The Community Based Collaborative Care Network (CCN) program was authorized by Section 10333 of the Patient Protection and Affordable Care Act (ACA) to provide grants to a team of health care providers with joint governance and who provide comprehensive and coordinated health care services for low-income populations.  One goal of this effort is to improve coordination among safety net providers such as hospitals, community health centers and other providers in low income communities to reduce ER use and improve patient outcomes.

Funding for this program was not guaranteed by the ACA and is subject to the annual Congressional appropriations process, although requests for FY 2011 have been submitted in both chambers. In order to qualify for any funding awarded, CCNs must provide a comprehensive range of services for low-income populations or medically underserved communities and include a safety net hospital and a federally qualified health center.  Funding priority will also be given to those CCNs that also include local public health departments in its model as well as a broad range of medical providers.

In our state, the Community Care of North Carolina (CCNC) Program has been paving the way for CCNs since 1998. CCNC enrolls Medicaid beneficiaries into enhanced medical homes among 14 nonprofit, physician-directed regional care networks that partner with hospitals, community health centers and public health departments to provide a wide variety of patient services. With over 700,000 newly eligible for Medicaid by 2014, the need for such effective care management will only increase and the $200 million that CCNC saves our state every year will be needed more than ever.

The Affordable Care Act was enacted six months ago on March 23, 2010. Here are the reform measures that kicked-in this week on September 23rd – six months from the day of enactment:

• No pre-existing condition exclusions for children under age 19. “Grandfathered health plans” established before March 23, 2010 may continue their existing policy until 2014, at which time no discrimination based on pre-existing conditions is allowed.
• No arbitrary rescissions of health insurance. In the past insurers have been able to rescind coverage when a patient gets sick and needs the coverage most. Reform eliminates this practice, except in cases of fraud.
• No lifetime limits on health insurance coverage. Applies to any plan issued or renewed after Sept. 23, 2010.
• No annual limits on coverage. Annual limits will be phased out beginning Sept. 23, 2010. The $750,000 minimum limit rises to $1.25 million next year on Sept. 23, 2011, and $2 million the following year. Beginning Jan 1, 2014, annual limits will be prohibited for most plans.
• Patients will have the option to keep a primary care doctor from among their insurer’s network. Referrals for obstetric or gynecological care cannot be required.
• Companies will no longer be able to deny coverage for the use of out-of-network emergency services.
• Preventive services are now covered. Beginning Sept. 23, 2010 all new or renewed health insurance plans must cover preventive services such as vaccinations, mammograms, colonoscopies, and nutrition counseling. 
• Adult children covered to age 26, unless they qualify for health insurance through their employer.

Some individuals and employers may choose to stay with their current plans, many of which will be grandfathered and exempt from some Sept. 23, 2010 provisions. By 2014, all plans will have to conform to these and other standards.

How do I know if my current insurance coverage is a grandfathered plan?

• By law, your plan has to tell you if it is grandfathered.
• Any individual plan that you purchase for the first time after March 23, 2010 is considered new and is NOT grandfathered.
• If you start a new job at a company with a grandfathered plan, your coverage is grandfathered as well, even though you are a new plan participant.
• The baseline is what your plan was when the reform law was signed on March 23, 2010.
• If any of these changes occur after March 23, your plan is no longer grandfathered:
  • Increase in your share of health-care bills (coinsurance) by any amount.
  • Increase in co-pays or deductibles by more than medical inflation (typically 4-5%) plus 15%.
  • Elimination or significant reduction in benefits to treat certain conditions.
  • Switching to a new carrier (unless you work for a self-insured company).
  • If under an employer group plan, and your share of premiums rises more than 5% it is no longer grandfathered.

The Affordable Care Act requires the Secretary of Health and Human Services to develop a national strategy to improve the delivery of health care services, patient outcomes and general population health.  The first national strategy document must be submitted to Congress by January 1, 2011.  This document will also be available to the public on a federal health care quality website to be developed.

