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July 15 — The fee-for-service model of Medicare has created disincentives to coordinating care for beneficiaries with chronic conditions, senators and witnesses said at a July 15 Senate panel hearing.
Speaking at a Senate Finance Committee hearing on the unmet needs of patients with chronic illness, William Bornstein, chief medical officer and chief quality officer of Emory Healthcare in Atlanta, discussed how the fee-for-service model makes it more profitable to prescribe and complete procedures than to coordinate care. Bornstein also said hospitals and other providers lack mechanisms to receive reimbursement for the extra costs of coordinating care.
Likewise, Sen. Orrin Hatch (R-Utah), the ranking Republican on the Finance Committee, said, “The Medicare Payment Advisory Commission has long said that fee-for-service Medicare creates silos—incentivizing providers to deliver more care, not necessarily higher quality, coordinated care.”
The committee also heard from witnesses representing the perspectives of insurers, patients, caregivers and employers. Sen. Ron Wyden (D-Ore.), chairman of the Finance Committee, said in his opening remarks that managing chronic illness represents “the biggest challenge” facing Medicare and the entire U.S. health-care system. Wyden said “the growing prevalence of chronic disease” is both a health and economic issue, adding, “The way health care in America is delivered has to change.”
Meanwhile, Hatch used the hearing to call for additional inquiries into the Affordable Care Act. While Hatch said that the hearing allowed the committee to explore bipartisan options for improving care coordination and reducing overall health-care costs, he also questioned accountable care organizations (ACOs) created by the ACA. According to Hatch, ACOs allow providers to integrate and coordinate Medicare services.
During his opening remarks, Hatch said, “There is no definitive data to prove if ACOs actually improve quality, if they show any promise to save Medicare money or if they are simply failing.”
Hatch also urged the committee to “start exercising proper levels of oversight” over the ACA.
“I don't say this out of politics or partisanship, but because patients, taxpayers and policy makers deserve honest answers,” Hatch said.
In written testimony, Chet Burrell, president and chief executive officer of Baltimore-based CareFirst BlueCross BlueShield, described an innovative model the health plan is using to improve coordination.
However, Burrell said CareFirst has been confronted by limits in “law, rule, policy and custom that thwart” common-sense actions. For example, he said, Medicare payment rules often don't cover the cost of developing and maintaining care plans for people with chronic conditions. He said that Medicare historically hasn't provided incentives or additional money to primary care doctors “to do the very things that most lead to better outcomes, and we are now participating in a pilot program with Medicare to see if these things can be overcome.”
Burrell also said that tax law is a barrier. Health savings accounts, which are growing in use, don't allow private insurers to provider first-dollar coverage for things that prevent the worsening of chronic conditions.
The Senate hearing also addressed how to promote wellness for people suffering from chronic conditions. Noting that chronic illnesses are often diagnosed before a person enrolls in Medicare, Wyden asked what can be done to improve the health of people with chronic conditions before aging into the program.
Citing her organization's experience, Cheryl DeMars, president and CEO of The Alliance, a not-for-profit cooperative owned by over 200 employers that use self-funding to provide health benefits to more than 90,000 employees and their family members in Wisconsin, Illinois and Iowa, advocated for early detection of chronic diseases through health risk appraisals with biometric screenings. According to DeMars, the biometric screenings provide data to employers about the impact of their health plans and wellness activities.
In addition, DeMars said that while employers try to encourage their employees to lead healthy lifestyles, “it's a bigger issue” that employers can't “tackle alone.”
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