Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Overview The Better Care, Lower Cost Act (S. 1932/H.R. 3890) was introduced on January 15, 2014, by Senators Ron Wyden (R-OR) and Johnny Isakson (R-GA) and Representatives Erik Paulsen (R-MN) and Peter Welch (D-VT). S. 1932 has been referred to the Senate Finance Committee and H.R. 3890 has been referred to the House Ways and Means and Energy and Commerce Committees. The goal of the legislation is to improve the care provided to chronically ill Medicare beneficiaries by eliminating some of the barriers that providers, insurers, economists, and health policy experts have identified under the current fee-for-service reimbursement system. The bill also removes some of the restrictions and limitations that currently apply to federal accountable care organizations (ACOs), such as attribution of patients. The bill allows providers and payers to team up to create Better Care Programs (BCPs) and offer their “products” directly to beneficiaries with chronic disease. BCPs have significant flexibility in marketing and benefit design so beneficiaries have incentives to seek appropriate and necessary care and become more engaged (and “sticky”) patients. The legislation states that “quality and cost containment are considered interdependent goals of the program.” The bill asserts that the “calculation of long-term cost savings is dependent on qualified BCPs delivering the full continuum of covered primary, post-acute care, and social services using capitated financing [emphasis added].” One way to think of BCPs is a hybrid between Medicare Advantage (MA) plans and ACOs – taking the best features from both and eliminating provisions that have been found to be problematic, create barriers, or otherwise are too restrictive. The bill moves Medicare physician-based care away from the fee-for-service system to a full-risk model that provides a capitated payment to BCPs, who maintain full responsibility for the care, cost, and outcomes of the beneficiaries enrolled in their plans. Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) The Congressional Research Service Official Bill Summary http://beta.congress.gov/bill/113th-congress/senatebill/1932?q=%7B%22search%22%3A%5B%22s+1932%22%5D%7D Amends title XVIII (Medicare) of the Social Security Act (SSA) to direct the Secretary of Health and Human Services (HHS) to establish an integrated chronic care delivery program (Better Care Program or BCP) that promotes accountability and better care management for chronically ill patient populations and coordinates items and services under Medicare parts A (Hospital Insurance), B (Supplementary Medical Insurance), and D (Voluntary Prescription Drug Benefit Program), while encouraging investment in infrastructure and redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations. Requires the program to include specified elements and focus on long-term cost containment and better overall health of the Medicare population by implementing through qualified BCPs strategies that prevent, delay, or minimize the progression of illness or disability associated with chronic conditions. Amends SSA title XIX (Medicaid) to require a state to pay the Secretary, with certain adjustments, for full benefit dual eligible individuals (eligible for both Medicare and Medicaid) enrolled in a qualified BCP. Makes Medicare the primary payor for such individuals. Amends SSA title XVIII part C (Medicare+Choice Program) to direct the Secretary to establish procedures for the transition of special needs individuals to Medicare Advantage plan qualified BCPs. Prohibits any Medicare supplemental (Medigap) policy from covering cost-sharing for items and services (other than certain emergent services) furnished to an enrollee in a qualified BCP by a service provider or supplier that is not a qualified BCP professional. Revises requirements for the initial preventive physical examination (Welcome to Medicare visit) and annual wellness visits for BCP eligible individuals. Directs the Secretary, acting through the Agency for Healthcare Research and Quality, to designate and provide core funding for at least three Chronic Care Innovation Centers. Establishes new curricula requirements for direct and indirect graduate medical education payments that address the need for team-based care and chronic care management, including palliative medicine, chronic care management, leadership and team-based skills and planning, and leveraging technology as a care tool. 2 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Please note: the information in this summary is not presented in the same order as the provisions in the legislative text. District Policy Group Detailed Section by Section Summary Section 1. Short Title and Table of Contents. Section 2. Findings. Section 3. Medicare Better Care Program. Generally What is a BCP and Who Can Enroll? The bill amends Medicare statute to require the Secretary of Health and Human Services (HHS) to “establish an integrated chronic care delivery program that promotes accountability and better care management for chronically ill patient populations and coordinates items