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XPP-PDF Support Utility A BNA’s HEALTH LAW REPORTER! Reproduced with permission from BNA’s Health Law Reporter, Vol. 18 No. 37, 09/24/2009. Copyright ஽ 2009 by The Bureau of National Affairs, Inc. (800-372- 1033) http://www.bna.com Health Care Delivery System Reform Provisions in the Baucus Bill: A Substantive Set of Provisions BY DOUGLAS A. HASTINGS Chasm. Especially in Subtitle A, ‘‘Transforming the Health Care Delivery System’’ (pages 75 to 110), one n addition to the many hotly contested insurance can see the impact of the IOM’s definition of quality as and access-related provisions in the America’s six aims: care that is safe, effective, efficient, patient- I Healthy Future Act of 2009, the chairman’s mark centered, equitable and timely. Given the fairly broad from Senate Finance Committee Chairman Max Baucus consensus regarding these concepts in the health policy (D-Mont.), released Sept. 16 (18 HLR 1205, 9/17/09), community, they may have a reasonable chance of sur- there is in the bill a section that addresses in a substan- viving in any final bill if one is adopted. tive way reform of the health care delivery system with a focus on quality. There has been some concern among The following key provisions with important long- many participants in and expert observers of the health term implications for health care providers appear in Title III of the chairman’s mark: care system that the major focus on access and cover- s age in the evolving legislation, while understandable, A hospital value-based purchasing program in has lessened attention to the important need to build on Medicare that moves beyond pay-for-reporting on the advances in evidence-based medicine over the last quality measures to paying for hospitals’ actual decade to create mechanisms and incentives to improve performance on those measures; s the quality and cost efficiency of health care in the Revisions to expand and extend quality reporting United States. Many believe that the broader adoption for physicians and other non-hospital providers; of evidence-based measures, clinical integration, care s A charge to the secretary of HHS to establish a na- coordination, standardization and related ‘‘quality’’ tional quality improvement strategy, which would, concepts is the key to improving health system perfor- among other things, address improvements in pa- mance, obtaining better health outcomes and managing tient safety, health outcomes, disparities, effective- costs in the long run. ness, efficiency and patient-centeredness; Much of the underlying thinking in Title III of the bill, s Recognition of Accountable Care Organizations, entitled ‘‘Improving the Quality and Efficiency of which, beginning in 2012, would be allowed to Health Care,’’ draws from the Institute of Medicine’s qualify for incentive bonus payments; among other seminal publication in 2001 of Crossing the Quality requirements, an ACO would have to have a formal legal structure to allow it to receive bonuses and distribute them to participating providers; Hastings is partner and chair, Epstein Becker s Formation at CMS of an Innovation Center that & Green PC; member, Board on Health Care would be required to test and evaluate patient- Services, Institute of Medicine; past president, centered delivery and payment models; American Health Lawyers Association; mem- s The establishment of a bundled payment pilot pro- ber, BNA Health Law Reporter Advisory gram involving multiple providers to cover costs Board. He can be reached at dhastings@ across the continuum of care and entire episodes ebglaw.com or (202) 861-1807. of care; if the pilot is successful, it would be made a permanent part of the Medicare program; COPYRIGHT ஽ 2009 BY THE BUREAU OF NATIONAL AFFAIRS, INC. ISSN 1064-2137 2 s Beginning in 2013, reductions in Medicare pay- use of data to improve care and population health. In ments to hospitals with preventable readmissions developing the strategy, the secretary of HHS is in- above a threshold based on appropriate evidence- structed to work with a broad array of stakeholders based measures; from the public and private sectors, and the President s Extension of the current gainsharing demonstra- would convene an interagency working group to make tion. recommendations to the secretary. The secretary would Below is a closer look at Title III, Subpart A, and an update the national strategy not less than triennially, initial assessment of its implications. with the first report due December 31, 2010. Key Implications: 1. Pay-for-Performance. The proposed value-based s The structure for a regular, comprehensive public- purchasing program (VBP) would provide value-based private strategic planning process and dialogue incentive payments to acute care IPPS hospitals that with a focus on quality