House Ways and Means Subcommittee on Health Hearing
Good afternoon and thank you, Chairman Tiberi, Ranking Member Levin, and Members of the Subcommittee. I am
With 18.5M enrollees in 2017 and growing,
There is strong bipartisan agreement that the
FROM A VOLUME-DRIVEN TO VALUE-BASED SYSTEM
Moving from a volume-driven to value-based delivery system requires a change in both how we pay for care (supply-side initiatives) and how we engage consumers to seek care (demand-side initiatives). Other testimonies today and at earlier Subcommittee hearings have focused on the critical importance of reforming care delivery and payment policies. These are important and worthy conversations. Prior to this hearing, little attention has been directed to how we can alter beneficiary behavior to bring about a more effective and efficient
Role of Medicare Beneficiary Cost-sharing
Chairman Tiberi, in the announcement for this hearing, you called for a review of programs designed to deliver integrated and coordinated care for our most vulnerable seniors and people living with disabilities; the potential clinical and financial impacts of these programs are staggering. Of the 57 million people covered by
Over the past few decades, public and private payers - including
A significantly growing share of out-of-pocket spending is devoted to high cost medications, many of which have profound positive impact on beneficiary health. Most
Dangers of a Blunt Approach to Beneficiary Cost-sharing - the Importance of "Clinical Nuance"
With some notable exceptions, MA plans implement cost-sharing in a 'one-size-fits-all' way, in that beneficiaries are charged the same amount for every doctor visit, diagnostic test, and prescription drug [within a specified formulary tier]. As
A noteworthy example is a
Since the decreased use of essential clinical services leads to reductions in quality, suboptimal patient-centered outcomes, and - in certain instances -increases in aggregate health care spending, solutions to this growing problem are urgently needed. To efficiently reallocate medical spending and optimize population health, the basic tenets of clinical nuance must be considered. These tenets recognize that: 1) medical services differ in the benefit provided; and 2) the clinical benefit derived from a specific service depends on the patient using it, as well as when, where, and by whom the service is provided.
Does it make sense to you,
Our current 'one- size- fits- all' system lacks clinical nuance, and frankly, to me, makes no sense. MA beneficiaries use too little high-value care and too much low-value care. We need benefit designs and other programs that support consumers in obtaining evidence-based services such as diabetic retinal exams and life-saving drugs through lower cost-sharing (when clinically indicated) and discourage individuals through higher cost-sharing from using dangerous or low-value services such as those identified by professional medical societies in the Choosing Wisely initiative. By incorporating greater clinical nuance into benefit design, payers, purchasers, beneficiaries and taxpayers can attain more health for every dollar spent.
VALUE-BASED INSURANCE DESIGN [V-BID]
Over the past two decades, public and private payers have implemented clinically nuanced plans, referred to as
Let me be clear,
Your Subcommittee is examining many of the bright spots in Medicare
Advantage aimed to better integrate and coordinate care. If these initiatives provide incentives to clinicians to recommend the right care, it is of equal importance that incentives for the patients are aligned with these goals as well. As a physician practicing in an alternative payment model, it is incomprehensible to realize that my patients' coverage often does not offer easy access for those exact services for which I am benchmarked. Does it make sense that I am offered a financial bonus to get my patients' diabetes under control when the benefit design makes it prohibitively expensive to fill their insulin prescription or provide the copayment for their eye examination?
I'm pleased to tell you that the intuitiveness of clinically nuanced design is driving momentum at a rapid pace, and we are truly at a "tipping point" in its adoption. Hundreds of public purchasers, private self-insured employers, non-profits, and insurance plans have designed and tested value-based programs. Just a few examples include the State Employee Plans in
INFUSING 'CLINICAL NUANCE' INTO MEDICARE ADVANTAGE
In theory,
There are two major restrictions within the
I. Flexibility in Imposing Differential Cost-Sharing for Use of Different Providers or Settings
Since the value of a clinical service may depend on the specific provider or the site of care delivery,
The provider network requirements also create challenges for care coordination among providers. The inability to use incentives to encourage beneficiaries to access care across a specified provider group hinders the ability for practitioners to track progress, encourage proper follow-up, and prevent the need for costly services due to lack of medical adherence. This is particularly important as we seek a return from a multi-billion dollar investment in health information technology. While the long-term intent of electronic medical records is to seamlessly share data across all providers, currently the most common use is among providers in a designated group.
