tv House Panel Examines Medicare Payment Systems Changes CSPAN May 19, 2017 6:41am-7:55am EDT
and excluding certain small ones from the recording requirements which might be a pathway. that is nothing the commission recommended but there is a discussion to that effect in our report. >> i appreciate that. 1-size-fits-all approach is not always helpful. it rarely is. we face these challenges and i
hope you will keep in mind the flexibility that often needs to occur and i appreciate your efforts. >> unless we are done i want to say in our recommendations, the principle i tried to save in the introduction, if you're going to provide rural providers, it is about targeting, not duplicating, not supporting two providers next door to each other may be in effect, not covering fixed costs, subsidize both of them. in the ambulance situation we took one of the add ons targeted to redistribute and targeted to counties that had low population density. you end up covering 70%, 75% of the same areas but they can provide a larger subsidy. and removing subsidy away from
places that are near metropolitan areas giving it more truly to the isolated areas and in our opinion, people disagree, making the dollar go further. >> i yield back. >> mister higgins, recognized for five minutes. >> the new york times on monday reported the united healthcare among the largest health insurance companies in america is being sued for defrauding the american people and medicare program under the medicare advantage program estimated to be between billions of dollars each year out of the past decade, the article went on to
name four other private insurance companies that participate in the medicare advantage for defrauding federal government and medicare programs as well, potentially tens of billions of dollars each year. yesterday the department of justice joined that lawsuit, and is rigorously investigating those allegations. of these allegations are true, the most egregious, defrauding of a federal program in a long time. and several audits have been done, and why is it more divisive action from the administrative point occurred.
which presumably the consequence of which is this legal action. >> let me try to answer what might be three questions in there, we are aware of the losses, we have gone through it ourselves as a way of educating ourselves and agree with you that there are some relatively egregious things, not sure how much of it you got into but the email traffic back and forth, people in the company, is certainly an issue. i am auditing and i will get you to something, never 2 on the auditing, and what we have been doing, we are looking over time, what is assumed and built into risk mode.
and it is taken out, and what is occurring within the plan. and you may have a different view. not all of it is fragile and -- fraudulent. we are collecting these codes to understand their mix of patients. let me reclaim my time. >> this is not one company, it is the largest provider under the medicare program, 17 million people in this country, healthcare under their medicare program for medicare advantage, and it is in the system, and it
was complicated $66 million, one person, one salary, one year. and on page 67, 15 a half-million dollar tax cut to the united healthcare ceo and their top executives, the other companies in question for overbilling, defrauding, medicare program, that bill provided their top executives with $78 million tax cut, at the same time that company and four others are under investigation
for defrauding the medicare programs, you can parse it anyway you want. the blatant violation of the trust that every member of congress to uphold and protect. i yield back. >> the scope of this hearing, to give an opportunity, i remind you of mister miller's valuable time in the scope of this hearing. i don't want to get in a tit-for-tat, allegations the gentleman brought up are very serious. individuals or companies are innocent until proven guilty, but i want to remind my colleagues, don't want to waste
mister miller's time in a tit-for-tat about the american healthcare act or the affordable care act, we could spend all day debating with each other about the affordable care act or the american healthcare act. mister miller and his staff have graciously given their time today to talk about the report, how we can work together in a bipartisan way to improve medicare. i hope my colleagues will spend the rest of the time respecting mister miller's time on how to work together to implement those recommendations. i recognize the gentlelady from the great state of kansas for five minutes. >> thank you for being here. medicare was created as a promise to seniors, so we talk about how to keep that promise and reform the system, and the affordability of the trust fund.
and services that have not moved in that direction. in your march of 2017 report, skilled nursing facilities are able to control the money medicare will pay them based on their payment model. i want your sense of the impact of move to evaluate these payment model and skilled nursing facilities, the american healthcare association has a value-based payment idea, and the march report discusses, reducing payments, increasing payments to nonprofit facilities. can you talk about medpac's believe that this will strengthen the skilled nursing facilities? >> there are a few things we are
seeing that we are responding to. it is not dissimilar -- inside the skilled nursing facility, overall spending is too high but we also think the way the system is structured but we get into the technical, the way the system is currently structured, not paying properly for different kinds of patients. and avoiding complex medical patients. patient need and barring a greater balance, improve value for the beneficiary, the greater balance in how the payment
works, we mentioned the not-for-profit or for profit, it isn't about making the payment system peculiar to for profit or not-for-profit, it happens because the way the payments shift based on what those different types of providers take. the other two quick comments on value, we do talk about the notion of time, patience, payments to different outcomes, returning to the hospital, avoiding going to the emergency room. and other conversations about reorganizing the entire payment system, having unified payment system but also ultimately moving towards more episodes of care in which inside, clinicians would have the flexibility to engage in practices and delivery practices that they would hopefully bring lower cost and
higher quality. a few threads in this particular area. >> to follow up, the reform payment system proposed by the american healthcare association is based on the creation of clinical groupings that would include an array of different patient types and cms has studied this type of payment and i would like to know if you believe that a move to patient characteristics instead of length of stay is feasible for cms and providers if it results in better cost savings. >> our work, the starting point in this process reconstructed in a different way to do the payment system based on patient characteristics, what you are referring to, the industry's notion is taking that and aggregating it into patient category. as long as the underlying
patient payment to patient need is not lost in the process of doing that, it is consistent with the direction we have been talking about going. >> we appreciate your being here. medpac over the years has helped deconstruct the hopelessly complex system congress routinely makes more complex and helping us dive into the details that otherwise we wouldn't have. we can explore some of this but otherwise we wouldn't. i'm hopeful that once we can move past the current controversies we can do a better job diving into what some of these elements are to understand them better, look for areas of
being able to rebalance the complexities, coach more value and incense more appropriate behaviors. and obamacare, we still pay twice as much as anybody else in the world and too many americans get mediocre to poor care. people in canada and france and great britain and japan live longer than we do, we get well faster, don't get sick as often and they pay far less. you are helping us understand some of the elements that are part of that, how we can use some of these large healthcare programs we finance to get better performance. i want to turn to one specific item you had in your report talking about hospice.
this is an area that works over the years. spend a lot of time dealing with end of life care hospice treatment and in your report you reference that people can get this medicare hospice if they are terminally ill with life expectancy of six months or less, but they agreed to forgo medicare coverage for conventional treatment of terminal illness and related conditions. i would like you may not have hard data on this. there is a pilot project underway looking at what the implications are for continuing punitive care while allowing
people to access the palliative care in terms of hospice treatment. i think there is some evidence that this is a decision point for people approaching hospice that is a difficult decision to be in that mindset letting go, forgoing carrot of as a note of finality to it. if there aren't some incentives for some people who would dramatically benefit from hospice care, they and their families and scale down some of the curative activity if they didn't have to be in either or. would you comment on whether there might be some savings over
all, hospice care that might be appropriate to them and not force them to jump off of that cliff. >> i am aware of the issue. the issue has come up a couple times in the commission conversation. there is no inherent hostility to the notion. a couple thoughts, there is a demonstration out there. and the answer to these questions, hard to get your arms around it because counterfactual is difficult. and hospice should be included in the maa benefit, we are in a full episode, the notion of the trade-offs being made by clinicians on the ground makes a lot more sense. a typical problem, we take it out and see for service where a lot of things and a lot of people can get involved. they are making the trade off.
again, it is not hostility to it but the concern whether it plays out the way they hope it plays out. >> we are looking at that demonstration too. >> thank you, mister chairman was i wholeheartedly concur with the motion of medicare advantage, makes a lot of sense, watching the pilot project as a way to federate, the best of both and appreciate having a chance to talk about it. >> thank you for your leadership in the hospice area. >> thanks for being here today. it is critical for members to have a firm understanding of how the program operates as we look for ways to continue to strengthen medicare for the future and as has been discussed, medicare advantage program plays a critical role in the medicare system.