The Secretary has been appropriated $20 million each year between 2010 and 2014 to support a body to gather stakeholder input and to use quality measures to report performance across many sectors of health care. Public comment will be accepted throughout the implementation process.  Currently the non-profit National Quality Forum (NQF) is responsible for endorsing quality measures and is viewed as a potential recipient of this funding.

Beginning in 2011, the Secretary must publish a list of quality measures that Health and Human Services is considering.  This list must be updated and released annually by December 1^st.

Together with CMS, the HHS Secretary will also identify gaps where no quality measures currently exist and support the development and expansion of measures through grants and other contracts.  $75 million has been authorized for each year from 2010 through 2014 for measure development.

It is imperative for the physician community to have a role in developing and implementing quality measurement policies and procedures in order to maintain a strong infrastructure for meaningful quality improvement.

Research to compare the effectiveness of different medical treatments of the same conditions is on the upswing, due largely to significant increases in federal funding and the creation of a new public-private institute to steer those dollars.

Some contend that comparative effectiveness research is the best way to test and understand what treatments work best for a majority of patients, potentially cutting waste in the health care system. However, others warn that patient populations are too complex to be tested comparatively and that holding patients to uniform standards of care could limit their ability to obtain coverage for unique reactions or conditions.

In large part the debate will be settled by the 21 members of the Patient-Centered Outcomes Research Institute which replaces the Federal Coordinating Council for Comparative Effectiveness Research under Health Care Reform.  Members of this institute will be appointed by the Comptroller General at the end of this month and will set the agenda for federal research efforts. However, the Patient Protection and Affordable Care Act prohibits this group from issuing practice guidelines or making recommendations for coverage. 

The research institute will receive baseline funding of $10 million in fiscal year 2010, $50 million in fiscal 2011 and $150 million each year from fiscal 2012 through fiscal 2019. The body will also receive substantial funding from fees on health insurance plans and transfers from the Medicare trust fund.

One provision of the Patient Protection and Affordable Care Act that takes effect at the end of this year is the restriction on physician ownership of hospitals in the Medicare program.  The health reform law also places major limits on the expansion of existing physician-owned hospitals.

New physician-owned facilities that are not certified as Medicare participants by December 31, 2010 will no longer be allowed into the program after that date.  Other changes to the law include capping levels of physician ownership, ending some exceptions to Stark self-referral bans and mandating more disclosure of physician owners’ potential conflicts of interest, if they send their patients to their own facilities.

Past legislative attempts to limit physician ownership of hospitals often targeted specialty hospitals such as orthopedic, cardiac and other surgical facilities.  However, limitations enacted by the PPACA will also impact acute care facilities, even some community hospitals that may have been financially supported by their physicians in the past.

Until many pending federal lawsuits are settled, existing plans for new or expanding physician-owned hospitals are in a holding pattern.  The new law caps ownership levels to where they were at the bill’s passage (March 23, 2010).  According to the Physician Hospitals of America, there are currently 265 physician-owned facilities in 34 states that employ more than 75,000 workers with an average bed size of 233 general acute care beds that will be negatively impacted by the restrictions.

With the expansion of Medicaid and the individual mandate to obtain health insurance brought about by Health System Reform comes the need for expanded access to quality health care providers.   In an attempt to address the inevitable shortage of medical providers the Patient Protection and Affordable Care Act has called for the creation of a National Health Care Workforce Commission.   The legislation requires that this group be appointed and operational no later than September 30^th of this year and to prepare, the U.S. Government Accountability Office has been seeking recommendations for members throughout the summer. 

The Commission will be tasked with determining if the demand for health care workers is being met, identifying possible barriers to health care workforce development and making recommendations to Congress based on their findings.

Fifteen members will serve on the Commission, each appointed to three year terms by the Comptroller General. Health care professionals cannot constitute more than half of the workforce, leaving other seats open to representatives of employers, third party payers, health care economists, consumers, labor unions, educational institutions, and state or local workforce investment boards.