Improving provider choice is an essential tool that will allow plans to incorporate clinical nuance, enhance consumer engagement, and drive higher quality of care in
II. Flexibility in Imposing Differential Cost-Sharing for Use of Different Services
To date, most clinically nuanced designs have focused on lowering patient out-of-pocket costs for high-value services. These are the services I beg my patients to do - for which there is no question of their clinical value - such as immunizations, preventive screenings, and critical medications and treatments for individuals with chronic diseases such as asthma, diabetes and mental illness (e.g. as recommended by
Yet, from the payer's perspective, the cost of incentive-only based V-BID programs depends on whether the added spending on high-value services is offset by a decrease in adverse events, such as hospitalizations and visits to the emergency department. While these high-value services are cost-effective and improve quality, many are not cost saving - particularly in the short term. However, research suggests that non-medical economic effects - such as impact on caregiver burden - can substantially impact the financial results of V-BID programs.
While significant cost-savings are unlikely with incentive-only programs in the short term, a V-BID program that combines reductions in cost-sharing for high-value services and increases in cost-sharing for low-value services can both improve quality and achieve net cost savings. Removing harmful/unnecessary care from the system is essential to reducing costs, while creating an opportunity to improve quality and patient safety. Evidence suggests significant opportunities exist to save money without sacrificing high-quality care. Though less common, some V-BID programs are designed to discourage use of low-value services and poorly performing providers.
Low-value services result in either harm or no net benefit, such as services labeled with a D rating by the
Fortunately, there is a growing movement to both identify and discourage the use of low-value services.
III. Flexibility in Imposing Differential Cost-Sharing for Certain Services For Specific Enrollees
Since a critical aspect of clinical nuance is that the value of a medical service depends on the person receiving it, we recommend that
Currently,
Although the 'one-size-fits-all' approach to
To assess the fiscal impact of the first year of MA V-BID programs, an actuarial analysis from the patient, plan, and societal perspectives was undertaken for diabetes mellitus (DM), chronic obstructive pulmonary disease (COPD), and congestive heart failure (CHF). After the first year, V-BID programs reduced consumer out-of-pocket costs in all three conditions. Plan costs increased slightly for DM and COPD, and the plan realized cost savings for CHF. From the societal perspective, the DM program was close to cost neutral; net societal savings resulted in the COPD and CHF programs.
CMS MEDICARE ADVANTAGE V-BID MODEL TEST
In the fall of 2015, the
1. Reduced Cost-Sharing for High-Value Services
Plans can choose to reduce or eliminate cost-sharing for items or services, including covered Part D drugs, that they have identified as high-value for a given target population. Participating plans have flexibility to choose which items or services are eligible for cost-sharing reductions; however, these services must be clearly identified and defined in advance, and cost-sharing reductions must be available to all enrollees within the target population. Examples of interventions within this category include eliminating co-pays for eye exams for members with diabetes and eliminating co-pays for angiotensin converting enzyme inhibitors for enrollees who have previously experienced an acute myocardial infarction.
2. Reduced Cost-Sharing for High-Value Providers
Plans can choose to reduce or eliminate cost-sharing when providers that the plan has identified as high-value treat targeted enrollees. Plans may identify high-value providers based on their quality and not solely based on cost, across all
3. Reduced Cost-Sharing for Enrollees Participating in Disease Management or Related Programs
Participating plans can reduce cost-sharing for an item or service, including covered Part D drugs, for enrollees who choose to participate in a plan-sponsored disease management or similar program. This could include an enhanced disease management program, offered by the plan as a supplemental benefit, or it could refer to specific activities that are offered or recommended as part of a plan's basic care coordination activities. Plans using this approach can condition enrollee eligibility for cost-sharing reductions on meeting certain participation milestones. For instance, a plan may require that enrollees meet with a case manager at regular intervals in order to qualify. However, plans cannot make cost-sharing reductions conditional on achieving any specific clinical goals (e.g., a plan cannot set cost-sharing reductions on enrollees achieving certain thresholds in HbA1c levels). Examples of interventions within this category include elimination of primary care co-pays for diabetes patients who meet regularly with a case manager and reduction of drug co-pays for patients with heart disease who regularly monitor and report their blood pressure.
4. Coverage of Additional Supplemental Benefits
Under this approach, participating plans can make coverage for specific supplemental benefits available only to targeted populations. Such benefits may include any service currently permitted under existing
Nine MA plans started the model test in
BIPARTISAN SUPPORT TO EXPAND MA V-BID MODEL TO ALL 50 STATES
Due to V-BID's success in the public and private sector, the TRICARE V-BID pilot, and early enthusiasm for the MA V-BID demonstration, the
Although there is urgency to bend the health care cost curve, cost containment efforts should not produce avoidable reductions in quality of care, particularly for the most vulnerable among us. It is my hope that as your Subcommittee considers changes to the
Thank you.
Read this original document at: https://waysandmeans.house.gov/wp-content/uploads/2017/06/2017.06.07.-HL-Testimony-Fendrick.pdf
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