almost a third of beneficiaries around the country are enrolled in a medicare advantage plan. those numbers will only continue to grow. i know in minnesota our seniors are interested in enrolling. 55% of minnesota seniors were enrolled in the maa plan which was the highest in the country and that is why i remain focused on ensuring high-quality. the report you released in march highlights the growing trend of seniors in fee-for-service plans choosing to enroll in medicare part a only. given medicare advantage enrollees must enroll in both parts a and b can you discuss the impact of more beneficiaries, in the program. >> ticking up on something we
said, we talked about in the report, getting more of this phenomenon of beneficiaries, a only or be only but the be only is a small phenomenon. what happens in that circumstance if you are in a only beneficiary your expenditures are below average. if you think of the way the payment system works which you are first in. you accumulate for fee-for-service beneficiaries and set a benchmark and there is some administrative -- to that benchmark, plans bid against. what we started to become concerned about is to the extent that you get more a only and this is geographic in its impact across the country and concerned that it would grow over time you're saying i will set a benchmark and include large body of people or growing body of
people the plans can't enroll and it compresses the benchmark. it may be a different -- we may need a different way to set the benchmark. the aab beneficiary, and this would add costs because it would potentially raise benchmark that the plans are betting against and we have pointed out at the same time there is a coding phenomenon that needs to be taken into account and those dollars need to be taken back. >> let me follow up, looking at you mentioning the possibility of adding costs but can you mention what would the benefits be to the beneficiaries themselves if we move to the system of calculating medicare benchmark only using data for
fee-for-service beneficiaries. >> thought about the question that way, a good question but what happens now is to the extent you bid below the benchmark, a portion of that dollar has to be converted to a benefit that goes back to the beneficiary. mostly they do it through lower cost sharing is arguably the plans are basically bidding below the benchmarks now and offering the additional benefits. of the benchmark went up in theory they would be able to offer in theory, a lot of behavioral response out there, would be able to bid below the benchmark. they should be able to offer more benefits. >> i am hopeful over the next few months we continue to examine and explore and address
the medicare extender policies, the therapy exceptions process, ambulance and payments, it is critical we ensure there is not a disruption, those critical services provided to seniors around the country that rely on strengthening the overall program in the future so thank you, yield back. >> doctor miller, thank you for your testimony today and the good work you and your staff doing the report we submit, i will follow up with my friend and colleague from minnesota, appreciate his interest in and appreciate the report as far as the benchmark caps and what you are recommending. from my colleagues edification, hr 40 to 75 along with mike kelly, mike doyle, get that this issue so we are glad to see you focusing additional tension on the benchmark issue and interested in following up what we have. to benefit us from the
legislature moving forward. also along those lines, you are aware we introduced a reform bill that would begin the conversation and start getting feedback, appreciative of the effort medpac and all of you, the work you are doing in this field, looking forward to following up with policy recommendations, there is more integration that could be had, more efficiency, better outcomes at a better price, the next generation of healthcare reform where we can get better outcomes at a better price, cost savings, we tried to follow up with that and i too share the concern of a number of my colleagues about the impact $75 billion worth of cuts in the medicaid program and the republican health care bill proposal, the impact that will have on health care providers, that will be on top of over $800
billion in cuts to medicaid managed care as we know it in wisconsin and the disproportionate impact that will have on providers and i look forward to following up with medpac as you do a deeper analysis. you are not in a position to comment, detail as far as the impact to follow up in the future so we know what to prepare for, the adverse consequences of future cuts that are being proposed in legislation and the impact it will have in rural america, rural providers struggling already with thin margins as it is and this could be adding on to their roles. getting back to mister higgins's line of questioning, new york times article in front of me today. that article submitted for the record stated be 152017 authored by mary williams, a whistleblower tells of health insurers bilking medicare.
