing overall resources.

Worse yet, the Affordable Care Act places a tax on Medicaid managed care plans. Not only would this tax mean the managed care plans have fewer resources for care or administrative costs, but also it would amplify the costs to Missouri to pay for Medicaid expansion in other states while receiving none of the benefits.

This salient, but often overlooked point in the cost-effectiveness debate on managed care was brought up yesterday by Sen. Rob Schaaf during a MO HealthNet Oversight Committee meeting. During the meeting, MHA presented the data I reviewed in my column last week on hospital utilization by managed care beneficiaries in Missouri.

The data raises a lot of questions on just how well the care for this population is being managed. Particularly striking to most committee members was the seemingly identical cost curves for managed care and fee-for-service patients. Identical curves, but very different populations — managed care consisting primarily of mothers and children, while fee-for-service has the comparatively difficult task of “managing” care for the aged, blind and disabled population.

The story we were able to tell with the HIDI data set prompted two questions from committee members during the presentation. First, why isn’t this information being shared more widely? And second, how can the state move forward with a fast-tracked request for proposal for the expansion of Medicaid managed care with these data in hand? We wonder the same and plan to distribute the data widely during the managed care debate in this year’s legislative session.

In business, there’s a natural tension between cost and quality. Most businesses choose one as a strategy. Missouri’s traditional managed care plans aren’t delivering on either — yet they’re claiming success at both.

Our principles on Medicaid managed care have been articulated in the 2016 legislative guide. Nonetheless, with the evidence being what it is, it is a fight we shouldn’t have to fight.

* * *

On Wednesday evening, MHA launched a completely updated version of our flagship website, MHAnet. At the same time, we redesigned our daily newsletters — including MHA Today — to reflect the more streamlined, approachable design.

There are two items I want to highlight. First, the search engine is powerful and front-and-center. We designed the site around search to ensure members could find what they want, when they want it, without having to drill through navigation. Second, we’ve added LinkedIn to the site to help us extend the reach of our subject matter experts. We’ll be using the platform to communicate more efficiently will all members, and directly with the experts in hospitals throughout the state.

I would encourage you to take a look.

As always, I want to know what you’re thinking.

Herb B. Kuhn
MHA President and CEO

Back To Top


In This Issue
Schaaf Contract Transparency Bill Passes Senate Committee
Senate Veterans Affairs And Health Committee Endorses Telehealth Legislation
CMS Proposes Update To ACO Benchmark Methodology
CMS Proposes Rule To Give Providers And Employers Access To Quality Information
TJC Releases New Prepublication Standards For Substance Abuse, Palliative Care
CMS Corrects Dates On Hospital Compare Preview Reports
CMS Issues Report On Star Ratings Methodology And Summary Results

state and federal health policy developments

Schaaf Contract Transparency Bill Passes Senate Committee

Staff Contact: Rob Monsees

Senate Bill 581, sponsored by Sen. Rob Schaaf (R-St. Joseph), prohibits enforcement of any contractual provision that prevents disclosure of the contractual payment amount for health care services. The bill was presented to the Senate Veterans Affairs and Health Committee. Sen. Schaaf believes that if SB 581 became a law it would allow competition to enter the health care market and costs would begin to drop. No one testified in support of SB 581. Testifying in opposition was the Missouri Hospital Association, suggesting that the release of the confidential contractual information between private parties could have the opposite effect and actually result in higher prices. The committee voted out SB 581 do pass.

Back To Top

Senate Veterans Affairs And Health Committee Endorses Telehealth Legislation

Staff Contact: Rob Monsees

Yesterday, the Senate Veterans Affairs and Health Committee passed, by a vote of 10-0, Senate Bill 621. The bill was offered by Sen. Gary Romine (R-Farmington) and modified various telehealth provisions. Testifying in support were the Missouri Hospital Association, Missouri Association of Rural Health Clinics, Wal-Mart, Missouri State Medical Association, BJC HealthCare, Missouri Kids First, Missouri Optometric Association, CoxHealth, Missouri Psychological Association, and SSM Health. No one testified in opposition.