Legislators have penned specific priorities for the Commission to focus on throughout the course of their evaluations which include integrated workforce planning for nursing, oral, mental, public, allied, and emergency health providers.  Also of significance is the Commission’s ability to evaluate existing scopes of practice in the health care sector and make recommendations to Congress.

The creation of the National Health Care Workforce Commission is accompanied by a number of development grants for eligible State Workforce Development Boards to analyze local health care workforce needs and provide resources to help meet those needs. Individual providers may also apply for a number of workforce development grants or loan repayment programs.   Many of these opportunities are focused on growing the nursing field, however programs also exist to repay loans for pediatric and public health physicians as well.

The Patient Protection and Affordable Care Act expands state Medicaid eligibility to almost anyone under the age of 65 with income up to 133% of the Federal Poverty Line (FPL).  As of 2009, this percentage equals $29, 327 for a family of four.  A family of four with an income of 400%  of the FPL (approximately $88,000 per year)  will also be eligible for subsidies.  This drastically changes the current face of the Medicaid program, especially due to the inclusion of many childless adults. Taking into account the drastic mandate for eligibility and other new requirements of the law, the ultimate reach of the program will be heavily dependent upon implementation at the state level.

The North Carolina Institute of Medicine, together with the NC DHHS Secretary Lanier Cansler and NC Insurance Commissioner Wayne Goodwin, has convened a Medicaid Work Group to begin looking at the major changes ahead for the NC Medicaid program.

By 2014, the Department of Health and Human Services estimates over 500,000 new Medicaid enrollees due to expanded eligibility as well as current eligibles who are not enrolled at this time. Half of this influx will be comprised of childless adults.  Other sources have projected this number to be even higher based on past enrollment trends.

The Act allows states to implement the new eligibility category options today, but only at the original NC FMAP rates.  At this time the state does not plan to implement this option due to the loss of future federal matching funds.

The law as currently written requires the federal government to finance the majority of spending for newly eligible Medicaid enrollees.  States will receive 100% funding from 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019 and 90% thereafter.  However, the state will be financially responsible for those who are currently eligible but who have not enrolled in the past. The law also requires states to maintain eligibility standards that were in place as of the date of passage (March 23, 2010).  

The Kaiser Family Foundation estimates that the state of North Carolina will spend anywhere from $1.02 to $1.8 billion during the first five years of Medicaid expansion. This will increase total spending on Medicaid from the current $12 billion to over $17 billon.  This range is based upon expected enrollment of the total eligibility ranging from 57-75%.  The federal government will pay the remaining 93-95% of costs, totaling $21-25 billion in North Carolina alone.  Under the new law states must also increase reimbursement for primary care procedures to 100% of Medicare payment rates. The federal government will cover the cost of the enhanced rate in 2013 and 2014.

The mass expansion of Medicaid coverage to over half a million new patients and the pending provider rates cuts at both the state and federal levels threatens patient access to care more than ever before. To address this challenge, we must stand together to ensure that the value of your services provided under the physician fee schedule is preserved.  State budget shortfalls and fallout from the recession should not be borne on the backs of the physicians and PAs that are providing the highest quality and most cost effective medical care to our Medicaid population.

One of the many new entities created by the Patient Protection and Affordable Care Act (the Act) is the Center for Medicare and Medicaid Innovation or “CMI,” which will be part of CMS.  The goal of CMI is to test the impact that innovative payment and service delivery models have on the cost and quality of health care services.   

Preference for selecting new delivery models to test will be given to those models that improve coordination, quality, and efficiency of health care services. The models further must target a defined patient population for which there are “deficits of care leading to poor clinical outcomes or potentially avoidable expenditures.”   The Secretary also may limit testing to certain geographical areas.

CMI is required to consult with relevant federal agency representatives as well as with clinical and analytical experts in medicine and healthcare management.  “Open door forums” will be conducted to seek input from interested parties. 