and services under parts A, B, and D, while encouraging investment in infrastructure and redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations.” The new program is to “focus on long-term cost containment and better overall health of the Medicare population by implementing through qualified BCPs … strategies that prevent, delay, or minimize the progression of illness or disability associated with chronic conditions.” The program “shall focus on physical, behavioral, and psychological needs of BCP eligible individuals.” A BCP can be a “health plan or group of providers of services and suppliers, or a health plan working with such a group” that is certified by the Secretary of HHS as meeting criteria (to be developed by HHS) to “recognize the challenges of managing a chronically ill population.” The criteria to be developed include: patient satisfaction, patient engagement, quality measurements specific to chronically ill individuals/populations, effective use of resources and providers. A BCP “may manage and coordinate care for BCP eligible individuals through an integrated care network or Better Care Program.” A BCP also may participate in other alternative payment models (APMs), such as ACOs, Medicaid 1115A models (except innovation awards), health care quality 3 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) demonstrations, and other demonstrations required by federal law. The legislation also add BCPs to the definition of APMs. What is a Qualifying BCP Provider? Any health plan, provider of services, or group of providers of services and suppliers, “may form a multi-disciplinary team of health professionals to be certified as a BCP … [they] may also choose to partner with a qualified insurer to become a qualified BCP.” The HHS Secretary may certify the following as qualified BCPs: “Health professionals acting as part of a multidisciplinary team. Networks of individual practices of health professionals that may include community health centers, Federally qualified health centers, rural health clinics, and partnerships or affiliations with hospitals. Health plans that meet appropriate network adequacy standards, as determined by the Secretary, and that include providers with experience and interest in managing a population with chronic conditions. Independent health professionals partnering with an independent risk manager. Such other groups of providers of services or suppliers as the Secretary determines appropriate.” BCPs must meet the following criteria: (1) have a “demonstrated capacity to manage the full continuum of care (other than long-term care) for the specialized population of BCP eligible individuals,” (2) have a “high rate of Medicare customer satisfaction, when applicable, or partnering with providers of services or suppliers with such a demonstrated high satisfaction rate.” BCPs are required to be “accountable for the quality, cost, and overall care of enrolled BCP eligible individuals and agree to be at financial risk for that enrolled population.” BCPs maintain responsibility for providing the “full continuum of care” except for long-term care – this includes: “medical care, skilled nursing and home health services, behavioral health care, and social services.” BCPs may not “actively restrict” enrollee access to providers “based on a practitioner’s license or medical specialty based on cost alone.” The bill does not preempt State licensure laws and seeks to encourage and allow providers to practice at the top of their respective licenses. A BCP “shall primarily consist of a care team tasked with responding to, treating, and actively supporting the needs of BCP eligible individuals.” 4 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Care teams are required to “develop a care plan for each eligible BCP enrollee and use it as a tool to execute effective care management and transactions.” A BCP must “include physicians, nurse practitioners, registered nurses, social workers, pharmacists, and behavioral health providers who commit to caring for BCP eligible individuals” and must “include adequate numbers of primary care and other relevant professionals that can effectively care for the number of BCP eligible individuals enrolled in the qualified BCP.” A “qualified BCP professional” is considered a “certified and licensed professional of medical or behavioral health services that is participating in a qualified BCP.” BCPs are required to enter into an agreement with HHS to participate in the program for at least a three-year period. BCPs are required to have “in place a structure that includes clinical and administrative systems, including health information technology, that supports the integration of services and providers across sites of care.” BCPs are permitted to develop collaborative partnerships with (1) a regional or national Chronic Care Innovation Center, (2) a regional or national Center of Innovation (COIN) of the Department of Veterans Affairs Health Services Research and Development Service to identify and implement best practices, (3) regional or national Telehealth Resource Center of the Health Resources and Services Administration (HRSA) Office for the Advancement of Telehealth. BCPs are required to have a structure for clinical and administrative systems, including health information technology, to support the “integration of services and providers across sites of care.” BCPs are required to “demonstrate” they meet “person-centeredness criteria specified by the Secretary in collaboration with accreditation organizations, including the use of patient and caregiver assessments and the use of individual patient-centered chronic care plans for each enrollee.” BCPs “shall provide care across settings, including in the home as needed” however, BCPs are not required to provide enrollees long-term care services. BCPs are required to “demonstrate financial solvency” as determined by the Secretary. BCPs “shall demonstration the ability to partner with providers of social and behavioral health services within the community.” 5 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) BCPs “shall engage in continuing education on chronic care” as determined necessary by certain federal entities. (See Sec. 6 and Sec. 7 below) BCPs and Value-Based Insurance Design BCPs “may elect to provide value-based Medicare coverage” and if they do so, they are required to provide part A and B items and services with “varied cost-sharing approved by the Secretary to incentivize the use of high-value, high-quality services that have been clinically proven to benefit BCP eligible individuals.” The HHS Secretary shall “establish a process for qualified BCPs to submit value-based Medicare coverage changes that encourage and incentivize the use of evidence-based practices that will drive better outcomes while ensuring patient protections and access are maintained.” Varied cost-sharing only applies to “items and services furnished by qualified BCP professionals of a qualified BCP” that elects to provide value-based Medicare coverage. In the event a beneficiary receives items or services from a provider that is not a qualified BCP professional, the cost-sharing will be the same as required under parts A and B, or an “actuarially equivalent level” as determined by the Secretary. Prior to enrollment in a BCP, beneficiaries are required to be “notified and counseled” with respect to “potential changes in out-of-pocket costs” (e.g., copayments) if care is provided by a non-qualified BCP professional. Beneficiary out of pocket expenses under a BCP cannot exceed what they “would otherwise have been” under the “original Medicare fee-for-service program under parts A and B for the same services or an actuarially equivalent level of cost-sharing as determined by the Secretary.” Prescription Drug Coverage Health plans certified as BCPs are permitted to provide their enrollees with a drug plan option “specifically designed to reflect the medication needs of enrollees.” BCPs offering drug plans are allowed to limit enrollment in the drug plan to the BCP enrollees. Generally the same requirements that apply to Medicare Part D plans apply to BCP drug plans, with a few exceptions. As necessary, the HHS Secretary has authority to waiver Medicare Part D provisions for BCP drug plans. 6 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) A BCP “managed by a group of providers of services” is permitted to enter into an agreement with a Medicare Part D prescription drug plan to “encourage individuals enrolled in the qualified BCP to enroll in a prescription drug plan … that is better suited to the needs of chronically ill patients.” BCP Payments and Savings Payments to BCPs are fixed/capitated and will be made on a monthly basis in advance for each eligible individual enrolled in the BCP. Payments are to be made in the “same manner and from the same sources as payments are made to a Medicare Advantage organization.” The “per member per month” (PMPM) amounts for BCP enrollees are to be based on similar risk and geography as a fee-for-service comparison group. Specifically, the HHS Secretary is required to utilize Medicare claims data to “identify a group of beneficiaries who have similar health risk characteristics, and have sought care in the same county, multi-county, or State” as the population the BCP is responsible for serving. To the extent possible, the calculation also is to factor in social characteristics such as income and medical risk. The capitated amount for each enrollee “for a year shall be 1/12 of the benchmark rate for the year.” The benchmark rate will be established, on an annual basis, by the Secretary and will be set for a BCP service area. The rate will be updated each year based on anticipated change in per capita spending for the comparison group of beneficiaries, as determined by the Centers for Medicare and Medicaid Services (CMS) actuary. The HHS Secretary is required to create a “risk score” to compare the health status of an [BCP] enrollee to the average health risk group of [Medicare] beneficiaries and include an “indicator for the number of chronic conditions with which the individual has been diagnosed.” The risk score must reflect at least two years of diagnosis data. The HHS Secretary is required to adjust up or down the PMPM payment to BCPs for each enrollee “depending on how the individual risk profile of the enrollee compares to average health status of such [comparison] group of beneficiaries.” As such, PMPM payments for healthier enrollees will be lower, while PMPM payments for those with “more severe” risk profiles will be greater. For each of the first three years, the Secretary, using information provided by the BCP, will determine the annual percentage gains and losses for each BCP: 7 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) If the gain or loss is greater than five percent [emphasis added], the BCP “shall bear 100 percent of the risk or reward of such loss or gain.” If the gain or loss is between two and five percent [emphasis added], the BCP “shall bear 80 percent of the risk or reward” and the Secretary “shall bear 20 percent of the risk or reward.” If the gain or loss is between zero and two percent [emphasis added], the loss or gain shall be split 50-50 between the BCP and the Secretary. In the fourth year of the program, BCPs will submit bids to participate in the program with information regarding the individual BCP’s experience in managing the care for the enrolled population at the rate of payment provided. The HHS Secretary is required to create a “quality bonus system” through which additional payments are made to BCPs that meet certain requirements and standards, which may include “quality measurement and improvement, delivering patientcentered care, and practicing in integrated health systems, including training in community-based settings.” The standards for the bonus system are to be developed in collaboration with stakeholders, such as “accrediting bodies, certifying boards, training programs, health care organizations, health care purchasers, and patient and consumer groups.” The quality of care being provided to BCP enrollees will be compared to the quality of care being delivered to beneficiaries not in BCPs or MA. The first five years of the bonus program will utilize quality measures for a geographic region that reflect the local standards of care. After the first five years, national standards will be utilized for the comparison of quality of care. BCP Reporting Requirements The HHS Secretary is required to develop “appropriate measures” to evaluate the quality of care delivered by a BCP to the individuals it serves. The Secretary is permitted to use existing measures, but is not required to do so. Measures are to include/address the following: Clinical processes and outcomes Patient (and caregiver) experiences of care Patient activation and engagement Utilization of care (e.g., hospitalization) 8 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Care coordination, management, and transitions Others that align with the National Strategy for Quality Improvement in Health Care (for reference: http://www.ahrq.gov/workingforquality) To be evaluated on the various measures, BCPs are required to submit data to HHS in a fashion which is not to be “overly burdensome,” as determined by the Secretary. The required data reporting is to “emphasize ‘patient-centered’ measurement and may include the functional status of patients, case management and care transitions across health care settings, including hospital discharge planning and post-hospital discharge follow-up by qualified BCP professionals.” The HHS Secretary is required to “establish quality performance standards to assess the quality of care furnished” by BCPs and is directed to continue to increase the standards over time to push for further improvements. The process includes retirement of measures as well as the creation of new measures. The HHS Secretary is authorized, if determined appropriate, to “incorporate and align reporting requirements and incentive payments related” to other quality reporting systems. The Secretary is permitted to employ other criteria than those that would otherwise apply under the physician quality reporting system to decide whether to provide such additional, value-based payments to BCPs. If payments are provided under other quality programs, the payments are not to be factored into the base payments provided to the BCP. Where Will the BCPs Be Located and How Many Will Be Created? The HHS Secretary is to give priority to certifying BCPs “that do not have a concentration of accountable care organizations under section 1899 and with a high burden of chronic conditions.” First five years of the program – at least half of the new BCPs are required to be “from counties or regions, as determined by the Secretary, where the prevalence of the most costly chronic conditions is at or greater than 125 percent of the national average.” The HHS Secretary, when choosing BCPs, is required to take into consideration “geography, urban and rural designations, and the population case mix that will be served.” The total number of certified BCPs is capped for first four years at 250. For the fifth year and after there is no limitation on how many BCPs can be certified. 