and population health is put meet certain quality performance standards beginning in place; in 2012. The first year of the program would be a data s Such a process is likely to trigger regular and re- collection year. In 2013, hospital payments would be ad- peated change and potentially significant innova- justed based on performance under the VBP program. tion; Hospitals that meet or exceed performance standards s Additional legal issues, transactions, regulatory would receive incentive payments. Funding for these compliance and other matters likely will result. payments would be generated through reducing Medi- care IPPS payments to all hospitals, but all such reduc- 4. Accountable Care Organizations. ACOs eligible for tions would be returned to hospitals through incentive bonuses beginning in 2012 are defined as group prac- payments in the same year. Individual hospital perfor- tices, networks of practices, joint ventures between hos- mance on each measure would be publicly reported, pitals and practitioners, hospitals employing practitio- and there would be an appeals process (related to per- ners, among others the secretary determines appropri- formance score calculation and the resulting value- ate. Practitioner is defined as including physicians, based incentive payment). nurse practitioners, physician assistants, clinical nurse Key Implications: specialists and others. To qualify as an ACO, an organi- s Quality performance would affect financial perfor- zation would have to meet at least the following crite- mance in a direct way; ria: (1) agree to become accountable for the overall care s This Medicare program, if adopted, might acceler- their Medicare fee-for-service beneficiaries; (2) agree to ate similar pay-for-performance programs in the a minimum three-year participation; (3) have a formal private sector; legal structure that would allow the organization to re- s The program would further highlight hospital ceive and distribute bonuses to participating providers; board fiduciary responsibility as it relates to qual- (4) include the primary care physicians for at least ity; 5,000 Medicare fee-for-service beneficiaries; (5) provide s There would be a host of new legal issues that CMS with information regarding primary care and spe- would arise in connection with performance stan- cialist physicians participating in the ACO as the secre- dards, measurement, other uses of publicly- tary deems appropriate; (6) have arrangements in place available poor performance data, the appeals pro- with a core group of specialist physicians; (7) have in cess, and others. place a leadership and management structure, includ- ing with regard to clinical and administrative systems; 2. Physician, home health agency and skilled nursing fa- (8) define processes to promote evidence-based medi- cility value-based purchasing and rehabilitation facility, cine, report on quality and costs measure, and coordi- long term acute care hospital, hospice, and cancer hospital nate care; and (9) demonstrate to the secretary that it quality reporting. The chairman’s mark includes a host meets patient-centeredness criteria determined by the of provisions that strengthen and expand current qual- secretary, such as use of patient and caregiver assess- ity reporting initiatives for all of the above-listed provid- ments or the use of individualized care plans. The mark ers. A great many more quality measures would be se- includes additional requirements related to the mea- lected and adopted for the various care settings, and in- sures to be used to determine incentive payments to centive payments would be extended and expanded ACOs, requirements related to data collection and re- (and reductions potentially put in place in future years) porting and the formula related to total per beneficiary for physicians, HHAs and SNFs. There is an additional spending that would be the basis for possible shared provision for measuring hospital-acquired conditions savings payments to the ACO. (HACs), reporting the results and in the future reducing Key Implications: payments to hospitals with high HAC rates. s Numerous organizational structurings, restructur- Key Implications: ings and transactions related to forming qualifying s Increased/improved reporting; ACOs or revising existing organizations; s More compliance obligations; s Major legal issues, notwithstanding this potential s Reimbursement impacts, good and bad. new law, in light of current antitrust, Stark, anti- 3. National Strategy to Improve Health Care Quality. As kickback, CMP and other laws; s contemplated in the mark, this strategy would be com- New and evolving application process for recogni- prehensive and far-reaching in developing priorities to tion as an ACO; improve overall population health,
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