Models will be evaluated based on an analysis of the quality of care furnished, including the measurement of patient-level outcomes and patient-centeredness criteria, and the effect of the model on program costs.   The Secretary is charged with publicizing the evaluation results for each model reviewed.

The Act requires that CMI be operational by January 1, 2011.  Over 10 billion dollars have been appropriated for CMI activities  for 2010-2019.  To read this section of the Act, click here.

A capacity crowd is expected at the ACO Summit being hosted by the North Carolina Medical Society on Saturday, August 7, 2010.  More than 100 physicians are expected, making it one of the largest meetings ever held at the NCMS offices. (See Agenda).

Accountable Care Organizations (ACO) are an emerging health care delivery model in which groups of providers join together to coordinate and improve quality and efficiency of health care by fostering greater accountability in health care delivery.  Community Care of North Carolina (CCNC) is considered a model that is consistent with ACO standards, which are among the provisions of the Patient Protection and Affordable Care Act.  Under the law, ACOs will be accountable for quality, cost and overall care of Medicare beneficiaries. The ACO Summit will seek to address how new business models can improve delivery of health care. (Click here to read Focus on Health Care Reform: Accountable Care Organizations and the Medicare Shared Savings Program.)

Read  the Current  Draft Policy on Accountable Care Organizations and offer your comments. The NCMS Board of Directors will consider the ACO report at its meeting in September. Please be sure to e-mail your comments by August 30, 2010 to Melanie Phelps, mphelps@ncmedsoc.org.  Following Board approval, the report will move on to the NCMS House of Delegates and will be heard in reference committee at our Annual Meeting in October.

Presentations and materials from the ACO Summit can be found on  the NCMS Health System Reform page, http://www.ncmedsoc.org/healthreform, beginning Monday, August 9, 2010.

Beginning in 2014, the federal government will be able to sidestep Congress and impose its own cost-containment policies for the Medicare program through the creation of the Independent Payment Advisory Board (IPAB).  The IPAB will consist of 15 members, appointed by the President with the consent of the Senate.  The IPAB must include physicians and other health care providers in its membership as well as representatives for consumers and the elderly.  Individuals who are directly involved in providing or managing the delivery of Medicare items and services may not constitute a majority of IPAB’s membership.  Also, IPAB members may not be engaged in any other business or be employed elsewhere, which could limit the pool of potential candidates.

By April 30^thof each year (beginning in 2013), if the Centers for Medicare & Medicaid Services (CMS) determines that per capita spending outpaces the average of the Consumer Price Index (CPI) for all urban consumers and for all urban consumers’ medical care, the IPAB will be charged with making recommendations to Congress on ways to cut Medicare expenses which could include cuts to the physician fee schedule. Beginning in 2019, the target criteria will change to be based on the nominal gross domestic product per capita, plus one percent. Spending rate reductions are currently:

• .5% in 2015
• 1% in 2016
• 1.25% in 2017
• 1.5% in 2018 and beyond

The IPAB must submit its spending reduction recommendations to Congress by January 15^thof each year.  If Congress fails to take action to approve the IPABs recommendations or pass its own legislation to reduce costs within 6 months, CMS must enact the measures the IPAB has proposed, doing so no later than August 15^th of the same year.

 There is no guarantee that IPAB recommendations will succeed in reducing growth by the required amount and there could be a significant bubble effect as cuts in one area are balanced by increased growth elsewhere.  IPAB’s ability to constrain spending may also be limited by factors beyond its control, including:

• Hospitals and hospices are “off limits” for IPAB recommendations (except changes to Medicare Advantage) until 2020.
• Clinical labs are exempt for one year.
• Changes that might raise premiums or revenues, increase beneficiary cost-sharing, restrict benefits, modify eligibility criteria, or ration healthcare are excluded.
• The growth rate reduction percentages that will be invoked are less than the expected rate by which Medicare growth will exceed CPI targets, which could lead to the implementation of short term fixes.
• Congress may, at any time, make changes to Medicare that increase spending.