Back To Top

Regulatory News
the latest actions of agencies monitoring health care

CMS Proposes Update To ACO Benchmark Methodology

Staff Contact: Andrew Wheeler

The Centers for Medicare & Medicaid Services issued a proposed rule that will update the methodology used to calculate accountable care organization benchmarks. The proposed rule focuses on incorporating regional fee-for-service expenditures into the methodology for establishing, adjusting and updating an ACO’s historical benchmark for its second or subsequent agreement period. CMS also has released a fact sheet with additional details. The comment period will be due 60 days after publication in the Federal Register.

Back To Top

CMS Proposes Rule To Give Providers And Employers Access To Quality Information

Staff Contact: Andrew Wheeler

The Centers for Medicare & Medicaid Services issued a proposed rule that will expand access to information that will help providers, employers and others make more informed decisions about care delivery. The rule also includes strict privacy and security requirements for all entities receiving the data. CMS Acting Administrator Andy Slavitt stated, “Increasing access to analyses and data that include Medicare data will make it easier for stakeholders throughout the health care system to make smarter and more informed health care decisions.” Comments may be submitted until Tuesday, March 29.

Back To Top

TJC Releases New Prepublication Standards For Substance Abuse, Palliative Care

Staff Contact: Sarah Willson

The Joint Commission has approved two new prepublication standards. The revisions for publication regarding opioid treatment programs will take effect Friday, July 1. The Substance Abuse and Mental Health Services Administration issued an update to its 2007 Guidelines for the Accreditation of Opioid Treatment Programs. TJC reviewed and incorporated the guidelines for continued accreditation. In addition, home health and hospice facilities already accredited by TJC can receive community-based palliative care certification for providing a CBPC program.

Back To Top

Quality and Population Health

CMS Corrects Dates On Hospital Compare Preview Reports

Staff Contacts: Dana Downing or Stephen Njenga

The Centers for Medicare & Medicaid Services has corrected the April 2016 Outpatient Quality Reporting Hospital Compare Preview Reports header date. The new date reflects third quarter 2013 through second quarter 2014 for the outpatient imaging efficiency data. For questions, contact the hospital program support contractor.

Back To Top

CMS Issues Report On Star Ratings Methodology And Summary Results

Staff Contacts: Dana Downing or Stephen Njenga

The Centers for Medicare & Medicaid Services has posted a report describing the final methodology for its overall hospital star ratings, as well as a summary of results for the first overall star ratings to be added to Hospital Compare in April. Hospitals participating in the inpatient and outpatient quality reporting programs can preview their overall hospital quality star rating through Feb. 14 on the QualityNet Secure Portal.

Back To Top

Did You Miss An Issue Of MHA Today?

January 28, 2016
MHD Posts Hospice Rate Changes
CMS Releases Home Health Patient Experience Star Ratings
CDC Responds To Increased Hepatitis C In Dialysis Patients
HB 618 Expands Authorization To Complete Death Certificates
MLN Connects Provider eNews Available
CDC Provides Zika Virus Resources To Health Care Providers
USPSTF Releases Adult Depression Screening Recommendation
MFH Seeks Letters Of Interest For Infant Mortality Reduction Initiative

January 27, 2016
House Committee Delays HMO High-Deductible Legislation
Committee Endorses Workforce Data Center
House Advances Newborn Screening Bill
Legislators Review Prescription Monitoring Bill
HIPAA Releases Rule Change For Reporting Mental Health Prohibitors
Medicare Learning Network Offers Infection Control Courses For Surveyors
Trajectories — Care Coordination
AHA Releases Principles To Achieve The Triple Aim

January 26, 2016
HMO Legislation Encounters Vigorous Opposition In Senate Hearing
MHA Distributes CAH Databook
CBO Releases 2016-2026 Budget And Economic Outlook
MHD Revises Outpatient Codes
MHD Posts Rate Update For Home And Community-Based Services
CMS Releases Guide To Prevent Readmissions Among Diverse Medicare Beneficiaries
TJC Awards First Integrated Care Certification
CMS Updates The Submission Engine Validation Tool
CDC Launches Prediabetes Awareness Campaign

January 25, 2016
MHA Provides Analysis Of Potential Effect On Medicare's VBP On CAHs
CMS Releases Resources For PAC Providers

Consider This ...

About 4 percent of American adults over the age of 18 deal with attention deficit hyperactivity disorder on a daily basis.


Missouri Hospital Association • P.O. Box 60 • Jefferson City, MO 65102
Phone: 573/893-3700 • Fax: 573/893-2809
MHAnetUnsubscribeContact UsPrivacy Policy