billions of dollars being affected by the up coding issue. doj has an interest in it. we need more guidance and information as far as how real this problem is and what policy steps we should be taking to guard against -- millions of dollars every year. medpac's focus in this area in more detailed fashion, recommendations you bring forth would be helpful. finally i have been almost one note on the need of delivery system reform and payment reform getting to a quality value of reimbursement, medicare throughout the healthcare system but with your analysis of the medicare program, what is your assessment of progress being made, integration and delivery system reform proposals that are part of the affordable care act or obamacare and payment models
and value-based payments taking place within medicare today. are we making progress, moving the needle? >> i would say there is progress in the sense that there is movement in the environment and greater degrees of organization in terms of things like accountable care organizations. for example that type of thing. what remains to be seen is how large of an impact those models are going to have. there is some evidence they have affected spending and also generally on the quality front, the quality seems to be as good or slightly better in those models. not to be dismissed, but kindoflargespendingimpacts hasn't materialized yet. there does seem to be a lot of
motion in the environment, the other thing i will say about that is this is a period utilization slowed down, these models come in to try to control utilization, having a harder time of it. >> thank you, mister chairman. >> sorry i did not recognize you properly, had nothing to do with my friend being from wisconsin, you are recognized for five minutes. >> mister miller. i am always concerned about my dual eligible in my district about 35,000 people are dual eligible and that is involved in medicaid and medicare program. these people are low income seniors on both programs for their care which is often chronic and expensive and nationally 10 million people are duly eligible. i know you have numerous proposals to rein in spending on
medicare, but what would happen if there was a drastic cut to medicaid. for instance, there is proposed $838 billion cuts in medicaid. i would like to know what the impact on a big cut in medicaid would be to medicare. >> in medicaid? i don't feel i have done enough work to understand the nature of the cut and what its back lash would be on medicare. i don't feel very versed in being able to answer this question. >> i will talk about a different topic, i was interested in the proposals to rein in spending on prescription drugs. i know there was the proposal to realign medicare part d to
better manage prescription drug costs and 15-0, change how medicare pays for prescription drugs under part d and that is expected to appear in your june report. you had several options for reining in those costs and noted with interest the ones that require prescription drug manufacturers for medicare for drug increase to exceed deflation which is similar to medicaid inflation and also proposal to create new private entities to negotiate drug prices. why these proposals rise to the top, how valuable are these proposals? >> very concerned about drug
costs, spending, we spent a lot of time, natural to move to part b, $26 billion, 8% or 9% growth rate, that is why these were rising to the attention of the commission, you were correct in describing both of the things you said. rebate as prices grow faster than x. the difference back to the program, the cost sharing to a lower growth rate, restrained on the benefit as well. may be like part d, this is a physician administered drug
transitions and more efficient provision of care. can you tell us what types of reform, other types of reform medpac would have considering this statement of three pieces here, and better care transitions, and provision of care. >> we would approach this from a couple different perspectives. in the existing systems even without major reform we try to create payment incentives, so there is not patient selection or arbitrage thing and we try to make link payment measurements, avoiding unnecessary hospitalizations, and the experience of the patient, they
get their care, they have to go back to the hospital in the emergency room and to the provider, if this happens this will not play well in terms of your financing and that type of thing. we have a set up where we talked about delivery system reform, where you are trying to take the risk and delivery of the care for the entire patient. we had a number of recommendations inside the managed-care space in order to address those issues because you have a model and a payment system where you are directing to the entire patient and trying to measure quality and outcomes. we made recommendations which given time, the other thing to support the development of similar models in fee-for-service environment. the affordable care
organization, how a set of fee for service providers have a top line benchmark and manage against that with quality metrics and manage against that benchmark so they control expenditures, improve quality of the beneficiary, and the entire experience, this service or that service and made a set of recommendations and given advice to secretary on how to approve the accountable care organization. the last thing i will speak too quickly is this will be in our june report, having conversations how to reorient the physician side and the apm on the physician side, broader than the physicians but on the physician side in order to get more of an organized look at the beneficiary as a whole rather than service.