The Congressional Budget Office (CBO), assuming that targets will be met, estimates Medicare spending to be reduced by $15.5 billion over five years. However, the CMS Chief Actuary has already commented that the target growth rates may be unachievable.

The creation of the Independent Payment Advisory Board is one of the more controversial provisions in the Patient Protection and Affordable Care Act and stands to impact the Medicare physician fee schedule more than any other portion of the act.

To build on last week’s article, this week’s Focus article discusses the types of insurance coverage that will be available in North Carolina’s Exchange.

Section 1301 of the Patient Protection and Affordable Care Act (PPACA) only allows “qualified health benefit plans” (QHPs) to be sold on the Exchange.  A QHP is a health plan that: (1) contains a specific level of coverage that meets the designation of an “essential health benefits package;” (2) is offered by a licensed health insurer; and (3) is certified as eligible to be offered on the Exchange.  The essential health benefits package is the most important component of a QHP and deserves further attention.

What Does an Essential Health Benefits Package Include?

Effective in 2014, an essential package must include specific categories of benefits, provide minimum levels of coverage, and meet certain cost-sharing requirements.  See PPACA, sec. 1302.  The categories of benefits must include:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder treatment, including behavioral health treatment
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

The Act empowers the U.S. Secretary of Health & Human Services to further define the essential package, while maintaining a balance among the essential benefits, making non-discriminatory design decisions, and considering diverse health needs.  Of course, insurers may construct their plans to provide extended coverage or additional benefits beyond the essential health benefits package.

Levels of Coverage

Remember that plans that offer an essential benefits package and that meet the additional criteria of a QHP may still be different.  To help consumers, the Exchange will categorize the QHPs based on each plan’s level of coverage using the following system:

Bronze Level:  A plan designed to provide benefits that are actuarially equivalent to 60% of the actuarial value of the benefits provided.

Silver Level:  A plan designed to provide benefits that are actuarially equivalent 70% of the actuarial value of the benefits provided.

Gold Level: A plan designed to provide benefits that are actuarially equivalent 80% of the actuarial value of the benefits provided.

Platinum Level: A plan designed to provide benefits that are actuarially equivalent 90% of the actuarial value of the benefits provided.

Many other details about North Carolina’s Health Benefit Exchange must still be decided at the federal and state level.  NCMS will bring you more on Exchanges as additional information becomes available.

Editor’s Note: At the direction of the NCMS Board of Directors, your NCMS staff is examining and reporting on specific provisions contained in the Patient Protection and Affordable Care Act.  The series is archived on the NCMS website, www.ncmedsoc.org and is also available as a podcast (mp3).

The American Health Benefit Exchange is a major component of insurance reform contained in the Patient Protection and Affordable Care Act (PPACA).  The main purpose of the Exchange is to help individuals and small businesses purchase insurance coverage.  The Exchange is best explained in terms of a marketplace where consumers can easily review benefit packages, compare prices, and purchase coverage.

Under the health reform law, each state is required to establish an Exchange by 2014.  See PPACA, sec. 1311(b).  States are also required to establish a Small Business Health Options Program (SHOP Exchange), in which small businesses with 100 or fewer employees can purchase coverage in the small group market.  But the PPACA permits states to establish a single Exchange as long as it provides both American Health Benefit Exchange and SHOP Exchange services.

Who Will Administer the Exchange?
The PPACA allows the state Exchange to be administered by either a governmental agency or a non-profit organization.  In North Carolina, early indications are that the state’s Department of Insurance wants to administer the Exchange, but the ultimate determination lies with the North Carolina General Assembly.

Whoever ends up operating the Exchange will have to ensure that the Exchange offers all of the following features (and many more), as set out in the PPACA:

• Certify, recertify, and decertify health plans as qualified health plans (also known as QHPs, which will be discussed in Exchanges, Part 2);
• Provide a toll-free consumer hotline to answer questions;
• Maintain a website where consumers can compare various plans with standardized information;
• Rate each plan offered on the exchange;
• Provide eligibility information for Medicaid and the Children’s Health Insurance Program (CHIP).