9 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) The bill defines BCP eligible individual as (1) someone who is entitled to Medicare benefits under part A and are enrolled in parts B and D, including individuals who are “enrolled in a MA plan under part C, an eligible organization under section 1876 [HMOs or competitive medical plans], or a PACE program under section 1894 [a program of all-inclusive care for the elderly],” and (2) someone who “is medically complex given the prevalence of chronic disease that actively and persistently affects their health status, and absent appropriate care interventions, causes them to be at enhanced risk for hospitalization, limitations on activities of daily living, or other significant health outcomes.” Dually Eligible Medicare and Medicaid Beneficiaries The HHS Secretary must “ensure alignment with other approved waivers of State plans under title XIX [Medicaid].” Individuals eligible for both Medicare and Medicaid (“dual eligibles”) cannot be excluded from enrolling in a BCP. Dual eligibles enrolled in BCPs will have the “full scope of their benefits” for both programs (except long-term care) managed by the BCP. The HHS Secretary is permitted to provide payment for the Medicare cost-sharing for dual eligibles enrolled in BCPs, if such a payment otherwise would be provided under the State Medicaid plan. States are required to pay HHS a monthly amount for full-benefit dual eligible individual BCP enrollees. Beginning January 1, 2017, states are required to include BCP information in the marketing materials distributed by the State to dual eligible individuals. BCP Enrollment BCP eligible beneficiaries will be notified, on an annual basis, of the available BCPs in their area for the year ahead. Beneficiary enrollment in BCPs will be voluntary during the annual election period and also can occur, voluntarily, during or following (for a period of time to be decided by the HHS Secretary): the initial preventive physical (“Welcome to Medicare” visit), and “any subsequent visit where a chronic condition is identified or a previous condition is identified as having escalated to the level of a chronic condition.” 10 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Health Status Assessment and Patient-Centered Chronic Care Plans By January 1, 2016, the HHS Secretary is required to publish “minimum guidelines for qualified BCPs to furnish to enrollees a health information technology-compatible, standardized and multi-dimensional risk assessment that assesses and quantifies the medical, psychosocial, and functional status of an enrollee, and includes a mechanism to determine the level of patient activation and ability to engage in self-care of an enrollee.” The guidelines are to be updated at least every three years. By January 1, 2016, the HHS Secretary is required to publish “minimum guidelines for qualified BCPs to develop individual patient-centered chronic care plans for enrollees.” Such plans are to incorporate “the medical, psychosocial, and functional components identified in the risk assessment … provide a framework that can be easily integrated into electronic health records, allowing clinicians to make timely accurate, evidencebased decisions at the point of care, and allow for the provider to describe how services will be provided to the enrollee.” To the extent appropriate, the individual patient-centered chronic are plan “shall include the use of technologies that enhance communication between patients, providers, and communities of care, such as telehealth, remote patient monitoring, Smartphone applications, and other such enabling technologies that promote patient engagement and self care while maintaining patient safety.” The HHS Secretary is required to work with the Office of the National Coordinator for Health Information Technology and the HHS Chief Technology Offices to “develop a streamlined pathway for the use of mobile applications and communications devices that effectively enhance the experience of the patient while maintaining patient safety and cost-effectiveness.” Such efforts are not to duplicate existing efforts. Other BCP Provisions – Medicare Supplemental Coverage The HHS Secretary is required to ask the National Association of Insurance Commissioners (NAIC) to “review and revise standards for benefit packages” related to Medicare supplemental coverage policies, factoring in changes that will result from the enactment of the legislation, including updated standards associated with costsharing. If practicable, changes should be made for benefit packages beginning January 1, 2017. With the exception of emergent services, for BCP enrollees to receive cost-sharing coverage through their Medicare supplemental policies, they must receive care, items, and services from qualified BCP professionals. 