Kaitlynn Ely

Savings hospitals had lower baseline spending than nonsavings hospitals during the first year of the Comprehensive Care for Joint Replacement (CJR) program, according to a Research Letter in JAMA.

Medicare’s CJR program offers bundled payments for hip and knee surgery at 799 hospitals that include payments for hospitalization and post-discharge care 90 days after the procedure into a single benchmark. The program incentivizes hospitals through bonus payments to exceed their quality and cost benchmarks. Overall, 67 urban markets in metropolitan statistical areas (MSAs) were required by Medicare to participate in the program.

Recently, Medicare has declared the most hospitals in 34 of 67 MSAs must continue participating in the CJR program, while low-volume hospitals could choose whether to continue or withdraw. The study evaluated Medicare’s change in policy and how it affects the future of mandatory bundled payment models.

Articles

Hospitals that saved money through bundled payments more likely to be nonprofit, teaching, and integrated with a post-acute care facility compared to other hospitals

Bundled Payments Lower Medicare Spending on Joint Replacement

Commercially insured individuals with health plans with value-based contracts for diabetes, high cholesterol, and HIV medicines had average co-pays that were 28% lower for those prescription medications compared with people on other plans, according to a report from the Pharmaceutical Research and Manufacturers of America (PhRMA).

Payers are exploring new contracts that connect reimbursement for medicines to the value for individual patients. Types of potential value-based contracts include performance-, outcomes-, indication-, and regimen-based contracts, among others.

“Results-based or value-based contracts can reduce healthcare system costs and can make medicines more affordable and accessible for patients,” Stephen J. Ubl, president and CEO of PhRMA, said in a press release. “The healthcare market is starting to move in this direction, but we need public policy reforms that allow greater flexibility for innovative payment arrangements that lower out-of-pocket costs and enable patients to access the right treatments the first time.”

Value-based contracts may also improve patient outcomes by increasing access to innovative medicines and supporting appropriate use.

Value-Based Contracting Drops Co-Pays for Chronic Disease Drugs

Policy changes are needed to increase risk-adjustment payments for special enrollment period (SEP) enrollees. A new study in Health Affairs, the current payment-adequacy difference between full-year members and SEP enrollees has a high probability of increasing.

SEPs allow consumers to sign up outside of the open enrollment period (OEP) when certain life events, like losing employer-sponsored health insurance due to unemployment, occur. Previous literature estimated that 30 million Americans spend a period during the year without insurance as a result of job loss, with only 5% of this population enrolling into SEPs.

In 2017, HHS changed risk adjustment to include the length of time a person was a plan member with a carrier. This increased payments for SEP enrollees and those who enrolled during an open period but lost coverage in the same year. Payments will increase again in 2018 on the basis of prescription drug category factors that signal the severity of conditions, making enrollees more of a risk to carriers. In addition, insurance companies believe SEP enrollees are more of a risk in general, explaining their increased payments.

Risk adjustment must be effective to achieve insurance market reform and expand coverage to new enrollees. 

Risk-Adjustment Reimbursement May Fall Short in Some Cases

By the fifth year of Kentucky's implementation of work requirements in its Medicaid program, there is a predicted 15% drop in enrollment, according to research from Urban Institute. The researchers estimated 169,000 enrollees are potentially nonexempt from the program's new work requirements but are working, and 188,000 enrollees are potentially nonexempt and not working.

According to the new requirements, Kentucky Medicaid beneficiaries must participate in 80 hours’ worth of “community engagement” activities each month by either working, participating in community service, searching for jobs, attending school or vocational training programs, or receiving treatment for a substance use disorder Children under age 19, adults age 65 and older, pregnant women, full-time students, primary caregivers of dependents, and enrollees who receive disability benefits while also qualifying for Medicaid are not subject to Kentucky’s new work requirement to receive Medicaid coverage.

Medicaid nonelderly adult enrollees fall into 1 of 3 groups. Group 1 includes beneficiaries in school, primary caregivers of children, and primary caregivers of disabled dependents who would be exempt from the work requirement. Group 2 includes enrollees who fall into one of those 3 categories and are working. Group 3 includes enrollees who are not working or seeking work.

President Donald Trump recently approved a proposal that requires Medicaid enrollees to comply with a work requirement.