As with many other parts of the PPACA, many details that will affect how North Carolina’s Health Benefit Exchange will operate have yet to be determined.  Stay tuned to NCMS’s series, Focus on Health System Reform, for the latest.

Generally, federal law prohibits physicians (and immediate family members) who have a financial relationship with a provider of Designated Health Services from making a referral of a Medicare or Medicaid patient to that provider.  Likewise, the provider is prohibited from filing claims to Medicare or Medicaid under those circumstances. There are exceptions. Among the exceptions is “in-office ancillary services.” [See § 1877 of the Social Security Act]. The exception is subject to numerous conditions, and Congress added another condition as part of the Patient Protection and Affordable Care Act. For certain in-office ancillary imaging services (i.e., MRI, CT, PET, and other imaging services to be determined by the Secretary of DHHS) furnished on or after January 1, 2010, the referring physician must now inform the patient, in writing, at the time of referral that they may obtain the services from a person other than 1) the referring physician, 2) a physician who is a member of the same group practice as the referring physician, or 3) individuals who are directly supervised by the physician or by another physician in the group practice. [See § 1877(b)(2)(A)(i) of the Social Security Act.] The patient must also be provided, in writing, a list of “suppliers” who furnish the service in the area where the patient resides. [See PPACA § 6003(a), (b).]

Under the Patient Protection and Affordable Care Act, the Secretary of Health and Human Services (HHS) is authorized to award demonstration grants to States for the development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations.

Starting in Fiscal Year 2011, the Secretary can begin awarding grants to states, with $50 million available for up to five years. Each state desiring a grant will be required to (1) allow for the resolution of disputes over injuries allegedly caused by health care providers or health care organizations; and (2) promote a reduction of health care errors by encouraging the collection and analysis of patient safety data related to such resolved disputes by organizations that engage in efforts to improve patient safety and the quality of health care.

Each state desiring a grant also will have to demonstrate how the proposed alternative will meet nine criteria, which are found in the document, State Demonstration Program to Evaluate Alternatives to Current Medical Tort Litigation. States will also have to identify the sources from and methods by which compensation would be paid for claims resolved under the proposed alternative to current tort litigation. This may include public or private funding sources, or a combination of such sources. As much as practically possible, funding methods will have to provide financial incentives for activities that improve patient safety.

Other requirements include establishing a scope of jurisdiction such as a geographic area, designated area of health care practice, or a designated group of health care providers so that the effects of the proposed alternative to current tort litigation can be sufficiently evaluated. Patients will need to be notified that they are receiving health care services that fall within the designated scope and given information on how they may opt out of or voluntarily withdraw from participating in the alternative.  Patient decisions cannot be limited in any way.

In awarding grants, the Secretary of HHS will be required to give preference to states that have developed a proposed alternative through substantive consultation with relevant stakeholders, including patient advocates, health care providers and health care organizations, attorneys with expertise in representing patients and health care providers, medical malpractice insurers and patient safety experts. Additionally, preference will be given to state proposals that are likely to enhance patient safety by detecting, analyzing, and helping to reduce medical errors and adverse events, and that are likely to improve access to liability insurance.

The Secretary may also use part of the $50 million, not to exceed $500,000 per state, to provide planning grants for the development of demonstration project applications meeting the criteria.  Additional information may also be found in the NCMS Health System Reform Resource Center.

The NCMS is working with the NC Hospital Association (NCHA) and others to explore the potential for development of a demonstration project for North Carolina.

The NCMS series Focus on Health Care Reform looks at the various provisions of The Patient Protection and Affordable Care Act of 2010. Topics covered so far include high-risk health insurance pool, medical loss ratio, mandatory PQRI participation, recovery audit contractors, and accountable care organizations and the Medicaid Shared Savings program. In addition to reading these articles, you can also listen to them on podcasts (mp3) at http://www.ncmedsoc.org/pages/advocacy_govt_affairs/health_reform.html.