Healthcare Law
What is in the Law?
The Affordable Care Act contains several provisions that could improve care transitions. These include both carrots (financial incentives) and sticks (financial penalties).
Among the carrot approaches, starting October 1, 2012, hospitals can receive increases to their Medicare payments if they achieve or exceed performance targets for certain quality measures, including whether they told patients about symptoms or problems to look out for postdischarge; whether they asked patients if they would have the help they needed at home; and whether they provided heart failure patients with discharge instructions. (See the Health Policy Brief published on April 15, 2011, for more information on improving quality and safety: healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_45.pdf.)
Among the stick approaches, also beginning October 1, 2012, the Centers for Medicare and Medicaid Services (CMS) can reduce payments by 1% to hospitals whose readmission rates for patients with heart failure, acute myocardial infarction, or pneumonia exceed a particular target. According to a recent analysis by the Kaiser Family Foundation, 76more than 2200 hospitals will forfeit about $280 million in Medicare payments over the next year because of these readmissions penalties.
Medical Homes.
The law also authorizes paying providers for care transition services as part of payments to primary care practices that operate as medical homes, practices that closely manage and coordinate the care of patients with chronic conditions. One demonstration project, which predates the Affordable Care Act, is the Multi-Payer Advanced Primary Care Practice Demonstration in which Medicare offers practices that have been formally recognized as medical homes in eight states up to $10 per beneficiary per month to cover the cost of medical home services, which include care transition planning.
Another demonstration, the Comprehensive Primary Care Initiative, offers monthly payments to practices that average $20 per beneficiary in the first 2 years and then transitions to $15 plus the opportunity to earn shared savings in the last 2 years. Again, a portion of these programs are intended to compensate practices for the costs of care coordination and care transitions planning.
In addition, the Federally Qualified Health Center Advanced Primary Care Practice Demonstration will pay $6 per beneficiary per month to health centers that adopt the medical home model and apply for Level 3 medical home recognition, having the most stringent requirements, from the National Committee for Quality Assurance (NCQA) by the end of the 3-year demonstration. NCQA’s medical home standards ask practices to establish processes to identify patients admitted to the hospital, share clinical information with the admitting hospital, obtain patient discharge summaries from the hospital, and contact patients for follow-up care, among many other expectations.
Medicaid and Medicare.
State Medicaid agencies can now offer providers enhanced reimbursement, such as through monthly care management payments, to cover the cost of “comprehensive transitional care” and other services if the practice qualifies as a “health home”; a practice that cares not only for Medicaid patients’ physical conditions but also helps them obtain such other services as behavioral health care and long-term care services and supports.
Also, a 5-year, $500 million Community-Based Care Transitions Program pays organizations that partner with hospitals with high readmission rates to provide care transition services for high-risk Medicare beneficiaries. All-inclusive payments cover the cost of care transition services provided to individual beneficiaries in the 180 days following an eligible discharge plus the cost of systemic changes made by partner hospitals to improve care transitions. So far 47 awardees have been announced, and applications continue to be accepted. Participating organizations initially enter into 2-year agreements, which can be extended annually through the end of 2015.
Incentives in New Payment Models.
The Medicare Shared Savings Program for accountable care organizations (ACOs) will give groups of providers an incentive to coordinate care more closely to keep patients healthy and out of the hospital because they will be eligible to share in the savings they are able to generate relative to a spending benchmark. The quality metrics that must be met by ACOs to benefit financially under the program include six that pertain to care coordination, including preventing unnecessary hospital readmissions. (See Health Policy Brief published on January 31, 2012, for more information on ACOs: healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_61.pdf.)
The Affordable Care Act also authorizes 5-year bundled payment pilots in Medicare and Medicaid to test whether making a single payment to one entity for services provided by several providers for an episode of care, such as a knee replacement, will give providers an incentive to work together to ensure that patients receive all the services they need, including hospital and follow-up care, in a more efficient manner. Managing care transitions to prevent costly hospital readmissions will be particularly important because, in the Medicare pilot, at least, the bundled payment will cover services beginning 3 days before a hospital admission for an 77eligible condition and extending 30 days after hospital discharge.
Signaling the importance of care transitions to the success of these efforts, the Medicare pilot requires bundled payments to cover the cost of transitional care services. CMS’s new Innovation Center has begun accepting applications from providers interested in piloting four bundled payment models through a separate Bundled Payments for Care Improvement initiative. The Medicaid pilot, meanwhile, requires participating hospitals to have “robust discharge planning programs.”
In addition, a new Medicare-Medicaid Coordination Office in CMS is charged with better integrating benefits for dual-eligible beneficiaries. It also works to ensure “safe and effective care transitions,” among other goals. This office has awarded contracts of up to $1 million each to 15 states to design models to coordinate primary, acute, behavioral, and long-term care for Medicare-Medicaid enrollees. CMS has also invited proposals from states to test two new payment models to better integrate care for this population and allow states to share in savings from these improvements. Twenty-six states, including the 15 states awarded demonstration design contracts, have developed proposals for this demonstration. The new payment and delivery system models are likely to focus on improving care transitions, among other strategies. (See the Health Policy Brief published on June 13, 2012, for more information on dual eligibles: healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_70.pdf.)