11 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) Section 4. Chronic Special Needs Plans. The legislation creates MA plan qualified BCPs to care for certain special needs individuals (e.g., institutionalized beneficiaries, dual eligible, individuals with severe or disabling chronic conditions as defined by CMS) and such plans are required to have “flexibility to offer specialized benefit packages” to special needs enrollees consistent with value-based insurance requirements. MA plan qualified BCPs are held to the same standards and requirements as BCPs, including enrollment periods, network adequacy, patient-centered chronic care plans, and quality reporting. Generally, Medicare Part C requirements, including those relating to special needs plans, also apply to MA plan qualified BCPs. Section 5. Improvements to Welcome to Medicare Visit and Annual Wellness Visits. For enrollees in BCPs, the legislation adds to the Welcome to Medicare Benefit and the Annual Wellness Visit a standardized functional and health risk assessment to be provided by a qualified BCP professional. This change is considered effective and shall apply to services delivered on or after the date that is one year following the date of enactment. Section 6. Chronic Care Innovation Centers. By October 1, 2016, the HHS Secretary through the Agency for Healthcare Research and Quality (AHRQ) is required to designate and provide funding for at least three “Chronic Care Innovation Centers” (CCICs) and to ensure “sufficient geographic representation” among the chosen entities. To become a CCIC, an eligible entity must meet six detailed criteria, including collaborating with “local schools of public health and universities to carry out its mission,” and “have the ability to convene experts practiced in the needs of chronically ill patient, including pharmacologists, psychiatrists, cardiologists, pulmonologists, rheumatologists, nutritionists and dieticians, social workers, and physical therapists.” CCICs are to partner with the HHS Secretary, the Secretary of Veterans Affairs, the medical community, medical schools, public health departments through AHRQ, and the Association of American Medical Colleges to “routinely develop new, forward thinking, and evidence-based curricula that addresses the tremendous need for teambased care and chronic care management.” The curricula to be developed by the CCICs shall include “palliative medicine, chronic care management, leadership and team-based skills and planning, and leveraging technology as a care tool.” 12 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) The CCICs are to undertake and contribute to ten specific objectives and activities pertaining to improving quality of care for individuals with chronic disease, including studying and identifying practices, technologies, socio-demographic factors, selfmanagement and behavioral interventions, and barriers that impact the quality and efficient delivery of care. CCICs also are to contribute to the understanding of “how management of care is affected when patients have multiple chronic conditions in which evidence or recommended guidelines are lacking, conflict with, or complicate overall care management.” Section 7. Curricula Requirements for Direct and Indirect Graduate Medical Education Payments. This section amends the Medicare Direct Graduate Medical Education (GME) program to add new curricula requirements. The HHS Secretary is required to “engage with the medical community and medical schools in developing curricula that:” “is new, forward thinking, and evidence-based” “addresses the need for team-based care and chronic care management” “includes palliative medicine, chronic care management, leadership and teambased skills and planning, and leveraging technology as a care tool” “shall include appropriate focus on care practices required for rural and underserved areas.” For Medicare cost reporting periods beginning on or after the date that is five years after the legislation is enacted, “if a hospital has not begun to implement curricula that meets the requirements … payments otherwise made to a hospital [for DME] may be reduced by a percentage determined appropriate by the Secretary … successful development and implementation of such curricula shall be determined by program accrediting bodies.” For Medicare discharges occurring on or after the date that is five years after the legislation is enacted, “if a hospital has not begun to implement curricula that meets the requirements … payments otherwise made to a hospital [for Indirect Medical Education] may be reduced by a percentage determined appropriate by the Secretary.” Resources Complete information regarding the Better Care, Lower Cost Act, including status of the legislation and a PDF of the 54 page bill, visit: 13 Summary: The Better Care, Lower Cost Act (S. 1932/H.R. 3890) http://beta.congress.gov/bill/113th-congress/senatebill/1932?q=%7B%22search%22%3A%5B%22s+1932%22%5D%7D Home page for Senator Wyden’s work on the legislation: http://www.wyden.senate.gov/chroniccare A bill summary provided by Senator Wyden: http://www.wyden.senate.gov/download/summary-of-better-care-lower-cost-act A side-by-side comparison between ACOs and BCPs: http://www.wyden.senate.gov/download/whats-the-difference-between-acos-andthe-better-care-lower-cost-act For more information about the Better Care, Lower Cost Act or other pending federal health legislative and regulatory issues, please contact: Ilisa Halpern Paul, MPP President District Policy Group at Drinker Biddle 202/230-5145 [email protected] 14
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