sort of three or four areas in their. >> are there any models being tested that you would say these models are being tested? >> the patient level, acos, a model around chemotherapy, oncology services for building a bundle around that, there are models around different posts of care and experiences. a smaller episode, not the whole patient episode. there is not a tremendous amount of final, clear evidence related to a question, this is working, everything good to go, it is not quite there yet. >> i yelled back. >> last but not least, recognize
for five minutes. giving us your insight on the current state of medicare. the highest rate of medicare beneficiaries. the lowest hospital medicare reimbursement. and the wage index against us is not very fair. this is quite alarming to me, seems unfair but when you think about the fact that we are contemplating medicare trust less solvent, it just means making sure as policymaker's we are not going in the wrong direction when it comes to medicare and medicaid. as i visit my hospital administrators and physicians and nurses across the district, i am concerned about the impact
of proposed medicare cuts and medicaid uncertainty on primary care shortage. i have an article i would like to submit about the primary care physician shortage in alabama in the new york times. >> without objection. >> perry county which is in my district not only has the lowest number of doctors and only two ambulances but most recently had a terrible outbreak in tuberculosis, and it was 100 times higher than the national average and kenya. imagine i was quite alarmed having that in my backyard and my district, only three physicians countywide and only one in marion where the outbreak was. and the mental care physician to a community causes the local
economy to grow and it predicted america will be short as many as 30,000 primary care doctors by 2025. the fee-for-service payment leads to, quote, undervaluing primary care. my question is can you expound on the findings with respect to primary care and salary disparity, and specialty care and the impact on our shortage. >> this is an issue the commission has pursued for several years and it shows up in several reports. and get you to what we said about it. one phenomena and is if you are a procedural issue have the ability to create new codes, they get priced at a certain
level and over time should come down because people are more efficient and spend less time doing it, don't necessarily always, to generate volume. for many years the commission is saying there has been this problem in the fee schedule. and look at this between procedural versus primary. >> and a bigger effect on rules communities. in rural areas there are more primary care positions. we made recommendations to rebalance those dollars and increase payments to the primary care sides, congress actually did take action on that but it will sunset and that issue is
out there. and rural areas, they tend to have more primary care and the other thing we have been saying, this isn't a hard and fast recommendation, we did make this recommendation at one point we might begin to say if you make that i'm payment instead of making it service by service, make it per patient and way the provider has flexibility, doesn't have to keep seeing revenue but doing things like spend the afternoon on the phone doing care coordination, the office and whatever the case may be. there is thinking like that along those lines. >> since my home state of alabama has the lowest wage index i increased a bipartisan
bill with my colleague, which would provide more equity in the area of wage index formulas by creating 4.76. many argue hospital and will end low-cost areas simply raise their wages. what reforms need to be made to the formula to provide more equity to the reimbursement structure. >> the gentleman's time has died, can you and your staff do that in writing? five words. pretty impressive. mister reid recognized for the final five minutes. >> way over here and over there. i want to follow up on my colleague from oregon's comments about hospice and hospice recommendations in your bill and
very committed to care across america with my colleague. if you look at the hospice update and did not recommend any update in the medpac recommendation i understand you look at quality of care coming at the determination. can you give me feedback what you are seeing quality care in the hospice environment. >> this is difficult to track for recently. a lot of good measures of quality and recently cms has collected measures. i am not exactly prepared to tell you how the quality profile looks these days because it is just coming online. it might be measurable but at this particular moment i am not able to pull it up. one of the things we have been
thinking about beyond what is being collected is looking at things like this. live discharges, live discharges if you have a lot of those an example of potential quality issues and other issues quite frankly. there are issues around the skilled present of a hospice provider and the patient's home in the late stages and whether there is enough of that going on, those are areas we have been looking at, put in place to come in now. >> i would appreciate sharing with our office. i am a firm believer, not only
does this make good fiscal sense for the purposes it serves but quality of care. and the benefit inpatients of hospice. another issue in western new york. the finger lakes, in the hometown, and reimbursement policy. peter welch off of this committee, can you give me any indications why the reimbursement policy makes sense rule environment and what do you see on the horizon, pro-numplaps and cons. >> the low-volume come medicare
defendant. sweetie reimbursement policies. the people who actually -- support that in concept. the way it was implemented was not the way to implement. here is the way to think about it. both of you have 1000 person hospital and the thousand admit hospital, no volume and that means we are struggling with fixed costs. the way it was implemented, medicare admission, if most of your admissions are medicare but only some of mine, i get help, you don't and we both might be in the same boat, we are thinking reset the metrics so it ties to total admission. we have ideas where the cutoff should occur. the other thing i would say on
medicare defendant, they are aimed at the same objective, helping the hospital that is struggling with fixed costs. we are concerned about duplication, hospitals are pulling bulk and that is not an exact use of federal dollars and the hospital issue there is this notion. and the rural adjusters conscious of the fact to hospitals that are 10 miles away from each other, may be propping up two operations that might never be efficient and there needs to be consolidation. >> i yield back. >> thank you for your leadership in this issue. thank you for your time and incredible patience and expertise, ensuring that with us today. these are important issues
ensuring efficiency of medicare for future generations, something we should be in a bipartisan way working together on not just in this congress but future congresss. we have two weeks to be answered later, those questions and your answers will be made part of the formal hearing record. with that, this hearing is adjourned.
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