Practice Economics

A little-noticed provision in legislation to repeal the Medicare Sustainable Growth Rate formula would protect doctors from lawsuits based on their performance on federal quality measures.

Language contained in H.R. 2, the Medicare Access and CHIP Reauthorization Act specifies that the development, recognition, or implementation of any federal health care guideline or standard shall not be construed to establish a duty of care in medical malpractice claims.

The provision helps distinguish government quality guidelines and payment rules from medical liability standards, according to Brian K. Atchinson, president and CEO of PIAA, a national trade association for medical malpractice liability insurers.

“None of these rules or guidelines were created with the intent to establish a legal standard for negligence, and so it makes sense for Congress to clarify that fact,” Mr. Atchinson said in an interview. “The standard of care provision in the SGR fix bill does just that, and nothing more. It does not shift the playing field to either plaintiffs or defendants. Instead, it ensures that these federal rules are not misused for purposes for which they were never intended.”

The language was originally included in the Affordable Care Act, but was removed by the Senate. If the SGR repeal legislation is enacted, the provision would prohibit plaintiffs from using a doctor’s performance in a quality improvement program as the sole basis for a medical liability lawsuit or to prove negligence. For example, a physician who missed earning an incentive under the Physician Quality Reporting System could not have that fact raised in a malpractice action to build the plaintiff’s case.

Federal guidelines and quality criteria intended to measure the impact of health care delivery and payment systems should not be exploited to invent new legal actions against physicians, said Dr. Robert M. Wah, president of the American Medical Association.

“These guidelines cannot be inflated into claims of physician negligence,” Dr. Wah said in a statement. “Nor can it be assumed that failure to report under these programs is an indication of substandard care. It is clear that explicit protections are needed to hold the line against a medical liability system that invites abuse. The potential for new liability exposure is not the way to encourage physician engagement in the development and implementation of new strategies to improve the quality and efficiency of care.”

Officials at the American Congress of Obstetricians and Gynecologists said the bill’s provision is one step toward better legal protection for physicians who participate in federal quality programs. However, they stressed the need for further protection, such safeguards incorporated in H.R. 4106, the Saving Lives, Saving Costs Act introduced in the last Congress by Rep. Andy Barr (R-Ky.) and Rep. Ami Bera, (D-Calif.). The bill would provide safe harbor protection to doctors who are sued if they followed evidence-based clinical guidelines.

“ACOG is pleased that a provision in the SGR package was included to address standard of care protection and continues to support prompt passage of SGR repeal legislation,” according to a statement from the organization. “However, while we support the provision in the SGR package, our work will not stop once that legislation passes. We will continue to seek comprehensive and alternative medical liability reforms, and we hope that Reps. Barr and Bera reintroduce their safe harbor bill soon. [The legislation] would improve quality of care by promoting physician adherence to clinical practice guidelines and would also help to avoid frivolous lawsuits, lowering overall health care costs, and ensuring that physicians can continue to treat their patients.”

Under the safe harbor legislation, clinical guidelines developed by professional medical organizations would be used to determine whether a plaintiff’s lawsuit could continue against a physician defendant. If a doctor adhered to the approved guidelines during the time of the alleged malpractice event, the case would be removed from court proceedings, while a medical review panel investigated the claim. The bill also would allow for relevant cases to be moved from state to federal court if they involved federal dollars such as Medicare.

The bill has yet to be introduced in the current Congress.

The Medicare Access and CHIP Reauthorization Act meanwhile, awaits action by the Senate, which returns from a recess on April 13. The House on March 26 overwhelming passed the bill, which would repeal the SGR, reauthorize the Children’s Health Insurance Program for 2 years, and reform Medicare.

Medicare physician pay was cut by approximately 21% effective April 1, because of the expiration of the last temporary SGR fix. However, the Centers for Medicare & Medicaid Services announced that it would hold Medicare payments for 2 weeks, allowing Congress to complete action on the issue.

Without a legislative fix, CMS will begin processing claims with a 21% reduction in the physician’s rate beginning April 15. Should the SGR repeal legislation be signed into law, CMS will reprocess any claims processed at the lower rate.

[email protected]

On Twitter @legal_med

A little-noticed provision in legislation to repeal the Medicare Sustainable Growth Rate formula would protect doctors from lawsuits based on their performance on federal quality measures.

Language contained in H.R. 2, the Medicare Access and CHIP Reauthorization Act specifies that the development, recognition, or implementation of any federal health care guideline or standard shall not be construed to establish a duty of care in medical malpractice claims.

The provision helps distinguish government quality guidelines and payment rules from medical liability standards, according to Brian K. Atchinson, president and CEO of PIAA, a national trade association for medical malpractice liability insurers.

“None of these rules or guidelines were created with the intent to establish a legal standard for negligence, and so it makes sense for Congress to clarify that fact,” Mr. Atchinson said in an interview. “The standard of care provision in the SGR fix bill does just that, and nothing more. It does not shift the playing field to either plaintiffs or defendants. Instead, it ensures that these federal rules are not misused for purposes for which they were never intended.”

The language was originally included in the Affordable Care Act, but was removed by the Senate. If the SGR repeal legislation is enacted, the provision would prohibit plaintiffs from using a doctor’s performance in a quality improvement program as the sole basis for a medical liability lawsuit or to prove negligence. For example, a physician who missed earning an incentive under the Physician Quality Reporting System could not have that fact raised in a malpractice action to build the plaintiff’s case.

Federal guidelines and quality criteria intended to measure the impact of health care delivery and payment systems should not be exploited to invent new legal actions against physicians, said Dr. Robert M. Wah, president of the American Medical Association.

“These guidelines cannot be inflated into claims of physician negligence,” Dr. Wah said in a statement. “Nor can it be assumed that failure to report under these programs is an indication of substandard care. It is clear that explicit protections are needed to hold the line against a medical liability system that invites abuse. The potential for new liability exposure is not the way to encourage physician engagement in the development and implementation of new strategies to improve the quality and efficiency of care.”

Officials at the American Congress of Obstetricians and Gynecologists said the bill’s provision is one step toward better legal protection for physicians who participate in federal quality programs. However, they stressed the need for further protection, such safeguards incorporated in H.R. 4106, the Saving Lives, Saving Costs Act introduced in the last Congress by Rep. Andy Barr (R-Ky.) and Rep. Ami Bera, (D-Calif.). The bill would provide safe harbor protection to doctors who are sued if they followed evidence-based clinical guidelines.

“ACOG is pleased that a provision in the SGR package was included to address standard of care protection and continues to support prompt passage of SGR repeal legislation,” according to a statement from the organization. “However, while we support the provision in the SGR package, our work will not stop once that legislation passes. We will continue to seek comprehensive and alternative medical liability reforms, and we hope that Reps. Barr and Bera reintroduce their safe harbor bill soon. [The legislation] would improve quality of care by promoting physician adherence to clinical practice guidelines and would also help to avoid frivolous lawsuits, lowering overall health care costs, and ensuring that physicians can continue to treat their patients.”

Under the safe harbor legislation, clinical guidelines developed by professional medical organizations would be used to determine whether a plaintiff’s lawsuit could continue against a physician defendant. If a doctor adhered to the approved guidelines during the time of the alleged malpractice event, the case would be removed from court proceedings, while a medical review panel investigated the claim. The bill also would allow for relevant cases to be moved from state to federal court if they involved federal dollars such as Medicare.

The bill has yet to be introduced in the current Congress.

The Medicare Access and CHIP Reauthorization Act meanwhile, awaits action by the Senate, which returns from a recess on April 13. The House on March 26 overwhelming passed the bill, which would repeal the SGR, reauthorize the Children’s Health Insurance Program for 2 years, and reform Medicare.

Medicare physician pay was cut by approximately 21% effective April 1, because of the expiration of the last temporary SGR fix. However, the Centers for Medicare & Medicaid Services announced that it would hold Medicare payments for 2 weeks, allowing Congress to complete action on the issue.

Without a legislative fix, CMS will begin processing claims with a 21% reduction in the physician’s rate beginning April 15. Should the SGR repeal legislation be signed into law, CMS will reprocess any claims processed at the lower rate.

[email protected]

On Twitter @legal_med

A little-noticed provision in legislation to repeal the Medicare Sustainable Growth Rate formula would protect doctors from lawsuits based on their performance on federal quality measures.

Language contained in H.R. 2, the Medicare Access and CHIP Reauthorization Act specifies that the development, recognition, or implementation of any federal health care guideline or standard shall not be construed to establish a duty of care in medical malpractice claims.

The provision helps distinguish government quality guidelines and payment rules from medical liability standards, according to Brian K. Atchinson, president and CEO of PIAA, a national trade association for medical malpractice liability insurers.

“None of these rules or guidelines were created with the intent to establish a legal standard for negligence, and so it makes sense for Congress to clarify that fact,” Mr. Atchinson said in an interview. “The standard of care provision in the SGR fix bill does just that, and nothing more. It does not shift the playing field to either plaintiffs or defendants. Instead, it ensures that these federal rules are not misused for purposes for which they were never intended.”

The language was originally included in the Affordable Care Act, but was removed by the Senate. If the SGR repeal legislation is enacted, the provision would prohibit plaintiffs from using a doctor’s performance in a quality improvement program as the sole basis for a medical liability lawsuit or to prove negligence. For example, a physician who missed earning an incentive under the Physician Quality Reporting System could not have that fact raised in a malpractice action to build the plaintiff’s case.

Federal guidelines and quality criteria intended to measure the impact of health care delivery and payment systems should not be exploited to invent new legal actions against physicians, said Dr. Robert M. Wah, president of the American Medical Association.

“These guidelines cannot be inflated into claims of physician negligence,” Dr. Wah said in a statement. “Nor can it be assumed that failure to report under these programs is an indication of substandard care. It is clear that explicit protections are needed to hold the line against a medical liability system that invites abuse. The potential for new liability exposure is not the way to encourage physician engagement in the development and implementation of new strategies to improve the quality and efficiency of care.”

Officials at the American Congress of Obstetricians and Gynecologists said the bill’s provision is one step toward better legal protection for physicians who participate in federal quality programs. However, they stressed the need for further protection, such safeguards incorporated in H.R. 4106, the Saving Lives, Saving Costs Act introduced in the last Congress by Rep. Andy Barr (R-Ky.) and Rep. Ami Bera, (D-Calif.). The bill would provide safe harbor protection to doctors who are sued if they followed evidence-based clinical guidelines.

“ACOG is pleased that a provision in the SGR package was included to address standard of care protection and continues to support prompt passage of SGR repeal legislation,” according to a statement from the organization. “However, while we support the provision in the SGR package, our work will not stop once that legislation passes. We will continue to seek comprehensive and alternative medical liability reforms, and we hope that Reps. Barr and Bera reintroduce their safe harbor bill soon. [The legislation] would improve quality of care by promoting physician adherence to clinical practice guidelines and would also help to avoid frivolous lawsuits, lowering overall health care costs, and ensuring that physicians can continue to treat their patients.”

Under the safe harbor legislation, clinical guidelines developed by professional medical organizations would be used to determine whether a plaintiff’s lawsuit could continue against a physician defendant. If a doctor adhered to the approved guidelines during the time of the alleged malpractice event, the case would be removed from court proceedings, while a medical review panel investigated the claim. The bill also would allow for relevant cases to be moved from state to federal court if they involved federal dollars such as Medicare.

The bill has yet to be introduced in the current Congress.

The Medicare Access and CHIP Reauthorization Act meanwhile, awaits action by the Senate, which returns from a recess on April 13. The House on March 26 overwhelming passed the bill, which would repeal the SGR, reauthorize the Children’s Health Insurance Program for 2 years, and reform Medicare.

Medicare physician pay was cut by approximately 21% effective April 1, because of the expiration of the last temporary SGR fix. However, the Centers for Medicare & Medicaid Services announced that it would hold Medicare payments for 2 weeks, allowing Congress to complete action on the issue.

Without a legislative fix, CMS will begin processing claims with a 21% reduction in the physician’s rate beginning April 15. Should the SGR repeal legislation be signed into law, CMS will reprocess any claims processed at the lower rate.

[email protected]

On Twitter @legal_med

High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

[email protected]

High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

[email protected]

High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

[email protected]

Low-income patients who receive health care coverage from Medicaid and the Children’s Health Insurance Plan would get greater coverage for mental health and substance abuse services under a federal proposed rule issued April 6.

The proposed rule extends to Medicaid and CHIP certain aspects of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which requires private health insurance to cover mental health and substance abuse treatments as they do medical and surgical services. The 2008 law originally applied to group health plans and group insurance coverage; the Affordable Care Act extended it to individual health insurance policies as well.

Alexander Raths/Fotolia.com

According to the proposed rule, Medicaid managed care organizations will be required to offer the same mental health and substance abuse services, subject to the same financial and treatment limitations consistent with regulations applicable to private insurers in that state. The rule does not applied to fee-for-service Medicaid.

The proposed rule also applies to states that offer Medicaid alternative benefit plans. States delivering services through a non-Medicaid managed care organization “must comply with the same requirements that would be necessary if such services were delivered through a managed care organization,” officials from the Centers for Medicare & Medicaid Services said in a fact sheet about the proposed rule.

All CHIP programs, including fee-for-service and managed care plans, would be subject to the parity standards.

“The proposed rule is a way to advance equity in the delivery of mental health and substance use disorder services. The proposal will support federal and state efforts to promote access to mental health and substance use services as part of broader delivery system reform through the Affordable Care Act,” Vikki Wachino, acting director of the Center for Medicaid and CHIP Services, said in a statement.

Approximately 21.6 million Medicaid beneficiaries and 850,000 CHIP beneficiaries would benefit from action, based on estimates from 2012 Medicaid and CHIP enrollment, according to the proposed rule. Among adults aged 18-64 years with Medicaid coverage, about 10% have a serious mental illness, 31% have any mental illness, and 12% have a substance abuse disorder, according to CMS. Additionally, 8% of CHIP beneficiaries “experience serious behavioral or emotional difficulties.”

The proposed rule is slated for publication in the Federal register on April 10; comments will be accepted until June 9 at www.regulations.gov.

[email protected]

Low-income patients who receive health care coverage from Medicaid and the Children’s Health Insurance Plan would get greater coverage for mental health and substance abuse services under a federal proposed rule issued April 6.

The proposed rule extends to Medicaid and CHIP certain aspects of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which requires private health insurance to cover mental health and substance abuse treatments as they do medical and surgical services. The 2008 law originally applied to group health plans and group insurance coverage; the Affordable Care Act extended it to individual health insurance policies as well.

Alexander Raths/Fotolia.com

According to the proposed rule, Medicaid managed care organizations will be required to offer the same mental health and substance abuse services, subject to the same financial and treatment limitations consistent with regulations applicable to private insurers in that state. The rule does not applied to fee-for-service Medicaid.

The proposed rule also applies to states that offer Medicaid alternative benefit plans. States delivering services through a non-Medicaid managed care organization “must comply with the same requirements that would be necessary if such services were delivered through a managed care organization,” officials from the Centers for Medicare & Medicaid Services said in a fact sheet about the proposed rule.

All CHIP programs, including fee-for-service and managed care plans, would be subject to the parity standards.

“The proposed rule is a way to advance equity in the delivery of mental health and substance use disorder services. The proposal will support federal and state efforts to promote access to mental health and substance use services as part of broader delivery system reform through the Affordable Care Act,” Vikki Wachino, acting director of the Center for Medicaid and CHIP Services, said in a statement.

Approximately 21.6 million Medicaid beneficiaries and 850,000 CHIP beneficiaries would benefit from action, based on estimates from 2012 Medicaid and CHIP enrollment, according to the proposed rule. Among adults aged 18-64 years with Medicaid coverage, about 10% have a serious mental illness, 31% have any mental illness, and 12% have a substance abuse disorder, according to CMS. Additionally, 8% of CHIP beneficiaries “experience serious behavioral or emotional difficulties.”

The proposed rule is slated for publication in the Federal register on April 10; comments will be accepted until June 9 at www.regulations.gov.

[email protected]

Low-income patients who receive health care coverage from Medicaid and the Children’s Health Insurance Plan would get greater coverage for mental health and substance abuse services under a federal proposed rule issued April 6.

The proposed rule extends to Medicaid and CHIP certain aspects of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which requires private health insurance to cover mental health and substance abuse treatments as they do medical and surgical services. The 2008 law originally applied to group health plans and group insurance coverage; the Affordable Care Act extended it to individual health insurance policies as well.

Alexander Raths/Fotolia.com

According to the proposed rule, Medicaid managed care organizations will be required to offer the same mental health and substance abuse services, subject to the same financial and treatment limitations consistent with regulations applicable to private insurers in that state. The rule does not applied to fee-for-service Medicaid.

The proposed rule also applies to states that offer Medicaid alternative benefit plans. States delivering services through a non-Medicaid managed care organization “must comply with the same requirements that would be necessary if such services were delivered through a managed care organization,” officials from the Centers for Medicare & Medicaid Services said in a fact sheet about the proposed rule.

All CHIP programs, including fee-for-service and managed care plans, would be subject to the parity standards.

“The proposed rule is a way to advance equity in the delivery of mental health and substance use disorder services. The proposal will support federal and state efforts to promote access to mental health and substance use services as part of broader delivery system reform through the Affordable Care Act,” Vikki Wachino, acting director of the Center for Medicaid and CHIP Services, said in a statement.

Approximately 21.6 million Medicaid beneficiaries and 850,000 CHIP beneficiaries would benefit from action, based on estimates from 2012 Medicaid and CHIP enrollment, according to the proposed rule. Among adults aged 18-64 years with Medicaid coverage, about 10% have a serious mental illness, 31% have any mental illness, and 12% have a substance abuse disorder, according to CMS. Additionally, 8% of CHIP beneficiaries “experience serious behavioral or emotional difficulties.”

The proposed rule is slated for publication in the Federal register on April 10; comments will be accepted until June 9 at www.regulations.gov.

[email protected]

Dr. Michael Kitchell initially welcomed the federal government’s new quality incentives for doctors. His medical group in Iowa has always scored better than most in the quality reports that Medicare has provided doctors in recent years, he said.

But when the government launched a new payment system that will soon apply to all physicians who accept Medicare, Dr. Kitchell’s McFarland Clinic in Ames didn’t win a bonus. In fact, there are few winners: Out of 1,010 large physician groups that the government evaluated, just 14 are getting payment increases this year, according to Medicare. Losers also are scarce. Only 11 groups will be getting reductions for low quality or high spending.

“We performed well, but not enough for the bonus,” said Dr. Kitchell, a neurologist. “My sense of disappointment here is really significant. Why even bother?”

Within 3 years, the Obama administration wants quality of care to be considered in allocating $9 of every $10 Medicare pays directly to providers to treat the elderly and disabled. One part of that effort is well underway: revising hospital payments based on excess readmissions, patient satisfaction, and other quality measures. Expanding this approach to physicians is touchier, as many are suspicious of the government judging them and reluctant to share performance metrics that Medicare requests.

“Without having any indication that this is improving patient care, they just keep piling on additional requirements,” said Dr. Mark Donnell, an anesthesiologist in Silver City, N.M. Dr. Donnell said he only reports a third of the quality measures he is expected to. “So much of what’s done in medicine is only done to meet the requirements,” he said.

The new financial incentive for doctors, called a physician value-based payment modifier, allows the federal government to boost or lower the amount it reimburses doctors based on how they score on quality measures and how much their patients cost Medicare. How doctors rate this year will determine payments for more than 900,000 physicians by 2017.

Medicare is easing doctors into the program, applying it this year only to medical groups with at least 100 health professionals, including doctors, nurses, speech-language pathologists, and occupational therapists. Next year, the program expands Medicare to groups of 10 or more health professionals. In 2017, all remaining doctors who take Medicare – along with about 360,000 other health professionals – will be included. By early in the next decade, 9% of the payments Medicare makes to doctors and other professionals would be at risk under a bill that the House of Representatives passed in March.

The quality metrics used to judge doctors vary by specialty. One test looks at how consistently doctors keep an accurate list of all the drugs patients were taking. Others track the rate of complications after cataract surgery or whether patients received recommended treatments for particular cancers.

There are more than 250 quality measures. Groups and doctors must report a selection – generally nine, which they choose – or else be automatically penalized. This year, 319 large medical groups are having their reimbursements reduced by 1% because they did not meet Medicare’s reporting standards.

Physicians who do report their quality data fear the measures are sometimes misguided, usually a hassle and may encourage doctors to avoid poorer and sicker patients, who tend to have more trouble controlling asthma or staying on antidepressants, for instance.

Dr. Leanne Chrisman-Khawam, a family physician in Cleveland, said many of her patients have difficulty just getting to follow-up appointments, since they must take two or three buses. She said those battling obesity or diabetes are less likely to reform their diets to emphasize fresh foods, which are expensive and less available in poor neighborhoods. “You’re going to link that physician’s payment to that life?” she asked.

Dr. Hamilton Lempert, an emergency physician in Cincinnati, criticized one measure that requires him to track how often he follows up with patients with high blood pressure.

“Most everyone’s blood pressure is elevated in the emergency department because they’re anxious,” Dr. Lempert said. Another metric encourages testing the heart’s electrical impulses in patients with nontraumatic chest pain, which Lempert said has led emergency rooms to give priority to these cases over more serious ones.

“It’s just very frustrating, the things we have to do to jump through the hoops,” he said.

In the first year that doctors are affected by the program, they can choose to forgo bonuses or penalties based on their performance. After that, the program is mandatory. This year, 564 groups opted out, but even if all of them had been included, only 3% would have gotten increases and 38% would have seen lower payments, mostly for not satisfactorily reporting quality measures, Medicare data show.

Smaller groups and solo practitioners are even less likely to report quality to the government. “The participation rates, even though it’s mandated, are just really low,” said Dr. Alyna Chien, an assistant professor at Harvard Medical School. It’s “a level of analytics that just is not typically built into a doctor’s office.”

Dr. Lisa Bielamowicz, chief medical officer of The Advisory Board, a consulting group, predicted more doctors will start reporting their quality scores when the prospect of fines is greater. “They are not going to motivate until it is absolutely necessary,” she said. “If you look at these small practices, a lot of them just run on a shoestring.”

This year’s assessments of big groups were based on patients seen in 2013. A total of $11 million of the $1.2 billion Medicare pays doctors is being given out as bonuses, which translates to a 5% payment increase for those 14 groups getting payment increases this year. That money came from low performers and those that did not report quality measures to Medicare’s satisfaction; they are losing up to 1%.

The exact amount any of these groups lose will depend on the number and nature of the services they provide over the year. This year, 268 medical groups were exempted because at least one of their doctors was participating in one of the government’s experiments in providing care differently.

Officials at the Centers for Medicare & Medicaid Services declined to be interviewed about the program but said in a prepared statement that they have been providing all doctors with reports showing their quality and costs. “We hope that this information will provide meaningful and actionable information to physicians so that they may improve the coordination and integration of the health care provided to beneficiaries,” the statement said.

Kaiser Health News (KHN) is a nonprofit national health policy news service. KHN’s coverage of aging and long-term-care issues is supported in part by a grant from The SCAN Foundation.

Dr. Michael Kitchell initially welcomed the federal government’s new quality incentives for doctors. His medical group in Iowa has always scored better than most in the quality reports that Medicare has provided doctors in recent years, he said.

But when the government launched a new payment system that will soon apply to all physicians who accept Medicare, Dr. Kitchell’s McFarland Clinic in Ames didn’t win a bonus. In fact, there are few winners: Out of 1,010 large physician groups that the government evaluated, just 14 are getting payment increases this year, according to Medicare. Losers also are scarce. Only 11 groups will be getting reductions for low quality or high spending.

“We performed well, but not enough for the bonus,” said Dr. Kitchell, a neurologist. “My sense of disappointment here is really significant. Why even bother?”

Within 3 years, the Obama administration wants quality of care to be considered in allocating $9 of every $10 Medicare pays directly to providers to treat the elderly and disabled. One part of that effort is well underway: revising hospital payments based on excess readmissions, patient satisfaction, and other quality measures. Expanding this approach to physicians is touchier, as many are suspicious of the government judging them and reluctant to share performance metrics that Medicare requests.

“Without having any indication that this is improving patient care, they just keep piling on additional requirements,” said Dr. Mark Donnell, an anesthesiologist in Silver City, N.M. Dr. Donnell said he only reports a third of the quality measures he is expected to. “So much of what’s done in medicine is only done to meet the requirements,” he said.

The new financial incentive for doctors, called a physician value-based payment modifier, allows the federal government to boost or lower the amount it reimburses doctors based on how they score on quality measures and how much their patients cost Medicare. How doctors rate this year will determine payments for more than 900,000 physicians by 2017.

Medicare is easing doctors into the program, applying it this year only to medical groups with at least 100 health professionals, including doctors, nurses, speech-language pathologists, and occupational therapists. Next year, the program expands Medicare to groups of 10 or more health professionals. In 2017, all remaining doctors who take Medicare – along with about 360,000 other health professionals – will be included. By early in the next decade, 9% of the payments Medicare makes to doctors and other professionals would be at risk under a bill that the House of Representatives passed in March.

The quality metrics used to judge doctors vary by specialty. One test looks at how consistently doctors keep an accurate list of all the drugs patients were taking. Others track the rate of complications after cataract surgery or whether patients received recommended treatments for particular cancers.

There are more than 250 quality measures. Groups and doctors must report a selection – generally nine, which they choose – or else be automatically penalized. This year, 319 large medical groups are having their reimbursements reduced by 1% because they did not meet Medicare’s reporting standards.

Physicians who do report their quality data fear the measures are sometimes misguided, usually a hassle and may encourage doctors to avoid poorer and sicker patients, who tend to have more trouble controlling asthma or staying on antidepressants, for instance.

Dr. Leanne Chrisman-Khawam, a family physician in Cleveland, said many of her patients have difficulty just getting to follow-up appointments, since they must take two or three buses. She said those battling obesity or diabetes are less likely to reform their diets to emphasize fresh foods, which are expensive and less available in poor neighborhoods. “You’re going to link that physician’s payment to that life?” she asked.

Dr. Hamilton Lempert, an emergency physician in Cincinnati, criticized one measure that requires him to track how often he follows up with patients with high blood pressure.

“Most everyone’s blood pressure is elevated in the emergency department because they’re anxious,” Dr. Lempert said. Another metric encourages testing the heart’s electrical impulses in patients with nontraumatic chest pain, which Lempert said has led emergency rooms to give priority to these cases over more serious ones.

“It’s just very frustrating, the things we have to do to jump through the hoops,” he said.

In the first year that doctors are affected by the program, they can choose to forgo bonuses or penalties based on their performance. After that, the program is mandatory. This year, 564 groups opted out, but even if all of them had been included, only 3% would have gotten increases and 38% would have seen lower payments, mostly for not satisfactorily reporting quality measures, Medicare data show.

Smaller groups and solo practitioners are even less likely to report quality to the government. “The participation rates, even though it’s mandated, are just really low,” said Dr. Alyna Chien, an assistant professor at Harvard Medical School. It’s “a level of analytics that just is not typically built into a doctor’s office.”

Dr. Lisa Bielamowicz, chief medical officer of The Advisory Board, a consulting group, predicted more doctors will start reporting their quality scores when the prospect of fines is greater. “They are not going to motivate until it is absolutely necessary,” she said. “If you look at these small practices, a lot of them just run on a shoestring.”

This year’s assessments of big groups were based on patients seen in 2013. A total of $11 million of the $1.2 billion Medicare pays doctors is being given out as bonuses, which translates to a 5% payment increase for those 14 groups getting payment increases this year. That money came from low performers and those that did not report quality measures to Medicare’s satisfaction; they are losing up to 1%.

The exact amount any of these groups lose will depend on the number and nature of the services they provide over the year. This year, 268 medical groups were exempted because at least one of their doctors was participating in one of the government’s experiments in providing care differently.

Officials at the Centers for Medicare & Medicaid Services declined to be interviewed about the program but said in a prepared statement that they have been providing all doctors with reports showing their quality and costs. “We hope that this information will provide meaningful and actionable information to physicians so that they may improve the coordination and integration of the health care provided to beneficiaries,” the statement said.

Kaiser Health News (KHN) is a nonprofit national health policy news service. KHN’s coverage of aging and long-term-care issues is supported in part by a grant from The SCAN Foundation.

Dr. Michael Kitchell initially welcomed the federal government’s new quality incentives for doctors. His medical group in Iowa has always scored better than most in the quality reports that Medicare has provided doctors in recent years, he said.

But when the government launched a new payment system that will soon apply to all physicians who accept Medicare, Dr. Kitchell’s McFarland Clinic in Ames didn’t win a bonus. In fact, there are few winners: Out of 1,010 large physician groups that the government evaluated, just 14 are getting payment increases this year, according to Medicare. Losers also are scarce. Only 11 groups will be getting reductions for low quality or high spending.

“We performed well, but not enough for the bonus,” said Dr. Kitchell, a neurologist. “My sense of disappointment here is really significant. Why even bother?”

Within 3 years, the Obama administration wants quality of care to be considered in allocating $9 of every $10 Medicare pays directly to providers to treat the elderly and disabled. One part of that effort is well underway: revising hospital payments based on excess readmissions, patient satisfaction, and other quality measures. Expanding this approach to physicians is touchier, as many are suspicious of the government judging them and reluctant to share performance metrics that Medicare requests.

“Without having any indication that this is improving patient care, they just keep piling on additional requirements,” said Dr. Mark Donnell, an anesthesiologist in Silver City, N.M. Dr. Donnell said he only reports a third of the quality measures he is expected to. “So much of what’s done in medicine is only done to meet the requirements,” he said.

The new financial incentive for doctors, called a physician value-based payment modifier, allows the federal government to boost or lower the amount it reimburses doctors based on how they score on quality measures and how much their patients cost Medicare. How doctors rate this year will determine payments for more than 900,000 physicians by 2017.

Medicare is easing doctors into the program, applying it this year only to medical groups with at least 100 health professionals, including doctors, nurses, speech-language pathologists, and occupational therapists. Next year, the program expands Medicare to groups of 10 or more health professionals. In 2017, all remaining doctors who take Medicare – along with about 360,000 other health professionals – will be included. By early in the next decade, 9% of the payments Medicare makes to doctors and other professionals would be at risk under a bill that the House of Representatives passed in March.

The quality metrics used to judge doctors vary by specialty. One test looks at how consistently doctors keep an accurate list of all the drugs patients were taking. Others track the rate of complications after cataract surgery or whether patients received recommended treatments for particular cancers.

There are more than 250 quality measures. Groups and doctors must report a selection – generally nine, which they choose – or else be automatically penalized. This year, 319 large medical groups are having their reimbursements reduced by 1% because they did not meet Medicare’s reporting standards.

Physicians who do report their quality data fear the measures are sometimes misguided, usually a hassle and may encourage doctors to avoid poorer and sicker patients, who tend to have more trouble controlling asthma or staying on antidepressants, for instance.

Dr. Leanne Chrisman-Khawam, a family physician in Cleveland, said many of her patients have difficulty just getting to follow-up appointments, since they must take two or three buses. She said those battling obesity or diabetes are less likely to reform their diets to emphasize fresh foods, which are expensive and less available in poor neighborhoods. “You’re going to link that physician’s payment to that life?” she asked.

Dr. Hamilton Lempert, an emergency physician in Cincinnati, criticized one measure that requires him to track how often he follows up with patients with high blood pressure.

“Most everyone’s blood pressure is elevated in the emergency department because they’re anxious,” Dr. Lempert said. Another metric encourages testing the heart’s electrical impulses in patients with nontraumatic chest pain, which Lempert said has led emergency rooms to give priority to these cases over more serious ones.

“It’s just very frustrating, the things we have to do to jump through the hoops,” he said.

In the first year that doctors are affected by the program, they can choose to forgo bonuses or penalties based on their performance. After that, the program is mandatory. This year, 564 groups opted out, but even if all of them had been included, only 3% would have gotten increases and 38% would have seen lower payments, mostly for not satisfactorily reporting quality measures, Medicare data show.

Smaller groups and solo practitioners are even less likely to report quality to the government. “The participation rates, even though it’s mandated, are just really low,” said Dr. Alyna Chien, an assistant professor at Harvard Medical School. It’s “a level of analytics that just is not typically built into a doctor’s office.”

Dr. Lisa Bielamowicz, chief medical officer of The Advisory Board, a consulting group, predicted more doctors will start reporting their quality scores when the prospect of fines is greater. “They are not going to motivate until it is absolutely necessary,” she said. “If you look at these small practices, a lot of them just run on a shoestring.”

This year’s assessments of big groups were based on patients seen in 2013. A total of $11 million of the $1.2 billion Medicare pays doctors is being given out as bonuses, which translates to a 5% payment increase for those 14 groups getting payment increases this year. That money came from low performers and those that did not report quality measures to Medicare’s satisfaction; they are losing up to 1%.

The exact amount any of these groups lose will depend on the number and nature of the services they provide over the year. This year, 268 medical groups were exempted because at least one of their doctors was participating in one of the government’s experiments in providing care differently.

Officials at the Centers for Medicare & Medicaid Services declined to be interviewed about the program but said in a prepared statement that they have been providing all doctors with reports showing their quality and costs. “We hope that this information will provide meaningful and actionable information to physicians so that they may improve the coordination and integration of the health care provided to beneficiaries,” the statement said.

Kaiser Health News (KHN) is a nonprofit national health policy news service. KHN’s coverage of aging and long-term-care issues is supported in part by a grant from The SCAN Foundation.