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D.C. Report: New Report on Failure of the Past Delivery Reform Pilots

January 24, 2012
by Jeff Smith, Assistant Director of Advocacy at CHIME
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CBO Report Sheds New Light on (In)effectivenes of Past Delivery Reform Pilots

This past Wednesday, the Congressional Budget Office released an issue briefthat looked at past attempts by Medicare to save money through delivery reform pilots.  The CBO’s conclusions were less than enthusiastic.  According to the report, “CBO reviewed the outcomes of 10 major demonstrations that have been evaluated by independent researchers.  The evaluations show that most programs have not reduced Medicare spending.”  Six of the programs CBO analyzed were designed to improve care coordination for patients with chronic diseases. They either made no difference or were actually more expensive than the traditional payment system.  CBO also looked at four “value-based purchasing” demonstrations, in which doctors received financial incentives to improve quality. One of those programs successfully saved money; the others had no effect.  In a corresponding post by the CBO Director’s Blog, Douglas Elmendorf wrote, “On average, the 34 programs had little or no effect on hospital admissions. There was considerable variation in the estimated effects among programs, however.”  See figure here

The report was explicit in highlighting the current fee-for-service payment system as a major impediment to the success of these demonstrations.  “Substantial changes to payment and delivery systems will probably be necessary for programs involving disease management and care coordination or value-based payment to significantly reduce spending and either maintain or improve the quality of care provided to patients,” Elmendorf added.

GAO Issues Report Finding Delays in Development of eMeasures for EHR Incentive Program

According to a report releasedthis week by the Governmental Accountability Office (GAO) the National Quality Forum (NQF) has consistently been behind in meeting HHS-approved time frames for quality measures.  “NQF has completed or made progress on 60 of 63 projects. For example, NQF has completed projects to endorse measures related to various topics, including nursing homes.  However, for more than half of the projects, NQF did not meet or did not expect to meet the initial time frames approved by HHS.”  Specifically, GAO cited the EHR Incentive Program as being one area that NQF’s lagging has been felt.  “As a result of the delay, HHS did not have all the retooled measures it expected to include in its Electronic Health Records (EHR) Incentive Program.”  GAO recommended that HHS pay special attention to the development of its electronic measures and to make sure the e-measures are tested extensively before being submitted for use in a regulation.

Republican Reps Bash HHS for ‘Rushed Regulations’

Two leading House Republicans have sent lettersto HHS Secretary Kathleen Sebelius and Office of Information and Regulatory Affairs Administrator Cass Sunstein over the way interim final rules were developed following passage of the Affordable Care Act.  House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and health care subcommittee Chairman Trey Gowdy (R-S.C.) want answers following a George Mason University study giving the agency an “F” for how it developed rules.  According to the report, ACA regulations were “seriously incomplete, often omitting significant benefits, costs or regulatory alternatives…the quality and use of regulatory analysis fell well below the standards set by other federal agencies and by HHS itself.”

The Representatives wrote, “President Obama’s health care program was rushed into law, and now it would appear that the review process — designed to be a check against flawed regulations — was rushed as well.  Flawed and rushed regulatory processes make for bad policy and create uncertainty for the businesses, consumers and taxpayers who will be impacted by and pay for these regulations.  HHS and OIRA owe them and this committee answers to explain how they earned an ‘F’ grade on an assignment that is the administration’s top policy priority.”

Senate and House Conferees to Look at SGR Next Tuesday

Another week comes to an end in Washington and another week of political maneuvering took place over how to deal with the nearly $300 billion “doc fix.”  With the House of Representatives back in session, contingents of Democratic leadership sought paths toward a permanent fix, while others called for a quick resolution to the issue.  Meanwhile, Republican members of the House revived their call for a two-year deal.  With consensus around why the SGR formula needs fixed the two parties differ greatly on how to pay for it.  House Minority Leader Nancy Pelosi has suggested that war funds could be one way to pay for the two-year patch.  But many Republicans are calling the savings earned by the drawdown of armed forces in Iraq and Afghanistan “playing with funny money.”

Still, most observers believe a 10-month fix to the SGR is the most likely outcome.  Given the measure is tied up with payroll taxes, many around Washington are expecting a fairly short deliberation with Republicans trying to forget the aborted House showdown last December and Democrats looking to score election year points.

The House and Senate conference committee on the payroll tax extension and a “doc fix” has scheduled its first meeting for Tuesday at 2:30 p.m.

For a visual of how the SGR drama is playing out to those of us who are constantly watching: